HomeMy Public PortalAbout2021 Audit ReportBOROUGH OF FRANKLIN LAKES
BERGEN COUNTY, NEW JERSEY
REPORT OF AUDIT
YEAR ENDED DECEMBER 31, 2021
Exhibits
A
A-1
A-2
A-3
B
C
C-1
D
D-1
D-2
D-3
E
A-4
A-5
A-6
A-7
A-8
A-9
A-10
A-11
A-12
A-13
A-14
A-15
A-16
A-17
A-18
A-19
A-20
A-21
A-22
A-23
A-24
BOROUGH OF FRANKLIN LAKES
TABLE OF CONTENTS
PART I -Report on Audit of Financial Statements and Supplementary Schedules
Independent Auditor's Report
Financial Statements
Comparative Balance Sheets -Regulatory Basis -Current Fund
Comparative Statements of Operations and Changes in Fund Balance -
Regulatory Basis -Current Fund
Statement of Revenues -Regulatory Basis -Current Fund
Statement of Expenditures-Regulatory Basis-Current Fund
Comparative Balance Sheets -Regulatory Basis -Trust Funds
Comparative Balance Sheets -Regulatory Basis -General Capital Fund
Comparative Statements of Changes in Fund Balance -Regulatory Basis -
General Capital Fund
Comparative Balance Sheets -Regulatory Basis -Sewer Utility Fund
Comparative Statements of Operations and Changes in Fund Balance -
Regulatory Basis -Sewer Utility Operating Fund
Statement of Revenues -Regulatory Basis -Sewer Utility Operating Fund
Statement of Expenditures -Regulatory Basis -Sewer Utility Operating Fund
Comparative Balance Sheets -Regulatory Basis -General Fixed Assets
Account Group
Notes to Financial Statements
Supplementary Schedules
Current Fund
Statement of Current Cash -Collector-Treasurer
Statement of Change Fund
Statement of Petty Cash
Statement of Grants Receivable
Statement of Due to State of New Jersey-
Senior Citizens' and Veterans' Deductions
Statement of Taxes Receivable and Analysis of Property Tax Levy
Statement of Tax Title Liens
Statement of Revenue Accounts Receivable
Statement of Appropriation Reserves
Statement of Encumbrances Payable
Statement of Reserve for Grants -Appropriated
Statement of Reserve for Grants -Unappropriated
Statement of Prepaid Taxes
Statement of Tax Overpayments
Statement of County Taxes Payable
Statement of Local District School Taxes Payable
Statement of Regional High School Taxes Payable
Statement of Reserves for Tax Appeals Pending
Statement of Fees Payable
Statement of Reserve for Recreation Online Fees
Statement of Reserve for Covid-19 Reimbursements
1-3
4-5
6-7
8-11
12-17
18-19
20
21
22
23
24
24
25
26-61
62
63
63
64
65
66
67
68
69-71
72
73
73
74
74
75
75
75
76
76
76
76
Exhibits
B-2
B-3
B-4
B-5
B-6
B-7
B-8
B-9
B-10
B-11
B-12
B-13
B-14
C-2
C-3
C-4
C-5
C-6
C-7
C-8
C-9
C-10
C-11
C-12
C-13
C-14
D-4
D-5
D-6
BOROUGH OF FRANKLIN LAKES
TABLE OF CONTENTS
(Continued)
Supplementary Schedules (Continued)
Trust Funds
Statement of Trust Cash -Collector-Treasurer
Statement of Reserve for Animal Control Expenditures
Statement of Due to State of New Jersey-Animal Control Trust Fund
Statement of Reserve for Affordable Housing-Other Trust Fund
Statement of Payroll and Deductions Payable-Trust Fund
Statement of Due to Current Fund -Other Trust Fund
Statement of Miscellaneous Reserves-Other Trust Fund
Statement of Reserve for Escrow Deposits -Other Trust Fund
Statement of Due to State of New Jersey-Unemployment Trust Fund
Statement of Reserve for Expenditures-Unemployment Trust Fund
Statement of Assessment Receivable -Assessment Trust Fund
Statement of Due to Current Fund -Assessment Trust Fund
Statement of Due to General Capital Fund -Assessment Trust Fund
General Capital Fund
Statement of Cash -General Capital Fund
Analysis of General Capital Cash
Statement of Grants Receivable
Statement of Deferred Charges to Future Taxation-Funded
Statement of Deferred Charges to Future Taxation -Unfunded
Statement of General Serial Bonds
Statement of Improvement Authorizations
Statement of Encumbrances Payable
Statement of Capital Improvement Fund
Statement of Reserve for CO AH-RCA Debt
Statement of Reserve for Future Capital Projects
Statement of Reserve for Payment of Debt
Statement of Bonds and Notes Authorized But Not Issued
Sewer Utility Fund
Statement of Cash-Treasurer
Statement of Sewer User Fees Receivable
Statement of 2020 Appropriation Reserves
77
78
79
79
80
80
81
81
82
82
83
84
84
85
86
87
88
89
90
91
92
92
93
93
93
94
95
96
96
BOROUGH OF FRANKLIN LAKES
TABLE OF CONTENTS
(Continued)
Part II -Government Auditing Standards
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-Independent
Auditor's Report
Schedule of Expenditures of Federal Awards, Schedule A
Schedule of Expenditures of State Financial Assistance, Schedule B
Notes to Schedules of Expenditures of Federal Awards
and State Financial Assistance
Schedule of Findings and Responses
Part III
Comparative Statement of Operations and Changes in Fund Balance -
Current Fund
Comparative Statement of Operations and Changes in Fund Balances -
Sewer Utility Fund
Comparative Schedule of Tax Rate Information
Comparison of Tax Levies and Collection
Delinquent Taxes and Tax Title Liens
Comparative Schedule of Fund Balances
Officials in Office and Surety Bonds
General Comments
Recommendations
97-98
99
100
101
102
103
104
105
105
106
106
107
108-109
110
BOROUGH OF FRANKLIN LAKES
COUNTY OF BERGEN
PART I
REPORT ON AUDIT OF FINANCIAL STATEMENTS
AND SUPPLEMENTARY SCHEDULES
YEAR ENDED DECEMBER 31, 2021
LERCH / VINCI & BLISS / LLP
DIET ER P. LERCH, CPA, RMA, PSA
GARY J. VINC I, CPA, RMA, PSA
JEFFREY C. BLISS, CPA, RMA, PSA
PAULJ. LERCH, CPA, RMA, PSA
JULI US B. CONSONI, CPA, PSA
ANDREW D. PARENTE, CPA, RMA, PSA
Honorable Mayor and
CERT IFIED PUB LI C ACCOUNT AN TS
REG ISTERED MUN ICIPA L ACCOUN T ANTS
INDEPENDENT AUDITOR'S REPORT
Members of the Borough Council
Borough of Franklin Lakes
Franklin Lakes, New Jersey
Report on the Audit of Financial Statements
Opinions
ELI ZABET H A SH ICK, CPA, RMA, PSA
ROBERT W HAAG, CPA, RMA, PSA
DEBRA GOL LE, CPA
MARK SACO, CPA
ROBERT LERCH, CPA
CHR ISTOPHER VINC I, CPA, PSA
CHR ISTI NA CU IFFO, CPA
We have audited the accompanying balance sheets -regulatory basis of the various funds and account group of the
Borough of Franklin Lakes, as of December 31, 2021 and 2020, and the related statements of operations and changes
in fund oalattce----=---re-grrlatnry basis for the-ye-ars th-en-ended, and the related statement ofTevenues~regofatory-basis and
statement of expenditures -regulatory basis of the various funds for the year ended December 31, 2021, and the
related notes to the financial statements.
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 account group of the Borough of Franklin Lakes as of
December 3 1, 2021 and 2020, and the results of operations and changes in fund balance -regulatory basis of such
funds for the years then ended and the respective revenues -regulatory basis and expenditures -regulatory basis of
the various funds for the year ended December 31, 2021 in accordance with the financial accounting and reporting
provisions and practices prescribed by the Division of Local Government Services, Department of Community
Affairs , State of New Jersey as described in Note 1.
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 section of our report, 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
each fund of the Borough of Franklin Lakes as of December 31, 2021 and 2020, or changes in financial position, or,
where applicable, cash flows for the years then ended.
Basis.for Opinions
W e conducted our audits in accordance with auditing standards gene rally accepted in the United States of America,
the sta nd ards applicable to financial audits contained in Government Auditing Standards issued by the Comptro ll er
Genera l of the United States and the audit requirements prescribed by the Division of Local Government Services,
Depa11rnent of Community Affairs, State of New Jersey. Our responsibilities under those standards are fut1her
described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of the Borough of Franklin Lakes and to meet our other ethical responsibilities , in
accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinions.
17-17 RO UT E 208 · FAIR LAWN, NJ 07410 · T ELEPHO N E (201) 79 1-7 100 · FACS IMI LE (201) 79 1-3035
WWW.LV~CPA.COM
Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles
As described in Note 1 of the financial statements, the financial statements are prepared by the Borough of Franklin
Lakes on the basis of the financial accounting and reporting provisions and practices that demonstrate compliance
with the regulatory basis of accounting and budget laws prescribed by 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 meet the financial reporting requirements of the State
of New Jersey for municipal government entities.
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 and pervasive.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the
financial accounting and reporting provisions and practices that demonstrate compliance with the regulatory basis of
accounting and budget laws prescribed by the Division of Local Government Services, Department of Community
Affairs, State of New Jersey as described in Note 1. Management is also responsible for the design, implementation,
and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatements, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the Borough of Franklin Lakes' ability to continue as a
going concern for twelve months beyond the financial statement date, including any currently known information that
may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an
audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards and audit
requirements prescribed by the Division of Local Government Services, Department of Community Affairs, State of
New Jersey, will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if
there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a
reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards and
audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs,
State of New Jersey, we:
• Exercise professional judgement and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include examining,
on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit 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
Borough of Franklin Lakes' internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the Borough of Franklin Lakes' ability to continue as a going concern for a reasonable
period of time.
2
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified
during the audit.
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements of the Borough of Franklin
Lakes as a whole . The supplementary schedules listed in the table of contents, schedule of expenditures of federal
awards and schedule of expenditures of state financial assistance are presented for purposes of additional analysis and
are not a required part of the financial statements of the Borough of Franklin Lakes . 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 schedules listed in the table of contents, schedule of expenditures of federal awards and schedule of
expenditures of state financial assistance are fairly stated, in all material respects, in relation to the financial
statements as a whole on the basis of accounting described in Note 1.
Other Information
Management is responsible for the other information included in the report of audit. The other information comprises
the supplementary data and letter of comments and recommendation section but does not include the financial
statements and our auditor's repo1t thereon. Our opinions on the financial statements do not cover the other
information , and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the financial statements, or the
other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an
uncorrected..materiaLmisstatem.ent ofthe otherinfo.rmatio_n_exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 28, 2022 on our
consideration of the Borough of Franklin Lakes' 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 solely 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 of
Franklin Lakes' 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 of Franklin Lakes' internal
control over financial reporting and compliance. ~·· /~· / 7k c!~/
CH, VINCI & BLISS LP
ertified Public Accountants
Fair Lawn, New Jersey
June 28, 2022
3
Registered i-a Ace , (mtants
e . erch
Registered Munici al Accountant
RMA Number CR00398
BOROUGH OF FRANKLIN LAKES
COMPARATIVE BALANCE SHEETS -REGULATORY BASIS
CURRENT FUND
AS OF DECEMBER 31, 2021 AND 2020
ASSETS Reference
Cash
Change Fund
Grants Receivable
Receivables and Other Assets With Full Reserves
Delinquent Property Taxes
Tax Title Liens
Revenue Accounts Receivable
Due from Other Trust Fund
Due from Assessment Trust Fund
Total Assets
The Accompanying Notes are an Integral Part of these Financial Statements
4
A-4
A-5
A-7
A-9
A-10
A-11
B-7
B-13
2021
$ 7,493,253
700
561,903
8,055,856
255,146
27,146
14,629
70
2,090
299,081
$ 8,354,937
$
$
EXHIBIT A
Page 1
2020
6,872,376
700
590,908
7,463,984
503,772
13,387
8,584
222
2,518
528,483
7,992,467
BOROUGH OF FRANKLIN LAKES
COMPARATIVE BALANCE SHEETS -REGULATORY BASIS
CURRENT FUND
AS OF DECEMBER 31, 2021 AND 2020
(Continued)
LIABILITIES, RESER YES AND FUND BALANCE Reference
Appropriation Reserves A-3, A-12
Encumbrances Payable A-13
Reserve for Grants -Appropriated A-14
Reserve for Grants -Unappropriated A-15
Prepaid Taxes A-16
Tax Overpayments A-17
Due to County for Added & Omitted Taxes A-18
Reserve for Tax Appeals A-21
Fees Payable A-22
Due to State of NJ -Senior Citizens/Veterans Deductions A-8
Reserve for Recreation Online Fees A-23
Reserve for COVID-19 Reimbursements A-24
Total Liabilities
Reserve for Receivables and Other Assets A
Fund Balance A-1
Total Liabilities, Reserves and Fund Balance
The Accompanying Notes are an Integral Part of these Financial Statements
5
2021
$ 743,290
461,787
630,868
581,905
917,432
5,602
204,183
55,135
16,569
5,693
3,214
3,625,678
299,081
4,430,178
$ 8,354,937
EXHIBIT A
Page 2
2020
$ 708,623
885,142
610,554
834,920
7,061
171,214
55,135
16,588
5,193
3,214
72,014
3,369,656
528,483
4,094,328
$ 7,992,467
BOROUGH OF FRANKLIN LAKES
EXHIBIT A-1
Page 1
COMPARATIVE STATEMENTS OF OPERATIONS AND CHANGES IN FUND BALANCE -
REGULATORY BASIS -CURRENT FUND
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
Reference
REVENUE AND OTHER INCOME REALIZED
Fund Balance Utilized
Miscellaneous Revenue Anticipated
Receipts from Delinquent Taxes
Receipts from Current Taxes
Non-Budget Revenue
Other Credits to Income:
Unexpended Balances of Appropriation Reserves
Prior Year Interfunds Returned
EXPENDITURES
Budget Appropriations
Operations
Salaries and Wages
Other Expenses
Capital Improvements
Municipal Debt Service
Deferred Charges and Statutory Expenditures
County Taxes
Due County for Added Taxes
Local District School Taxes
Regional High School Tax
Refund of Prior Year Revenue
Refund of Prior Year Taxes
Interfunds Established
Less:
Expenditures Included Above to Deferred Charges
Adjusted Expenditures
Statutory Excess to Fund Balance (Brought Forward)
The Accompanying Notes are an Integral Part of these Financial Statements
6
A-2
A-2
A-2
A-2
A-2
A-12
A
A-3
A-3
A-3
A-3
A-3
A-18
A-18
A-19
A-20
A-4
A-4
A
2021
$ 2,000,000
5,162,425
497,698
73,427,055
184,137
440,110
2,740
81,714,165
6,263,535
8,472,449
1,400,000
1,605,900
1,541,500
11,069,466
204,183
29,407,906
19,291,656
1,655
117,905
2,160
79,378,315
79,378,315
2,335,850
$
2020
1,100,000
4,533,619
532,262
71,217,069
537,010
209,812
21,042
78,150,814
5,994,566
7,977,525
300,000
1,459,831
1,963,717
10,853,729
171,214
28,405,982
19,048,893
1,987
120,344
76,297,788
462,000
75,835,788
2,315,026
BOROUGH OF FRANKLIN LAKES
EXHIBIT A-1
Page 2
COMPARATIVE STATEMENTS OF OPERATIONS AND CHANGES IN FUND BALANCE -
REGULATORY BASIS -CURRENT FUND
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Continued)
Reference
Statutory Excess to Fund Balance (Carried Forward)
FUND BALANCE, January 1
Decreased by:
Utilized as Anticipated Revenue
FUND BALANCE, December 31
The Accompanying Notes are an Integral Part of these Financial Statements
7
A
A-1
A
2020
$ 2,335,850 $ 2,315,026
4,094,328
6,430,178
2,000,000
2,879,302
5,194,328
1,100,000
$ 4,430,178 $ 4,094,328
BOROUGH OF FRANKLIN LAKES
STATEMENT OF REVENUES -REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2021
Anticipated
Reference Budget
FUND BALANCE ANTICIPATED A-1 $ 2,000,000
MISCELLANEOUS REVENUES
Licenses
Alcoholic Beverages A-11 $ 10,000
Other A-2 13,900
Fees and Permits A-2 137,050
Fines and Costs -Municipal Court A-11 214,000
Interest and Costs on Taxes and Assessments A-2 162,700
Interest on Investments and Deposits A-2 377,300
Outside Police Employment A-11 70,000
Abandoned Property Fees A-11 64,400
Uniform Construction Code Fees A-11 840,000
Energy Receipts Tax A-11 1,775,732
Watershed Moratorium Offset Aid A-11 5,969
Shared Service -Borough of Oakland A-11 56,850
Public and Private Programs Offset with Appropriations
Recycling Tonnage Grant A-7
Clean Communities Grant A-7
Drunk Driving Enforcement Grant A-7 3,922
Body Armor Replacement Program A-7 1,912
Drive Sober or Get Pulled Over A-7
CDBG -Handicap Improvements -Sr. Center A-7
Distracted Driving A-7
Private Donations A-7 100
Other Special Items of Revenue
Uniform Fire Safety Act A-11 18,600
Cable T.V. Franchise Fee A-11 184,666
Lease of Land for Monopole-Sprint Co A-11 114,300
Recreation Program Fees A-11 154,900
Recycling Revenue A-11 6,000
VFW Parking Permits A-11 2,800
Reserve for Future Capital Projects A-11 119,300
Library Reimbursement A-11 189,700
Rental Fees -Community Center/ Field A-11 16,000
Child Care Facility Rent A-11 46,200
PILOT -Municipal A-11 54,400
Reserve for COVID Reimbursement A-24 67,325
Reserve for Payment of Debt A-11 121,463
Total Miscellaneous Revenues A-1 4,829,489
The Accompanying Notes are an Integral Part of these Financial Statements
8
Added by
N.J.S.A.
40A:4-87
$ 18,319
29,938
5,923
15,000
5,957
20,400
95,537
EXHIBIT A-2
Pagel
Excess or
Realized (Deficit)
$ 2,000,000
$ 10,000 $
17,982 4,082
170,641 33,591
178,857 (35,143)
143,138 (19,562)
431,199 53,899
138,217 68,217
36,000 (28,400)
893,301 53,301
1,775,732
5,969
57,088 238
18,319
29,938
3,922
1,912
5,923
15,000
5,957
20,500
18,482 (118)
184,666
116,914 2,614
201,858 46,958
89,724 83,724
2,770 (30)
119,300
197,970 8,270
7,000 (9,000)
30,090 (16,110)
45,268 (9,132)
67,325
121,463
5,162,425 237,399
BOROUGH OF FRANKLIN LAKES
STATEMENT OF REVENUES -REGULATORY BASIS
CURRENTFUND
FOR THE YEAR ENDED DECEMBER 31, 2021
(Continued)
Anticipated
RECEIPTS FROM DELINQUENT TAXES
AMOUNT TO BE RAISED BY TAXES FOR
SUPPORT OF MUNICIPAL BUDGET
Local Tax for Municipal Purposes
Minimum Library Tax
Total General Revenue
Non-Budget Revenue
Reference Budget
A-1, A-9 _$ __ 5_03~, 7_0_0
A-2 11,314,062
A-2 1,445,696
12,759,758
$ 20,092,947
A-1,A-2
The Accompanying Notes are an Integral Part of these Financial Statements
9
$
Added by
N.J.S.A.
40A:4-87
95,537
$
Realized
EXHIBIT A-2
Page2
Excess or
(Deficit)
497,698 _$ -~<~6,_00~2)
12,913,148 1,599,086
1,445,696
14,358,844 1,599,086
22,018,967 $ 1,830,483
184,137
BOROUGH OF FRANKLIN LAKES
STATEMENT OF REVENUES -REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2021
(Continued)
Reference
ANALYSIS OF REALIZED REVENUES
Allocation of Current Tax Collections
Revenues from Collections A-9
Less: Allocated to School and County Taxes A-18, A-19, A-20
Balance for Support of Municipal Budget Appropriations
Add Appropriation "Reserve for Uncollected Taxes" A-3
Amount for Support of Municipal Budget of Appropriations A-2
Licenses -Other
Borough Clerk A-11
Board of Health A-11
A-2
Fees and Permits -Other
Tax Collector A-11
Police Department A-11
Fire Prevention A-11
Planning Board A-11
Board of Health A-11
A-2
Interest and Costs on Taxes and Assessments
Cash Receipts A-11
Due from Assessment Trust Fund B-13
A-2
Interest on Investments and Deposits
Cash Receipts A-11
Due from Other Trust Fund B-7
A-2
The Accompanying Notes are an Integral Part of these Financial Statements
10
$
$
$
$
$
$
$
$
$
EXHIBIT A-2
Page 3
73,427,055
59,973,211
13,453,844
905,000
14,358,844
1,484
16,498
17,982
660
11,625
27,574
46,450
84,332
170,641
141,048
2,090
143,138
431,129
70
431 199
BOROUGH OF FRANKLIN LAKES
STATEMENT OF REVENUES -REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2021
(Continued)
Delinquent Taxes
Taxes Receivable
Tax Title Liens
ANALYSIS OF NON-BUDGET REVENUES
Insurance Dividends/Refunds
Bravo -Housewives Fee
Road Openings
Tree Specialist Fee
Sale of Municipal Assets
Police Department -Accident Reports/Firearms/ID
Public Defender's Applications
Administrative Fee -Senior CitizensNeterans Deductions
Miscellaneous
Reference
A-9
A-10
A-2
A-1,A-2
The Accompanying Notes are an Integral Part of these Financial Statements
11
$
$
$
$
EXHIBIT A-2
Page4
491,426
6,272
497,698
21,760
4,800
6,800
12,700
35,000
3,279
2,400
880
96,518
184,137
BOROUGH OF FRANKLIN LAKES
STATEMENT OF EXPENDITURES -REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2021
Appropriations
Budget After
Expended
Paid or
Budget Modification Charged Reserved
GENERAL APPROPRIATIONS
OPERATIONS WITHIN "CAPS"
General Government
General Administration
Salaries and Wages $ 321,150 $
Other Expenses 132,900
Mayor & Council
Salaries and Wages 35,000
Other Expenses 19,800
Municipal Clerk
Salaries and Wages 126,680
Other Expenses 68,000
Financial Administration
Salaries and Wages 197,110
Other Expenses 42,100
Audit Services
Other Expenses 49,500
Revenue Administration (Tax Collection)
Salaries and Wages 78,600
Other Expenses 14,250
Tax Assessment Administration
Salaries and Wages 40,150
Other Expenses 13,355
Reserve for Tax Appeals 100,000
Legal Services (Legal Department)
Other Expenses 160,000
Engineering Services and Costs
Salaries and Wages 54,035
Other Expenses 52,500
Land Use Administration
Planning Board
Salaries and Wages 4,600
Other Expenses 16,090
Zoning Board of Adjustment
Salaries and Wages 3,300
Other Expenses 9,000
Zoning Official
Salaries and Wages 17,990
Other Expenses
Insurance
Unemployment Insurance 5,000
General Liability 217,000
Worker's Compensation 201,000
Employee Group Health 1,754,252
Other Insurance Premiums 25,000
Health Benefit Waiver 65,000
The Accompanying Notes are an Integral Part of these Financial Statements
12
321,150 $ 315,594 $ 5,556
149,400 148,957 443
35,000 34,500 500
19,800 16,820 2,980
126,680 125,642 1,038
68,000 61,482 6,518
203,110 201,371 1,739
27,100 23,875 3,225
49,500 45,354 4,146
80,600 73,392 7,208
14,250 13,344 906
40,150 39,033 1,117
13,355 7,570 5,785
100,000 100,000
148,050 118,109 29,941
55,285 55,030 255
58,500 55,218 3,282
4,680 4,675 5
19,090 18,774 316
3,300 2,294 1,006
9,000 5,347 3,653
17,990 17,987 3
5,000 5,000
217,000 210,804 6,196
201,000 201,000
1,686,152 1,600,570 85,582
25,000 18,978 6,022
68,000 65,620 2,380
EXHIBIT A-3
Page I
Cancelled
BOROUGH OF FRANKLIN LAKES
STATEMENT OF EXPENDITURES -REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2021
(Continued)
Appropriations
Budget After
Expended
Paid or
Budget Modification Charged Reserved
GENERAL APPROPRIATIONS (Cont'd.)
OPERATIONS WITHIN "CAPS" (Cont'd)
Public Safety
Police Department
Salaries and Wages $ 3,347,700 $
Other Expenses 373,825
Office of Emergency Management
Salaries and Wages 7,175
Other Expenses 9,575
Ambulance Service
Other Expenses 87,375
Fire Department
Salaries and Wages 6,100
Other Expenses 197,300
Uniform Fire Safety
Salaries and Wages 53,875
Other Expenses 238,100
Municipal Court
Salaries and Wages 146,500
Other Expenses 14,075
Municipal Court Public Defender
Salaries and Wages 8,500
Municipal Prosecutor's Office
Salaries and Wages 19,500
Public Works
Streets and Road Maintenance
Salaries and Wages 1,171,885
Other Expenses 642,900
Solid Waste Collection
Other Expenses 541,500
Buildings and Grounds
Other Expenses 332,000
Vehicle Maintenance (including Police)
Other Expenses 265,000
Shade Tree
Salaries and Wages 28,000
Other Expenses 17,000
Health and Human Services
Board of Health
Salaries and Wages 60,990
Other Expenses 135,300
Animal Control Services
Other Expenses 15,000
Parks and Recreation
Recreation Services and Programs
Salaries and Wages 179,710
Other Expenses 251,050
Senior Citizens Programs
Other Expenses 4,500
The Accompanying Notes are an Integral Part of these Financial Statements
13
3,320,020 $ 3,239,931 $ 80,089
333,825 326,329 7,496
7,175 7,175
9,575 5,622 3,953
87,375 60,878 26,497
6,100 3,383 2,717
197,300 193,054 4,246
54,455 54,452 3
238,100 237,315 785
146,500 136,135 10,365
14,075 5,680 8,395
8,500 8,346 154
19,600 19,222 378
1,171,885 1,158,540 13,345
642,900 580,485 62,415
541,500 519,976 21,524
408,000 341,995 66,005
265,000 257,089 7,911
28,000 14,559 13,441
17,000 16,947 53
60,990 60,861 129
135,300 114,978 20,322
15,000 13,310 1,690
190,710 187,435 3,275
251,050 204,224 46,826
4,500 4,500
EXHIBIT A-3
Page 2
Cancelled
BOROUGH OF FRANKLIN LAKES
STATEMENT OF EXPENDITURES -REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDING DECEMBER 31, 2021
(Continued)
A1212ro12riations Ex12ended
Budget After
Budget Modification
GENERAL APPROPRIATIONS (Cont'd.)
OPERATIONS WITHIN "CAPS" (Cont'd)
Environment Commission
Other Expenses $ 2,000 $ 2,000
Celebration of Public Events
Other Expenses 72800
Cable T.V. Committee
Other Expenses 2,000
UNIFORM CONSTRUCTION CODE
APPROPRIATIONS OFFSET BY
DEDICATED REVENUES (NJAC5:23-4-17)
CODE ENFORCEMENT AND ADMINISTRATION
Uniform Construction Code Enforcement Functions
Building Inspector
Salaries and Wages 219,060
Other Expenses 65,775
Other Code Enforcement Functions
Electrical Inspector
Salaries and Wages 64,575
Plumbing Inspector
Salaries and Wages 27,150
UN CLASSIFIED:
UTILITY EXPENSES AND BULK PURCHASES
Electricity 165,000
Street Lighting 27,500
Telephone 48,000
Water 35,000
Gasoline 80,000
Landfill/Solid Waste Disposal Costs 316,000
Telecommunications 19,000
Total Operations Within "CAPS" 13,121,657
Total Operations including Contingent -
Within "CAPS" 13,121,657
Detail:
Salaries and Wages 6,219,335
Other Expenses 6,902,322
The Accompanying Notes are an Integral Part of these Financial Statements
14
72,800
2,000
219,060
65,775
69,795
27,150
165,000
28,500
55,000
35,000
97,500
316,000
19,000
13,115,157
13,115,157
6,217,885
6,897,272
Paid or
Charged
$ 1,169 $
70,911
110
216,140
47,846
69,788
27,150
129,649
26,261
52,089
29,788
92,717
284,639
12,211
12,407,054
12,407,054
6,065,460
6,341,594
EXHIBIT A-3
Page 3
Reserved Cancelled
831
1,889
1,890
2,920
17,929
7
35,351
2,239
2,911
5,212
4,783
31,361
6,789
708,103
708,103
152,425
555,678
BOROUGH OF FRANKLIN LAKES
CURRENT FUND
STATEMENT OF EXPENDITURES -REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2021
(Continued)
Appropriations
Budget After
Expended
Paid or
Budget Modification Charged Reserved
GENERAL APPROPRIATIONS (Cont'd.)
DEFERRED CHARGES AND STATUTORY
EXPENDITURES -MUNICIPAL WITHIN
"CAPS"
Statutory Charges
Public Employees Retirement System
Social Security System (O.A.S.I.)
DCRP Employer Contribution
Police & Firemen's Retirement System
Total Deferred Charges & Statutory
Expenditures -Municipal Within "CAPS"
Total General Appropriations for Municipal
Purposes Within "CAPS"
OPERATIONS-EXCLUDED FROM "CAPS"
Other Operations
Municipal Library
NJ DEP Stormwater Permit
Total Other Operations Excluded from "CAPS"
Interlocal Municipal Service Agreements
Enhanced 911 Service -Northwest Bergen
Central Dispatch
Other Expenses
Borough of Oakland
Construction Code Offical
Salaries and Wages
Other Expenses
Total Interlocal Municipal Service Agreements
$ 435,000
285,000
15,000
800,000
1,535,000
14,656,657
1,445,696
8,000
1,453,696
8,810
45,650
11,200
65,660
$
The Accompanying Notes are an Integral Part of these Financial Statements
15
435,000
290,000
16,500
800,000
1,541,500
14,656,657
1,445,696
8,000
1,453,696
8,810
45,650
11,200
65,660
$ 422,097
285,911
11,119
788,926
1,508,053
13,915,107
1,445,696
6,299
1,451,995
8,803
45,618
11,200
65,621
$ 12,903
4,089
5,381
11,074
33,447
741,550
1,701
1,701
7
32
39
EXHIBIT A-3
Page4
Cancelled
BOROUGH OF FRANKLIN LAKES
STATEMENT OF EXPENDITURES-REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2021
(Continued)
Appropriations
Budget After
Budget Modification
GENERAL APPROPRIATIONS (Cont'd.)
OPERATIONS -EXCLUDED FROM "CAPS" (Cont'd.)
Public and Private Programs Offset by Revenues
State of New Jersey Recycling Tonnage Grant $ 18,319
Clean Communities Grant 29,938
Municipal Alliance on Alcoholism and Drug Abuse
County Share
Local Share
Private Donations $ 100 20,500
Drive Sober/Get Pulled Over Grant 5,923
Drunk Driving Enforcement Fund 3,922 3,922
MC Alcohol Edu, Rehab & Enfor Fund Grant
2021 Distracted Driving 5,957
Body Armor Replacement Program 1,912 1,912
Handicap Improvement 15,000
Total Public and Private Programs Offset
by Revenues 5,934 101,471
Total Operations Excluded from "CAPS" 1,525,290 1,620,827
Detail
Salaries & Wages 45,650 45,650
Other Expenses 1,479,640 1,575,177
CAPITAL IMPROVEMENTS EXCLUDED FROM "CAPS"
Capital Improvement Fund 1,400,000 1,400,000
Total Capital Improvements -Excluded from "CAPS" 1,400,000 1,400,000
MUNICIPAL DEBT SERVICE -EXCLUDED FROM "CAPS"
Payment of Bond Principal 1,380,000 1,380,000
Payment of Bond Anticipation Notes
Interest on Bonds 226,000 226,000
Interest on Notes
Total Municipal Debt Service -
Excluded from "CAPS" 1,606,000 1,606,000
Total General Appropriations Excluded from
"CAPS" 4,531,290 4,626,827
The Accompanying Notes are an Integral Part of these Financial Statements
16
$
Expended
Paid or
Charged
18,319
29,938
20,500
5,923
3,922
5,957
1,912
15,000
101,471
1,619,087 $
45,618
1,573,469
1,400,000
1,400,000
1,380,000
225,900
1,605,900
4,624,987
EXHIBIT A-3
Page 5
Reserved Cancelled
1,740
32
1,708
$ 100
100
1,740 100
BOROUGH OF FRANKLIN LAKES
STATEMENT OF EXPENDITURES -REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2021
(Continued)
Appropriations Expended
Subtotal General Appropriations
Reserve for Uncollected Taxes
Total General Appropriations
Budget as Adopted
Added by N.J.S. 40A:4-87
Cash Disbursements
Encumbrances Payable
Appropriated Grant Reserves
Reserve for Uncollected Taxes
Reference
A-2
A-2
Budget
$ 19,187,947
905,000
$ 20,092,947
A-2
A-4
A-13
A-14
A-2
Budget After
Modification
$ 19,283,484
905,000
$ 20,188,484
$ 20,092,947
95,537
$ 20,188,484
The Accompanying Notes are an Integral Part of these Financial Statements
17
Paid or
Charged
$ 18,540,094 $
905,000
$ 19,445,094 $
$ 17,992,111
446,512
101,471
905,000
$ 19,445,094
Reserved
743,290
743,290
A
EXHIBIT A-3
Page 6
Cancelled
$ 100
100
ASSETS
BOROUGH OF FRANKLIN LAKES
COMPARATIVE BALANCE SHEETS -REGULATORY BASIS
TRUST FUNDS
AS OF DECEMBER 31, 2021 AND 2020
Reference 2021
EXIDBITB
Page 1
ANlMALCONTROLTRUSTFUND
Cash B-2 $ 14,106 $ 10,600 --~-
OTHER TRUST FUND
Cash
ASSESSMENT TRUST FUND
Cash
Assessments Receivable
UNEMPLOYMENT INSURANCE TRUST FUND
Cash
Total Assets
B-2
B-2
B-13
B-2
The Accompanying Notes are an Integral Part of these Financial Statements
18
3,919,027
3,919,027
23,308
93,800
117,108
40,596
40,596
3,221,109
3,221,109
13,022
104,514
117,536
37,350
37,350
$ 4,090,837 $ 3,386,595
BOROUGH OF FRANKLIN LAKES
COMPARATIVE BALANCE SHEETS -REGULATORY BASIS
TRUST FUNDS
AS OF DECEMBER 31, 2021 AND 2020
(Continued)
Reference
LIABILITIES, RESERVES AND FUND BALANCE
ANIMAL CONTROL TRUST FUND
Due to State of NJ B-4
Reserve for Animal Control Expenditures B-3
OTHER TRUST FUND
Payroll Deductions and Withholdings Payable B-6
Due to Current Fund B-7
Reserve for:
Affordable Housing B-5
Miscellaneous Reserves B-8
Escrow Deposits B-9
ASSESSMENT TRUST FUND
Due to Current Fund B-13
Due to General Capital Fund B-14
Reserve for Assessments B-12
UNEMPLOYMENT INSURANCE TRUST FUND
Due to the State of New Jersey B-10
Reserve for Unemployment Insurance Claims B-11
Total Liabilities, Reserves and Fund Balance
The Accompanying Notes are an Integral Part of these Financial Statements
19
2021
$ 11
14,095
14,106
29,621
70
875,917
1,068,951
1,944,468
3,919,027
2,090
21,218
93,800
117,108
40,596
40,596
$ 4,090,837
$
$
EXHIBITB
Page2
2020
631
9,969
10,600
31,985
222
603,280
796,925
1,788,697
3,221,109
2,518
10,504
104,514
117,536
5,152
32,198
37,350
3,386,595
BOROUGH OF FRANKLIN LAKES
COMPARATIVE BALANCE SHEETS -REGULATORY BASIS
GENERAL CAPITAL FUND
AS OF DECEMBER 31, 2021 AND 2020
Reference 2021
ASSETS
Cash C-2,C-3 $ 1,008,182
Grants Receivable C-4 52,500
Due from Assessment Trust Fund B-14 21,218
Deferred Charges to Future Taxation -Funded C-5 9,995,000
Deferred Charges to Future Taxation -Unfunded C-6 32,566
Total Assets $ 11,109,466
LIABILITIES, RESERVES AND FUND BALANCE
Serial Bond Payable C-7 $ 9,995,000
Improvement Authorizations
Funded C-8 315,284
Unfunded C-8 17,119
Encumbrances Payable C-9 173,192
Capital Improvement Fund C-10 113,356
Reserve for Payment of Debt C-13 53,267
Reserve for COAH -RCA Debt C-11 230,732
Reserve for Future Capital Projects C-12 200,802
Fund Balance C-1 10,714
Total Liabilities, Reserves and Fund Balance $ 11,109,466
$
$
$
There were bonds and notes authorized but not issued on December 31, 2021 and 2020 of $32,566 and
$131,096, respectively (Exhibit C-14).
The Accompanying Notes are an Integral Part of these Financial Statements
20
EXHIBIT C
2020
2,289,403
10,504
11,375,000
131,096
11,375,000
355,305
17,119
811,357
436,839
4,923
347,272
288,333
169,855
13,806,003
EXHIBIT C-1
BOROUGH OF FRANKLIN LAKES
COMPARATIVE STATEMENTS OF CHANGES IN FUND BALANCE -REGULATORY BASIS
GENERAL CAPITAL FUND
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
Reference
Balance, January 1 C
Increased by:
Assessment Collections B-15
Decreased by:
Appropriated to Finance Improvement Authorizations C-8
Balance, December 31
The Accompanying Notes are an Integral Part of these Financial Statements
21
2021
$ 169,855
10,714
180,569
169,855
$ 10,714
2020
$ 105,741
10,504
169,855
$ 169,855
BOROUGH OF FRANKLIN LAKES
COMPARATIVE BALANCE SHEETS -REGULATORY BASIS -
SEWER UTILITY OPERA TING FUND
AS OF DECEMBER 31, 2021 AND 2020
ASSETS
Operating Fund
Cash
Accounts Receivable
Total Operating Fund
Total Assets
LIABILITIES, RESERVES AND FUND BALANCE
Operating Fund
Appropriation Reserves
Reserve for Receivable
Fund Balance
Total Operating Fund
Total Liabilities, Reserves and Fund Balance
The Accompanying Notes are an Integral Part of these Financial Statements
22
Reference
D-4
D-5
D-3, D-6
D-5
D-1
2021
$ 230,557
2,309
232,866
$ 232,866
$ 12,170
12,170
2,309
218,387
232,866
$ 232,866
EXHIBITD
2020
$ 204,029
1,489
205,518
$ 205,518
$ 24,976
24,976
1,489
179,053
205,518
$ 205,518
EXHIBIT D-1
BOROUGH OF FRANKLIN LAKES
COMPARATIVE STATEMENTS OF OPERATIONS AND CHANGES IN FUND BALANCE-
REGULATORY BASIS -SEWER UTILITY OPERA TING FUND
FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020
Reference 2021 2020
Revenue and Other Income Realized
Surplus Anticipated
Sewer User Fees
Sewer Connection Fees
Non-Budget Revenue
Other Credits to Income
Unexpended Balances of Appropriation Reserves
Expenditures
Budget Appropriations
Operating
Excess of Revenues Over Expenditures
Fund Balance, January 1
Utilized as Anticipated Revenue
Fund Balance, December 31
The Accompanying Notes are an Integral Part of these Financial Statements
23
D-2
D-2, D-5
D-2
D-2
D-6
D-3
D
D
$ 22,900 $ 45,000
92,323 91,618
41,116 25,344
1,919 1,063
24,976 30,118
183,234 193,143
121,000 130,000
121,000 130,000
62,234 63,143
179,053 160,910
241,287 224,053
(22,900) (45,000)
Anticipated Fund Balance
Sewer User Fees
Sewer Connection Fees
Non-Budget Revenue
BOROUGH OF FRANKLIN LAKES
STATEMENT OF REVENUES -REGULATORY BASIS
SEWER UTILITY OPERATING FUND
FOR THE YEAR ENDED DECEMBER 31, 2021
2021
Reference Budget
D-1 $ 22,900 $
D-1, D-4 91,600
D-1, D-4 6,500
$ 121,000
Reference D-3
$
2021
Realized
22,900
92,323
41,116
156,339
1,919
158,258
STATEMENT OF EXPENDITURES -REGULATORY BASIS
SEWER UTILITY OPERA TING FUND
FOR THE YEAR ENDED DECEMBER 31, 2021
EXHIBITD-2
Excess or
(Deficit)
$
723
34,616
$ 35,339
EXHIBITD-3
Appropriation Expended
Operating
Other Expenses $
$
Reference
Budget as Adopted D-2
Cash Disbursements D-4
Budget
121,000
121,000
D-2
Budget After
Modification
$ 121,000
$ 121,000
D-2
$ 121,000
The Accompanying Notes are an Integral Part of these Financial Statements
24
$
$
$
Paid or
Charged
108,830
108,830
108,830
Reserved
$ 12,170
$ 12,170
D
ASSETS
Land
BOROUGH OF FRANKLIN LAKES
COMPARATIVE BALANCE SHEETS -REGULATORY BASIS
GENERAL FIXED ASSETS ACCOUNT GROUP
AS OF DECEMBER 31, 2021 AND 2020
2021
$ 39,242,900
Buildings and Improvements 13,210,897
Vehicles 6,511,919
Machinery and Equipment 5,123,291
Total Assets $ 64,089,007
FUND BALANCE
EXHIBITE
2020
$ 39,242,900
13,210,897
6,401,803
4,176,745
$ 63,032,345
Investment in General Fixed Assets $ 64,089,007 $ 63,032,345
The Accompanying Notes are an Integral Part of these Financial Statements
25
NOTES TO FINANCIAL STATEMENTS
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The Borough of Franklin Lakes (the "Borough") was incorporated in 1922 and operates under an elected Mayor and
Council form of government. The Mayor is elected to a four-year term and the six council members are elected at-
large, two each year for terms of three years. The Mayor is the Chief Executive Officer of the Borough and as such
presides over all public meetings and makes appointments to various boards. The Borough Council exercises all
legislative powers including final adoption of the municipal budget and bond ordinances and confirmation of the
Mayor's appointments, and all executive authority which is not specifically provided to the Mayor, by state law. A
Borough Administrator is appointed by the Borough Council and is responsible for the implementation of the policies
of the Mayor and Council, for the administration of all Borough affairs and for the day to day operations of the
Borough. The Borough Administrator is the Chief Administrative Officer for the Borough. The Borough's major
operations include public safety, road repair and maintenance, sanitation, fire protection, recreation and parks, health
services, and general administrative services.
GASB requires the financial reporting entity to include both the primary government and component units. Component
units are legally separate organizations for which the Borough is financially accountable. The Borough is financially
accountable for an organization if the Borough appoints a voting majority of the organization's governing board and (1)
the Borough is able to significantly influence the programs or services performed or provided by the organization; or (2)
the Borough is legally entitled to or can otherwise access the organization's resources; the Borough is legally obligated
or has otherwise assumed the responsibility to finance the deficits of, or provide financial support to, the organization;
or the Borough is obligated for the debt of the organization. Component units may also include organizations that are
fiscally dependent on the Borough in that the Borough approves the budget, the issuance of debt or the levying of taxes.
The Borough is not includable in any other reporting entity as a component unit.
The financial statements contained herein include only those boards, bodies, officers or commissions as required by
NJS 40A:5-5. Accordingly, the financial statements of the Borough do not include the municipal library, volunteer fire
department and volunteer ambulance squad, which are considered component units under GAAP. Complete financial
statements of the above component units can be obtained by contacting the Treasurer of the respective entity.
B. Description of Regulatory Basis of Accounting
The financial statements of the Borough of Franklin Lakes have been prepared on a basis of accounting in conformity
with accounting principles and practices prescribed or permitted by the Division of Local Government Services,
Department of Community Affairs, State of New Jersey (the "Division") which is a regulatory basis of accounting other
than accounting principles generally accepted in the United States of America (GAAP). Such principles and practices
are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of
reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the
Borough accounts for its financial transactions through separate funds, which differ from the fund structure required by
GAAP.
The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing
governmental accounting and financial reporting principles. GASB has adopted accounting statements to be used by
governmental units when reporting financial position and results of operations in accordance with accounting principles
generally accepted in the United States of America. (GAAP). The municipalities in the State of New Jersey do not
prepare financial statements in accordance with GAAP and thus do not comply with all of the GASB pronouncements.
26
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Basis of Presentation -Financial Statements
The Borough uses funds, as required by the Division, to report on its financial position and the results of its operations.
Fund accounting is designed to demonstrate legal compliance and to aid financial administration by segregating
transactions related to certain Borough functions or activities. The Borough also uses an account group, which is
designed to provide accountability for certain assets that are not recorded in those Funds.
The Borough has the following funds and account group:
Current Fund -This fund is used to account for the revenues and expenditures for governmental operations of a
general nature and the assets and liabilities related to such activities, including Federal and State grants not
accounted for in another fund.
Trust Funds -These funds are used to account for assets held by the government in a trustee capacity. Funds held by
the Borough as an agent for individuals, private organizations, or other governments are recorded in the Trust Funds.
Animal Control Trust Fund -This fund is used to account for fees collected from dog and cat licenses and
expenditures which are regulated by NJS 4: 19-15 .11.
Other Trust Fund -This fund is established to account for the assets and resources, which are held by the
Borough as a trustee or agent for individuals, private organizations, other governments and/or other funds.
These funds include dedicated fees/proceeds collected, developer deposits, payroll related deposits and
funds deposited with the Borough as collateral.
Assessment Trust Fund -This fund is used to account for special benefit assessments levied against
properties for specific purposes.
Unemployment Insurance Trust Fund -This fund is used to account for employee and employer
contributions for the purpose of providing unemployment benefits to former eligible employees.
General Capital Fund -This fund is used to account for the receipt and disbursement of funds used and related
financial transactions related to the acquisition or improvement of general capital facilities and other capital assets,
other than those acquired in the Current Fund.
Sewer Utility Fund -This fund is used to account for the revenues and expenditures for the operation of the
Borough's sanitary sewerage system and the assets and liabilities relative to such activities.
General Fixed Assets Account Group -This account group is used to account for all general fixed assets of the
Borough. The Borough's infrastructure is not reported in the account group.
Comparative Data -Comparative data for the prior year has been presented in the accompanying financial statements
in order to provide an understanding of changes in the Borough's financial position and operations. However,
comparative data have not been presented in all statements because their inclusion would make certain statements
unduly complex and difficult to understand.
Reclassifications -Certain reclassifications may have been made to the December 31, 2020 balances to conform to the
December 31, 2021 presentation.
27
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Basis of Presentation-Financial Statements (Continued)
Financial Statements -Regulatory Basis
The GASB Codification also requires the financial statements of a governmental unit to be presented in the basic
financial statements in accordance with GAAP. The Borough presents the regulatory basis financial statements listed
in the table of contents which are required by the Division and which differ from the basic financial statements required
by GAAP. In addition, the Division requires the regulatory basis financial statements listed in the table of contents to
be referenced to the supplementary schedules. This practice differs from reporting requirements under GAAP.
D. Measurement Focus and Basis of Accounting
The accounting and financial reporting treatment is determined by the accounting principles and practices prescribed by
the Division in accordance with the regulatory basis of accounting. Measurement focus indicates the type of resources
being measured. The basis of accounting indicates the timing of transactions or events for recognition in the financial
statements.
The Borough of Franklin Lakes follows a modified accrual basis of accounting. Under this method of accounting,
revenues, except State/Federal Aid, are recognized when received and expenditures are recorded when incurred. The
accounting principles and practices prescribed or permitted for municipalities by the Division ("regulatory basis of
accounting") differ in certain respects from accounting principles generally accepted in the United States of America
(GAAP) applicable to local government units. The more significant differences are as follows:
Cash and Investments -Cash includes amounts in demand deposits as well as short-term investments with a maturity
date within three months of the date acquired by the government. Investments are reported at cost and are limited by
N.J.S.A. 40A:5-15.1 et seq. GAAP requires that all investments be reported at fair value.
Inventories -The costs of inventories of supplies for all funds are recorded as expenditures at the time individual items
are purchased. The costs of inventories are not included on the various balance sheets. GAAP requires inventories to
be recorded as assets in proprietary-type funds.
Property Tax Revenues/Receivables -Real property taxes are assessed locally, based upon the assessed value of the
property. The tax bill includes a levy for Municipal, County, and School purposes. The bills are mailed annually in
June for that calendar year's levy. Taxes are payable in four quarterly installments on February 1, May 1, August 1, and
November 1. The amounts of the first and second installments are determined as one-quarter of the total tax levied
against the property for the preceding year. The installment due the third and fourth quarters is determined by taking
the current year levy less the amount previously charged for the first and second installments, with the remainder being
divided equally. If unpaid on these dates, the amount due becomes delinquent and subject to interest at 8% per annum,
or 18% on any delinquency amount in excess of $1,500. A penalty ofup to 6% of the delinquency may be imposed on
a taxpayer with a delinquency in excess of $10,000 who fails to pay that delinquency prior to the end of the fiscal year
in which the charges become delinquent. The school levy is turned over to the Board of Education as expenditures are
incurred, and the balance, if any, must be transferred as of June 30, of each fiscal year. County taxes are paid quarterly
on February 15, May 15, August 15 and November 15, to the County by the Borough. When unpaid taxes or any
municipal lien, or part thereof, on real property, remains in arrears on April first in the year following the calendar year
levy when the same became in arrears, the collector in the municipality shall, subject to the provisions of the New
Jersey Statutes, enforce the lien by placing the property on a standard tax sale. The Borough also has the option when
28
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Measurement Focus and Basis of Accounting (Continued)
Property Tax Revenues/Receivables (Continued)
unpaid taxes or any municipal lien, or part thereof, on real property remains in arrears on the 11 th day of the eleventh
month in the fiscal year when the taxes or lien became in arrears, the collector in the municipality shall, subject to the
provisions of the New Jersey Statutes, enforce the lien by placing property on an accelerated tax sale, provided that the
sale is conducted and completed no earlier than in the last month of the fiscal year. The Borough may institute annual
in rem tax foreclosure proceedings to enforce the tax collection or acquisition of title to the property. In accordance
with the accounting principles prescribed by the State of New Jersey, current and delinquent taxes are realized as
revenue when collected. Since delinquent taxes and liens are fully reserved, no provision has been made to estimate
that portion of the tax receivable and tax title liens that are uncollectible. GAAP requires property tax revenues to be
recognized in the accounting period when they become susceptible to accrual (i.e., when they are both levied and
available), reduced by an allowance for doubtful accounts.
Miscellaneous Revenues/Receivables -Miscellaneous revenues are recognized on a cash basis. Receivables for the
miscellaneous items that are susceptible to accrual are recorded with offsetting reserves on the balance sheet of the
Borough's Current Fund. GAAP requires such revenues to be recognized in the accounting period when they become
susceptible to accrual (i.e., when they are both measurable and available).
Utility Revenues/Receivables -Utility charges are levied quarterly based upon a flat service charge and if applicable,
an excess consumption or usage charge. Revenues from these sources are recognized on a cash basis. Receivables
that are susceptible to accrual are recorded with offsetting reserves on the balance sheet of the Borough's sewer utility
operating fund. GAAP requires such revenues to be recognized in the accounting period when they become susceptible
to accrual, reduced by an allowance for doubtful accounts.
Grant and Similar Award Revenues/Receivables -Federal and State grants, entitlements or shared revenues received
for purposes normally financed through the Current Fund are recognized when anticipated in the Borough's budget.
GAAP requires such revenues to be recognized as soon as all eligibility requirements imposed by the granter or
provider have been met.
Interfunds -Interfund receivables in the Current Fund are recorded with offsetting reserves, which are created by
charges to operations. Income is recognized in the year the receivables are liquidated. Interfund receivables in the
other funds are not offset by reserves. GAAP does not require the establishment of an offsetting reserve for interfunds
and, therefore, does not recognize income in the year liquidated.
Deferred Charges -Funded and unfunded debt authorizations for general capital projects are also recorded as deferred
charges and represent permanent long-term debt issues outstanding (funded) and temporary debt issues outstanding or
unissued debt authorizations (unfunded), respectively. GAAP does not permit the recording of deferred charges for
funded and unfunded debt authorizations.
Appropriation Reserves -Appropriation reserves are recorded as liabilities and are available, until lapsed at the close
of the succeeding year, to meet specific claims, commitments or contracts incurred during the preceding year. Lapsed
appropriation reserves are recorded as additions to income. Appropriation reserves do not exist under GAAP.
29
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Measurement Focus and Basis of Accounting (Continued)
Expenditures -Expenditures are recorded on the "budgetary" basis of accounting. Generally, expenditures are
recorded when an amount is encumbered for goods or services through the issuance of a purchase order in conjunction
with an encumbrance accounting system. Outstanding encumbrances at December 31, are reported as a cash liability in
the financial statements. Unexpended or uncommitted appropriations, at December 31, are reported as expenditures
through the establishment of appropriation reserves unless cancelled by the governing body. GAAP requires
expenditures to be recognized in the accounting period in which the fund liability is incurred, if measurable, except for
unmatured interest on general long-term debt, as well as expenditures related to compensated absences and claims and
judgements, which are recognized when due.
Encumbrances -Contractual orders outstanding at December 31, are reported as expenditures and liabilities through
the establishment of an encumbrance payable. Encumbrances do not constitute expenditures or liabilities under GAAP.
Compensated Absences -Expenditures relating to obligations for unused vested accumulated vacation and sick leave
are not recorded until paid; however, municipalities may establish and budget reserve funds subject to NJSA 40A:4-39
for the future payment of compensated absences. GAAP requires that the amount that would normally be liquidated
with expendable available financial resources be recorded as an expenditure in the operating funds and the remaining
obligations are recorded as a long-term obligation in the government-wide financial statements.
Tax Appeals and Other Contingent Losses -Losses arising from tax appeals and other contingent losses are
recognized at the time a decision is rendered by an administrative or judicial body; however, municipalities may
establish reserves transferred from tax collections or by budget appropriation for future payments of tax appeal losses.
GAAP requires such amounts to be recorded when it is probable that a loss has been incurred and the amount of such
loss can be reasonably estimated.
General Fixed Assets -In accordance with NJAC 5:30-5.6, Accounting for Governmental Fixed Assets, the Borough
of Franklin Lakes has developed a fixed assets accounting and reporting system. Fixed assets are defined by the
Borough as assets with an initial, individual cost of $2,000 and an estimated useful life in excess of two years.
Fixed assets used in governmental operations (general fixed assets) are accounted for in the General Fixed Assets
Account Group. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than
buildings, such as roads, bridges, curbs and gutters, streets and sidewalks and sewerage and drainage systems are not
capitalized.
General Fixed Assets purchased after December 31, 2015 are stated as cost. Donated fixed assets are recorded at
estimated fair market value at the date of donation.
General Fixed Assets purchased prior to December 31, 2015 are stated as follows:
Land and Buildings
Machinery and Equipment
30
Assessed Value
Historical Cost
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Measurement Focus and Basis of Accounting (Continued)
General Fixed Assets (Continued)
No depreciation has been provided for in the financial statements.
Expenditures for construction in progress are recorded in the General Capital Fund until such time as the construction is
completed and put into operation for general fixed assets.
GAAP requires that capital assets be recorded in proprietary-type funds as well as the government-wide financial
statement at historical or estimated historical cost if actual historical cost is not available. In addition, GAAP requires
depreciation on capital assets to be recorded in proprietary-type funds as well as in the government-wide financial
statements.
Use of Estimates -The preparation of financial statements requires management of the Borough to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of accrued revenues and expenditures
during the reporting period. Accordingly, actual results could differ from those estimates.
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgets and Budgetary Accounting -An annual budget is required to be adopted and integrated into the accounting
system to provide budgetary control over revenues and expenditures. Budget amounts presented in the accompanying
financial statements represent amounts adopted by the Borough and approved by the State Division of Local
Government Services as per N.J.S.A. 40A:4 et seq.
The Borough is not required to adopt budgets for the following funds:
General Capital Fund
Trust Funds ( except Assessment Trust Fund)
The governing body is required to introduce and approve the annual budget no later than February 10, of the fiscal year.
The budget is required to be adopted no later than March 20, and prior to adoption must be certified by the Division of
Local Government Services, Department of Community Affairs, State of New Jersey. The Director of the Division of
Local Government Services, with the approval of the Local Finance Board may extend the introduction and approval
and adoption dates of the municipal budget. The budget is prepared by fund, function, activity and line item (salary or
other expense) and includes information on the previous year. The legal level of control for appropriations is exercised
at the individual line item level for all operating budgets adopted. The governing body of the municipality may
authorize emergency appropriations and the inclusion of certain special items of revenue to the budget after its adoption
and determination of the tax rate. During the last two months of the fiscal year, the governing body may, by a 2/3 vote;
amend the budget through line item transfers. Management has no authority to amend the budget without the approval
of the governing body. Expenditures may not legally exceed budgeted appropriations at the line item level. During
2021 and 2020 the Borough Council increased the original budget by $95,537 and $498,520, respectively. The increase
for 2021 was funded by additional aid allotted to the Borough. The increase for 2020 was funded by additional aid
allotted to the Borough as well as an emergency appropriation for COVID expenses. In addition, the governing body
approved several budget transfers during 2021 and 2020.
31
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 3 CASH DEPOSITS AND INVESTMENTS
The Borough considers petty cash, change funds, cash in banks, certificates of deposit and deposits with the New Jersey
Cash Management Fund as cash and cash equivalents.
A. Cash Deposits
The Borough's deposits are insured through either the Federal Deposit Insurance Corporation (FDIC), National Credit
Union Share Insurance Fund (NCUSIF), Securities Investor Protection Corporation (SIPC) or New Jersey's
Governmental Unit Deposit Protection Act (GUDPA). The Borough is required to deposit their funds in a depository
which is protecting such funds pursuant to GUDPA. The New Jersey Governmental Unit Deposit Protection Act
requires all banks doing business in the State of New Jersey to pledge collateral equal to at least 5% of the average
amount of its public deposits and 100% of the average amount of its public funds in excess of the lesser of 75% of its
capital funds or $200 million for all deposits not covered by the FDIC or NCUSIF.
Bank balances are insured up to $250,000 in the aggregate by the FDIC for each bank. NCUSIF insures credit union
accounts up to $250,000 in the aggregate for each financial institution. SIPC replaces cash claims up to a maximum of
$250,000 for each failed brokerage firm. At December 31, 2021 and 2020, the book value of the Borough's deposits
were $12,729,729 and $12,648,589 and bank and brokerage firm balances of the Borough's deposits amounted to
$13,232,588 and $12,820,372, respectively. The Borough's deposits which are displayed on the various fund balance
sheets as "cash" are categorized as:
Depository Account
Insured $
Bank Balance
2021 2020
13,232,588 $ 12,820,372 ===========
Custodial Credit Risk -Deposits -Custodial credit risk is the risk that in the event of a bank failure, the
government's deposits may not be returned to it. The Borough does not have a formal policy for custodial credit
risk. As of December 31, 2021 and 2020, the Borough's bank balances were not exposed to custodial credit risk.
B. Investments
The Borough is permitted to invest public funds in accordance with the types of securities authorized by N.J.S.A.
40A: 5-15 .1. Investments include bonds or other obligations of the United States or obligations guaranteed by the
United States of America, Government Money Market Mutual Funds, any obligation that a federal agency or a
federal instrumentality has issued in accordance with an act of Congress, which security has a maturity date not
greater than 397 days from the date of purchase, provided that such obligations bear a fixed rate of interest not
dependent on any index or other external factor; bonds or other obligations of the Borough or bonds or other
obligations of the school districts which are a part of the Borough or school districts located within the Borough,
Bonds or other obligations, having a maturity date of not more than 397 days from the date of purchase, issued by
New Jersey school district, municipalities, counties, and entities subject to the "Local Authorities Fiscal Control
Law, "(C.40A:5A-l et seq.); Other bonds or obligations having a maturity date not more than 397 days from the
date of purchase may be approved by the Division of Investments in the Department of the Treasury for investment
by local units; Local Government investment pools, deposits with the State of New Jersey Cash Management Fund
established pursuant to section 1 of P.L. 1977, c.281 (C.52: 18A-90.4); and agreements for the repurchase of fully
collateralized securities, if transacted in accordance with NJSA 40A:5-15.l (8a-8e).
As of December 31, 2021 and 2020 the Borough had no outstanding investments.
Interest earned in the General Capital Fund, Assessment Trust Fund, Animal Control Fund and certain Other Trust
Funds are assigned to the Current Fund in accordance with the regulatory basis of accounting.
32
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 4 TAXES RECEIVABLE
Receivables at December 31, 2021 and 2020 consisted of the following:
Current
Property Taxes
Tax Title Liens
$
$
2021
255,146 $
27,146
282,292
2020
503,772
13,387
51 159
In 2021 and 2020, the Borough collected $497,698 and $532,262 from delinquent taxes, which represented 96% and
97%, respectively of the prior year delinquent taxes receivable balance.
NOTE 5 DUE TO/FROM OTHER FUNDS
As of December 31, interfund receivables and payables that resulted from various interfund transactions were as
follows:
2021
Due from
Other Funds
Current Fund $ 2,160
Trust Fund:
Other Trust
Assessment Trust
General Capital Fund 21,218
Total $ 23,378
Due to
Other Funds
$ 70
23,308
$ 23,378
Due from
Other Funds
$ 2,740
10,504
2020
Due to
Other Funds
$ 222
13,022
$ 13,244 $ 13,244 ========
The above balances are the result of revenues being received or expenditures being paid by one fund on behalf of
another.
The Borough expects all interfund balances to be liquidated within one year.
33
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 6 FUND BALANCES APPROPRIATED
Under the regulatory basis of accounting, fund balance in the Current Fund is comprised of cash surplus ( fund balance)
and non-cash surplus (fund balance). All or part of cash surplus as of December 31 may be anticipated in the
subsequent year's budget. The non-cash surplus portion of fund balance may be utilized in the subsequent year's
budget with the prior written consent of the Director of the Division of Local Government Services if certain guidelines
are met as to its availability. Fund balances at December 31, which were appropriated and included as anticipated
revenue in their own respective fund's budget for the succeeding year were as follows:
Fund Fund
Balance Utilized Balance Utilized
December 31, in Subsequent December 3 1, in Subsequent
2021 Year's Budget 2020 Year's Budget
Current Fund
Cash Surplus $ 3,868,275 $ 2,450,000 $ 3,503,420 $ 2,000,000
Non-Cash Surplus 561,903 590,908
$ 4,430,178 $ 2,450,000 $ 4,094,328 $ 2,000,000
Sewer Utility Operating Fund
Cash Surplus $ 218,387 $ 45,100 $ 179,053 $ 22,900
Non-Cash Surplus
$ 218,387 $ 45,100 $ 179,053 $ 22,900
34
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 7 FIXED ASSETS
General Fixed Assets
The following is a summary of changes in the general fixed assets account group for the years ended December 31,
2021 and 2020.
Balance Balance,
December 31, December 31,
2020 Increases Decreases 2021
2021
Land $ 39,242,900 $ 39,242,900
Buildings and Improvements 13,210,897 13,210,897
Vehicles 6,401,803 $ 223,581 $ 113,465 6,511,919
Machinery and Equipment 4,176,745 1,017,975 71,429 5,123,291
$ 63,032,345 $ 1,241,556 $ 184,894 $ 64,089,007
Balance Balance,
December 31, December 31,
2019 Increases Decreases 2020
2020
Land $ 39,242,900 $ 39,242,900
Buildings and Improvements 13,210,897 13,210,897
Vehicles 6,264,855 173,631 $ 36,683 6,401,803
Machinery and Equipment 4,000,212 239,878 63,345 4,176,745
$ 62,718,864 $ 413,509 $ 100,028 $ 63,032,345
35
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 8 MUNICIPAL DEBT
The Local Bond Law governs the issuance of bonds and notes used to finance capital expenditures. General obligation
bonds have been issued for general capital fund projects. All bonds are retired in serial installments within the
statutory period of usefulness. Bonds issued by the Borough are general obligation bonds, backed by the full faith and
credit of the Borough. Bond anticipation notes, which are issued to temporarily finance capital projects, must be paid
off within ten years and four months or retired by the issuance of bonds.
The Borough's debt is summarized as follows:
2021 2020
Issued
General
Bonds and Notes $ 9,995,000 $ 11,375,000
Less Funds Temporarily Held to Pay Bonds
and Notes (283,999) (352,195)
Net Debt Issued 9,711,001 11,022,805
Authorized But Not Issued
Bonds and Notes
General 2,480 101,010
Assessment 30,086 30,086
Net Bonds and Notes Issued and Authorized
But Not Issued $ 9,743,567 $ 11,153,901
36
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 8 MUNICIPAL DEBT (Continued)
Statutory Net Debt
The statement of debt condition that follows is extracted from the Borough's Annual Debt Statement and indicates a
statutory net debt of .220% and .255% at December 31, 2021 and 2020, respectively.
Gross Debt Deductions Net Debt
2021
General Debt $ 10,027,566 $ 283,999 $ 9,743,567
School Debt 6,421,073 6,421,073
Total $ 16,448,639 $ 6,705,072 $ 9,743,567
Gross Debt Deductions Net Debt
2020
General Debt $ 11,506,096 $ 352,195 $ 11,153,901
School Debt 6,873,723 6,873,723
Total $ 18,379,819 $ 7,225,918 $ 11,153,901
Statutory Borrowing Power
The Borough's remaining borrowing power under N.J.S. 40A:2-6, as amended, at December 31, was as follows:
3-1/2% of Equalized Valuation Basis (Municipal)
Net Debt
Remaining Borrowing Power
2021
$ 154,886,322 $
9,743,567
$ 145,142,755 $
37
152,954,955
11,153,901
141,801,054
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 8 MUNICIPAL DEBT (Continued)
A. Long-Term Debt
The Borough's long-term debt consisted of the following at December 31:
General Obligation Bonds
The Borough levies ad valorem taxes to pay debt service on general obligation bonds. General obligation bonds
outstanding at December 31 are as follows:
$5,055,000, 2014 Bonds, due in annual
installments of $270,000 to $460 ,000
through September 1, 2029, interest at 2.00%
$4,400,000, 2017 Refunding Bonds, due in annual
installments of $935,000
through March 1, 2023, interest at 4.00%
$5,025,0ff0~-TOW73on s, ue in annual
installments of $225,000 to $375,000
through September l, 2035, interest at 1.00%-1.625%
$
$
3,325,000 $ 3,590,000
1,870,000 2,760,000
4,800,000 5,025,000
9,995,000 $ 11,375,000 ============a-
The Borough's principal and interest for long-term debt issued and outstanding as of December 31, 2021 is as follows:
Calendar General
Year Principal Interest Total
2022 $ 1,430,000 $ 181,850 $ 1,611,850
2023 1,455,000 136,800 1,591,800
2024 810,000 109,950 919 ,950
2025 810,000 97,250 907,250
2026-2030 3,615,000 295,750 3,910,750
2031-2035 1,875,000 86,719 1,961,719
Total $ 9,995,000 $ 908,319 $ 10,903,319
38
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 8 MUNICIPAL DEBT (Continued)
Changes in Long-Term Municipal Debt
The Borough's long-term capital debt activity for the years ended December 31, 2020 and 2019 were as follows:
Balance, Balance, Due
December 31, December 31, Within
2020 Additions Reductions 2021 One Year
2021
General Capital Fund
Bonds Payable $ 11,375,000 $ $1,380,000 $ 9,995,000 $ 1,430,000
Balance, Balance, Due
December 31, December 31, Within
2019 Additions Reductions 2020 One Year
2020
General Capital Fund
Bonds Payable $ 7,450,000 $5,025,000 $1,100,000 $ 11,375,000 $ 1,380,000
NOTE 9 CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS
As of December 31, the Borough had the following commitments with respect to unfinished capital projects:
Capital Project
2021
2021 Road Program
Public Safety Radio System
2020
2020 Road Program
Pumper Fire Apparatus
$
$
39
Commitment
80,598
76,150
384,424
388,842
Estimated
Date of
Completion/
Acquisition
2022
2022
2021
2021
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 10 OTHER LONG-TERM LIABILITIES
A. Compensated Absences
Under the existing policies and labor agreements of the Borough, certain employees and bargaining units are permitted
to be compensated for one-half ( 1/2) of their unused sick days from the previous calendar year. Carryover days not paid
in the succeeding calendar year are forfeited.
These amounts, which have not been determined and are considered immaterial to the financial statements, are not
reported either as an expenditure or liability.
Changes in Other Long-Term Liabilities
Under the regulatory basis of accounting, certain other long-term liabilities which may be considered material to the
financial statements are not reported either as an expenditure or a liability. However, under the regulatory basis of
accounting, these other long-term liabilities and related information are required to be disclosed in the footnotes to the
financial statements in conformity with the disclosure requirements of the Governmental Accounting Standards Board.
The Borough's changes in other long-term liabilities for the years ended December 31, 2021 and 2020 were as follows:
Balance, Balance,
December 31, December 31,
2020 Additions Reductions 2021
2021
Net Pension Liability -PERS (1) $ 6,390,345 $ 6,390,345
Net Pension Liability-PFRS (1) 9,114,267 $ 9,114,267
Net OPEB Liability 17,390,679 $ 672,353 16,718,326
Total Other Long-Term Liabilities $ 32,895,291 $ $ 672,353 $ 32,222,938
Balance, Balance,
December 31, December 31,
2019 Additions Reductions 2020
2020
Net Pension Liability -PERS $ 7,160,950 $ 770,605 $ 6,390,345
Net Pension Liability -PFRS 8,670,115 $ 444,152 9,114,267
Net OPEB Liability 16,378,579 1,012,100 17,390,679
Total Other Long-Term Liabilities $ 32,209,644 $ 1,456,252 $ 770,605 $ 32,895,291
(1) GASB Statement Number 68 Pension financial information was not provided by the State's Division of Pensions and
Benefits as of the date of audit.
40
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS
The State of New Jersey sponsors and administers the following contributory defined benefit public employee
retirement systems (retirement systems) covering substantially all state and local government employees which
includes those Borough employees who are eligible for pension coverage.
Police and Firemen's Retirement System (PFRS) -established in July 1944, under the provisions of N.J.S.A.
43: 16A to provide coverage to substantially all full time county and municipal police or firemen and State firemen
appointed after June 30, 1944. Membership is mandatory for such employees. PFRS is a cost-sharing multi-
employer defined benefit pension plan with a special funding situation. For additional information about PFRS,
please refer to the State Division of Pension and Benefits (Division's) Comprehensive Annual Financial Report
(CAFR) which can be found at www.state.nj.us/treasury/pensions.
The vesting and benefit provisions are set by N.J.S.A. 43:16A. PFRS provides retirement benefits as well as death and
disability benefits. All benefits vest after ten years of service, except disability benefits which vest after four years of
service.
The following represents the membership tiers for PFRS:
Tier
1
2
3
Definition
Members who were enrolled prior to May 22, 2010
Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011
Members who were eligible to enroll on or after June 28, 2011
Service retirement benefits are available at age 55 and are generally determined to be 2% of final compensation for
each year of creditable service, as defined, up to 30 years plus 1 % for each year of service in excess of 30 years.
Members may seek special retirement after achieving 25 years of creditable service, in which benefits would equal
65% (tier 1 and 2 members) and 60% (tier 3 members) of final compensation plus 1 % for each year of creditable
service over 25 years, but not to exceed 30 years. Members may elect deferred retirement benefits after achieving
ten years of service, in which case, benefits would begin at age 55 equal to 2% of final compensation for each year
of service.
Public Employees' Retirement System (PERS) -established in January 1955, under the provisions of N.J.S.A.
43: I SA to provide coverage to substantially all full-time employees of the State or any county, municipality, school
district, or public agency provided the employee is not a member of another State-administered retirement system.
Membership is mandatory for such employees. PERS is a cost-sharing multi-employer defined benefit pension plan.
For additional information about PERS, please refer to the State Division of Pension and Benefits (Division's)
Comprehensive Annual Financial Report (CAFR) which can be found at www.state.nj.us/treasury/pensions.
The vesting and benefit provisions are set by N.J.S.A. 43:lSA. PERS provides retirement, death, and disability
benefits. All benefits vest after ten years of service, except for medical benefits, which, if applicable, vest after 25
years of service or under the disability provisions of PERS.
The following represents the membership tiers for PERS:
Tier
1
2
3
4
5
Definition
Members who were enrolled prior to July 1, 2007
Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008
Members who were eligible to enroll on or after November 2, 2008 and prior to May 22, 2010
Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011
Members who were eligible to enroll on or after June 28, 2011
41
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Public Employees' Retirement System (PERS) (Continued)
Service retirement benefits of 1155 th of final average salary for each year of service credit is available to tier 1 and 2
members upon reaching age 60 and to tier 3 members upon reaching age 62. Service retirement benefits of 1160th of
final average salary for each year of service credit is available to tier 4 members upon reaching age 62 and tier 5
members upon reaching age 65. Early retirement benefits are available to tier 1 and 2 members before reaching age
60, tier 3 and 4 members with 25 or more years of service credit before age 62, and tier 5 members with 30 or more
years of service credit before age 65. Benefits are reduced by a fraction of a percent for each month that a member
retires prior to the age at which member can receive full early retirement benefits in accordance with their respective
tier. Tier 1 members can receive an unreduced benefit from age 55 to age 60 if they have a least 25 years of service.
Deferred retirement is available to members who have at least ten years of service credit and have not reached the
service retirement age for the respective tier.
The State of New Jersey sponsors and administers the following defined contribution public employee retirement
program covering certain state and local government employees which include those Borough employees who are
eligible for pension coverage.
Defined Contribution Retirement Program (DCRP) -established under the provisions of Chapter 92, P.L. 2007
and Chapter 103, P.L. 2008 to provide coverage to elected and certain appointed officials, effective July 1, 2007 and
employees enrolled in PERS on or after July 1, 2007 who earn in excess of established annual maximum
compensation limits (equivalent to annual maximum wage for social security deductions). This provision was
extended by Chapter 1, P.L. 2010, effective May 21, 2010, to new employees (Tier 2) of the PFRS and new
employees who would otherwise be eligible to participate in PERS and do not earn the minimum salary required or
do not work the minimum required hours but earn a base salary of at least $5,000 are eligible for participation in the
DCRP. Membership is mandatory for such individuals with vesting occurring after one (1) year of membership.
DCRP is a defined contribution pension plan.
Other Pension Funds
The state established and administers a Supplemental Annuity Collective Trust Fund (SACT) which is available to
active members of the State-administered retirement systems to purchase annuities to supplement the guaranteed
benefits provided by their retirement system. The state or local governmental employers do not appropriate funds to
SACT.
The cost of living increase for PFRS and PERS are funded directly by each of the respective systems, but are
currently suspended as a result of reform legislation.
According to state law, all obligations of each retirement system will be assumed by the State of New Jersey should
any retirement system be terminated.
The State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, issues publicly available
financial reports that include the financial statements and required supplementary information of each of the above
systems, funds, and trust. The financial reports may be accessed via the New Jersey, Division of Pensions and
Benefits website at www.state.nj.us/treasury/pensions.
Measurement Focus and Basis of Accounting
The financial statements of the retirement systems are prepared in accordance with U.S. generally accepted accounting
principles as applicable to governmental organizations. In doing so, the Division adheres to reporting requirements
established by the Governmental Accounting Standards Board (GASB).
The accrual basis of accounting is used for measuring financial position and changes in net position of the pension trust
funds. Under this method, contributions are recorded in the accounting period in which they are legally due from the
employer or plan member, and deductions are recorded at the time the liabilities are due and payable in accordance with
the terms of each plan. The accounts of the Division are organized and operated on the basis of funds. All funds are
accounted for using an economic resources measurement focus.
42
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Investment Valuation
The Division oflnvestment, Department of the Treasury, State of New Jersey (Division oflnvestment) manages and
invests certain assets of the retirement systems. Prudential retirement is the third-party administrator for the DCRP
and provides record keeping, administrative services and investment options. Investment transactions are accounted
for on a trade or investment date basis. Interest and dividend income is recorded on the accrual basis, with
dividends accruing on the ex-dividend date. The net increase or decrease in the fair value of investments includes
the net realized and unrealized gains or losses on investments.
The State of New Jersey, Department of the Treasury, Division of Investment, issues publicly available financial
reports that include the financial statements of the State of New Jersey Cash Management Fund. The financial
report may be obtained by writing to the State of New Jersey, Department of the Treasury, Division of Investment,
P.O. Box 290, Trenton, New Jersey 08625-0290, or at www.state.nj/treasury/doinvest.
Collective Net Pension Liability
The collective net pension liability of the participating employers for local PERS at June 30, 2021 was not available
and for June 30, 2020 is $16.4 billion and the plan fiduciary net position as a percentage of the total pension liability
is 58.32% at June 30, 2020. The collective net pension liability of the participating employers for local PFRS at
June 30, 2021 was not available and for June 30, 2020 is $14.9 billion and the plan fiduciary net position as a
percentage of total pension liability is 63.52% at June 30, 2020.
The total pension liabilities were determined based on actuarial valuations as of July I, 2019 which were rolled
forward to June 30, 2020.
Actuarial Methods and Assumptions
In the July I, 2019 PERS and PFRS actuarial valuations, the actuarial assumptions and methods used in these
valuations were described in the Actuarial Assumptions and Methods section of the Actuary's report and are included
here in this note to the financial statements. The pension systems selected economic and demographic assumptions and
prescribed them for use for purposes of compliance with GASB Statement No. 68. The Actuary provided guidance
with respect to these assumptions, and it is their belief that the assumptions represent reasonable expectations of
anticipated plan experience.
Employer and Employee Pension Contributions
The contribution policy is set by laws of the State of New Jersey and contributions are required by active members
and participating employers. Plan members and employer contributions may be amended by State of New Jersey
legislation, with the amount of contributions by the State of New Jersey contingent upon the annual Appropriations
Act. As defined, the various retirement systems require employee contributions for 2021 and 2020 based on I 0.0%
for PFRS, 7.50% for PERS and 5.50% for DCRP of employee's annual compensation.
For PFRS and PERS, which are cost sharing multi-employer defined benefit pension plans, employers' contributions
are based on an actuarially determined amount, which includes the normal cost and unfunded accrued liability. In
the DCRP, which is a defined contribution plan, member contributions are matched by a 3% employer contribution.
All contributions made by the Borough for 2021, 2020 and 2019 were equal to the required contributions.
43
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Employer and Employee Pension Contributions (Contributions)
During the years ended December 31, 2021, 2020 and 2019, the Borough, was required to contribute for normal cost
pension contributions, accrued liability pension contributions and non-contributory life insurance premiums the
following amounts which equaled the required contributions for each respective year:
Year Ended
December 31 PFRS PERS DCRP
2021 $ 788,926 $ 422,097 $ 11,119
2020 740,917 387,125 10,639
2019 675,637 393,401 10,190
In addition for the years ended December 31, 2021, 2020 and 2019 the Borough contributed for long-term disability
insurance premiums (LTDI) $-0-, $1,380 and $1,380, respectively for PERS.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
The regulatory basis of accounting requires participating employers in PERS and PFRS to disclose in accordance with
GASB Statement No. 68, Accounting and Financial Reporting for Pensions, (GASB No. 68) their proportionate share of
the collective net pension liability, collective deferred outflows of resources, collective deferred inflows of resources
and collective pension expense excluding that attributable to employer-paid member contributions.
Under GASB Statement No. 68 local governmental employers are required to provide certain financial information
based on a measurement date no earlier than the end of the employer's prior fiscal year. The GASB 68 financial
information from the State's Division of Pensions and Benefits to be reported for the year ended December 31, 2021 for
the measurement date of June 30, 2021 was not available as of the date of audit. Accordingly, the State's Division of
Local Government Services issued Local Finance Notice 2021-10 which authorized and permits New Jersey
municipalities to present the most recent available audited GASB 68 financial information to be incorporated into the
audit and remain in compliance with the regulatory basis of accounting disclosure requirements for notes to the
financial statements. As such the GASB 68 financial information for the year ended December 31, 2021 is not
presented in the notes to the financial statements.
The employer allocation percentages presented are based on the ratio of the contributions made as an individual
employer toward the actuarially detennined contribution amount to total contributions to the plan during the fiscal years
ended June 30, 2020 and 2019. Employer allocation percentages have been rounded for presentation purposes.
Public Employees Retirement System (PERS)
At December 31, 2020, the Borough reported a liability of $6,390,345 for its proportionate share of the PERS net
pension liability. The net pension liability was measured as of June 30, 2020 and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of July 1, 2019. The Borough's
proportionate share of the net pension liability was based on the ratio of the Borough's contributions to the pension plan
relative to the total contributions of all participating governmental entities during the measurement period. As of the
measurement date of June 30, 2020, the Borough's proportionate share was 0.03238 percent, which was a decrease of
0.00736 percent from its proportionate share measured as of June 30, 2019 of 0.03974 percent.
44
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Public Employees Retirement System (PERS) (Continued)
For the year ended December 31, 2020, the pension system has determined the Borough's pension expense to be
$157,417 for PERS based on the actuarial valuations which is less than the actual contribution reported in the
Borough's financial statements of $387,125. At December 31, 2020, the Borough's deferred outflows of resources and
deferred inflows ofresources related to PERS pension which are not reported on the Borough's financial statements are
from the following sources:
2020
Deferred Deferred
Outflows Inflows
of Resources of Resources
Difference Between Expected and
Actual Experience $ 116,358 $ 22,599
Changes of Assumptions 207,310 2,675,698
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 218,427
Changes in Proportion and Differences Between
Borough Contributions and Propo1iionate Share
of Contributions 264,226 304,973
Total $ 806,321 $ 3,003,270
At December 31, 2020 the amounts reported as deferred outflows of resources and deferred inflows of resources related
to PERS pension will be recognized in pension expense (benefit) as follows:
Year
Ending
December 31, Total
2021 $ (761,835)
2022 (729,658)
2023 (482,542)
2024 (183,357)
2025 (39,557)
Thereafter
$ (2,196,949)
45
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Public Employees Retirement System (PERS) (Continued)
Actuarial Assumptions
The Borough's total pension liability reported for the year ended December 31, 2020 was based on the June 30, 2020
measurement date as determined by an actuarial valuation as of July 1, 2019, which was rolled forward to June 30,
2020. This actuarial valuation used the following actuarial assumptions, applied to all periods in the measurement date:
Inflation Rate:
Price
Wage
Salary Increases:
Through 2026
Thereafter
Investment Rate of Return
Mortality Rate Table
2.75%
3.25%
2.00-6.00%
Based on Years
of Service
3.00%-7.00%
Based on Years
of Service
7.00%
Pub-2010
Assumptions for mortality improvements are based on Society of Actuaries Scale MP for 2020.
The actuarial assumptions used in the July 1, 2019 valuations were based on the results of an actuarial experience study
for the period July 1, 2014 to June 30, 2018.
46
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Pension Liabilities, Pension Expense, and Def erred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions (Continued)
Public Employees Retirement System (PERS) (Continued)
Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in
which best-estimate ranges of expected future real rate of return ( expected returns, net of pension plans investment
expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term
expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and
by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the
pension plans' target asset allocation as of June 30, 2020, as reported for the year ended December 31, 2020 are
summarized in the following table:
Asset Class
Risk Mitigation Strategies
Cash Equivalents
U.S. Treasuries
Investment Grade Credit
US Equity
Non-US Developed Markets Equity
Emerging Markets Equity
High Yield
Real Assets
Private Credit
Real Estate
Private Equity
Discount Rate
Target
Allocation
3.00%
4.00%
5.00%
8.00%
27.00%
13.50%
5.50%
2.00%
3.00%
8.00%
8.00%
13.00%
2020
Long-Term
Expected Real
Rate of Return
3.40%
0.50%
1.94%
2.67%
7.71%
8.57%
10.23%
5.95%
9.73%
7.59%
9.56%
11.42%
The discount rate used to measure the total pension liabilities of the PERS plan was as follows:
Calendar
Year
2020
2019
Measurement Date
June 30, 2020
June 30, 2019
Discount Rate
7.00%
6.28%
47
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions (Continued)
Public Employees Retirement System (PERS) (Continued)
Discount Rate (Continued)
The following table represents the crossover period, if applicable, for the PERS defined benefit plan:
Period of Projected Benefit
Payments for which the Following
Rates were Applied:
Long-Term Expected Rate of Return
Sensitivity of Net Pension Liability
All Periods
The following presents the Borough's proportionate share of the PERS net pension liability as of December 31, 2020
calculated using the discount rate of 7. 00%, as well as what the Borough's proportionate share of the PERS net pension
liability would be if it were calculated using a discount rate that is I-percentage-point lower 6.00% or 1-percentage-
point higher 8.00% than the current rate:
1% Current 1%
Decrease Discount Rate Increase
2020 (6.00%) (7.00%) (8.00%)
Borough's Proportionate Share of
the PERS Net Pension Liability $ 8,044,378 $ 6,390,345 $ 4,986,853
The sensitivity analysis was based on the proportionate share of the Borough's net pension liability at December 31,
2020. A sensitivity analysis specific to the Borough's net pension liability was not provided by the pension system.
48
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions
Public Employees Retirement System (PERS) (Continued)
Pension Plan Fiduciary Net Position
Detailed information about the PERS pension plan's fiduciary net position is available in the separately issued financial
report from the State of New Jersey, Department of the Treasury, Division of Pension and Benefits. The financial
report may be accessed via the New Jersey, Division of Pensions and Benefits, website at
www.state.nj.us/treasmy/pensions.
Police and Firemen's Retirement System (PFRS)
At December 31, 2020 the Borough reported a liability of $9,114,267 for its proportionate share of the PFRS net
pension liability. The net pension liability was measured as of June 30, 2020 and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of July 1, 2019. The Borough's
proportionate share of the net pension liability was based on the ratio of the Borough's contributions to the pension plan
relative to the total contributions of all participating governmental entities during the measurement period. As of the
measurement date of June 30, 2020, the Borough's proportionate share was 0.07054 percent, which was a decrease of
0.00031 percent from its proportionate share measured as of June 30, 2019 of 0.07085 percent.
For the year ended December 31, 2020, the pension system has determined the Borough pension expense to be
$542,256 for PFRS based on the actuarial valuations which is less than the actual contribution reported in the
Borough's financial statements of $740,917. At December 31, 2020, the Borough's deferred outflows of resources and
deferred inflows of resources related to PFRS pension which are not reported on the Borough's financial statements are
from the following sources:
2020
Deferred Deferred
Outflows Inflows
of Resources of Resources
Difference Between Expected and
Actual Experience $ 91,887 $ 32,710
Changes of Assumptions 22,936 2,443,480
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 534,412 394,120
Changes in Proportion and Differences Between
Borough Contributions and Proportionate Share
of Contributions 915,192
Total $ 1,564,427 $ 2,870,310
49
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions (Continued)
Police and Firemen's Retirement System (PFRS) (Continued)
At December 31, 2020 the amounts reported as deferred outflows of resources and deferred inflows of resources related
to PFRS pension will be recognized in pension expense (benefit) as follows:
Year
Ending
December 31, Total
2021 $ (765,934)
2022 (401,455)
2023 (55,781)
2024 (73,542)
2025 (9,171)
Thereafter
$ (1,305,883)
Actuarial Assumptions
The Borough's total pension liability reported for the year ended December 31, 2020 was based on the June 30, 2020
measurement date as determined by an actuarial valuation as of July 1, 2019, which was rolled forward to June 30,
2020. This actuarial valuation used the following actuarial assumptions, applied to all periods in the measurement date:
Inflation Rate:
Price
Wage
Salary Increases:
Through
Thereafter
Investment Rate of Return
Mortality Rate Table
2020
2.75%
3.25%
All Future Years
3.25%-15.25%
Based on Years
of Service
Not Applicable
7.00%
Pub -2010
Assumptions for mortality improvements are based on Society of Actuaries Scale MP for 2020.
The actuarial assumptions used in the July 1, 2019 valuations were based on the results of an actuarial experience study
for the period July 1, 2013 to June 30, 2018.
50
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Def erred Inflows of Resources
Related to Pensions (Continued)
Police and Firemen's Retirement System (PFRS) (Continued)
Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in
which best-estimate ranges of expected future real rate of return ( expected returns, net of pension plans investment
expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term
expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and
by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the
pension plans' target asset allocation as of June 30, 2020, as reported for the year ended December 31, 2020 are
summarized in the following table:
Asset Class
Risk Mitigation Strategies
Cash Equivalents
U.S. Treasuries
Investment Grade Credit
US Equity
Non-US Developed Markets Equity
Emerging Markets Equity
High Yield
Real Assets
Private Credit
Real Estate
Private Equity
Discount Rate
Target
Allocation
3.00%
4.00%
5.00%
8.00%
27.00%
13.50%
5.50%
2.00%
3.00%
8.00%
8.00%
13.00%
2020
Long-Term
Expected Real
Rate of Return
3.40%
0.50%
1.94%
2.67%
7.71%
8.57%
10.23%
5.95%
9.73%
7.59%
9.56%
11.42%
The discount rate used to measure the total pension liabilities of the PFRS plan was as follows:
Calendar
Year
2020
2019
Measurement Date
June 30, 2020
June 30, 2019
Discount Rate
7.00%
6.85%
51
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Pension Liabilities, Pension Expense, and Def erred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions (Continued)
Police and Firemen's Retirement System (PFRS) (Continued)
Discount Rate (Continued)
The following table represents the crossover period, if applicable, for the PFRS defined benefit plan:
Period of Projected Benefit
Payments for which the Following
Rates were Applied:
Long-Term Expected Rate of Return
Sensitivity of Net Pension Liability
2020
All Periods
The following presents the Borough's proportionate share of the PFRS net pension liability as of December 31, 2020
calculated using the discount rate of 7.00% as well as what the Borough's proportionate share of the PFRS net pension
liability would be if it were calculated using a discount rate that is I-percentage-point lower 6.00% or 1-percentage-
point higher 8.00% than the current rate:
1% Current 1%
Decrease Discount Rate Increase
2020 (6.00%) (7.00%) (8.00%)
Borough's Proportionate Share of
the PFRS Net Pension Liability $ 12,120,099 $ 9,114,267 $ 6,617,694
The sensitivity analysis was based on the proportionate share of the Borough's net pension liability at December 31,
2020. A sensitivity analysis specific to the Borough's net pension liability was not provided by the pension system.
52
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 11 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pensions (Continued)
Police and Firemen's Retirement System (PFRS) (Continued)
Special Funding Situation -PFRS
Under N.J.S.A. 43:16A-15, the Borough is responsible for their own PFRS contributions based on actuarially
detennined amounts, except where legislation was passed which legally obligated the State to make contributions if
certain circumstances occurred. The legislation which legally obligates the State is as follows: Chapter 8, P.L. 2000,
Chapter 318, P .L. 2001, Chapter 86, P .L. 2001, Chapter 511, P .L. 1991, Chapter 109, P .L. 1979, Chapter 24 7, P .L. 1993
and Chapter 201, P .L. 2001. The amounts contributed on behalf of the Borough by the State under this legislation is
considered to be a special funding situation as defined by GASB Statement No. 68 and the State is treated as a
nonemployer contributing entity. Accordingly, the Borough's proportionate share percentage of the net pension
liability, deferred outflows and inflows detennined under GASB Statement No. 68 is zero percent and the State's
proportionate share is 100% for PFRS under this legislation.
At December 31, 2020, the State's proportionate share of the net pension liability attributable to the Borough for the
PFRS special funding situation is $1,414,493. For the year ended December 31, 2020, the pension system has
detennined the State's proportionate share of the pension expense attributable to the Borough for the PFRS special
funding situation is $160,304 which is more than the actual contribution the State made on behalf of the Borough of
$108,844. At December 31, 2020 (measurement date June 30, 2020) the State's share of the PFRS net pension liability
attributable to the Borough was 0.07054 percent, which was an increase of 0.00031 percent from its proportionate share
measured as of December 31, 2019 (measurement date June 30, 2019) of 0.07085 percent. The State's proportionate
share attributable to the Borough was developed based on actual contributions made to PFRS allocated to employers
based upon covered payroll. These on-behalf contributions have not been reported on the Borough's financial
statements.
Pension Plan Fiduciary Net Position
Detailed infonnation about the PFRS pension plan's fiduciary net position is available in the separately issued financial
report from the State of New Jersey, Department of the Treasury, Division of Pension and Benefits. The financial
reports may be accessed via the New Jersey, Division of Pensions and Benefits, website at
www.state.nj.us/treasury/pensions.
53
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 12 POST-RETIREMENT MEDICAL BENEFITS
OPEB Liabilities, OPEB Expenses and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
Plan Description
The Borough provides a postemployment healthcare plan (OPEB) for its eligible retirees and their spouses. The plan is
a single-employer defined benefit healthcare plan administered by the Borough. No assets are accumulated in a trust
that meets the criteria in paragraph 4 of GASB Statement No.75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions.
Benefits Provided
The Borough provides postretirement healthcare insurance benefits for retirees and their dependents who meet certain
eligibility requirements.
Employees Covered by Postemployment Benefits
At December 31, 2021 and 2020, the following employees were covered by postemployment health care benefits:
Active Employees
Inactive Employees or Beneficiaries Currently Receiving Benefits
Inactive Employees Entitles to But Not Yet Receiving Benefits
2021
10
32
42
2020
10
32
42
At December 31, 2021 and 2020, the Borough's total OPEB liabilities were $16,718,326 and $17,390,679, respectively.
Net OPEB liability was measured as of December 31, 2021 and December 31, 2020, respectively, and the OPEB
liability was determined by an actuarial valuation as of those dates.
For the years ended December 31, 2021 and 2020, the Borough has determined it's OPEB expense to be $552,955 and
$688,055, respectively, based on the actuarial valuations which is less than the actual contributions for 2021 and more
than the actual contributions reported in the Borough's financial statements of $630,389 and $592,171, respectively.
54
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 12 POST-RETIREMENT MEDICAL BENEFITS (Continued)
OPEB Liabilities, OPEB Expenses and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB (Continued)
Actuarial Assumptions
The Borough's total OPEB liability reported for the year ended December 31, 2021 was based on the December 31,
2020 measurement date as determined by an actuarial valuation as of December 31, 2020 which was rolled forward to
December 31, 2021. The total OPEB liability reported for the year ended December 31, 2020 was based on the
December 31, 2019 measurement date as determined by an actuarial valuation as of December 31, 2019, which was
rolled forward to December 31, 2020. This actuarial valuation used the following actuarial assumptions, applied to all
periods in the measurement date:
2021 2020
Inflation Rate 2.5% 2.5%
Salary Increases 2.5% 2.5%
Discount Rate 2.1% 2.12%
Healthcare Cost Trend Rates 5.5% 5.6%
Retirees' Share of Benefit-Related Costs
The discount rate was based on the Bond Buyer 20 Index for 2021 and Bond Buyer 20 Index for 2020.
Mortality rates for 2021 and 2020 were based on the Mortality Table for Males or Females, as appropriate, respectively,
with adjustments for mortality improvements based on Scale and RP 2000 combined Healthy Male Mortality Rates set
forward one year and adjusted for generational improvement.
55
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 12 POST-RETIREMENT MEDICAL BENEFITS (Continued)
OPEB Liabilities, OPEB Expenses and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB (Continued)
Changes in the Total OPEB Liability
The change in the Borough's OPEB liability for the years ended December 31, 2021 and 2020 based on measurement
dates of December 31, 2021 and December 31, 2020, respectively are as follows:
Total OPEB Total OPEB
Liability Liability
2021 2020
Balance -Beginning of Year $ 17,390,579 $ 16,378,579
Changes for the Year:
Service Cost 28,576 28,576
Interest on the Total OPEB Liability 363,653 443,636
Changes of Benefit Terms
Differences Between Expected and Actual Experience
Changes in Assumptions (533,074) 971,941
Benefit Payments {531,408) (432,153)
Net Changes (672,253) 1,012,000
Balance -End of Year $ 16,718,326 $ 17,390,579
Changes of assumptions for 2021 reflect a change in the discount rate from 2.12 percent in 2020 to 2.06 percent in
2021. Changes in assumptions for 2020 reflect a change in the discount rate from 2.74 percent in 2019 to 2.12 percent
in 2020.
56
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 12 POST-RETIREMENT MEDICAL BENEFITS (Continued)
OPEB Liabilities, OPEB Expenses and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB (Continued)
Sensitivity of Net OPEB Liability to Changes in the Discount Rate
The following presents the Borough's net OPEB liability as of December 31, 2021 and 2020 calculated using the
discount rate of 2.06% and 2.12%, respectively, as well as what the Borough's net OPEB liability would be if it were
calculated using a discount rate that is I-percentage-point lower 1.06% and 1.12%, respectively or I-percentage-point
higher 3 .06% and 3 .12%, respectively than the current rate:
1% Current 1%
Decrease Discount Rate Increase
2021 (1.06%) (2.06%) (3.06%)
Net OPEB Liability $ 18,666,412 $ 16,718,326 $ 15,089,016
1% Current 1%
Decrease Discount Rate Increase
2020 (1.12%) (2.12%) (3.12%)
Net OPEB Liability $ 19,002,833 $ 17,390,579 $ 15,995,274
Sensitivity of Net OPEB Liability to Changes in the Healthcare Trend Rate
The following presents the Borough's net OPEB liability as of December 31, 2021 and 2020 calculated using the
healthcare trend rates as disclosed above as well as what the Borough's net OPEB liability would be if it were
calculated using healthcare trend rates that are I-percentage-point lower or I-percentage-point higher than the current
rate:
1% Healthcare Cost 1%
Decrease Trend Rates Increase
2021 (1.06%) (2.06%) (3.06%)
Net OPEB Liability $ 18,666,412 $ 16,718,326 $ 15,089,016
1% Healthcare Cost 1%
Decrease Trend Rates Increase
2020
Net OPEB Liability $ 15,941,378 $ 17,390,579 $ 19,096,175
57
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 12 POST-RETIREMENT MEDICAL BENEFITS (Continued)
OPEB Liabilities, OPEB Expenses and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB (Continued)
Special Funding Situation
Under GASB Statement No. 75 local governmental employers are required to provide certain financial information
based on a measurement date no earlier than the end of the employer's prior fiscal year. The GASB 75 financial
information from the State's Division of Pensions and Benefits to be reported for the year ended December 31, 2021 for
the measurement date of June 30, 2021 was not available as of the date of audit. Accordingly, the State's Division of
Local Government Services issued Local Finance Notice 2021-10 which authorizes and permits New Jersey
municipalities to present the most recent available audited GASB 75 financial information to be incorporated into the
audit and remain in compliance with the regulatory basis of accounting disclosure requirements for notes to the
financial statements. As such the GASB 75 financial information for the year ended December 31, 2021 is not
presented in the notes to the financial statements.
Under N.J.S.A. 43:3C-24 the Borough is responsible for their own OPEB contributions based on actuarially determined
amounts, except where legislation was passed which legally obligated the State to make contributions if certain
circumstances occurred. The legislation which legally obligates the State is as follows: Chapter 330, P.L. 1997 and
Chapter 271, P.L., 1989. Under Chapter 330, P.L. 1997, the State pays the premiums or periodic charges for the
qualified local police and firefighter retirees and dependents equal to 80 percent of the premium of periodic charge for
the category of coverage elected by the qualified retiree under the State managed care plan or a health maintenance
organization participating in the program providing the lowest premium or periodic charge. The State also provides
funding for retiree health benefits to survivors of local police officers and firefighters who die in the line of duty under
Chapter 271, P.L. 1989. The amounts contributed on behalf of the Borough by the State under this legislation is
considered to be a special funding situation as defined by GASB Statement No. 75 and the State is treated as a
nonemployer contributing entity. Accordingly, the Borough's proportionate share percentage of the net pension
liability, deferred outflows and inflows determined under GASB Statement No. 75 is zero percent and the State's
proportionate share is 100% of OPEB under this legislation.
At December 31, 2020, the State's proportionate share of the net OPEB liability attributable to the Borough for the
OPEB special funding situation is $5,396,209. For the year ended December 31, 2020 the plan has determined the
State's proportionate share of the OPEB expense attributable to the Borough for the OPEB special funding situation is
$268,625. At December 31, 2020, (measurement date June 30, 2020), the State's share of the OPEB liability
attributable to the Borough was 0.09879 percent, which was an increase of 0.01829 percent from its proportionate share
measured as of December 31, 2019 (measurement date June 30, 2019) of 0.08050 percent. The State's proportionate
share attributable to the Borough was developed based on eligible plan members subject to the special funding
situation. This data takes into account active members from both participating and non-participating employer locations
and retired members currently receiving OPEB benefits.
OPEB Plan Fiduciary Net Position
Detailed information about the OPEB plan's fiduciary net position is available in the separately issued financial report
from the State of New Jersey, Department of the Treasury, Division of Pension and Benefits. The financial reports may
be accessed via the New Jersey, Division of Pensions and Benefits, website at www.state.nj.us/treasury/pensions.
NOTE 13 RISK MANAGEMENT
The Borough is exposed to various risks of loss related to general liability, automobile coverage, theft of, damage to and
destruction of assets; errors and omissions; injuries to employees; termination of employees and natural disasters. The
Borough has obtained commercial insurance coverage to guard against these events to minimize the exposure to the
Borough should they occur.
58
BOROUGH OF FRANKLIN LAKES
NOTES TO THE FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 13 RISK MANAGEMENT (Continued)
The Borough of Franklin Lakes is a member of the Bergen County Municipal Joint Insurance Fund (BJIF) and
Municipal Excess Liability Joint Insurance Fund (MEL). The joint insurance funds are both an insured and self-
administered group of municipalities established for the purpose of insuring against property damage, general liability,
motor vehicles and equipment liability and worker's compensation. The Funds are risk-sharing public entity pools. The
BJIF and MEL coverage amounts are on file with the Borough.
The relationship between the Borough and respective insurance funds is governed by a contract and by-laws that have
been adopted by resolution of each unit's governing body. The Borough is contractually obligated to make all annual
and supplementa1y contributions to the insurance funds, to report claims on a timely basis, to cooperate with the
management of the funds, its claims administrator and attorneys in claims investigation and settlement, and to follow
risk management procedures as outlined by the funds. Members have a contractual obligation to fund any deficit of the
funds attributable to a membership year during which the municipality was a member.
The funds provide its members with risk management services, including the defense of and settlement of claims, and
established reasonable and necessary loss reduction and prevention procedures to be followed by the members.
Complete financial statements of the funds can be obtained by contacting the respective fund's Treasurer.
There has been no significant reduction in insurance coverage from the previous year nor have there been any
settlements in excess of insurance coverage in any of the prior three years.
The Borough has elected to fund its New Jersey Unemployment Compensation Insurance under the "Benefit
Reimbursement Method". Under this plan the Borough is required to reimburse the New Jersey Unemployment Trust
Fund for benefits paid to its former employees and charged to its account with the State. The Borough is billed
quarterly for amounts due to the State. The following is a summary of Borough contributions, employee contributions,
reimbursements to the State for benefits paid and the ending balance of the Borough's unemployment compensation
trust fund for the current and previous two years:
Year Ended Employee Amount Ending
December 31 Contributions Reimbursed Balance
2021 $ 8,623 $ 225 $ 40,596
2020 12,883 6,611 32,198
2019 7,766 7,086 25,926
NOTE 14 CONTINGENT LIABILITIES
The Borough is a party defendant in some lawsuits, none of a kind unusual for a municipality of its size and scope of
operation. In the opinion of the Borough's Attorney, the potential claims against the Borough not covered by insurance
policies would not materially affect the financial condition of the Borough.
Pending Tax Appeals -Various tax appeal cases were pending in the New Jersey Tax Court at December 31, 2021 and
2020. Amounts claimed have not yet been determined. The Borough is vigorously defending its assessments in each
case. Under the accounting principles prescribed by the Division of Local Government Services, Department of
community Affairs, State of New Jersey, the Borough does not recognize a liability, if any, until these cases have been
adjudicated. The Borough expects such amounts, if any, could be material. As of December 31, 2021 and 2020, the
Borough reserved $55,135 and $55,135, respectively in the Current Fund for tax appeals pending in the New Jersey Tax
Court. Funding of any ultimate liability would be provided for in succeeding years' budget or from fund balance.
Federal and State Awards -The Borough participates in a number of federal and state programs that are fully or
partially funded by grants received from other governmental units. Expenditures financed by grants are subject to audit
by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grant program
regulations, the Borough may be required to reimburse the grantor government. As of December 31, 2021 and 2020,
significant amounts of grant expenditure have not been audited by the various grantor agencies but the Borough
believes that disallowed expenditures, if any, based on subsequent audits will not have a material effect on the overall
financial position of the Borough.
59
BOROUGH OF FRANKLIN LAKES
NOTES TO THE FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 15 FEDERAL ARBITRAGE REGULATIONS
The Borough is subject to Section 148 of the Internal Revenue Code as it pertains to the arbitrage rebate on all tax-
exempt obligations, both long and short-term debt. Under the 1986 Tax Reform Act, the Internal Revenue Service
(IRS) required that all excess earnings from investment proceeds be rebated to the IRS. Arbitrage, for purposes of these
regulations, is defined as the difference between the yield on the investment and the yield on the obligations issued. If
there are excess earnings, this amount may be required to be rebated to the IRS. At December 31, 2021 and 2020, the
Borough had no estimated arbitrage earnings due to the IRS.
NOTE 16 INFECTIOUS DISEASE OUTBREAK-COVID-19 PANDEMIC
The World Health Organization declared a pandemic following the global outbreak of COVID-19, a respiratory disease
caused by a new strain of coronavirus. On March 13, 2020, the President of the United States declared a national
emergency to unlock federal funds and assistance to help states and local governments fight the pandemic. Governor
Phil Murphy, of the State of New Jersey, also declared a public health emergency on March 9, 2020 and instituted
mandatory measures via various executive orders to contain the spread of the virus, including closing schools and
nonessential businesses and limiting social gatherings. These measures, which altered the behaviors of businesses and
people, had negative impacts on regional, state and local economies. The Governor, pursuant to various executive
orders, then implemented a multi-stage approach to restarting New Jersey's economy. The declaration of the state of
emergency and of a public health emergency was terminated by the Governor, by executive order, on June 4, 2021.
Also, on June 4, 2021, the Governor signed into law Assembly Bill No. 5820 which terminates most of the Governor's
pandemic-related executive orders in early July. The remaining executive orders ( dealing with coronavirus testing and
vaccinations, moratoriums on evictions and utility shutoffs and various other matters) will terminate on January 1, 2022.
On January 11, 2022, the Governor reinstated, via Executive Order No. 280, the state of emergency and declared a new
public health emergency in response to a surge in cases tied to new variants of COVID-19, in particular the Omicron
variant. Such public health emergency was set to expire 30 days from January 11, 2022, but was later extended, via
Executive Order No. 288, for an additional 30 days on February 10, 2022. In the event of substantial increases in
COVID-19 hospitalizations, spot positivity or rates of transmission, the Governor is empowered to impose more
restrictive measures than currently in place.
In order to provide additional means for local governmental units to address the financial impact of the COVID-19
outbreak, the Governor signed into law P.L. 2020 c. 74 ("Chapter 74") on August 31, 2020. Chapter 74, which took
effect immediately, adds two new purposes to the list of special emergency appropriations which may be raised by
municipalities or counties over a five year period ( either through the issuance of special emergency notes or raised
internally without borrowing): (1) direct COVID-19 response expenses; and (2) deficits in prior year's operations
attributable to COVID-19 (the beginning of the five year repayment schedule is delayed by one year for these new
purposes). Upon approval by the Director of the Division of Local Government Services, New Jersey Department of
Community Affairs, in cases of significant fiscal distress, the five year period may be extended to up to ten years. In
addition, the statute permits school districts and public authorities to issue debt with a maximum five year maturity
schedule for direct COVID-19 expenses. Chapter 74 provides for State supervision of all local government unit
borrowings. The statute also grants the Director the authority to modify municipal budgeting rules concerning
anticipated revenues in order to lessen the impact of revenue reductions due to COVID-19.
The Borough of Franklin Lakes' finances and operations may be materially and adversely affected as a result of the
continued spread of COVID-19 through reduced or delayed revenue streams, which include the collection of property
taxes, which are the Borough of Franklin Lakes' primary revenue source for supporting its budget. The Borough of
Franklin Lakes cannot predict costs associated with a potential infectious disease outbreak like COVID-19 such as
operational costs to clean, sanitize and maintain its facilities, or costs to operate remotely and support Borough functions
and critical government actions during an outbreak or any resulting impact such costs could have on the operations of the
Borough. However, as of the date of audit, even though the Borough finances and operations had certain reduced
revenue streams due to the COVID-19 outbreak, the overall finances and operations of the Borough have not been
materially and adversely affected due to the COVID-19 outbreak.
60
BOROUGH OF FRANKLIN LAKES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE 16 INFECTIOUS DISEASE OUTBREAK-COVID-19 PANDEMIC (Continued)
The degree of any such impact on the operations and finances of the Borough cannot be predicted due to the dynamic
nature of the COVID-19 outbreak, including uncertainties relating to its (i) duration, and (ii) severity, as well as with
regard to what actions may be taken by governmental and other health care authorities to contain or mitigate its impact.
The continued spread of the outbreak could have a material adverse effect on the Borough and its economy. The
Borough is monitoring the situation and will take such proactive measures as may be required to maintain its
functionality and meet its obligations.
The American Rescue Plan Act of 2021, H.R. 1319 (the "Plan"), signed into law by President Biden on March 11, 2021,
comprises $1.9 trillion in relief designed to provide funding to address the COVID-19 pandemic and alleviate the
economic and health effects of the COVID-19 pandemic.
The Plan includes various forms of financial relief including up to a $1,400 increase in direct stimulus payment to
individuals and various other forms of economic relief, including extended unemployment benefits, continued eviction
and foreclosure moratoriums, an increase in the child tax credit, an increase in food and housing aid, assistance grants to
restaurants and bars, and other small business grants and loans. The Plan provides funding for state and local
governments to offset costs to safely reopen schools during the COVID-19 pandemic and to subsidize COVID-19 testing
and vaccination programs. In addition, the Plan includes $350 billion in relief funds to public entities, such as the
Borough.
The Borough will receive $1,163,810 from the Plan in two equal payments. On May 24, 2021, the Borough received its
first installment of funds under the Plan in the amount of $581,905. The Borough utilized these funds in the 2022 budget
to replace lost public sector revenue. The deadline to obligate the funds is December 31, 2024 and to spend them is
December 31, 2026.
61
CURRENT FUND
BOROUGH OF FRANKLIN LAKES
STATEMENT OF CURRENT CASH -COLLECTOR-TREASURER
Balance, December 31, 2020
Increased by Receipts:
Taxes Receivable
Non-Budget Revenue
Due from State of NJ -Senior Citizens' and Veterans' Deductions
Tax Title Lien Redemption
Grants Receivable
Unappropriated Grants
Revenue Accounts Receivable
Petty Cash
Receipts from Other Trust Fund
Receipts from Trust Assessment Fund
Fees Payable
Prepaid Taxes
Reserve for Recreation Online Fees
Tax Overpayments
COVID-19 Reimbursements
Decreased by Disbursements:
2021 Budget Appropriations
2020 Appropriation Reserves
Encumbrances Payable
County Taxes Payable
Local District School Tax Payable
Regional High School Taxes Payable
Fees Payable
Petty Cash
Tax Overpayments Refunded
Reserve for Recreation Online Fees
Reserve for State and Federal Grants -Appropriated
Reserve for COVID-19 Reimbursements
Refund of Prior Year Revenue
Refund of Prior Year Taxes
Balance, December 31, 2021
$
62
73,257,072
184,137
44,000
6,272
130,476
581,905
4,991,469
500
222
2,518
52,226
700,421
159,848
68,972
5,060
17,992,111
1,130,348
23,307
11,240,680
29,407,906
19,291,656
52,245
500
70,430
159,848
65,882
9,748
1,655
117,905
EXHIBIT A-4
$ 6,872,376
80,185,098
87,057,474
79,564,221
$ 7,493,253
Office
Borough Clerk
Tax Office
Municipal Court
Board of Health
Construction Code
Borough Clerk
Recreation
BOROUGH OF FRANKLIN LAKES
STATEMENT OF CHANGE FUND
STATEMENT OF PETTY CASH
63
EXHIBIT A-5
Balance, Balance,
December 3 1, December 31,
2020 2021
$ 100 $ 100
200 200
100 100
100 100
200 200
700 $ 700
EXHIBIT A-6
Received
from Treasurer
Returned to
Treasurer
$
$
400 $
100
400
100
500 $ 500 ~=~~
EXHIBIT A-7
BOROUGH OF FRANKLIN LAKES
STATEMENT OF GRANTS RECEIVABLE
Balance, Balance,
December 31, Revenue Cash December 31,
2020 Accrued Receipts 2021
Clean Communities Grant $ 29,938 $ 29,938
Recycling Tonnage Grant 18,319 18,319
Municipal Alliance Program $ 15,858 $ 15,858
Drunk Driving Enforcement Fund 3,922 3,922
Distracted Driving 5,957 5,957
Body Armor Replacement Program 1,912 1,912
Franklin Lakes Rec Foundation
CDBG -Handicap Accessible Ramps 15,000 15,000
Private Donation 20,500 20,500
Drive Sober or Get Pulled Over 5,923 5,923
Alcohol Education and Rehabilitation
FEMA -Fire Department SAFER Grant 548,727 29,005 519,722
ANJEC Open Space Grant 500 500
NJUCF Reforestation & Tree Planting 25,823 25,823
$ 590,908 $ 101,471 $ 130,476 $ 561,903
Cash Collections $ 130,476
64
BOROUGH OF FRANKLIN LAKES
STATEMENT OF DUE TO STATE OF NEW JERSEY
SENIOR CITIZENS' AND VETERANS' DEDUCTIONS
Balance, December 3 1, 2020
Increased by:
Received in Cash from State $
Decreased by:
Senior Citizens' Deductions Per Tax Billings
Veterans' Deductions Per Tax Billings
Senior Citizens' and Veterans' Deductions Allowed by Tax Collector
Balance, December 31, 2021
65
EXHIBIT A-8
$ 5,193
44,000
44,000
49,193
3,000
39,750
750
43,500
$ 5,693
°' °'
BOROUGH OF FRANKLIN LAKES
STATEMENT OF TAXES RECEIVABLE AND ANALYSIS OF PROPERTY TAX LEVY
Balance, Added and
December 31, 2021 Omitted
Year 2020 !&.YY Taxes
2020 $ 503,772
503,772
2021 $ 72,548,973 $ 1,335,434
$ 503,772 $ 72,5j8,973 $ 1,335,434
Analysis of 2021 Property Tax Levy
TAX YIELD
General Purpose Tax
Added and Omitted Taxes (54:4-63.1 et seq.)
TAX LEVY
Local District School Tax (Abstract)
Regional High School Tax (Abstract)
County Tax (Abstract)
County Open Space Tax
Due County for Added and Omitted Taxes
Local Tax for Municipal Purposes (Abstract)
Minimum LibnuyTax
Additional Tax Levied
$ 29,407,906
19,291,656
10,628,150
441,316
204,183
11,314,062
1,445,696
1,151,438
Collected In
2020
$ 617,909
$ 617,909
$ 72,548,973
1,335,434
$ 59,973,211
13,91_1_,196
2021
$ 491,426
491,426
72,765,646
$ 73,257,072
$ 73,884,407
$ 73,884,407
Senior
Citizens'
and Veterans'
Deductions
Allowed Cancelled
-$ 2,648
2,648
$ 43,500 191,873
$ 43,500 $ 194,521
EXHIBIT A-9
Transfer
to Tax Balance,
Title December 31,
Liens 2021
$ 9,698 $
9,698
10,333 255,146
$ 20,031 $ ---255,146
Balance, December 31, 2020
Increased by:
BOROUGH OF FRANKLIN LAKES
STATEMENT OF TAX TITLE LIENS
Transferred from Current Taxes Receivable
Transferred from Delinquent Taxes Receivable
Decreased by:
Tax Title Lien Redemptions
Balance, December 31, 2021
67
EXHIBIT A-10
$ 13,387
10,333
9,698
33,418
6,272
$ 27,146
EXHIBIT A-11
BOROUGH OF FRANKLIN LAKES
STATEMENT OF REVENUE ACCOUNTS RECEIVABLE
Balance, Balance,
December 3 1, Accrued Collected in December 31,
2020 2021 2021 2021
Borough Clerk
Licenses
Alcoholic Beverages $ 10,000 $ 10,000
Other 1,484 1,484
Board of Health
Licenses 16,498 16,498
Fees and Permits 84,332 84,332
Tax Collector
Fees and Permits 660 660
Planning Board
Fees and Permits 46,450 46,450
Fire Prevention
Fees and Permits 27,574 27,574
Police Department
Fees and Permits 11,625 11,625
Uniform Construction Code
Fees and Permits 893,301 893,301
Municipal Court
Fines and Costs -Municipal Court $ 8,584 184,902 178,857 $ 14,629
Interest and Costs on Taxes and Assessments 141,048 141,048
Interest on Investments and Deposits 431,129 431,129
Outside Police Employment 138,217 138,217
Abandoned Property Fees 36,000 36,000
Energy Receipts Tax 1,775,732 1,775,732
Watershed Moratorium Offset Aid 5,969 5,969
Shared Service -Borough of Oakland 57,088 57,088
Uniform Fire Safety Act 18,482 18,482
Cable T.V. Franchise Fee 184,666 184,666
Lease of Land for Monopole-Sprint Co 116,914 116,914
Recreation Program Fees 201,858 201,858
Recycling Revenue 89,724 89,724
VFW Parking Permits 2,770 2,770
Reserve for Future Capital Projects 119,300 119,300
Library Reimbursement 197,970 197,970
Rental Fees -Community Center/ Field 7,000 7,000
Child Care Facility Rent 30,090 30,090
PILOT -Municipal 45,268 45,268
Reserve for Payment of Debt 121,463 121,463
$ 8,584 $ 4,997,514 $ 4,991,469 $ 14,629
68
EXHIBIT A-12
Page 1
BOROUGH OF FRANKLIN LAKES
STATEMENT OF APPROPRIATION RESERVES
Balance, Balance Paid
December 31, Encumbrances After or Balance
GENERAL GOVERNMENT 2020 Restored Transfers Modification Charged Lapsed
General Administration
Salaries and Wages $ 5 $ 5 $ 5
Other Expenses 19,758 $ 12,090 $ (8,375) 23,473 $ 17,143 6,330
Mayor & Council
Salaries and Wages 1,250 1,250 1,250
Other Expenses 9,556 1,102 10,658 1,741 8,917
Municipal Clerk
Salaries and Wages 847 847 847
Other Expenses 3,148 4,165 7,313 3,950 3,363
Financial Administration
Salaries and Wages 1,297 1,297 1,297
Other Expenses 982 2,976 2,000 5,958 5,942 16
Audit Services
Other Expenses 4,117 4,117 1,200 2,917
Revenue Administration (Tax Collection)
Salaries and Wages 254 254 254
Other Expenses 1,703 947 2,650 1,804 846
Tax Assessment Administration
Salaries and Wages 771 771 771
Other Expenses 352 168 520 263 257
Reserve for Tax Appeals 100,000 100,000 100,000
Legal Services (Legal Department)
Other Expenses 13,880 23,692 1,400 38,972 38,922 50
Engineering Services and Costs
Salaries and Wages 2 2 2
Other Expenses 13,769 9,847 23,616 10,703 12,913
Planning Board
Salaries and Wages 1,200 1,200 1,200
Other Expenses 3,371 142 3,513 2,343 1,170
Zoning Board of Adjustment
Salaries and Wages 5 5 5
Other Expenses 2,420 510 2,930 510 2,420
Zoning Official
Salaries and Wages
Other Expenses
Insurance
Worker's Compensation 2,861 49,551 52,412 49,551 2,861
General Liability 51,291 51,291 51,291
Employee Group Health 7,234 156 7,390 5,864 1,526
Unemployment Insurance
Other Insurance Premiums 1,691 1,691 1,691
Health Benefits 7,515 7,515 7,515
69
EXHIBIT A-12
Page2
BOROUGH OF FRANKLIN LAKES
STATEMENT OF APPROPRIATION RESERVES
Balance, Balance Paid
December 31, Encumbrances After or Balance
GENERAL GOVERNMENT (Cont'd) 2020 Restored Transfers Modification Charged Lapsed
Police
Salaries and Wages $ 9,673 $ 9,673 $ 9,673
Other Expenses 49,337 $ 174,081 223,418 $ 222,321 1,097
Office of Emergency Management
Other Expenses 5,853 1,491 7,344 3,336 4,008
Ambulance Service
Other Expenses 14,642 13,358 28,000 16,781 11,219
Fire Department
Salaries and Wages 2,529 2,529 2,529
Other Expenses 25,294 58,976 84,270 64,939 19,331
Uniform Fire Safety
Salaries and Wages 8,241 8,241 8,241
Other Expenses 2,575 1,144 3,719 1,144 2,575
Municipal Court
Salaries and Wages 5,595 5,595 5,595
Other Expenses 6,641 1,671 8,312 1,875 6,437
Municipal Court Public Defender
Salaries and Wages 504 504 504
Municipal Prosecutor
Salaries and Wages 2,158 2,158 2,158
Streets and Road Maintenance
Salaries and Wages 5 5 5
Other Expenses 99,163 106,901 $ (35,000) 171,064 117,013 54,051
Solid Waste Collection
Other Expenses 85,000 85,000 85,000
Buildings and Grounds
Other Expenses 20,064 112,217 10,675 142,956 142,956
Vehicle Maintenance
Other Expenses 8,747 27,001 25,000 60,748 46,562 14,186
Shade Tree
Salaries and Wages 15 15 15
Other Expenses 2,577 4,500 7,077 4,722 2,355
Board of Health
Salaries and Wages 26 26 26
Other Expenses 6,291 43,121 10,500 59,912 59,801 111
Animal Control Services
Other Expenses 405 1,200 1,605 1,185 420
Recreation Services and Programs
Salaries and Wages 1,456 1,456 1,456
Other Expenses 43,856 16,648 60,504 36,011 24,493
70
EXHIBIT A-12
Page 3
BOROUGH OF FRANKLIN LAKES
STATEMENT OF APPROPRIATION RESERVES
Balance, Balance Paid
December 31, Encumbrances After or Balance
GENERAL GOVERNMENT (Cont'd) 2020 Restored Transfers Modification Charged Lapsed
Celebration of Public Events
Other Expenses $ 17,729 $ (17,700) $ 29 $ 29
Environment Commission
Other Expenses 2,438 2,438 2,438
Cable T.V. Committee
Other Expenses 2,001 $ 10 2,01 I $ 10 2,001
Building Inspector
Salaries and Wages 5,332 5,332 5,332
Other Expenses 11,394 2,013 13,407 2,567 10,840
Electrical Inspector
Salaries and Wages 1,133 1,133 1,133
Plumbing Inspector
Salaries and Wages 4 4 4
Unclassified
Electricity 34,102 22,008 56,110 25,402 30,708
Street Lighting 2,325 2,605 4,930 2,605 2,325
Telephone 4,123 1,990 6,113 190 5,923
Telecommunications 6,282 1,025 7,307 762 6,545
Water 5,599 3,315 8,914 2,084 6,830
Gasoline 18,293 1,124 19,417 5,719 13,698
Landfill/ Solid Waste Disposal Costs 57,533 20,539 11,500 89,572 89,562 10
Statutory Expenditures:
Contribution to:
Social Security System 11,095 11,095 11,095
PERS 6,495 6,495 1,246 5,249
PFRS 83 83 83
DCRP Employer Contribution 4,361 4,361 4,361
Interlocal Municipal Service Agreements
Enhanced 911 Service -Northwest Bergen
Central Dispatch
Other Expenses 70 70 70
Matching Funds for Grants
Municipal Library
NJ DEP Stormwater Permit 1,985 3,260 5,245 5,245
Emergency Authorization -COVID 19 147 147 147
Municipal Alliance on Alcoholism and Drug
Local Share 2,462 2,462 2,462
$ 708,623 $ 861,835 $ $ 1,570,458 $ 1,130,348 $ 440,110
Appropriation Reserves $ 708,623
Encumbrances Payable 861,835
$ 1,570,458
Cash Disbursements $ I, 130,348
71
BOROUGH OF FRANKLIN LAKES
STATEMENT OF ENCUMBRANCES PAYABLE
Balance, December 31, 2020
Increased by:
Charges to 2021 Budget Appropriations
Charges to Appropriated Grant Reserves
Decreased by:
Restored to Appropriation Reserves
Cash Disbursements
Balance, December 31, 2021
72
EXHIBIT A-13
$ 446,512
15,275
861,835
23,307
$ 885,142
461,787
1,346,929
885,142
$ 461,787
BOROUGH OF FRANKLIN LAKES
STATEMENT OF RESERVE FOR GRANTS -APPROPRIATED
Balance, Transfer from
December 31, 2021 Budget
2020 Appropriations Expenditures
Recycling Tonnage Grant $ 10,639 $ 18,319 $ 110
Drunk Driving Enforcement 13,149 3,922
Drive Sober or Get Pulled Over 1,908 5,923 5,923
Distracted Driving 5,957 5,957
Clean Communities Grant 40,532 29,938 20,123
Municipal Alliance -State 3,653
Municipal Alcohol Ed/Rehabilitation 1,713
Private Donation 4,652 20,500
Dog Park Donations 17
Citizens Corp. -CERT Trailers 700
Murphy Grant -OEM Building Improvements 7,427 480
Body Armor Replacement Program 2,430 1,912 2,208
ANJEC 2020 Open Space Stewardship 1,500 1,498
NJUCD Reforestation & Tree Planting 540 395
2019 Franklin Lakes Rec Foundation 7,801
CDBG -Handicap Improvements -Sr Center 15,000 15,000
Meyer Foundation -FLPD Cars and Software 2,834
FEMA -Fire Department Safer Grant 511,059 29,463
$ 610,554 $ 101,471 8
Cash Disbursements $ 65,882
Encumbrances Payable 15,275
$ 81,157
STATEMENT OF RESERVE FOR GRANTS-UNAPPROPRIATED
Balance December 31, 2020
Increased by Cash Receipts
American Rescue Plan
Balance December 31, 2021
73
EXHIBIT A-14
Balance,
December 31,
2021
$ 28,848
17,071
1,908
50,347
3,653
1,713
25,152
17
700
6,947
2,134
2
145
7,801
2,834
481,596
EXHIBIT A-15
$
581,905
$ 581,905
Balance, December 3 1, 2020
Increased by:
Collection of2022 Taxes
Decreased by:
Applied to 2021 Taxes
Balance, December 31, 2021
Balance, December 31, 2020
Increased by:
Taxes Overpaid
Decreased by:
Tax Overpayments Refunded
Balance, December 31, 2021
BOROUGH OF FRANKLIN LAKES
STATEMENT OF PREPAID TAXES
STATEMENT OF TAX OVERPAYMENTS
74
EXHIBIT A-16
$ 834,920
700,421
1,535,341
617,909
$ 917,432
EXHIBIT A-17
$ 7,061
68,972
76,033
70,431
$ 5,602
Balance, December 31, 2020
Increased by:
2021 County Tax Levy
BOROUGH OF FRANKLIN LAKES
STATEMENT OF COUNTY TAXES PAYABLE
$
2021 County Open Space Tax Levy
2021 County Added and Omitted Taxes
Decreased by:
Payments
Balance, December 3 1, 2021
10,628,150
441,316
204,183
STATEMENT OF LOCAL DISTRICT SCHOOL TAXES PAYABLE
Increased by:
Levy -Calendar Year 2021
Decreased by:
Payments
STATEMENT OF REGIONAL HIGH SCHOOL TAXES PAYABLE
Increased by:
Levy -Calendar Year 2021
Decreased by:
Payments
75
$
$
EXHIBIT A-18
171,214
11,273,649
11,444,863
11,240,680
204,183
EXHIBIT A-19
$ 29,407,906
$ 29,407,906
EXHIBIT A-20
$ 19,291,656
$ 19,291,656
BOROUGH OF FRANKLIN LAKES
STATEMENT OF RESERVES FOR TAX APPEALS PENDING
Balance, December 31, 2020
Balance, December 31, 2021
Balance, December 3 I, 2020
Increased by:
Cash Receipts
DCA Training Fees
Marriage Licenses
Decreased by:
Cash Disbursements
DCA Training Fees
Marriage Licenses
Balance, December 31, 2021
STATEMENT OF FEES PAYABLE
$ 50,551
1,675
50,645
I 600
STATEMENT OF RESERVE FOR RECREATION ONLINE FEES
Balance, December 31, 2020
Increased by:
Cash Receipts
Decreased by:
Cash Disbursements
Balance, December 3 I, 2021
STATEMENT OF RESERVE FOR COVID-19 REIMBURSEMENTS
Balance, December 31, 2020
Increased by:
Cash Receipts
Decreased by:
Budgeted Revenue to Current Fund
Cash Disbursements
Balance, December 31, 2021
$
76
67,325
9 749
EXHIBIT A-21
$
$
55,135
55,135
EXHIBIT A-22
$ 16,588
52,226
68,814
52,245
$ 16,569
EXHIBIT A-23
$ 3,214
159,848
163,062
159,848
EXHIBIT A-24
$ 72,014
5,060
77,074
77,074
$
TRUST FUND
EXHIBITB-2
BOROUGH OF FRANKLIN LAKES
STATEMENT OF TRUST CASH -COLLECTOR-TREASURER
Unemployment
Animal Control Trust Fund Other Trust Fund Assessment Trust Fund Insurance Trust Fund
Balance, December 31, 2020 $ 10,600 $ 3,221,109 $ 13,022 $ 37,350
Increased by Receipts:
Animal Control Fees $ 8,664
State License Fees 1,205
Payroll Deposits $ 8,621,431
Miscellaneous Reserves 2,118,885
Assessment Receivable $ 10,714
Interest on Assessments 2,090
Reserve for Affordable Housing 297,416
Developers Escrow 529,612
--..) Payment from Current Fund
--..)
Employee Unemployment Contributions $ 8,623
Interest Earned on Escrow Accounts 70
9,869 11,567,414 12,804 8,623
20,469 14,788,523 25,826 45,973
Decreased by Disbursements:
Miscellaneous Reserves 1,846,859
Reserve for Affordable Housing 24,779
Expenditures Under R.S. 4:19-15.11 4,527
Payroll Deductions 8,623,795
Due to State ofNJ -Animal Control Fees 1,836
Due to State of NJ -Unemployment 5,377
Payments to Current Fund 222 2,518
Payments to General Capital Fund
Escrow Deposits 373,841
6,363 10,869,496 2,518 5,377
Balance, December 31, 2021 $ 14,106 _l___]__,919,027 $ 23,308 $ 40,596
BOROUGH OF FRANKLIN LAKES
STATEMENT OF RESERVE FOR ANIMAL CONTROL EXPENDITURES
ANIMAL CONTROL TRUST FUND
Balance, December 3 1, 2020
Increased by:
Animal Control Fees Collected
Payment from Current Fund
Decreased by:
Cash Disbursements
Noncash adjustment
Balance, December 31, 2021
$ 8,664
4,527
11
EXHIBIT B-3
$ 9,969
8,664
18,633
4,538
$ 14,095
Licenses Fees Collected
78
Year
2020
2019
$
Amount
7,845
9,227
$ 17,072
Balance, December 31, 2020
Increased by:
Noncash Adjustment
2021 State Fees Collected
Decreased by:
BOROUGH OF FRANKLIN LAKES
ST ATE ME NT OF DUE TO ST ATE OF NEW JERSEY
ANIMAL CONTROL TRUST FUND
$
Payments to State of New Jersey
Balance, December 31, 2021
ST ATE ME NT OF RESERVE FOR AFFORDABLE HOUSING
OTHER TRUST FUND
Balance, December 31, 2020
Increased by:
Cash Receipts $
Decreased by:
Cash Disbursements
Balance, December 31, 2021
79
EXHIBITB-4
$ 631
11
1,205
1,216
1,847
1,836
$ 11
EXHIBITB-5
$ 603,280
297,416
297,416
900,696
24,779
24,779
$ 875,917
BOROUGH OF FRANKLIN LAKES
STATEMENT OF PAYROLL AND DEDUCTIONS PAYABLE
OTHER TRUST FUND
Balance, December 31, 2020
Increased by:
Payroll Deposits
Decreased by:
Payroll Deductions Remitted
Balance, December 31, 2021
Balance, December 31, 2020
Increased by:
Interest on Escrow Accounts
Decreased by:
Payments to Current Fund
Balance, December 31, 2021
STATEMENT OF DUE TO CURRENT FUND
OTHER TRUST FUND
80
EXHIBIT B-6
$ 31,985
8,621,431
8,653,416
8,623,795
$ 29,621
EXHIBITB-7
$ 222
70
292
222
$ 70
EXHIBITB-8
BOROUGH OF FRANKLIN LAKES
STATEMENT OF MISCELLANEOUS RESERVES
OTHER TRUST FUND
Balance, Balance,
December 31, December 31,
2020 Receipts Disbursements 2021
Tax Sale Premiums $ 656,620 $ 613,100 $ 437,600 $ 832,120
Tax Sale Certificate Redemptions 343 300,120 300,119 344
Parking Offenses Adjudication Act 158 42 200
Off Duty Police Fees 23,980 1,052,048 1,063,082 12,946
Public Safety Trust Fund 900 900
Monuments 15,125 15,125
Municipal Alliance Program 3,640 1,500 1,240 3,900
Flexible Spending Account 14,476 21,625 22,694 13,407
Town Fair Celebration 20,658 5,012 15,646
Open Space Recreation Trust I I
Mayor's Wellness Program 43,478 10,418 6,493 47,403
Franklin Lakes Centennial 96,500 7,800 88,700
Memorial Pond Donations 23,349 2,819 20,530
Beautification Pond 5,730 5,730
Municipal Court Deposits 1,177 1,177
Police Dept -Unclaimed Money 1,165 183 1,348
Miscellaneous Reserves 9,474 9,474
$ 796,925 $ 2,118,885 $ 1,846,859 $ 1,068,951
EXHIBITB-9
STATEMENT OF RESERVE FOR ESCROW DEPOSITS
OTHER TRUST FUND
Balance, Balance,
December 3 I, December 3 I,
2020 Receipts Disbursements 2021
Escrow Bonds $ 649,324 $ 111,500 $ 42,000 $ 718,824
Engineering / Legal Fees 147,419 66,617 40,845 I 73,191
Soil Deposits 632,806 273,965 167,214 739,557
Tree Escrow Fund 47,637 14,605 34,238 28,004
Street Escrow 18,000 18,000
Accutrak -Engineering/Legal Fees 293,Sll 62,925 89,544 266,892
$ 1,788,697 $ 529,612 $ 373,841 $ 1,944,468
81
BOROUGH OF FRANKLIN LAKES
STATEMENT OF DUE TO STATE OF NEW JERSEY
UNEMPLOYMENT INSURANCE TRUST FUND
Balance, December 31, 2020
Increased by:
Unemployment Claims
Decreased by:
Payments to State of New Jersey
Balance, December 3 1, 2021
STATEMENT OF RESERVE FOR EXPENDITURES
UNEMPLOYMENT INSURANCE TRUST FUND
Balance, December 31, 2020
Increased by:
Employee Contributions $ 8,623
Decreased by:
Unemployment Claims 225
Balance, December 31, 2021
82
EXHIBIT B-10
$ 5,152
225
5,377
5,377
$
EXHIBIT B-11
$ 32,198
8,623
40,821
225
$ 40,596
Ordinance
Number Improvement Description
1819 Improvements to Harriet Place
BOROUGH OF FRANKLIN LAKES
STATEMENT OF ASSESSMENT RECEIVABLE
ASSESSMENT TRUST FUND
Balance
Date of Due December 31,
Confirmation Dates 2020
9/15/2020 9/15/2020-2029 $ 104,514 $
$ 104,651 $
83
EXHIBIT B-12
Balance Balance
December 31, Pledged to
Collected 2021 Res_erve
10,714 $ 93,800 $ 93,800
10,714 $ 93,800 $ 93,800
Balance, December 31, 2020
Increased by:
Interest on Assessments
Decreased by:
Payment to Current Fund
Balance, December 31, 2021
BOROUGH OF FRANKLIN LAKES
STATEMENT OF DUE TO CURRENT FUND
ASSESSMENT TRUST FUND
STATEMENT OF DUE TO GENERAL CAPITAL FUND
ASSESSMENT TRUST FUND
Balance, December 31, 2020
Increased by:
Collections on Assessments Due to Capital
Balance, December 31, 2021
84
EXHIBIT B-13
$ 2,518
2,090
4,608
2,518
$ 2,090
EXIDBIT B-14
$ 10,504
10,714
$ 21,218
GENERAL CAPITAL FUND
BOROUGH OF FRANKLIN LAKES
STATEMENT OF CASH -GENERAL CAPITAL FUND
Balance, December 31, 2020
Increased by:
Grants Receivable
Grant Proceeds
Deferred Charges Unfunded
Reserve for Payment of Debt
Reserve for Future Capital Projects
Current Fund Budget Appropriation
Capital Improvement Fund
Grant Reimbursements
Decreased by:
Improvement Authorizations
Encumbrances Payable
Current Fund Anticipated Revenue
Reserve for Payment of Debt -COAH
Reserve for Payment of Debt
Reserve for Future Capital Projects
Balance, December 31, 2021
$
85
EXHIBITC-2
$ 2,289,403
157,500
98,530
53,267
31,769
1,400,000
268,162
2,009,228
4,298,631
2,238,329
811,357
116,540
4,923
119,300
3,290,449
$ 1,008,182
Fund Balance
BOROUGH OF FRANKLIN LAKES
ANALYSIS OF GENERAL CAPITAL CASH
Capital Improvement Fund
Due from Assessment Trust Fund
Grants Receivable
Encumbrances Payable
Reserve for Future Capital Projects
Reserve for COAH -RCA Debt
Reserve for Payment ofBANs
Improvement Authorizations:
Ord. No.
1369
1428
1601
1617/1637
1717
1727
1738/1796
1744
1763
1770
1778/1801
1803
1808
1815
1818
1829
1831/1848
1832/1839
1225/1259
1316/1346
1747
General Improvements
Haledon Reservoir Phase II
Ambulance Building Groundwater Study
DPW Vehicles and Huron Road Improv
Various Capital Improvements
Old Mill Road Improvements
Acquisition of Real Property
2018 Road ImprovementsN arious Improvements
Fire Department and DPW Equipment and Truck
Police Handicap Restrooms
Improvements to Vichiconti Way Synthetic Turf Field
Various Street Improvements and Parking Lots
Refurbishment ofDPW Bathroom/ Purch DPW Equip
Acquisition of Fire Apparatus
2020 Road Improvements & Tennis Court
Improvements to Old Mill Road/Sidewalk
FD Portable Radios
2021 Road Program
Radio System and Equipment
Local Improvements
Improvement to Wildwood Ave
Improvements to Ryerson Road
Improvements to Harriet Place
86
EXHIBITC-3
Balance,
December 31,
2021
$ 10,714
113,356
(21,218)
(52,500)
173,192
200,802
230,732
53,267
480
7,182
1,703
276
1,025
(255)
28,748
4,531
(2,225)
34,055
6,547
19,123
11,114
3,084
126,995
599
59,292
2,974
(12,967)
5,360
2,196
$ 1,008,182
Ord.
No.
1848
Improvement Description
2021 Road Program
Analysis of Balance
Pledged to Ordinance
BOROUGH OF FRANKLIN LAKES
STATEMENT OF GRANTS RECEIVABLE
Balance,
December 3 1, 2021 Grant
2020 Award
$ 210,000
87
EXHIBITC-4
Balance,
December 3 I,
Receipts 2021
$ 157,500 $ 52,500
$ 52,500
EXHIBITC-5
BOROUGH OF FRANKLIN LAKES
STATEMENT OF DEFERRED CHARGES TO FUTURE TAXATION -FUNDED
Balance, December 31, 2020
Decreased by:
Serial Bonds Paid by Budget Appropriation
Balance, December 31, 2021
88
$ 11,375,000
$ 1,380,000
1,380,000
$ 9,995,000
00
\0
EXHIBITC-6
BOROUGH OF FRANKLIN LAKES
STATEMENT OF DEFERRED CHARGES TO FUTURE TAXATION -UNFUNDED
Ord.
No.
1727
1763
1815
Improvement Description
General Improvements
Acquisition of Real Property
Police Handicap Restrooms
2020 Road Improvements & Tennis Court
Local Improvements
1225/1259 Improvements to Wildwood Ave
1316/1346 Improvements to Ryerson Road
Balance,
December 31, 2021
$
2020 Authorizations
255
2,225
98,530
20,836
9,250
$ 131,096 =$====
$
$
Grant
PrQceeds
98,530
Balance,
December 31,
2021
$ 255
2,225
20,836
9,250
Analysis of Balance. Decembe_d L 2_Q2 l
Bond
Anticipation
Note
Unexpended
Improvement
Expenditures Authorization
$ 255 $
2,225
12,967 7,869
9,250
98,530 $ 32,566 =$===== $ 15,447 $ 17,119
Improvement Authorizations -Unfunded $ 17)19
'D
0
Pm:pose
General Improvements
Refunding Bonds
General Improvements
Date
of
Issue
9/1/2014
3/1/2017
9/1/2020
BOROUGH OF FRANKLIN LAKES
STATEMENT OF GENERAL SERIAL BONDS
Original
Issue
Outstanding Maturities
December 31, 2021
Date Amount
5,055,000 9/1/2022 270,000
295,000
460,000
9/1/2023
9/1/2024-2029
935,000
225,000
350,000
Interest
Rate
2.00%
2.00%
2.00%
4.00%
1.00%
1.00%
4,400,000 3/1/2022-2023
5,025,000. 9/1/2021-2023
9/1/2024-2029
9/1/2030-2035 375,000 1.375-1.625%
$
$
Balance,
December 3 1,
2020
3,590,000
2,760,000
5,025,000
11,375,000
Increas~_d
$
Paid by Budget Appropriation
Decreas.ed
$ 265,000 $
890,000
225,000
$ 1,380,000 $
$ 1,380,000
EXHIBIT C-7
Balance,
December 3 1,
2021
3,325,000
1,870,000
4,800,000
9,995,000
Ord.
No.
General Improvements
Improvement Description
1369 Haledon Reservoir Phase II
1428 Ambulance Building Groundwater Study
1601 DPW Vehicles and Huron Road lmprov
1617/1637 Various Capital Improvements
1717 Old Mill Road Improvements
1738/1796 2018 Road ImprovcmentsNarious Improvements
1744 Fire Department and DPW Equipment and Truck
1770 Improvements to Vichiconti Way Synthetic Turf Field
>D 1778/1801 Various Street Improvements and Parking Lots
-1803 Refurbishment of DPW Bathroom/ Purch DPW Equip
1808 Acquisition of Fire Apparatus
1815 2020 Road Improvements & Tennis Court
1818/1823 Improvements to Old Mill Road/Sidewalk
1829 FD Portable Radios
1831/1848 2021 Road Program
1832/1839 Radio System and Equipment
Local Improvements
1225/1238/ Improvements to Wildwood Ave
1316/1346 Improvements to Ryerson Road
1747 Improvements to Harriet Place
BOROUGH OF FRANKLIN LAKES
STATEMENT OF IMPROVEMENT AUTHORIZATIONS
Balance.
Ordinance December 31 2020 Capital
Date Amount Funded Unfunded Surplus
$ 185.000 $ 480
2008 37,000 7.182
7/15/2014 280.000 l,703
2/17/15, 8/18/15 686,900 276
8/1/2017 198,250 1,025
4/17/2018, 7/1/19 1,880,000 31,578
6/19/2018 328,500 4,531
2/19/2019 880,000 34,055
4/16/2019. 8/20/19 1,888.000 72,711
9/3/2019 155,000 19,123
11/12/2019 750,000 13,620
4n12020 1,717,800 31,030
5/19/20. 11/17/20 147,800 130,435
246.500
9/21/2021 1,300.000 $ 169,855
5/4/2021 825.000
2002 100,000 7,869
2005 118.750 5,360 9.250
8n12018 120.000 2.196
355,305 ~ $ 169.855
EXHIBIT C-8
2021 Authorizations
Capital Balance.
Grants Improvement Paid or Authorizations December 31. 2021
Receivable Fund Charged Cancelled Funded Unfunded
$ 480
7.182
l,703
276
1,025
$ 2,830 28.748
4,531
34,055
66.164 6,547
19,123
2.506 11,114
27,946 3.084
3.440 126,995
$ 246.500 245,901 599
$ 210,000 920.145 1,240,708 59,292
825.000 822,026 2.974
$ 7,869
5,360 9,250
2.196
$ 210.000 $ 1.991.645 $ 2,411,521 $ $ 315.284 ~
Cash Disbursements $ 2,238,329
Encumbrances Payable ~ 192
2.4.!.!.,_521
BOROUGH OF FRANKLIN LAKES
STATEMENT OF ENCUMBRANCES PAYABLE
Balance, December 31, 2020
Increased by:
Charges to Improvement Authorizations
Decreased by:
Cash Disbursements
Balance, December 31, 2021
STATEMENT OF CAPITAL IMPROVEMENT FUND
Balance, December 31, 2020
Increased by:
Budget Appropriation
Reimbursement on Fully Funded Ordinance -Ord. 1829
Reimbursement on Fully Funded Ordinance -Ord. 1848
Decreased by:
Appropriation to Finance Improvement Authorizations
Ord. 1831/1848
Ord. 1832/1839
Ord. 1829
Balance, December 31, 2021
92
$ 1,400,000
234,162
34,000
920,145
825,000
246,500
EXHIBIT C-9
$ 811,357
173,192
984,549
811,357
$ 173,192
EXHIBIT C-10
$ 436,839
1,668,162
2,105,001
1,991,645
$ 113,356
Balance, December 31, 2020
Decreased by:
BOROUGH OF FRANKLIN LAKES
STATEMENT OF RESERVE FOR COAH -RCA DEBT
Budgeted Revenue to Current Fund
Balance, December 31, 2021
STATEMENT OF RESERVE FOR FUTURE CAPITAL PROJECTS
Balance, December 3 1, 2020
Increased by:
Cash Receipts -Sumise Senior Living -Contribution in Lieu of Paving
Decreased by:
Budgeted Revenue to Current Fund
Balance, December 31, 2021
STATEMENT OF RESERVE FOR PAYMENT OF DEBT
Balance, December 31, 2020
Increased by:
Cash Receipts -County of Bergen -Ord. 1815
Cash Receipts -Borough of Oakland -Ord. 1815
Decreased by:
Budgeted Revenue to Current Fund
Balance, December 3 1, 2021
93
$ 44,537
8,730
EXHIBIT C-11
$ 347,272
116,540
$ 230,732
EXHIBIT C-12
$ 288,333
31,769
320,102
119,300
$ 200,802
EXHIBIT C-13
$
$
4,923
53,267
58,190
4,923
53,267
EXHIBIT C-14
BOROUGH OF FRANKLIN LAKES
STATEMENT OF BONDS AND NOTES AUTHORIZED BUT NOT ISSUED
Balance, Funded by Balance December 31 2021
Ord. December 31, 2021 Grant Assessment General Assessment
No. Improvement Description 2020 Authorizations Proceeds Collections Capital Fund Trust Fund
General Improvements
1727 Acquisition of Real Property $ 255 $ 255
1763 Police Handicap Restrooms 2,225 2,225
1815 2020 Road Improvements & Tennis Court 98,530 $ 98,530
'° .,,_
Local Improvement
1225/1259 Improvement to Wildwood Avenue 20,836 20,836 $
1316/1346 Improvement to Ryerson Road 9,250 9,250 -
$ 131,02§_ $ $ 98,530 $ $ 32,566 $
SEWER UTILITY FUND
Balance, December 31, 2020
Increased by:
Sewer User Fees
Sewer Connection Fees
Nonbudget Revenue
Decreased by:
2021 Budget Appropriations
Balance, December 31, 2021
BOROUGH OF FRANKLIN LAKES
SEWER UTILITY
STATEMENT OF CASH -TREASURER
95
EXHIBITD-4
Operating
$ 204,029
$ 92,323
41,116
1,919
135,358
339,387
108,830
$ 230,557
BOROUGH OF FRANKLIN LAKES
SEWER UTILITY
STATEMENT OF SEWER USER FEES RECEIVABLE
Balance, December 31, 2020
Increased by:
Sewer User Fees Billed
Decreased by:
Collections
Balance, December 31, 2021
STATEMENT OF 2020 APPROPRIATION RESERVES
Balance,
December 31, Balance After Paid or
2020 Modification Charged
Operating
Other Expenses $ 24,976 $ 24,976
$ 24,976 $ 24,976
96
EXHIBITD-5
$
$
1,489
93,143
94,632
92,323
2,309
EXHIBITD-6
Balance
Lapsed
$ 24,976
$ 24,976
BOROUGH OF FRANKLIN LAKES
PART II
GOVERNMENT AUDITING STANDARDS
DIETER P. LERC H, CPA, RMA, PSA
GARY J VINC I, CPA, RMA, PSA
JEFFREY C. BLISS, CPA, RMA, PSA
PAU LJ LERCH , CPA, RMA, PSA
JULIUS B. CO NSON I, CPA, PSA
ANDREW D. PARENTE, CPA, RMA, PSA
LERCH / VINCI & BLISS / LLP
CERT IFI ED PUB LI C ACCOUNT AN TS
REG ISTERED M UNICIPAL ACCO UNT ANTS
ELI ZA BETH A SH ICK, CPA, RMA, PSA
ROBERT W. HAAG, CPA, RMA, PSA
DEBRA GOL LE, CPA
MARK SACO , CPA
ROBERT LERC H, CPA
CHRISTOPHER VINC I, CPA, PSA
CHRIST INA CUI FFO, CPA
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members
of the Borough Council
Borou gh of Franklin Lakes
Franklin Lakes , New Jersey
We have audite d, in accordance with the auait1ng 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 audit requirements prescribed by the Division of Local Government Services, Department of
Community Affairs , State of New Jersey, the financial statements -regulatory basis of the Borough of Franklin Lakes as
of and for the year ended December 31 , 2021, and the related notes to the financial statements, and have issued our report
thereon dated June 28 , 2022. Our repoti on the financial statements -regulatory basis was modified to indicate that the
financial statements were not prepared in accordance with accounting principles generally accepted in the United States of
America but rather prepared in accordance with the regulatory basis of accounting prescribed by 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 , to meet the financial reporting requirements of the State of
New Je rsey for municipal government entities as described in Note 1.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Borough of Franklin Lakes ' internal
control over financial rep01iing (internal control) as a basis for designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the financial statements but not for the purpose of expressing
an opinion on the effectiveness of the Borough of Franklin Lakes' internal control. Accordingly, we do not express an
opinion on the effectiveness of the Borough of Franklin Lakes' 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 Borough '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 ch arged
with go vernance.
17-17 ROUTE 208 · FA IR LAWN, NJ 074 10 · TELEP HONE (20 1) 791 -7 100 · FACS IMIL E (20 1) 79 1-3035
WWW.LVBCPACOM
97
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was
not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.
Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified .
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Borough of Franklin Lakes' 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 financial statements.
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 and audit requirements as prescribed by the Division of
Local Government Services, Department of Community Affairs, State of New Jersey.
However, we noted a certain matter that is not required to be rep01ted under Government Auditing Standards that we
repo1ted to management of the Borough of Franklin Lakes in Part III of this repo1t entitled "Letter of Comments and
Recommendations"
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 Borough of Franklin Lakes' internal control or on
compliance. This repo1t is an integral patt of an audit performed in accordance with Government Auditing Standards in
considering the Borough of Franklin Lakes' internal control and compliance. Accordingly, this communication is not
suitable for any other purpose .
Fair Lawn, New Jersey
June 28, 2022
98
µ ✓-; /fat ;_if
RCH, VINCI & BLISS, LLP
Certified Public Accountants
Registered Municip Accountant
RMA Number CR0 398
SCHEDULE A
BOROUGH OF FRANKLIN LAKES
SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS
FOR THE YEAR ENDED DECEMBER 31, 2021
Federal State Grant Balance, Balance, (MEMO)
CFDA Project Award 2021 January 1, Revenue December 31, Cumulative
Number Number Amount Receipts 2021 Realized Expended 2021 Expenditures
U.S. Department of Homeland Security
Passed Thru State Dept. of Law and Public Safety
C.E.R.T. Trailers 97.042 2013-066-1200-100-726 $ 700 $ 700 $ 700
FEMA -Fire Department SAFER Grant 97.083 NIA 624,000 29,005 511,059 $ 29,463 481,596 $ 142,404
U.S. Dept of Treasury (Passed through
County of Bergen)
Coronavirus Relief Fund 21.019 NIA 534,014 72,014 72,014 462,000
American Rescue Plan Act 21.027 NIA 1,163,810 581,905 -
'D $ 583,773 $ $ _ 29,463 $ 554,_310
'D
This schedule was not subject to single audit in accordance with U.S. Uniform Guidance.
See Accompanying Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance
SCHEDULE B
BOROUGH OF FRANKLIN LAKES
SCHEDULE OF EXPENDITURES OF STA TE FINANCIAL ASSISTANCE
FOR THE YEAR ENDED DECEMBER 31, 2021
Balance, Balance, (MEMO)
Grant 2021 January 1, Revenue December 31, Cumulative
State Grant Program Account Number Year Award Receipts 2021 Realized Expended 2021 Expenditures
Department of Environmental Protection
Recycling Tonnage Grant 042-752-6020 2020 $ 15,900 $ 10,639 $ 10,639 $ 5,261
2021 18,319 $ 18,319 $ 18,319 $ 110 18,209 110
Clean Communities Grant NIA 2019 30,534 13,003 13,003 17,531
2020 27,529 27,529 27,529
2021 29,938 29,938 29,938 20,123 9,815 20,123
NJUCF Reforestation & Tree Planting NIA 2019 25,823 540 395 145 25,678
ANJEC 2020 Open Space Stewardship NIA 2020 1,500 1,500 1,498 2
Department of Law and Public Safety
Drunk Driving Enforcement Fund NIA 2016 4,063 1,811 1,811 2,252
2017 4,546 4,546 4,546
2018 3,650 3,650 3,650
0 2019 3,142 3,142 3,142 0
2021 3,922 3,922 3,922 3,922
Body Armor Replacement Program NIA 2020 2,430 2,430 2,208 222 2,208
2021 1,912 1,912 1,912 1,912
Drive Sober or Get Pulled Over NIA 2020 5,466 1,908 1,908 3,558
2021 5,923 5,923 5,923 5,923 5,923
Distracted Driving NIA 2021 5,957 5,957 5,957 5,957 5,957
Municipal Alcohol Education and
Rehabilitation NIA 2017 643 643 643
2018 659 659 659
2019 161 161 161
2020 250 250 250
CDBG -Handicap Improvements -Sr Center NIA 2021 15,000 15,000 15,000 15,000
Department of Human Services -
Passed Thru County of Bergen
Municipal Alliance NIA 2019 9,876 3,653 3,653 6,223
$ 76,064 $ 80,971 $ 51,214 ~821
This schedule is not subject to audit in accordance with NJ 0MB 15-08.
See Accompanying Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance
NOTES TO THE SCHEDULES OF EXPENDITURES OF FEDERAL AW ARDS
AND STATE FINANCIAL ASSISTANCE
BOROUGH OF FRANKLIN LAKES
NOTES TO THE SCHEDULES OF EXPENDITURES OF FEDERAL AW ARDS
AND STATE FINANCIAL ASSISTANCE
YEAR ENDED DECEMBER 31, 2021
NOTE 1 GENERAL
The accompanying schedules present the activity of all federal awards and state financial assistance programs
of the Borough of Franklin Lakes. The Borough is defined in Note l(A) to the Borough's financial statements.
All federal financial assistance received directly from federal agencies, as well as federal awards and state
financial assistance passed through other government agencies is included on the schedules of expenditures of
federal awards and state financial assistance.
NOTE 2 BASIS OF ACCOUNTING
The accompanying schedules are prepared and presented using the regulatory basis of accounting as prescribed
for municipalities by the Division of Local Government Services, Department of Community Affairs, State of
New Jersey which differ in certain respects from accounting principles generally accepted in the United States
of America (GAAP) applicable to local government units. This basis of accounting is described in Note 1 to
the Borough's financial statements.
NOTE 3 RELATIONSHIP TO FINANCIAL STATEMENTS
Amounts reported in the accompanying schedules agree with amounts reported in the Borough's financial
statements. Financial assistance revenues are reported in the Borough's financial statements on a basis of
accounting described above as follows:
Federal State Total
Current Fund $ $ 80,971 $ 80,971 -----
Total $ $ 80,971 $ 80,971
=======
NOTE 4 RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS
Amounts reported in the accompanying schedules may not necessarily agree with the amounts reported in the
related federal and state financial reports due to timing differences between the Borough's fiscal year and grant
program year.
101
BOROUGH OF FRANKLIN LAKES
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED DECEMBER 31, 2021
Part I -Summary of Auditor's Results
Financial Statements
Type of auditors' report issued on financial statements
Internal control over financial reporting:
1) Material weakness( es) identified
2) Significant deficiency(ies) that are not
considered to be material weakness( es)?
Noncompliance material to the financial
statements noted?
Federal Awards Section
NOT APPLICABLE
State Awards Section
NOT APPLICABLE
Modified
_____ yes
_____ yes
_____ yes
102
X no
X none
X no
BOROUGH OF FRANKLIN LAKES
PARTID
SUPPLEMENTARY DATA
LETTER OF COMMENTS AND RECOMMENDATIONS
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF FRANKLIN LAKES
SUPPORTING DATA
COMPARATIVE STATEMENT OF OPERATIONS AND CHANGES IN FUND BALANCE -
CURRENT FUND
Year 2021 Year 2020
Amount Percent Amount Percent
REVENUE AND OTHER INCOME REALIZED
Fund Balance Utilized $ 2,000,000 2.45 % $ I, 100,000 1.41 %
Miscellaneous -From Other Than Local
Property Tax Levies 5,346,562 6.54 5,070,629 6.49
Collection of Delinquent Taxes
and Tax Title Liens 497,698 0.61 532,262 0.68
Collection of Current Tax Levy 73,427,055 89.86 71,217,069 91.13
Other Credits 442,850 0.54 230,854 0.30
Total Income 81714165 100.00 % 78150814 100.00 %
EXPENDITURES
Budget Expenditures
Municipal Purposes 19,283,384 24.29 % 17,695,639 23.33 %
County Taxes 11,273,649 14.20 11,024,943 14.54
Local District School Taxes 29,407,906 37.05 28,405,982 37.46
Regional School Taxes 19,291,656 24.30 19,048,893 25.12
Other Expenditures 121,720 0.15 122,331 0.16
Less: Expenditures Included Above To
Deferred Changes (462,000) (0.61)
Total Expenditures 79,378,315 100.00 % 75,835,788 100.00 %
Excess in Revenue 2,335,850 2,315,026
Fund Balance, January I 4,094,328 2,879,302
6,430,178 5,194,328
Less Utilization as Anticipated Revenue 2,000,000 1,100,000
Fund Balance, December 31 178 $ 4,094,328
103
BOROUGH OF FRANKLIN LAKES
SUPPORTING DATA
COMPARATIVE STATEMENT OF OPERATIONS AND CHANGES IN FUND BALANCE -
SEWER UTILITY FUND
Year 2021 Year 2020
Amount Percent Amount Percent
REVENUE AND OTHER INCOME REALIZED
Surplus Anticipated $ 22,900 12.50 % $ 45,000 23.30 %
Sewer User Fees 92,323 50.39 91,618 47.44
Sewer Connection Fees 41,116 22.44 25,344 13.12
Non-Budget Revenue 1,919 1.05 1,063 0.55
Other Credits to Income 24,976 13.63 30,118 15.59
Total Income 183 234 100.00 % 193 143 100.00 %
EXPENDITURES
Budget Expenditures
Operating 121,000 100.00 130,000 100.00
Total Expenditures 121,000 100.00 % 130,000 100.00 %
Excess in Revenue 62,234 63,143
Fund Balance, January 1 179,053 160,910
241,287 224,053
Less: Utilization as Anticipated Revenue (22,900) (45,000)
Fund Balance, December 31 $ 218,387 $ 179,053
104
BOROUGH OF FRANKLIN LAKES
SUPPORTING DATA
Comparative Schedule of Tax Rate Information
Tax Rate
Appo1tionment of Tax Rate
Municipal
County
County Open Space
Local School
Regional High School
Library
Assessed Valuation
2021
2020
2019
Comparison of Tax Levies and Collection
2021
$1.662
.259
.244
.010
.674
.442
.033
$4,365,160,800
$1.648
.257
.243
.010
.661
.443
.034
$4,297,626,000
2019
$1.642
.250
.246
.011
.650
.451
.034
$4.245,681.000
A study of this tabulation could indicate a possible trend in future tax levies. A decrease in the percentage of current
collection could be an indication of a probable increase in future tax levies.
Percentage
of
Year Tax Levy Cash Collections Collection
2021 $ 73,884,407 $ 73,427,055 99.38%
2020 71,938,653 71,217,069 99.00%
2019 70,775,463 69,821,834 98.65%
105
BOROUGH OF FRANKLIN LAKES
SUPPORTING DATA
Delinquent Taxes and Tax Title Liens
This tabulation includes a comparison, expressed in percentage, of the total of delinquent taxes and tax title liens, in
relation to the tax levies of the last three years.
Amount of Amount of Percentage
December 31 Tax Title Delinquent Total of
Year Liens Taxes Delinquent Tax Levy
2021 $27,146 $255,146 $282,292 0.38%
2020 13,387 503,772 517,159 0.72%
2019 12,600 546,481 559,081 0.79
Comparative Schedule of Fund Balances
Utilized
Balance, in Budget of
Year December 3 1, Succeeding Year
Current Fund 2021 $4,430,178 $2,450,000
2020 4,094,328 2,000,000
2019 2,879,302 1,100,000
2018 3,927,650 2,390,000
2017 4,374,345 2,109,000
Sewer Utiliry Fund 2021 $218,387 $45,100
2020 179,053 22,900
2019 160,910 45,000
2018 123,658 25,000
2017 108,810
106
BOROUGH OF FRANKLIN LAKES
SUPPORTING DATA
OFFICIALS IN OFFICE AND SURETY BONDS
The following officials were in office during the period under audit:
Frank Bivona
Dennis Bonagura
Charles Kahwaty
Gail Kelly
Joseph Cadicina
Ann Swist
Gregory Hart
Gail M. Rulli
William G. Pike
William T. Smith
Chiesa, Shahinian & Giantomasi, P.C.
Meena Sivakumar
Edmund Brown
Boswell Engineering
Francis J. Leddy, Jr.
Stacey Gambuti
Beth De Vries
John Wittekind, Jr.
Title
Mayor
Council President
Councilman
Councilwoman
Councilman
Councilwoman
Business Administrator
Borough Clerk
Chief Financial Officer
Borough Attorney
Bond Counsel
Tax Collector
Tax Assessor
Borough Engineer
Municipal Court Judge
Court Administrator
Violations Clerk
Construction Code Official/Zoning Officer
(1) Municipal Excess Liability Joint Insurance Fund Blanket Bond $1,000,000
107
Corporate
Surety
(I)
(l)
(1)
(I)
(1)
(1)
BOROUGH OF FRANKLIN LAKES
LETTER OF COMMENTS AND RECOMMENDATIONS
Our comments with respect to the examination and any error, omission, irregularity, violation of law, discrepancy or
other nonconformity to the law or regulation found during the examination are herewith set forth.
GENERAL COMMENTS
Current Year Findings
There are none.
Contracts and Agreements Required to be Advertised for NJS 40A:11-4
NJS 40A: 11-4 states "Every contract or agreement, for the performance of any work or the furnishing or hiring of
any materials or supplies, the cost or the contract price whereof is to be paid with or out of public funds not included
within the terms of Section 3 of this act, shall be made or awarded only after public advertising for bids and bidding
therefore, except as is provided otherwise in this act or specifically by any other law. No work, materials or supplies
shall be undertaken, acquired or furnished for a sum exceeding in the aggregate $17,500, except by contract or
agreement."
During 2021, the Governing Body approved a resolution authorizing the bid threshold of $44,000 for the period of
January 1, 2021 through December 31, 2021 as the Borough Administrator is a qualified purchasing agent.
The Governing Body of the Municipality has the responsibility of determining whether the expenditures in any
category will exceed the bid threshold within the fiscal year. Where question arises as to whether any contract or
agreement might result in violation of the statute, the Borough Counsel's opinion should be sought before a
commitment is made.
The minutes indicate that bids were requested by public advertising for the following items:
2021 Road Program
Parsons Pond Road
Cell Tower Ground Lease
In as much as the system of records did not provide for an accumulation of payments for categories for the
performance of any work or the furnishing or hiring of any materials or supplies, the results of such an
accumulation could not reasonably be ascertained. Disbursements were reviewed, however, to determine
whether any clear-cut violations existed. No such violations were detected.
108
BOROUGH OF FRANKLIN LAKES
SUPPORTING DATA
GENERAL COMMENTS (Continued)
Collection of Interest on Delinquent Taxes and Assessments
The statute provides the method for authorizing interest and the maximum rates to be charged for the non-payment
of taxes or assessments on or before the date when they would become delinquent.
The Governing Body on January 2, 2021 adopted the following resolution authorizing interest to be charged on
delinquent taxes and assessments:
"BE IT RESOLVED, by the Mayor and Council of the Borough of Franklin Lakes, New Jersey, County
of Bergen that, for the year 2021, the rate of interest on delinquent taxes and assessment shall be fixed
at the rate of eight (8%) percent per year on the first $1,500 of the delinquency and at the rate of
eighteen (18%) percent per year on any amount of delinquency in excess of $1,500; except that no
interest shall be charged if payment of any installment is made within the ten (10) days after the date
upon which same became payable, and
"BE IT FURTHER RESOLVED, that an additional penalty of six ( 6%) percent will be charged on any
delinquency in excess of $10,000 if not paid by the end of the calendar year, and
"BE IT RESOLVED, that interest be computed on delinquent taxes to the day payment is received in
the Tax Collector's Office.
It appears from our examination of the Collector's record that interest was collected in accordance with the
foregoing resolution.
Delinquent Taxes and Tax Title Liens
The following comparison is made of the number of tax title liens receivable on December 31, of the last three
years:
Year
2021
2020
2019
Number of Liens
109
6
4
3
BOROUGH OF FRANKLIN LAKES
SUPPORTING DAT A
RECOMMENDATIONS
There are none .
Status of Prior Year 's Audit Findings/Recommendations
A review was performed on the prior year recommendation and corrective action has been taken.
I 10
p L · . ~ t!.c-;:; /2E§ VINCI & BU S, LLP
Cettified Public Accountants
Registered Municipal Accountants
" eter
Registered Municipal Accountant
RMA Number CR00398