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HomeMy Public PortalAboutReport on the Examination of Basic Financial StatementsTOWN OF BREWSTER, MASSACHUSETTS REPORT ON EXAMINATION OF BASIC FINANCIAL STATEMENTS JUNE 30, 2021 TOWN OF BREWSTER, MASSACHUSETTS REPORT ON EXAMINATION OF BASIC FINANCIAL STATEMENTS JUNE 30, 2021 TABLE OF CONTENTS PAGE Independent Auditor’s Report 1 - 2 Management’s Discussion and Analysis 3 – 10 Basic Financial Statements Statement of Net Position 11 Statement of Activities 12 – 13 Governmental Funds – Balance Sheet 14 Governmental Funds – Statement of Revenues, Expenditures, and Changes in Fund Balances 15 Reconciliation of the Governmental Funds Balance Sheet Total Fund Balances to the Statement of Net Position 16 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 17 General Fund – Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual 18 Proprietary Funds - Statement of Net Position Proprietary Funds – Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds – Statement of Cash Flows 19 20 21 Fiduciary Funds – Statement of Fiduciary Net Position 22 Fiduciary Funds – Statement of Changes in Fiduciary Net Position 23 Notes to Basic Financial Statements 24 – 70 Required Supplementary Information: Barnstable County Retirement Association Schedules: Schedule of Town’s Proportionate Share of the Net Pension Liability 71 Schedule of Town’s Contribution 72 TOWN OF BREWSTER, MASSACHUSETTS REPORT ON EXAMINATION OF BASIC FINANCIAL STATEMENTS JUNE 30, 2021 TABLE OF CONTENTS PAGE Massachusetts Teachers Retirement System Schedule: Schedule of the Commonwealth’s Collective amounts of the Net Pension Liability 73 Other Postemployment Benefit Plan Schedules: Schedule of the Town’s Net OPEB Liability and Related Ratios 74 Schedule of the Town’s Contribution 75 Schedule of Investment Return 76 Notes to Required Supplementary Information 77 - 78 ROBERT E. BROWN II CERTIFIED PUBLIC ACCOUNTANT 25 CEMETERY STREET – P.O. BOX 230 Mendon, Massachusetts 01756 Phone: (508) 478-3941 Fax: (508) 478-1779 INDEPENDENT AUDITOR’S REPORT To the Honorable Select Board Town of Brewster, Massachusetts Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Brewster, Massachusetts, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Town of Brewster, Massachusetts’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Brewster, Massachusetts, as of June 30, 2021, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, and Barnstable County Retirement Association schedules - Town’s proportionate share of the net pension liability, and Town’s contribution, Massachusetts Teachers Retirement System’s schedule of the Commonwealth’s Collective amounts of the Net Pension Liability, Other Postemployment Benefit schedules - Town’s Net OPEB Liability and Related Ratios, Town’s contribution, and investment return, and notes to required supplementary information on pages 3 – 10, 71 – 72, 73, 74 – 76 and 77 - 78 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 13, 2022, on our consideration of the Town of Brewster, Massachusetts’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 Town of Brewster, Massachusetts’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town of Brewster, Massachusetts’s internal control over financial reporting and compliance. Certified Public Accountant May 13, 2022 - 3 - Management’s Discussion and Analysis As management of the Town of Brewster (the Town), we offer readers of the Town’s financial statements this narrative overview and analysis of the financial activities of the Town for the fiscal year ended June 30, 2021. We encourage readers to consider this information in addition to the statements and notes. The Town complies with financial reporting requirements issued by the Governmental Accounting Standards Board (GASB). GASB is the authoritative standard setting body that provides guidance on how to prepare financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). Users of these financial statements, such as investors and rating agencies, rely on the GASB to establish consistent reporting standards for all governments in the United States. This consistent application is the only way users can assess the financial condition of one government compared to others. Financial Highlights • The assets of the Town exceeded its liabilities at the close of the fiscal year by $69.7 million (net position). • The unrestricted negative net position of the Town’s governmental activities are -$31.0 million. The unrestricted negative net position of the Town’s business-type activities are -$1.4 million. • The government’s total net position increased by $7.6 million from fiscal 2020. Within this total, net position of governmental activities increased by $6.3 million from fiscal 2020. Also, net position of business-type activities increased by $1.3 million from 2020. • At June 30, 2021, the Town’s governmental funds had combined ending fund balances of $22.8 million. The combined governmental funds balance increased by $3.8 million, a 20.0% increase over the prior year’s ending fund balances. • The Town’s general fund reported a fund balance of $13.1 million at the end of fiscal 2021. The unassigned fund balance for the general fund was $8.6 million or 18.88% of total general fund expenditures. A total of $1.8 million of the assigned fund balance was designated for funding the fiscal year 2022 budget. • The total cost of all Town services for fiscal 2021 was $54.15 million, $48.14 million of which was for governmental activities, and $6.01 million of which was for business-type activities. - 4 - Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Town’s basic financial statements. These basic financial statements are comprised of three components: 1. Government-wide Financial Statements 2. Fund Financial Statements 3. Notes to the Basic Financial Statements Government-wide Financial Statements – The government-wide financial statements are designed to provide readers with a broad overview of finances, in a manner similar to private-sector business. The statement of net position presents information on all assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position is improving or deteriorating. The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future periods, (e.g., uncollected taxes). Both of the government-wide financial statements distinguish functions that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees or charges (business-type activities). The governmental activities include general government, public safety, education, public works, human services, culture and recreation, employee benefits, debt service, and state and county assessments. The business-type activities include water and golf department services. Fund Financial Statements – A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Fund accounting is used to ensure and demonstrate compliance with finance related legal requirements. All of the funds can be divided into three main categories: governmental funds, proprietary funds and fiduciary funds. Governmental Funds – governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental funds statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both, the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. - 5 - The Town of Brewster adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. Proprietary Funds – Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Town has two enterprise funds:  Water Enterprise Fund accounts for the water activity of the Town.  Golf Enterprise Fund accounts for the golf activity of the Town. Fiduciary Funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements, as the resources of those funds are not available to support the Town’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Private-purpose trust funds and postemployment benefits trust are each reported and combined into a single, aggregate presentation in the fiduciary funds financial statements under the captions “private purpose trust funds” and “postemployment benefits trust”, respectively. Notes to the basic financial statements – The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Government-wide Financial Analysis: The chart on the following page summarizes key financial components of the Town’s financial statements. As noted earlier, assets exceed liabilities by $69,702,472 at the close of fiscal year 2021. The Town is able to report positive balances of net position, both for the government as a whole, and for its separate governmental and business-type activities in total. The largest component of the Town’s net position are its investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related outstanding debt used to acquire those assets, and is $87,308,999, or 125.26% of total net position. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the investment in the Town’s capital assets is reported net of its related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the net position totaling $14,820,801 (21.26% of total) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position is ($32,427,328) or -46.52% of total. The Town decreased its total liabilities by $6,939,603 as compared to fiscal 2020, and total net position increased by $7.7 million or 12.41%. Net position of governmental activities increased by $6,410,232, a 13.53% increase from fiscal 2020. Net position of business-type activities increased by $1,282,325 or 8.76% from 2020. There was an increase of $141,203 in net position reported in connection with the water business-type activity, and an increase of $1,141,122 in net position in connection with the golf department business-type activity, respectively. - 6 - Increase Increase Increase FY 2021 FY 2020 (Decrease)FY 2021 FY 2020 (Decrease)FY 2021 FY 2019 (Decrease) Assets: Current assets 26,994,288$ 23,821,424$ 3,172,864$ 5,165,550$ 3,567,883$ 1,597,667$ 32,159,838$ 27,389,307$ 4,770,531$ Noncurrent assets (excluding capital)259,040 382,481 (123,441) 3,394 6,120 (2,726) 262,434 388,601 (126,167) Capital assets 87,994,147 88,131,471 (137,324) 21,263,921 22,041,682 (777,761) 109,258,068 110,173,153 (915,085) Total assets 115,247,475 112,335,376 2,912,099 26,432,865 25,615,685 817,180 141,680,340 137,951,061 3,729,279 Deferred Outflow of Resources:3,030,607 3,864,142 (833,535) 525,640 711,137 (185,497) 3,556,247 4,575,279 (1,019,032) Liabilities: Current liabilities (excluding debt)2,382,036 2,180,014 202,022 263,219 175,689 87,530 2,645,255 2,355,703 289,552 Noncurrent liabilities (excluding debt)34,703,766 38,193,385 (3,489,619) 5,618,729 6,260,119 (641,390) 40,322,495 44,453,504 (4,131,009) Current debt 2,276,248 3,343,146 (1,066,898) 405,000 405,000 - 2,681,248 3,748,146 (1,066,898) Noncurrent debt 16,966,808 18,593,056 (1,626,248) 3,510,000 3,915,000 (405,000) 20,476,808 22,508,056 (2,031,248) Total liabilities 56,328,858 62,309,601 (5,980,743) 9,796,948 10,755,808 (958,860) 66,125,806 73,065,409 (6,939,603) Deferred Inflows of Resources:8,161,563 6,512,488 1,649,075 1,246,746 938,528 308,218 9,408,309 7,451,016 1,957,293 Net Position: Net investment in capital assets 69,960,078 68,419,755 1,540,323 17,348,921 17,873,006 (524,085) 87,308,999 86,292,761 1,016,238 Restricted 14,820,801 11,810,300 3,010,501 - - - 14,820,801 11,810,300 3,010,501 Unrestricted (30,993,218) (32,852,626) 1,859,408 (1,434,110) (3,240,520) 1,806,410 (32,427,328) (36,093,146) 3,665,818 Total net position 53,787,661$ 47,377,429$ 6,410,232$ 15,914,811$ 14,632,486$ 1,282,325$ 69,702,472$ 62,009,915$ 7,692,557$ Revenues Program Revenues: Charges for services 3,901,614$ 2,947,017$ 954,597$ 7,521,954$ 6,242,526$ 1,279,428$ 11,423,568$ 9,189,543$ 2,234,025$ Operating grants and contributions 6,729,568 4,364,989 2,364,579 79,217 71,245 7,972 6,808,785 4,436,234 2,372,551 Capital grants and contributions 774,186 1,146,894 (372,708) - - - 774,186 1,146,894 (372,708) General Revenues: Real Estate and personal property taxes 36,346,103 35,304,344 1,041,759 - - - 36,346,103 35,304,344 1,041,759 Tax Liens 13,146 46,612 (33,466) - - - 13,146 46,612 (33,466) Motor vehicle and other excise taxes 1,722,856 1,617,176 105,680 - - - 1,722,856 1,617,176 105,680 Hotel/Motel Tax and Meals Tax 2,262,385 1,699,075 563,310 - - - 2,262,385 1,699,075 563,310 Penalties and interest on taxes 110,261 62,505 47,756 - - - 110,261 62,505 47,756 Payments in Lieu of Taxes 6,883 6,884 (1) - - - 6,883 6,884 (1) Nonrestricted grants and contributions 2,213,764 2,180,275 33,489 - - - 2,213,764 2,180,275 33,489 Unrestricted investment income 27,416 172,935 (145,519) - - - 27,416 172,935 (145,519) Other revenues 48,929 28,012 20,917 - - - 48,929 28,012 20,917 Total Revenues 54,157,111 49,576,718 4,580,393 7,601,171 6,313,771 1,287,400 61,758,282 55,890,489 5,867,793 Expenses: General Government 6,018,917 4,264,012 1,754,905 - - - 6,018,917 4,264,012 1,754,905 Public Safety 7,521,175 7,125,037 396,138 - - - 7,521,175 7,125,037 396,138 Education 21,384,051 21,011,343 372,708 - - - 21,384,051 21,011,343 372,708 Public Works 2,647,621 2,485,848 161,773 - - - 2,647,621 2,485,848 161,773 Human Services 876,708 950,022 (73,314) - - - 876,708 950,022 (73,314) Culture and Recreation 1,330,301 1,253,516 76,785 - - - 1,330,301 1,253,516 76,785 Employee Benefits 7,186,486 6,639,159 547,327 - - - 7,186,486 6,639,159 547,327 State and County Assessments 621,789 626,188 (4,399) - - - 621,789 626,188 (4,399) Interest 556,230 641,385 (85,155) - - - 556,230 641,385 (85,155) Golf - - - 3,393,440 3,041,693 351,747 3,393,440 3,041,693 351,747 Water - - - 2,610,413 2,409,295 201,118 2,610,413 2,409,295 201,118 Total Expenses 48,143,278 44,996,510 3,146,768 6,003,853 5,450,988 552,865 54,147,131 50,447,498 3,699,633 Increase/(Decrease) in Net Position before contributions to permanent endowments and transfers 6,013,833 4,580,208 1,433,625 1,597,318 862,783 734,535 7,611,151 5,442,991 2,168,160 Transfers 314,993 200,000 114,993 (314,993) (200,000) (114,993) - - - Change in Net Position 6,328,826 4,780,208 1,548,618 1,282,325 662,783 619,542 7,611,151 5,442,991 2,168,160 Prior Period Adjustment - OPEB - (1,071,452) 1,071,452 - 109,991 (109,991) - (961,461) 961,461 Prior Period Adjustment - Agency 81,406 - 81,406 - - - 81,406 - 81,406 Net Position - beginning 47,377,429 43,668,673 3,708,756 14,632,486 13,859,712 772,774 62,009,915 57,528,385 4,481,530 Net Position - ending 53,787,661$ 47,377,429$ 6,410,232$ 15,914,811$ 14,632,486$ 1,282,325$ 69,621,066$ 62,009,915$ 7,611,151$ Town of Brewster - Financial Highlights Total Governmental Business-type Primary Activities Activities Government - 7 - Financial analysis of the Government’s Funds As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds – The focus of governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, governmental funds reported combined ending fund balances of $22,762,191 a $3,795,356 increase from the prior year’s ending fund balance. The general fund is the primary operating fund. At the end of the current fiscal year, unassigned fund balance of the general fund was $8,568,197, while total fund balance stood at $13,086,497. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 18.9% of total general fund expenditures, while total fund balance represents 28.8% of that same amount. The stabilization fund has accumulated a fund balance of $2,990,811 which represents 6.59% of general fund expenditures. The funds can be used for general or capital purposes upon Town Meeting approval. General Fund Budget Highlights During the fiscal year the operating budget was amended by $63,859 (at Special Town Meeting), primarily for increases to fund general government, public safety, education, public works, human services, and culture & recreation; while decreases were approved for employee benefits. The Town budgeted $42.7 million in revenues and $47.0 million in expenditures, drawing on transfers and prior year’s surplus to finance the difference. At year end, actual revenues exceeded estimates by $1,813,846 and $1,546,607 of unexpended appropriation balances was closed out to unassigned fund balance. - 8 - Capital Asset and Debt Administration Capital Assets - In conjunction with the operating budget, the Town annually prepares capital budgets for the upcoming fiscal year. The Town’s investment in capital assets for governmental and business type activities, as summarized below, as of June 30, 2021, amounts to $109,258,068 net of accumulated depreciation. The investment in capital assets includes land, buildings and improvements, capital improvements (other than buildings), machinery, equipment and vehicles, infrastructure, and construction in progress. The governmental activities capital assets (net of accumulated depreciation) were decreased by -$137,324 during the current fiscal year while the business-type activities capital assets (net of accumulated depreciation) decreased by -$777,761. Total depreciation was $3.28 million, resulting in a total government-wide decrease to capital assets (net of accumulated depreciation) of $915,085. Increase Increase FY 2021 FY 2020 (Decrease)FY 2021 FY 2020 (Decrease)FY 2021 FY 2020 Land 42,192,861$ 42,192,861$ -$ 3,559,212$ 3,559,212$ -$ 45,752,073$ 45,752,073$ Construction in Progress 145,547 3,709,131 (3,563,584) 100,850 581,224 (480,374) 246,397 4,290,355 42,338,408 45,901,992 (3,563,584) 3,660,062 4,140,436 (480,374) 45,998,470 50,042,428 Buildings and improvements 25,252,798 26,120,151 (867,353) 3,984,451 4,033,351 (48,900) 29,237,249 30,153,502 Improvements (other than buildings)3,672,386 3,594,726 77,660 - - - 3,672,386 3,594,726 Machinery, Equipment, and Vehicles 4,378,913 4,176,913 202,000 1,324,318 1,017,516 306,802 5,703,231 5,194,429 Infrastructure 12,351,642 8,337,689 4,013,953 12,295,090 12,850,379 (555,289) 24,646,732 21,188,068 45,655,739 42,229,479 3,426,260 17,603,859 17,901,246 (297,387) 63,259,598 60,130,725 Total Capital Assets 87,994,147$ 88,131,471$ (137,324)$ 21,263,921$ 22,041,682$ (777,761)$ 109,258,068$ 110,173,153$ Activities Activities Government Capital Assets (Net of Depreciation) Total Governmental Business-type Primary - 9 - Long Term Debt - The Town’s debt burden is reasonable in relation to other communities its size. Outstanding long-term debt, as of June 30, 2021 totaled $21,400,000. Within this total, business-type activities have debt of $3,915,000 that is fully supported by their respective program revenues, and governmental activities debt is $17,485,000. Total debt consists of the following: Outstanding Outstanding Governmental Activities June 30, 2021 June 30, 2020 Road Betterments - Prell Circle 15,000$ 20,000$ Road Betterments - Allen Drive 15,000 20,000 Ebeneezer Lane Road Bett 50,000 60,000 S. Pond DR/Captain Fitz Rd 70,000 80,000 School Renovations 2,175,000 2,320,000 Road Repairs 1,325,000 1,460,000 MWPAT Title V 30,000 40,000 Punkhorn Land Acquisition - 6/30/11 325,000 360,000 Heights Road Betterments - 6/30/11 - 20,000 Lane Road Betterments - 6/30/11 - 5,000 MWPAT #97-1156 Title V - 10,200 Land Purchase - 60,000 Land Purchase 660,000 785,000 Fire Station - 5/3/17 5,200,000 5,525,000 Road Repairs - 5/3/17 1,610,000 1,770,000 Library Parking Lot - 5/3/17 200,000 220,000 Tower Hill Circle - RD Bett - 5/3/17 150,000 165,000 Moss/Commons - RD Bett - 5/3/17 50,000 55,000 Public Way - 3/15/18 75,000 85,000 Fire Building - 3/15/18 5,100,000 5,400,000 TriTown Septage - 3/15/18 435,000 500,000 Total Governmental Activities 17,485,000$ 18,960,200$ Outstanding Outstanding Business-type Activities June 30, 2021 June 30, 2020 Land Purchase - Copelas 415,000$ 450,000$ Well Access Road 125,000 150,000 Water 615,000 660,000 WELL #6 & WATER MAIN - 1,730,000 1,865,000 Water offices/garage 850,000 975,000 Slough Road 175,000 210,000 Water Betterments - Fiddler's Lane 5,000 10,000 Total Business-type Activities 3,915,000$ 4,320,000$ Grand Total - All long-term debt 21,400,000$ 23,280,200$ Outstanding Debt at Year End Please refer to Notes 5 and 9 for further discussion of the major capital asset and debt activity. - 10 - Economic Factors and Next Year’s Budgets & Tax Rate The Town’s leadership (elected and appointed officials) considered many factors when setting the fiscal 2022 budget and tax rates including the following: • The Fiscal 2022 tax rate was set at $7.85, a $.73 cent decrease over Fiscal 2021. The excess levy capacity was $19,622. • The Select Board voted during their classification hearing to maintain the same tax rate for all classes of property. • Fiscal 2021 budgetary issues were Health Care (for active and retired employees), Pension Obligations, and State Aid for both the Town and Nauset Regional School District. • OPEB Liability Funding: Brewster Invested $1,123,000 with the HSCB in FY 2014 and is committed to an annual contribution. The Fiscal 2016 contribution was $50,000, $75,000 in Fiscal 2017, $55,000 in Fiscal 2018, $100,000 in Fiscal 2019, $200,000 in Fiscal 2020, and $250,000 in Fiscal 2021. The June 30, 2021 balance in this fund is $3,136,620. • The June 30, 2021 balance in the Stabilization Fund is $2,990,811. In addition, the Town has a balance of $500,168 in the Capital Stabilization Fund. Request for Information This financial report is designed to provide a general overview of the Town of Brewster’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or request for additional financial information should be addressed to the Finance Director, 2198 Main Street, Brewster, MA 02631. GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES CURRENT: CASH AND SHORT-TERM INVESTMENTS 25,068,023$ 4,366,343$ 29,434,366$ RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES: REAL ESTATE AND PERSONAL PROPERTY TAXES 472,032 - 472,032 TAX LIENS 497,724 - 497,724 MOTOR VEHICLE EXCISE TAXES 119,196 - 119,196 USER FEES - 797,308 797,308 DEPARTMENTAL AND OTHER 362,277 - 362,277 INTERGOVERNMENTAL 408,297 - 408,297 SPECIAL ASSESSMENTS 66,739 1,899 68,638 NONCURRENT: RECEIVABLES: SPECIAL ASSESSMENTS 259,040 3,394 262,434 CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 87,994,147 21,263,921 109,258,068 TOTAL ASSETS 115,247,475 26,432,865 141,680,340 DEFERRED OUTFLOWS OF RESOURCES RELATED TO PENSIONS 2,783,617 491,227 3,274,844 RELATED TO POST EMPLOYMENT BENEFITS 246,990 34,413 281,403 TOTAL DEFERRED OUTFLOWS OF RESOURCES 3,030,607 525,640 3,556,247 LIABILITIES CURRENT: ACCOUNTS PAYABLE 2,211,800 249,482 2,461,282 OTHER LIABILITIES 156 - 156 ACCRUED INTEREST 130,836 13,737 144,573 LANDFILL POSTCLOSURE CARE COSTS 39,244 - 39,244 CAPITAL LEASES 176,040 - 176,040 BONDS AND NOTES PAYABLE 2,100,208 405,000 2,505,208 NONCURRENT: LANDFILL POSTCLOSURE CARE COSTS 241,556 - 241,556 POSTEMPLOYMENT BENEFITS 12,461,944 1,736,329 14,198,273 NET PENSION LIABILITY 22,000,266 3,882,400 25,882,666 CAPITAL LEASES 434,288 - 434,288 BONDS AND NOTES PAYABLE 16,532,520 3,510,000 20,042,520 TOTAL LIABILITIES 56,328,858 9,796,948 66,125,806 DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS 2,950,759 520,722 3,471,481 RELATED TO POST EMPLOYMENT BENEFITS 5,210,804 726,024 5,936,828 TOTAL DEFERRED INFLOWS OF RESOURCES 8,161,563 1,246,746 9,408,309 NET POSITION NET INVESTMENT IN CAPITAL ASSETS 69,960,078 17,348,921 87,308,999 RESTRICTED FOR: PERMANENT FUNDS: EXPENDABLE 147,994 - 147,994 NONEXPENDABLE 150,388 - 150,388 OTHER PURPOSES 14,522,419 - 14,522,419 UNRESTRICTED (30,993,218) (1,434,110) (32,427,328) TOTAL NET POSITION 53,787,661$ 15,914,811$ 69,702,472$ TOWN OF BREWSTER, MASSACHUSETTS STATEMENT OF NET POSITION JUNE 30, 2021 PRIMARY GOVERNMENT See accompanying notes to the basic financial statements - 11 - OPERATING CAPITAL CHARGES FOR GRANTS AND GRANTS AND NET (EXPENSE) FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS REVENUE PRIMARY GOVERNMENT: GOVERNMENTAL ACTIVITIES: GENERAL GOVERNMENT 6,018,917$ 541,738$ 2,858,529$ -$ (2,618,650)$ PUBLIC SAFETY 7,521,175 2,043,770 345,560 - (5,131,845) EDUCATION 21,384,051 218,139 1,323,258 - (19,842,654) PUBLIC WORKS 2,647,621 598,805 28,625 102,756 (1,917,435) HUMAN SERVICES 876,708 68,836 159,621 - (648,251) CULTURE & RECREATION 1,330,301 430,326 133,810 671,430 (94,735) EMPLOYEE BENEFITS 7,186,486 - 1,880,165 - (5,306,321) STATE & COUNTY ASSESSMENTS 621,789 - -- (621,789) INTEREST 556,230 - -- (556,230) TOTAL GOVERNMENTAL ACTIVITIES 48,143,278 3,901,614 6,729,568 774,186 (36,737,910) BUSINESS-TYPE ACTIVITIES: GOLF 3,393,440 4,649,529 - - 1,256,089 WATER 2,610,413 2,872,425 79,217 - 341,229 TOTAL BUSINESS-TYPE ACTIVITIES 6,003,853 7,521,954 79,217 - 1,597,318 TOTAL PRIMARY GOVERNMENT 54,147,131$ 11,423,568$ 6,808,785$ 774,186$ (35,140,592)$ (continued) TOWN OF BREWSTER, MASSACHUSETTS STATEMENT OF ACTIVITIES FISCAL YEAR ENDED JUNE 30, 2021 PROGRAM REVENUES See accompanying notes to the basic financial statements - 12 - GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL CHANGES IN NET POSITION: NET (EXPENSE) REVENUE FROM PREVIOUS PAGE (36,737,910)$ 1,597,318$ (35,140,592)$ GENERAL REVENUES: REAL ESTATE AND PERSONAL PROPERTY TAXES, NET OF TAX REFUNDS PAYABLE 36,346,103 - 36,346,103 TAX LIENS 13,146 - 13,146 MOTOR VEHICLE AND OTHER EXCISE TAXES 1,722,856 - 1,722,856 HOTEL/MOTEL & MEALS TAX 2,262,385 - 2,262,385 PENALTIES AND INTEREST ON TAXES 110,261 - 110,261 PAYMENTS IN LIEU OF TAXES 6,883 - 6,883 GRANTS AND CONTRIBUTIONS NOT RESTRICTED TO SPECIFIC PROGRAMS 2,213,764 - 2,213,764 UNRESTRICTED INVESTMENT INCOME 27,416 - 27,416 MISCELLANEOUS 48,929 - 48,929 TRANSFERS, NET 314,993 (314,993) - TOTAL GENERAL REVENUES AND TRANSFERS 43,066,736 (314,993) 42,751,743 CHANGE IN NET POSITION 6,328,826 1,282,325 7,611,151 NET POSITION: BEGINNING OF YEAR 47,458,835 14,632,486 62,091,321 END OF YEAR 53,787,661$ 15,914,811$ 69,702,472$ (concluded) TOWN OF BREWSTER, MASSACHUSETTS STATEMENT OF ACTIVITIES FISCAL YEAR ENDED JUNE 30, 2021 PRIMARY GOVERNMENT See accompanying notes to the basic financial statements - 13 - TOWN OF BREWSTER, MASSACHUSETTS GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2021 NONMAJOR TOTAL COMMUNITY GOVERNMENTAL GOVERNMENTAL ASSETS GENERAL PRESERVATION FUNDS FUNDS CASH AND SHORT-TERM INVESTMENTS 15,040,302$ 3,750,079$ 6,277,642$ 25,068,023$ RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES: REAL ESTATE AND PERSONAL PROPERTY TAXES 472,032 - - 472,032 TAX LIENS 497,724 - - 497,724 MOTOR VEHICLE EXCISE TAXES 119,196 - - 119,196 DEPARTMENTAL AND OTHER - 24,097 338,180 362,277 INTERGOVERNMENTAL - - 408,297 408,297 SPECIAL ASSESSMENTS - - 325,779 325,779 TOTAL ASSETS 16,129,254$ 3,774,176$ 7,349,898$ 27,253,328$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES: ACCOUNTS PAYABLE 2,101,476$ 13,127$ 97,197$ 2,211,800$ OTHER LIABILITIES 156 - - 156 NOTES PAYABLE - - 650,000 650,000 TOTAL LIABILITIES 2,101,632 13,127 747,197 2,861,956 DEFFERRED INFLOWS OF RESOURCES: UNAVAILABLE REVENUE 941,125 24,097 663,959 1,629,181 FUND BALANCES: NONSPENDABLE - - 150,388 150,388 RESTRICTED 175,690 3,736,952 7,189,516 11,102,158 COMMITTED 2,042,002 - - 2,042,002 ASSIGNED 2,300,618 - - 2,300,618 UNASSIGNED 8,568,187 - (1,401,162) 7,167,025 TOTAL FUND BALANCES 13,086,497 3,736,952 5,938,742 22,762,191 TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES AND FUND BALANCES 16,129,254$ 3,774,176$ 7,349,898$ 27,253,328$ See accompanying notes to the basic financial statements - 14 - NONMAJOR TOTAL COMMUNITY GOVERNMENTAL GOVERNMENTAL GENERAL PRESERVATION FUNDS FUNDS REVENUES: REAL ESTATE AND PERSONAL PROPERTY TAXES, NET OF TAX REFUNDS 36,406,979$ -$ -$ 36,406,979$ MOTOR VEHICLE AND OTHER EXCISE TAXES 1,797,486 - - 1,797,486 INTERGOVERNMENTAL 3,711,911 746,093 2,968,064 7,426,068 PAYMENTS IN LIEU OF TAXES 6,883 - - 6,883 PENALTIES & INTEREST ON TAXES 110,261 - - 110,261 FINES & FORFEITS 46,349 - - 46,349 CHARGES FOR SERVICES 595,104 - 2,049,804 2,644,908 HOTEL/MOTEL & MEALS TAX 1,229,111 - - 1,229,111 INVESTMENT INCOME 26,573 5,902 1,443 33,918 CONTRIBUTIONS AND DONATIONS - - 247,432 247,432 DEPARTMENTAL AND OTHER 2,485,227 1,076,380 755,361 4,316,968 TOTAL REVENUES 46,415,884 1,828,375 6,022,104 54,266,363 EXPENDITURES: CURRENT: GENERAL GOVERNMENT 3,407,643 442,592 2,243,514 6,093,749 PUBLIC SAFETY 6,581,531 - 597,736 7,179,267 EDUCATION 20,449,168 - 463,838 20,913,006 PUBLIC WORKS 2,675,452 - 622,303 3,297,755 HUMAN SERVICES 814,892 - 73,420 888,312 CULTURE & RECREATION 827,745 511,617 167,344 1,506,706 EMPLOYEE BENEFITS 8,159,221 - 944 8,160,165 STATE & COUNTY ASSESSMENTS 621,789 - - 621,789 DEBT SERVICE PRINCIPAL 1,255,200 220,000 - 1,475,200 INTEREST 593,153 56,898 - 650,051 TOTAL EXPENDITURES 45,385,794 1,231,107 4,169,099 50,786,000 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 1,030,090 597,268 1,853,005 3,480,363 OTHER FINANCING SOURCES (USES) OPERATING TRANSFERS IN 1,528,711 70,000 240,417 1,839,128 OPERATING TRANSFERS OUT (240,417) - (1,283,718) (1,524,135) TOTAL OTHER FINANCING SOURCES (USES)1,288,294 70,000 (1,043,301) 314,993 NET CHANGE IN FUND BALANCES 2,318,384 667,268 809,704 3,795,356 FUND BALANCES AT BEGINNING OF YEAR 10,768,113 3,069,684 5,129,038 18,966,835 FUND BALANCES AT END OF YEAR 13,086,497$ 3,736,952$ 5,938,742$ 22,762,191$ TOWN OF BREWSTER, MASSACHUSETTS GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES FISCAL YEAR ENDED JUNE 30, 2021 See accompanying notes to the basic financial statements - 15 - TOTAL GOVERNMENTAL FUND BALANCES 22,762,191$ CAPITAL ASSETS (NET) USED IN GOVERNMENTAL ACTIVITIES ARE NOT FINANCIAL RESOURCES AND, THEREFORE, ARE NOT REPORTED IN THE FUNDS 87,994,147 ACCOUNTS RECEIVABLE ARE NOT AVAILABLE TO PAY FOR CURRENT-PERIOD EXPENDITURES AND, THEREFORE, ARE DEFERRED IN THE FUNDS 1,629,181 IN THE STATEMENT OF ACTIVITIES, INTEREST IS ACCRUED ON OUTSTANDING LONG-TERM DEBT, WHEREAS IN GOVERNMENTAL FUNDS INTEREST IS NOT REPORTED UNTIL DUE (130,836) LONG-TERM LIABILITIES ARE NOT DUE AND PAYABLE IN THE CURRENT PERIOD AND, THEREFORE, ARE NOT REPORTED IN THE GOVERNMENTAL FUNDS BONDS AND NOTES PAYABLE (17,485,000) CAPITAL LEASES (610,328) NET PENSION LIABILITY (22,000,266) DEFERRED OUTFLOWS OF RESOURCES - RELATED TO PENSION 2,783,617 DEFERRED INFLOWS OF RESOURCES - RELATED TO PENSION (2,950,759) POSTEMPLOYMENT BENEFITS (12,461,944) DEFERRED OUTFLOWS OF RESOURCES - RELATED TO POSTEMPLOYMENT BENEFITS 246,990 DEFERRED INFLOWS OF RESOURCES - RELATED TO POSTEMPLOYMENT BENEFITS (5,210,804) UNAMORTIZED BOND PREMIUM (497,728) LANDFILL POSTCLOSURE CARE COSTS (280,800) NET EFFECT OF REPORTING LONG-TERM LIABILITIES (58,467,022) NET POSITION OF GOVERNMENTAL ACTIVITIES 53,787,661$ TOWN OF BREWSTER, MASSACHUSETTS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION JUNE 30, 2021 See accompanying notes to the basic financial statements - 16 - NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 3,795,356$ GOVERNMENTAL FUNDS REPORT CAPITAL OUTLAYS AS EXPENDITURES. HOWEVER, IN THE STATEMENT OF ACTIVITIES THE COST OF THOSE ASSETS IS ALLOCATED OVER THEIR ESTIMATED USEFUL LIVES AND REPORTED AS DEPRECIATION EXPENSE. CAPITAL OUTLAY 2,256,286 DEPRECIATION EXPENSE (2,393,610) NET EFFECT OF REPORTING CAPITAL ASSETS (137,324) REVENUES IN THE STATEMENT OF ACTIVITIES THAT DO NOT PROVIDE CURRENT FINANCIAL RESOURCES ARE FULLY DEFERRED IN THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES. THEREFORE, THE RECOGNITION OF REVENUE FOR VARIOUS TYPES OF ACCOUNTS RECEIVABLE (I.E. REAL ESTATE AND PERSONAL PROPERTY, MOTOR VEHICLE EXCISE, ETC.) DIFFER BETWEEN THE TWO STATEMENTS. THIS AMOUNT REPRESENTS THE NET CHANGE IN DEFERRED REVENUE (109,252) THE ISSUANCE OF LONG-TERM DEBT (E.G., BONDS) PROVIDES CURRENT FINANCIAL RESOURCES TO GOVERNMENTAL FUNDS, WHILE THE REPAYMENT OF THE PRINCIPAL OF LONG- TERM DEBT CONSUMES THE FINANCIAL RESOURCES OF GOVERNMENTAL FUNDS. NEITHER TRANSACTION, HOWEVER, HAS ANY EFFECT ON NET ASSETS. ALSO, GOVERNMENTAL FUNDS REPORT THE EFFECT OF ISSUANCE COSTS, PREMIUMS, DISCOUNTS, AND SIMILAR ITEMS WHEN DEBT IS FIRST ISSUED, WHEREAS THESE AMOUNTS ARE DEFERRED AND AMORTIZED IN THE STATEMENT OF ACTIVITIES. DEBT SERVICE PRINCIPAL PAYMENTS 1,475,200 CAPITAL LEASE - PRINCIPAL PAYMENTS 204,446 NET EFFECT OF REPORTING LONG-TEM DEBT 1,679,646 SOME EXPENSES REPORTED IN THE STATEMENT OF ACTIVITIES DO NOT REQUIRE THE USE OF CURRENT FINANCIAL RESOURCES AND, THEREFORE, ARE NOT REPORTED AS EXPENDITURES IN THE GOVERNMENTAL FUNDS. NET CHANGE IN POSTEMPLOYMENT BENEFITS 2,279,608 NET CHANGE IN DEFERRED OUTFLOWS OF RESOURCES - RELATED TO POSTEMPLOYMENT BENEFITS (199,184) NET CHANGE IN DEFERRED INFLOWS OF RESOURCES - RELATED TO POSTEMPLOYMENT BENEFITS (707,267) NET CHANGE IN LANDFILL POSTCLOSURE CARE ACCRUAL 32,900 NET CHANGE IN NET PENSION LIABILITY 1,176,681 NET CHANGE IN DEFERRED OUTFLOWS OF RESOURCES - RELATED TO PENSIONS (634,351) NET CHANGE IN DEFERRED INFLOWS OF RESOURCES - RELATED TO PENSIONS (941,808) NET CHANGE IN UNAMORTIZED BOND PREMIUM 77,393 NET CHANGE IN ACCRUED INTEREST ON LONG-TERM DEBT 16,428 NET EFFECT OF RECORDING LONG-TERM LIABILITIES 1,100,400 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 6,328,826$ TOWN OF BREWSTER, MASSACHUSETTS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FISCAL YEAR ENDED JUNE 30, 2021 See accompanying notes to the basic financial statements - 17 - ACTUAL ORIGINAL FINAL BUDGETARY VARIANCE BUDGET BUDGET AMOUNTS OVER(UNDER) REVENUES: REAL ESTATE AND PERSONAL PROPERTY TAXES, NET OF TAX REFUNDS 36,381,645$ 36,381,645$ 36,406,979$ 25,334$ MOTOR VEHICLE AND OTHER EXCISE TAXES 1,354,879 1,354,879 1,797,486 442,607 INTERGOVERNMENTAL 1,830,709 1,830,709 1,847,817 17,108 PAYMENTS IN LIEU OF TAXES 8,328 8,328 6,883 (1,445) PENALTIES & INTEREST ON TAXES 99,890 99,890 110,261 10,371 FINES & FORFEITS 23,826 23,826 46,349 22,523 HOTEL/MOTEL & MEALS TAX 1,257,107 1,257,107 1,229,111 (27,996) INVESTMENT INCOME 114,793 114,793 20,835 (93,958) DEPARTMENTAL AND OTHER 1,661,029 1,661,029 3,080,331 1,419,302 TOTAL REVENUES 42,732,206 42,732,206 44,546,052 1,813,846 EXPENDITURES: CURRENT: GENERAL GOVERNMENT 4,614,853 4,665,745 4,200,526 465,219 PUBLIC SAFETY 7,441,831 7,470,467 7,159,143 311,324 EDUCATION 20,832,251 20,890,125 20,889,858 267 PUBLIC WORKS 3,074,998 3,091,794 3,041,887 49,907 HUMAN SERVICES 913,631 924,617 823,961 100,656 CULTURE & RECREATION 910,737 923,072 852,030 71,042 EMPLOYEE BENEFITS 6,673,415 6,559,755 6,050,115 509,640 STATE & COUNTY ASSESSMENTS 657,402 657,402 621,789 35,613 DEBT SERVICE PRINCIPAL 1,255,383 1,255,383 1,255,200 183 INTEREST 593,891 593,891 591,135 2,756 TOTAL EXPENDITURES 46,968,392 47,032,251 45,485,644 1,546,607 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (4,236,186) (4,300,045) (939,592) 3,360,453 OTHER FINANCING SOURCES (USES): OPERATING TRANSFERS IN 1,460,592 1,524,451 1,528,711 4,260 OPERATING TRANSFERS OUT (240,417) (240,417) (240,417) - TOTAL OTHER FINANCING SOURCES (USES)1,220,175 1,284,034 1,288,294 4,260 NET CHANGE IN FUND BALANCE (3,016,011) (3,016,011) 348,702 3,364,713 BUDGETARY FUND BALANCE, BEGINNING OF YEAR 7,873,492 7,873,492 7,873,492 - BUDGETARY FUND BALANCE, END OF YEAR 4,857,481$ 4,857,481$ 8,222,194$ 3,364,713$ See accompanying notes to the basic financial statements TOWN OF BREWSTER, MASSACHUSETTS GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FISCAL YEAR ENDED JUNE 30, 2021 BUDGETED AMOUNTS - 18 - ASSETS GOLF WATER TOTAL CURRENT: CASH AND SHORT-TERM INVESTMENTS 1,617,879$ 2,748,464$ 4,366,343$ USER FEES - 797,308 797,308 SPECIAL ASSESSMENTS - 1,899 1,899 TOTAL CURRENT ASSETS 1,617,879 3,547,671 5,165,550 NONCURRENT: SPECIAL ASSESSMENTS - 3,394 3,394 CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 7,402,969 13,860,952 21,263,921 TOTAL NONCURRENT ASSETS 7,402,969 13,864,346 21,267,315 TOTAL ASSETS 9,020,848 17,412,017 26,432,865 DEFERRED OUTFLOWS OF RESOURCES RELATED TO PENSIONS 261,988 229,239 491,227 RELATED TO POST EMPLOYMENT BENEFITS 20,912 13,501 34,413 TOTAL DEFERRED OUTFLOWS OF RESOURCES 282,900 242,740 525,640 LIABILITIES CURRENT: ACCOUNTS PAYABLE 151,552 97,930 249,482 ACCRUED INTEREST - 13,737 13,737 BONDS AND NOTES PAYABLE - 405,000 405,000 TOTAL CURRENT LIABILITIES 151,552 516,667 668,219 NONCURRENT: POSTEMPLOYMENT BENEFITS 1,055,134 681,195 1,736,329 NET PENSION LIABILITY 2,070,613 1,811,787 3,882,400 BONDS AND NOTES PAYABLE - 3,510,000 3,510,000 TOTAL NONCURRENT LIABILITIES 3,125,747 6,002,982 9,128,729 TOTAL LIABILITIES 3,277,299 6,519,649 9,796,948 DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS 277,718 243,004 520,722 RELATED TO POST EMPLOYMENT BENEFITS 441,191 284,833 726,024 TOTAL DEFERRED INFLOWS OF RESOURCES 718,909 527,837 1,246,746 NET POSITION NET INVESTMENT IN CAPITAL ASSETS 7,402,969 9,945,952 17,348,921 UNRESTRICTED (2,095,429) 661,319 (1,434,110) TOTAL NET POSITION 5,307,540$ 10,607,271$ 15,914,811$ See accompanying notes to the basic financial statements TOWN OF BREWSTER, MASSACHUSETTS PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2021 BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS - 19 - GOLF WATER TOTAL OPERATING REVENUES: CHARGES FOR SERVICES 4,649,529$ 2,872,425$ 7,521,954$ DEPARTMENTAL AND OTHER - 76,486 76,486 TOTAL OPERATING REVENUES 4,649,529 2,948,911 7,598,440 OPERATING EXPENSES: GENERAL SERVICES 2,961,131 2,011,562 4,972,693 DEPRECIATION 432,309 456,281 888,590 TOTAL OPERATING EXPENSES 3,393,440 2,467,843 5,861,283 OPERATING INCOME (LOSS)1,256,089 481,068 1,737,157 NON-OPERATING REVENUES (EXPENSES): INTEREST INCOME - 2,731 2,731 INTEREST EXPENSE - (142,570) (142,570) TOTAL NON-OPERATING REVENUES (EXPENSES), NET - (139,839) (139,839) INCOME (LOSS) BEFORE OPERATING TRANSFERS 1,256,089 341,229 1,597,318 OPERATING TRANSFERS: OPERATING TRANSFERS OUT (114,967) (200,026) (314,993) CHANGE IN NET POSITION 1,141,122 141,203 1,282,325 NET POSITION AT BEGINNING OF YEAR 4,166,418 10,466,068 14,632,486 NET POSITION AT END OF YEAR 5,307,540$ 10,607,271$ 15,914,811$ See accompanying notes to the basic financial statements TOWN OF BREWSTER, MASSACHUSETTS PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FISCAL YEAR ENDED JUNE 30, 2021 BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS - 20 - TOWN OF BREWSTER, MASSACHUSETTS PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FISCAL YEAR ENDED JUNE 30, 2021 GOLF WATER TOTAL CASH FLOWS FROM OPERATING ACTIVITIES: RECEIPTS FROM CUSTOMERS AND USERS 4,649,529$ 3,105,935$ 7,755,464$ PAYMENTS TO SUPPLIERS (1,699,652) (1,000,433) (2,700,085) PAYMENTS TO EMPLOYEES (1,421,936) (908,987) (2,330,923) NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,527,941 1,196,515 2,724,456 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: OPERATING TRANSFERS OUT (114,967) (200,026) (314,993) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: PRINCIPAL PAYMENTS ON BONDS AND NOTES - (405,000) (405,000) ACQUISITION AND CONSTRUCTION OF CAPITAL ASSETS (23,050) (87,779) (110,829) INTEREST EXPENSE - (144,400) (144,400) NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES (23,050) (637,179) (660,229) CASH FLOWS FROM INVESTING ACTIVITIES: INTEREST RECEIVED - 2,731 2,731 NET INCREASE (DECREASE) IN CASH AND SHORT TERM INVESTMENTS 1,389,924 362,041 1,751,965 CASH AND SHORT TERM INVESTMENTS - BEGINNING OF YEAR 227,955 2,386,423 2,614,378 CASH AND SHORT TERM INVESTMENTS- END OF YEAR 1,617,879$ 2,748,464$ 4,366,343$ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: OPERATING INCOME (LOSS)1,256,089$ 481,068$ 1,737,157$ ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: DEPRECIATION 432,309 456,281 888,590 (INCREASE) DECREASE IN ACCOUNTS RECEIVABLE - 157,024 157,024 (INCREASE) DECREASE IN DEFERRED OUTFLOWS OF RESOURCES 114,743 70,754 185,497 INCREASE (DECREASE) IN ACCOUNTS PAYABLE 48,398 40,962 89,360 INCREASE (DECREASE) IN DEFERRED INFLOWS OF RESOURCES 156,104 152,114 308,218 INCREASE (DECREASE) IN NET PENSION LIABILITY (391,023) (177,413) (568,436) INCREASE (DECREASE) IN POSTEMPLOYMENT BENEFITS (88,679) 15,725 (72,954) TOTAL ADJUSTMENTS 271,852 715,447 987,299 NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,527,941$ 1,196,515$ 2,724,456$ BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS See accompanying notes to the basic financial statements - 21 - POSTEMPLOYMENT PRIVATE BENEFITS PURPOSE TRUST TRUST FUNDS ASSETS CASH AND SHORT-TERM INVESTMENTS -$ 86,850$ INVESTMENTS 3,136,620 - TOTAL ASSETS 3,136,620 86,850 LIABILITIES - - NET POSITION RESTRICTED FOR: POSTEMPLOYMENT BENEFITS 3,136,620 - INDIVIDUALS AND OTHER ORGAIZATIONS - 86,850 TOTAL NET POSITION 3,136,620$ 86,850$ TOWN OF BREWSTER, MASSACHUSETTS See accompanying notes to the basic financial statements FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2021 - 22 - POSTEMPLOYMENT PRIVATE BENEFITS PURPOSE TRUST TRUST FUNDS ADDITIONS: CONTRIBUTIONS: CONTRIBUTIONS -$ 4,124$ EMPLOYER CONTRIBUTIONS 250,000 - EMPLOYER CONTRIBUTIONS TO PAY FOR OPEB BENEFITS 731,652 - NET INVESTMENT INCOME (LOSS): INVESTMENT INCOME 686,730 111 TOTAL ADDITIONS 1,668,382 4,235 DEDUCTIONS: BENEFIT PAYMENTS 731,652 - FUNDS DISTRIBUTED ON BEHALF OF OTHERS - 5,000 TOTAL DEDUCTIONS 731,652 5,000 NET INCREASE (DECREASE) IN FIDUCIARY NET POSITION 936,730 (765) NET POSITION AT BEGINNING 2,199,890 87,615 NET POSITION AT END 3,136,620$ 86,850$ See accompanying notes to the basic financial statements TOWN OF BREWSTER, MASSACHUSETTS FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FISCAL YEAR ENDED JUNE 30, 2021 - 23 - TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 24 - NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying basic financial statements of the Town of Brewster, Massachusetts (the Town) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The Governmental Accounting Standards Board (GASB) is the recognized standard- setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the more significant Town accounting policies: A. Reporting Entity Primary Government The Town is a municipal corporation that is governed by an elected five member Select Board (the Board). The Board is responsible for appointing a Town Administrator whose responsibility is to manage the day to day operations. For financial reporting purposes, the Town has included all funds, organizations, account groups, agencies, boards, commissions and institutions. The Town has also considered all potential component units, blended or discretely presented, for which it is financially accountable as well as other organizations for which the nature and significance of their relationship with the Town are such that exclusion would cause the basic financial statements to be misleading or incomplete. Blended component units, although legally separate entities, are, in substance, part of the government’s operations and discretely presented component units are reported in a separate column in the government-wide financial statements to emphasize that they are legally separate from the government. It has been determined that there are no component units (blended or discretely presented) for inclusion in the primary government’s financial reporting entity. Joint Ventures Municipal joint ventures pool resources to share the costs, risks and rewards of providing services to their participants, the general public or others. The Town is a participant in the following joint ventures: The Nauset Regional School District (the District) is governed by a ten (10) member school committee consisting of three (4) elected representatives from the Town of Brewster. The Town is indirectly liable for debt and other expenditures of the District and is assessed annually for its share of the operating and capital costs. Separate financial statements may be obtained by writing to the Treasurer of the District at the above address. The Town has an equity interest of approximately 48.00% in the joint venture. Name Purpose Address Annual Assessment Nauset Regional To provide education services 78 Eldredge Parkway $ 11,599,042 School District Orleans, MA 02653 Cape Cod Regional Technical High School To provide vocational education 351 Pleasant Lake Ave Harwich, MA 02645 $ 857,387 TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 25 - The Cape Cod Regional Technical High School is governed by a twenty-three (23) member school committee consisting of two (2) elected representatives from the Town of Brewster. The Town is indirectly liable for debt and other expenditures of the District and is assessed annually for its share of the operating and capital costs. Separate financial statements may be obtained by writing to the Treasurer of the District at the above address. The Town has an equity interest of approximately 6.55% in the joint venture. Pursuant to an inter-municipal agreement authorized by state statutes, the Town joined the Town of Orleans, and the Town of Eastham to provide for sharing of the capital, operating and maintenance and other costs of a Septic Treatment Facility (Tri-Town Septage Facility). The Tri-Town Septage Facility, has been decommissioned and the facility demolished. The three towns now share the cost of the health insurance and the annual pension assessment for the retirees of the facility. B. Government-Wide and Fund Financial Statements Government-Wide Financial Statements The government-wide financial statements (i.e., statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government. Governmental activities, which are primarily supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which are supported primarily by user fees and charges. Fund Financial Statements Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and displayed in a single column. Major Fund Criteria A fund is considered major if it is the primary operating fund of the Town or it meets the following criteria: a. If the total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of an individual governmental or enterprise fund are at least 10 percent of the corresponding element (total assets and deferred outflows of resources, liabilities and deferred inflows of resources, etc.) for all funds of that category or type (total governmental or total enterprise funds), and b. If the total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding element for all governmental and enterprise funds combined. Additionally, any other governmental or enterprise fund that management believes is particularly significant to the basic financial statements may be reported as a major fund. Fiduciary funds are reported by fund type. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 26 - C. Measurement Focus, Basis of Accounting and Financial Statement Presentation Government-Wide Financial Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded when the liabilities are incurred. Real estate and personal property taxes are recognized as revenues in the fiscal year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The statement of activities demonstrates the degree to which the direct expenses of a particular function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include the following: a. Charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment. b. Grants and contributions that are restricted to meeting the operational requirements of a particular function or segment. c. Grants and contributions that are restricted to meeting the capital requirements of a particular function or segment. Taxes and other items not identifiable as program revenues are reported as general revenues. For the most part, the effect of interfund activity has been removed from the government-wide financial statements. Exceptions are charges between the general fund and the various enterprise funds. Elimination of these charges would distort the direct costs and program revenues reported for the functions affected. Fund Financial Statements Governmental Fund Financial Statements Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). Measurable means the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Expenditures are recorded when the related fund liability is incurred, except for interest on general long- term debt which is recognized when due, and the noncurrent portion of landfill postclosure care costs, capital leases, net pension liability, and other postemployment benefits (OPEB) which are recognized when the obligations are expected to be liquidated with current expendable available resources. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 27 - In applying the susceptible to accrual concept to intergovernmental revenues, there are essentially two types of revenues. In one, moneys must be expended on the specific purpose or project before any amounts will be paid to the Town; therefore, revenues are recognized based upon the expenditures incurred. In the other, moneys are virtually unrestricted and are usually revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenues at the time of receipt or earlier if the susceptible to accrual criteria are met. The Town considers property taxes as available if they are due and collected within 60 days after fiscal year-end. Licenses and permits, user charges, fines and forfeitures, and miscellaneous revenues are recorded as revenues when received. Investment earnings are recorded as earned. The Town reports the following major governmental funds:  The General fund is the primary operating fund of the Town. It is used to account for all financial resources, except those that are required to be accounted for in another fund.  The Community Preservation fund is a special revenue fund used to account for the accumulation of resources to purchase open space, assist in development of affordable housing, or preservation of historic property under the guidelines of the Community Preservation Act of the Massachusetts general laws.  The Nonmajor Governmental funds consist of other special revenue, capital projects and permanent funds that are aggregated and presented in the nonmajor governmental funds column on the governmental funds financial statements. The following describes the general use of these fund types: • The Special Revenue fund is used to account for the proceeds of specific revenue sources (other than permanent funds or capital projects funds) that are restricted by law or administrative action to expenditures for specified purposes. • The Capital Projects fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by enterprise and trust funds). • The Permanent fund is used to account for financial resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the governmental programs. Proprietary Fund Financial Statements Proprietary fund financial statements are reported using the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded when the liabilities are incurred. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 28 - Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the proprietary funds principal ongoing operations. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. The following major proprietary funds are reported:  The Water Enterprise fund is used to account for water activities.  The Golf Enterprise fund is used to account for golf activities. Fiduciary Fund Financial Statements Fiduciary fund financial statements are reported using the flow of economic resources measurement focus and use the accrual basis of accounting. Fiduciary funds are used to account for assets held by the Town in a trustee capacity for others that cannot be used to support the governmental programs. The following fiduciary fund types are reported:  The Private-Purpose Trust fund is used to account for trust arrangements, other than those properly reported in the permanent fund (nonmajor governmental funds), under which principal and investment income exclusively benefit individuals, private organizations, or other governments.  The Postemployment Benefit Trust fund is used to account for the assets held that will fund the long term liability associated with the Towns retiree’s health benefits. D. Cash and Investments Government-Wide and Fund Financial Statements Cash and short term investments are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments are reported at fair value. E. Fair Value Measurements The Town reports required types of financial instruments in accordance with the fair value standards. These standards require an entity to maximize the use of observable inputs (such as quoted prices in active markets) and minimize the use of unobservable inputs (such as appraisals or valuation techniques) to determine fair value. Fair value standards also require the government to classify these financial instruments into a three-level hierarchy, based on the priority of inputs to the valuation technique or in accordance with net asset value practical expedient rules, which allow for either Level 2 or Level 3 depending on lock up and notice periods associated with the underlying funds. Instruments measured and reported at fair value are classified and disclosed in one of the following categories: TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 29 - Level 1 – Quoted prices are available in active markets for identical instruments as of the reporting date. Instruments, which are generally included in this category, include actively traded equity and debt securities, U.S. government obligations, and mutual funds with quoted market prices in active markets. Level 2 – Pricing inputs are other than quoted in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Certain fixed income securities, primarily corporate bonds, are classified as Level 2 because fair values are estimated using pricing models, matrix pricing, or discounted cash flows. Level 3 – Pricing inputs are unobservable for the instrument and include situations where there is little, if any, market activity for the instrument. The inputs into the determination of fair value require significant management judgment or estimation. In some instances the inputs used to measure fair value may fall into different levels of the fair value hierarchy and is based on the lowest level of input that is significant to the fair value measurement. Market price is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Instruments with readily available active quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. It is reasonably possible that change in values of these instruments will occur in the near term and that such changes could materially affect amounts reported in these financial statements. For more information on the fair value of the Town’s financial instruments, see Note 3 – Fair Value Measurements. F. Accounts Receivable Government-Wide and Fund Financial Statements The recognition of revenue related to accounts receivable reported in the government-wide financial statements and proprietary and fiduciary funds financial statements are reported under the accrual basis of accounting. The recognition of revenue related to accounts receivable reported in the governmental funds financial statements are reported under the modified accrual basis of accounting. Real Estate, Personal Property Taxes and Tax Liens Real estate and personal property taxes are based on values assessed as of each January 1 and are normally due on the subsequent November 1 and May 1. Property taxes that remain unpaid after the respective due dates are subject to penalties and interest charges. By law, all taxable property in the Commonwealth must be assessed at 100% of fair market value. Once levied, which is required to be at least 30 days prior to the due date, these taxes are recorded as receivables in the fiscal year of levy. Based on the Town’s experience, most property taxes are collected during the year in which they are assessed. Liening of properties on which taxes remain unpaid occurs annually. The Town ultimately has the right to foreclose on all properties where the taxes remain unpaid. A statewide property tax limitation statute known as “Proposition 2 ½” limits the amount of increase in property tax levy in any fiscal year. Generally, Proposition 2 ½ limits the total levy to an amount not greater than 2 ½ % of the total assessed value of all taxable property within the Town. Secondly, the tax levy cannot increase by more than 2 ½ % of the prior year’s levy plus the taxes on property newly added to the tax rolls. Certain provisions of Proposition 2 ½ can be overridden by a Town-wide referendum. Real estate receivables are secured via the tax lien process and are considered 100% collectible. Accordingly, an allowance for uncollectibles is not reported. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 30 - Personal property taxes cannot be secured through the lien process. The allowance of uncollectibles is estimated based on historical trends and specific account analysis. Motor Vehicle Excise Motor vehicle excise taxes are assessed annually for each vehicle registered in the Town and are recorded as receivables in the fiscal year of the levy. The Commonwealth is responsible for reporting the number of vehicles registered and the fair values of those vehicles. The tax calculation is the fair value of the vehicle multiplied by $25 per $1,000 of value. The allowance for uncollectibles is estimated based on historical trends and specific account analysis. Water User fees are levied semi-annually based on meter readings and are subject to penalties if they are not paid by the respective due date. Water liens are processed in December of every year and included as a lien on the property owner's tax bill. Water charges and related liens are recorded as receivables in the fiscal year of the levy. Since the receivables are secured via the lien process, these accounts are considered 100% collectible and therefore do not report an allowance for uncollectibles. Special Assessments Governmental activities special assessments consist primarily of Road Betterments, and Title V receivables which are recorded as receivables in the fiscal year accrued. Since the receivables are secured via the lien process, these assets are considered 100% collectable and therefore do not report an allowance for uncollectibles. Departmental and Other Departmental and other receivables consist primarily of ambulance receivables and are recorded as receivables in the fiscal year accrued. The allowance for uncollectibles for the ambulance receivables is estimated based on historical trends and specific account analysis. Intergovernmental Various federal and state grants for operating and capital purposes are applied for and received annually. For non-expenditure driven grants, receivables are recognized as soon as all eligibility requirements imposed by the provider have been met. For expenditure driven grants, receivables are recognized when the qualifying expenditures are incurred and all other grant requirements are met. These receivables are considered 100% collectible and therefore do not report an allowance for uncollectibles. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 31 - G. Inventories Government-Wide and Fund Financial Statements Inventories of the governmental funds and the water and golf enterprise funds are recorded as expenditures at the time of purchase. Such inventories are not material in total to the basic financial statements, and therefore are not reported. H. Capital Assets Government-Wide and Proprietary Fund Financial Statements Capital assets, which include land, vehicles, buildings and improvements, capital improvements, machinery and equipment, infrastructure (e.g., water mains, roadways, and similar items) and construction in progress, are reported in the applicable governmental or business-type activities column of the government-wide financial statements, and the proprietary funds financial statements. Capital assets are recorded at historical cost, or at estimated historical cost, if actual historical cost is not available. Donated capital assets are recorded at the estimated fair market value at the date of donation. Except for the capital assets of the governmental activities column in the government-wide financial statements, construction period interest is capitalized on constructed capital assets if material. All purchases and construction costs in excess of $15,000, and all land costs, are capitalized at the date of acquisition or construction, respectively, with expected useful lives of five years or greater. Capital assets (excluding land and construction in progress) are depreciated on a straight-line basis. The estimated useful lives of capital assets are as follows: The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized and are treated as expenses when incurred. Improvements are capitalized. Governmental Fund Financial Statements Capital asset costs are recorded as expenditures in the fiscal year of purchase for the various funds. Asset Class Estimated Useful Life (in years) Buildings and Improvements 20-40 Capital Improvements (other than buildings) 20 Machinery, Equipment and Vehicles 5-15 Infrastructure 40 TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 32 - I. Interfund Receivables and Payables During the course of its operations, transactions occur between and within individual funds that may result in amounts owed between funds. Government-Wide Financial Statements Transactions of a buyer/seller nature between and within governmental funds are eliminated from the governmental activities in the statement of net position. Any residual balances outstanding between the governmental activities and business-type activities are reported in the statement of net position as "internal balances". Fund Financial Statements Transactions of a buyer/seller nature between and within funds are not eliminated from the individual fund statements. Receivables and payables resulting from these transactions are classified as "Due from other funds" or "Due to other funds" on the balance sheet. J. Interfund Transfers During the course of its operations, resources are permanently reallocated between and within funds. These transactions are reported as operating transfers in and operating transfers out. Government-Wide Financial Statements Operating transfers between and within governmental funds are eliminated from the governmental activities in the statement of net position. Any residual balances outstanding between the governmental activities and business-type activities are reported in the statement of activities as "Transfers, net". Fund Financial Statements Operating transfers between and within funds are not eliminated from the individual fund statements and are reported as operating transfers in and operating transfers out. K. Deferred Outflows/Inflows of Resources Government-Wide Financial Statements (Net Position) In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The Town reported deferred outflows of resources related to postemployment benefits and pensions in this category. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 33 - In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The Town reported deferred inflows of resources related to postemployment benefits and pensions in this category. Governmental Fund Financial Statements In addition to liabilities, the governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents assets that have been recorded in the governmental fund financial statements but the revenue is not available and so will not be recognized as an inflow of resources (revenue) until it becomes available. The Town has recorded unavailable revenue as deferred inflows of resources in the governmental funds balance sheet. Unavailable revenue is recognized as revenue in the conversion to the government-wide (full accrual) financial statements. L. Net Position and Fund Equity Government-Wide Financial Statements (Net Position) Net position are classified into three components: a. Net investment in capital assets – consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. b. Restricted net position – Consists of net position with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. Net position have been “restricted” for the following: • Permanent funds -expendable represents amounts held in trust for which the expenditures are restricted by various trust agreements. • Permanent funds -nonexpendable represents amounts held in trust for which only investment earnings may be expended. • Other specific purpose represents restrictions placed on assets from outside parties. c. Unrestricted net position – All other net position that do not meet the definition of “restricted” or “net investment in capital assets.” TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 34 - Fund Financial Statements (Fund Balances) The Town uses the following criteria for fund balance classification: • For nonspendable fund balance: includes amounts that cannot be spent because they are either (1) not in spendable form or (2) legally or contractually required to be maintained intact. • For restricted fund balance: when constraints placed on the use of the resources are either (1) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or (2) imposed by law trough constitutional provisions or enabling legislation. • For committed fund balance: (1) the government’s highest level of decision-making authority and (2) the formal action that is required to be taken to establish (and modify or rescind) a fund balance commitment. • For assigned fund balance: (1) the body or official authorized to assign amounts to a specific purpose and (2) the policy established by the governing body pursuant to which the authorization is given. • For unassigned fund balance: is the residual classification for the general fund. In other governmental funds, if expenditures incurred for specific purposes exceeded the amounts restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance. The Town uses the following criteria for fund balance policies and procedures: • When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the unrestricted amount will be considered to have been spent. • When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, and the least restricted amount will be considered to have been spent. M. Long-term debt Government-Wide and Proprietary Fund Financial Statements Long-term debt is reported as liabilities in the government-wide and proprietary fund statement of net position. Material bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Governmental Fund Financial Statements The face amount of governmental funds long-term debt is reported as other financing sources. Bond premiums and discounts, as well as issuance costs, are recognized in the current period. Bond premiums are reported as other financing sources and bond discounts are reported as other financing uses. Issuance costs, whether or not withheld from the actual bond proceeds received, are reported as general government expenditures. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 35 - N. Investment Income Excluding the permanent funds, investment income derived from major and nonmajor governmental funds is legally assigned to the general fund unless otherwise directed by Massachusetts General Laws (MGL). O. Compensated Absences Employees are granted sick and vacation leave in varying amounts. Upon retirement, termination or death, certain employees are compensated for unused sick and vacation leave (subject to certain limitations) at their then current rates of pay. The total amount of sick and vacation costs to be paid in future years is not material to the basic financial statements and has not been recorded on the basic financial statements. P. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Barnstable County Retirement Association (Association) and the Massachusetts Teachers Retirement System (MTRS) and additions to/deductions from the Association’s fiduciary net position have been determined on the same basis as they are reported by the Association. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Q. Post Retirement Benefits Government-Wide and Fund Financial Statements In addition to providing pension benefits, health and life insurance coverage is provided for retired employees and their survivors in accordance with Chapter 32B, of Massachusetts General Laws, under various contributory plans. The cost of providing health and life insurance is recognized by recording the employer's 50% share of insurance premiums in the general fund in the fiscal year paid. All benefits are provided through third-party insurance carriers and health maintenance organizations that administer, assume, and pay all claims. R. Use of Estimates Government-Wide and Fund Financial Statements The preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United States of America, requires management 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 revenues and expenditures/expenses during the reporting period. Actual results could vary from estimates that were used. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 36 - S. Total Column Government-Wide Financial Statements The total column presented on the government-wide financial statements represents consolidated financial information. Fund Financial Statements The total column on the fund financial statements is presented only to facilitate financial analysis. Data in this column is not comparable to the consolidated financial information. NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Basis of Accounting Pursuant to Chapter 44, Section 32 of the Massachusetts General Laws, the Town adopts an annual budget for the general fund as well as for those special revenue funds for which the provisions of Chapter 44,Section 53fl1/2 have been adopted. The budgets for all departments and operations of the Town, except that of the public schools, are prepared under the direction of the Town Administrator. The School Department budget is prepared under the direction of the School Committee. The level of expenditures may not legally exceed appropriations for each department or undertaking in the following categories: (1) salaries and wages; (2) ordinary maintenance; and (3) capital outlays. The majority of appropriations are non-continuing which lapse at the end of each fiscal year. Others are continuing appropriations for which the governing body has authorized that an unspent balance from a prior fiscal year be carried forward and made available for spending in the current fiscal year. Carryover articles, not encumbrances, are included as part of the subsequent fiscal year's original budget. Original and supplemental appropriations are enacted upon by a Town Meeting vote. Management may not amend the budget without seeking the approval of the governing body. The Town’s Finance Committee can legally transfer funds from its reserve fund to other appropriations within the budget without seeking Town Meeting approvals. The original fiscal year 2021 approved budget authorized $44,246,478 in current year appropriations and other amounts to be raised and $2,721,914 in carryover articles carried over from previous fiscal years. Supplemental appropriations of $63,859 were approved for fiscal year 2021. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 37 - The Finance Director has the responsibility to ensure that budgetary controls are maintained and monitored through the accounting system. B. Budgetary – GAAP Reconciliation For budgetary financial reporting purposes, the Uniform Municipal Accounting System basis of accounting (established by the Commonwealth) is followed, which differs from the GAAP basis of accounting. A reconciliation of budgetary-basis to GAAP-basis results for the general fund for the fiscal year ended June 30, 2021 is presented below: C. Deficit Fund Balances Several individual fund deficits exist within the special revenue and the governmental capital projects funds. These individual deficits will be eliminated through subsequent fiscal year budget transfers, grants, and/or proceeds from long-term debt during fiscal year 2022. NOTE 3 – DEPOSITS AND INVESTMENTS State and local statutes place certain limitations on the nature of deposits and investments available to the Town. Deposits (including demand deposits, term deposits and certificates of deposit) in any one financial institution may not exceed certain levels unless collateralized by the financial institutions involved. Deposits  Custodial Credit Risk - Deposits Custodial credit risk is the risk that in the event of bank failure, the Town’s deposits may not be returned. Massachusetts General Law Chapter 44, Section 55, limits the deposits “in a bank or trust company, or banking company to an amount not exceeding sixty percent (60%) of the capital and surplus of such bank or trust company or banking company, unless satisfactory security is given to it by such bank or trust company or banking company for such excess.” The Town does not have a formal deposit policy for custodial credit risk. Net change in fund balance - budgetary basis 348,702$ Basis of accounting differences: Inc rease in revenue for on-behalf payments - MTRS 1,862,076 Increase in expenditures for on-behalf payments - MTRS (1,862,076) Increase in revenue for the MWPAT subsidy 2,018 Increase in expenditures for the MWPAT subsidy (2,018) Net Stabilization fund activity (244,262) Adjustment for current year articles 2,042,002 Adjustment for current year encumbrances 287,232 Adjustment for expenditures from prior year encumbrances (115,290) Net change in fund balance - GAAP basis 2,318,384$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 38 - The Town carries deposits that are fully insured by the Federal Deposit Insurance Corporation (FDIC), and the Depositor’s Insurance Fund (DIF). The Town also carries deposits that are collateralized with securities held by the pledging financial Institution’s trust department or agent but not in the Town’s name. The following table illustrates how much of the Town’s bank deposits are insured and how much of the Town’s bank deposits are collateralized and held by the pledging bank’s trust department but not in the Town’s name as of June 30, 2021: Total Bank Balances 25,494,337$ Bank Balances Covered by Deposit Insurance Federal Deposit Insurance Corporation (FDIC)1,634,550 Depositor's Insurance Fund (DIF)15,344,859 Total Bank Balances Covered by Deposit Insurance 16,979,409 Balances Subject to Custodial Credit Risk Bank Balances Collaterallized with Securities Held by the Pledging Financial Institution's Trust Department or Agent but not in the Town's Name 8,514,928 Total Bank Balances Subject to Custodial Credit Risk 8,514,928 Total Bank Balances 25,494,337$ Investments Investments can also be made in securities issued by or unconditionally guaranteed by the U.S. government or agencies that have a maturity of less than one year from the date of purchase, repurchase agreement guaranteed by the U.S. government or agencies that have a maturity of less than one year from the date of purchase, repurchase agreements guaranteed by such securities with maturity dates of no more than 90 days from the date of purchase, and units in the Massachusetts Municipal Depository Trust (MMDT). The Treasurer of the Commonwealth of Massachusetts oversees the financial management of the MMDT, a local investment pool for cities, towns, and other state and local agencies within the Commonwealth. The Town’s fair value of its investment in MMDT represents their value of the pool’s shares. The Town’s Trust Funds have expanded investment powers including the ability to invest in equity securities, corporate bonds, annuities and other specified investments. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 39 - The composition of the Town’s bank recorded deposits and investments fluctuates depending primarily on the timing of property tax receipts, proceeds from borrowings, collections of state and federal aid, and capital outlays throughout the year. • Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. For short-term investments that were purchased using surplus revenues, Massachusetts General Law Chapter 44, Section 55, limits the Town’s investments to the top rating issued by at least one nationally recognized statistical rating organization (NRSROs). Presented below are the rating as of year-end for each investment type of the Town. Minimum Rating as of Legal Year End Investment type Fair value Rating Unrated State Retirees Benefits Trust Fund (SRBT) - HCST OPEB Master Trust 3,136,620$ N/A 3,136,620$ • Custodial Credit Risk For an investment, this is the risk that, in the event of a failure by the counterparty, the Town will not be able to recover the value of its investments or collateral security that are in possession of an outside party. The investment in the State Retirees Benefit Trust Fund is not exposed to custodial credit risk because the investment is registered in the name of the Town. The Town does not have an investment policy for custodial credit risk. • Interest Rate Risk Interest rate risk is the risk of changes in market interest rates which will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the risk of its fair value to change with the market interest rate. The Town does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 40 - Information about the sensitivity of the fair values of the Town’s investments to market interest rate fluctuations are as follows: Investment maturities (in years) Investment type Fair value Less than 1 State Retirees Benefits Trust Fund (SRBT) - HCST OPEB Master Trust 3,136,620$ 3,136,620$ • Concentration of Credit Risk The Town places no limit on the amount the government may invest in any one issuer. More than 5% of the Town’s investments are in the following securities: Issuer Percentage of Total Investments State Retirees Benefits Trust Fund (SRBT) - HCST OPEB Master Trust 100.00% Fair Market Value of Investments The Town holds investments that are measured at fair value on a recurring basis. Because investing is not a core part of the Town’s mission, the Town determines that the disclosures related to these investments only need to be disaggregated by the major type. The Town chooses a tabular format for disclosing the levels within the fair value hierarchy. The Town categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 41 - The Town has the following recurring fair value measurement as of June 30, 2021: Investment Type June 30, 2021 Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments measured at fair value -$ -$ -$ -$ Investments measured at the net asset value (NAV) State Retirees Benefits Trust - (SRBT)3,136,620 Investments measured at amortized cost Massachusetts Municipal Depository Trust - (MMDT)3,626,571 Total Investments 6,763,191$ Fair Value Measurements Using State Retirees Benefits Trust (SRBT) investments are valued using the net assets value method. This investment pool was established by the Treasurer of the Commonwealth of Massachusetts, who serves as Trustee. SRBT is administered by the Pension Reserves Investment Management Board (PRIM). The fair values of the positions in each investment Pool are the same as the value of each Pool’s shares. The Town does not have the ability to control any of the investment decisions relative to its funds in SRBT. Massachusetts Municipal Depository Trust (MMDT) investments are valued at amortizated cost. Under the amortized cost method an investment is valued initially at its cost and adjusted for the amount of interest income accrued each day over the term of the investment to account for any difference between the initial cost and the amount payable at its maturity. If amortized cost is determined not to approximate fair value, the value of the portfolio securities will be determined under procedures established by the Advisor. NOTE 4 – RECEIVABLES The receivables at June 30, 2021 for the Town’s individual major and nonmajor governmental funds, in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: Allowance Gross for Net Receivables:Amount Uncollectibles Amount Real estate and personal property taxes 476,032$ (4,000)$ 472,032$ Tax liens 497,724 - 497,724 Motor vehicle and other excise taxes 188,099 (68,903) 119,196 Departmental and other 420,353 (58,076) 362,277 Intergovernmental 408,297 - 408,297 Special assessments 325,779 - 325,779 Total 2,316,284$ (130,979)$ 2,185,305$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 42 - The receivables at June 30, 2021, for the water enterprise fund consists of the following: Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with revenues that have been received, but not yet earned. At the end of the current fiscal year, various components of deferred inflows of resources reported in the governmental funds are as follows: Allowance Gross for Net Receivables:Amount Uncollectibles Amount Water User fees 797,308$ -$ 797,308$ Special Assessments 5,293 - 5,293 Total 802,601$ -$ 802,601$ Nonmajor General Community Governmental Deferred Inflows:Fund Preservation Funds Total Deferred Property Taxes 324,204$ 24,097$ 312,613$ 660,914$ Deferred Other Revenue 616,921 - 351,346 968,267 Total 941,125$ 24,097$ 663,959$ 1,629,181$ Deferred Inflows of Resources Analysis TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 43 - NOTE 5 – CAPITAL ASSETS Capital asset activity for the fiscal year ended June 30, 2021, was as follows: Beginning Decrease/Ending Governmental Activities:Balance Increases Adjustments Balance Capital assets not being depreciated: Land 42,192,861$ -$ -$ 42,192,861$ Construction in progress 3,709,131 91,560 (3,655,144) 145,547 Total capital assets not being depreciated 45,901,992 91,560 (3,655,144) 42,338,408 Capital assets being depreciated: Building and improvements 41,675,228 121,370 - 41,796,598 Capital improvement (other than buildings)6,288,284 468,936 23,300 6,780,520 Machinery, equipment, and vehicles 14,229,188 809,145 26,950 15,065,283 Infrastructure 14,572,080 827,676 3,542,493 18,942,249 Total capital assets being depreciated 76,764,780 2,227,127 3,592,743 82,584,650 Less accumulated depreciation for: Building and improvements (15,555,077) (988,723) - (16,543,800) Capital improvement (other than buildings)(2,693,558) (414,576) - (3,108,134) Machinery, equipment, and vehicles (10,052,275) (634,095) - (10,686,370) Infrastructure (6,234,391) (356,216) - (6,590,607) Total accumulated depreciation (34,535,301) (2,393,610) - (36,928,911) Total capital assets being depreciated, net 42,229,479 (166,483) 3,592,743 45,655,739 Total governmental activities capital assets, net 88,131,471$ (74,923)$ (62,401)$ 87,994,147$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 44 - Depreciation expense was charged to functions/programs of the primary government as follows: General government 128,694$ Public safety 953,529 Education 518,255 Public works 543,574 Human services 13,643 Culture and recreation 235,915 Total depreciation expense - governmental activities 2,393,610$ Water 456,281$ Golf 432,309 Total depreciation expense - business-type activities 888,590$ Governmental Activities: Business-Type Activities: Beginning Decreases/Ending Business-Type Activities:Balance Increases Adjustments Balance Capital assets not being depreciated: Land 3,559,212$ -$ -$ 3,559,212$ Construction in progress 581,224 53,100 (533,474) 100,850 Total capital assets not being depreciated 4,140,436 53,100 (533,474) 3,660,062 Capital assets being depreciated: Buildings and improvements 5,707,991 23,050 - 5,731,041 Machinery, equipment, and vehicles 3,686,776 34,679 468,474 4,189,929 Infrastructure 25,947,876 - 65,000 26,012,876 Total capital assets being depreciated 35,342,643 57,729 533,474 35,933,846 Less accumulated depreciation for: Buildings and improvements (1,674,643) (71,950) - (1,746,593) Machinery, equipment, and vehicles (2,669,259) (196,352) - (2,865,611) Infrastructure (13,097,495) (620,288) - (13,717,783) Total accumulated depreciation (17,441,397) (888,590) - (18,329,987) Total capital assets being depreciated, net 17,901,246 (830,861) 533,474 17,603,859 Total business-type activites capital assets, net 22,041,682$ (777,761)$ -$ 21,263,921$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 45 - NOTE 6 – CAPITAL LEASES The Town has entered into lease agreements as lessee for financing the acquisition of a Volvo front end loader, a MVP rescue pumper, an Ambulance and specialty vehicles. The lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the inception date. The assets acquired through the capital leases are as follows: The future minimum lease obligations and the net present value of the minimum lease payments as of June 30, 2021, are as follows: Governmental Activities Assets: Vehicles 1,205,000$ Machinery & Equipment 152,756 Less: Accumulated depreciation (328,240) 1,029,516$ Primary Year Ending June 30 Government 2022 191,473$ 2023 125,570 2024 125,570 2025 71,085 2026 71,085 2027 71,085 Total minimum lease payments 655,868 Less: amounts representing interest (45,540) Present value of minimum lease payments 610,328$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 46 - NOTE 7 – INTERFUND TRANSFERS Interfund transfers for the fiscal year ended June 30, 2021, are summarized as follows: (1) Represents budgeted transfers from the various funds to the general fund. (2) Represents budgeted transfers from the general fund to various funds (3) Represents other transfers NOTE 8 – SHORT-TERM FINANCING Under state law, and with the appropriate authorization, the Town is authorized to borrow funds on a temporary basis as follows: • To fund current operations prior to the collection of revenues by issuing revenue anticipation notes (RANS). • To fund grants prior to reimbursement by issuing grant anticipation notes (GANS). • To fund Capital project costs incurred prior to selling permanent debt by issuing bond anticipation notes (BANS). • To fund current project costs and other approved expenditures incurred, that are anticipated to be reimbursed by the Commonwealth through the issuance of State Aid anticipation notes (SAANS). Short-term loans are general obligations of the Town and maturity dates are governed by statute. Interest expenditures and expenses for short-term borrowings are accounted for in the general fund. Community Nonmajor General P reservation Governmental Operating Transfers Out:Fund Fund Funds Total Nonmajor Governmental Funds 1,215,599$ -$ -$ 1,215,599$ (1) Golf Enterprise Fund 114,967 - - 114,967 (1) General Fund - - 240,417 240,417 (2) Water Enterprise Fund 130,026 - - 130,026 (1) Nonmajor Governmental Funds 68,119 - - 68,119 (3) Water Enterprise Fund - 70,000 - 70,000 (3) Total 1,528,711$ 70,000$ 240,417$ 1,839,128$ Operating Transfers In: TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 47 - The following is a summary of changes in short-term debt for the year ended June 30, 2021: NOTE 9 – LONG-TERM DEBT The Town is subject to a dual-level, general debt limit: the normal debt limit and the double debt limit. Such limits are equal to 5% and 10%, respectively, of the valuation of taxable property in the Town as last equalized by the Commonwealth’s Department of Revenue. Debt may be authorized up to the normal debt limit without state approval. Authorizations under the double debt limit however require the approval of the Commonwealth’s Emergency Finance Board. Additionally, there are many categories of general long-term debt which are exempt from the debt limit but are subject to other limitations. Type Purpose Rate (%) Due Date Balance at June 30, 2020 Renewed/ Issued Retired/ Redeemed Balance at June 30, 2021 Governmental Funds BAN Various Projects 0.75 4/2/2021 834,959$ -$ (834,959)$ -$ BAN Various Projects 0.75 4/2/2021 651,695 - (651,695) - BAN Road Betterments 2.05 4/2/2021 99,453 - (99,453) - BAN Various Projects 0.43 4/1/2022 - 650,000 - 650,000 Total Governmental Funds 1,586,107 650,000 (1,586,107) 650,000 TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 48 - The following is a summary of the changes in long-term debt for the year ended June 30, 2021: Bonds and Notes Payable Schedule -Governmental Funds Project Interest Rate (%) Outstanding at June 30, 2020 Issued Redeemed/ Refunded Outstanding at June 30, 2021 MWPAT Title V Septic Var 10,200$ -$ 10,200$ -$ MWPAT Title V Septic 3.59 40,000 - 10,000 30,000 Land Acquisition 3.64 60,000 - 60,000 - Land Acquisition 4.49 225,000 - 45,000 180,000 Land Acquisition 4.49 560,000 - 80,000 480,000 Land Acquisition 3.84 360,000 - 35,000 325,000 Road Betterments 3.84 20,000 - 20,000 - Road Betterments 3.84 5,000 - 5,000 - Road Betterments 3.00 20,000 - 5,000 15,000 Road Betterments 3.00 20,000 - 5,000 15,000 Road Betterments 2.5 - 4.0 60,000 - 10,000 50,000 Road Betterments 2.5 - 4.0 80,000 - 10,000 70,000 School Renovations 2.5 - 4.0 2,320,000 - 145,000 2,175,000 Road Betterments 2.5 - 4.0 1,460,000 - 135,000 1,325,000 Fire Station 2.25 -5.00 5,525,000 - 325,000 5,200,000 Road Repairs 2.25 -5.00 1,770,000 - 160,000 1,610,000 Library Parking Lot 2.25 -5.00 220,000 - 20,000 200,000 Road Betterments 2.25 -5.00 165,000 - 15,000 150,000 Road Betterments 2.25 -5.00 55,000 - 5,000 50,000 Road Betterments 2.92 85,000 - 10,000 75,000 Fire Station 2.92 5,400,000 - 300,000 5,100,000 Town Septage 2.92 500,000 - 65,000 435,000 Total Bonds and Notes Payable 18,960,200 - 1,475,200 17,485,000 Add: Unamortized Bond Premium 575,121 - 77,393 497,728 Total 19,535,321$ -$ 1,552,593$ 17,982,728$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 49 - The annual debt service requirements for principal and interest for Governmental bonds and notes outstanding at June 30, 2021 are as follows: Bonds and Notes Payable Schedule -Water and Golf Enterprise Funds Fiscal Year Principal Interest Total 2022 1,380,000$ 572,230$ 1,952,230$ 2023 1,375,000 507,405 1,882,405 2024 1,365,000 450,405 1,815,405 2025 1,350,000 394,718 1,744,718 2026 1,295,000 331,198 1,626,198 2027-2031 5,890,000 1,133,192 7,023,192 2032-2036 3,905,000 479,287 4,384,287 2037-2038 925,000 39,000 964,000 Total 17,485,000$ 3,907,435$ 21,392,435$ Project Interest Rate (%) Outstanding at June 30, 2020 Issued Redeemed/ Refunded Outstanding at June 30, 2021 Water Betterments - Slough Rd 3.64 210,000$ -$ 35,000$ 175,000.00$ Water Betterments - Fiddler's Ln 4.49 10,000 - 5,000 5,000.00 Land Acquisition 3 - 3.50 450,000 - 35,000 415,000 Water Offices/Garage 3.96 975,000 - 125,000 850,000 Well #6 3 - 3.50 1,865,000 - 135,000 1,730,000 Well Access Road 2.5 - 4.0 150,000 - 25,000 125,000 Water 2.5 - 4.0 660,000 - 45,000 615,000 Total 4,320,000$ -$ 405,000$ 3,915,000$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 50 - The annual debt service requirements for principal and interest for water and golf enterprise funds bonds and notes outstanding at June 30, 2021 are as follows: Loans Authorized and Unissued As of June 30, 2021, the Town has loans authorized and unissued as follows: Fiscal Year Principal Interest Total 2022 405,000$ 129,880$ 534,880$ 2023 400,000 115,355 515,355 2024 395,000 101,020 496,020 2025 390,000 86,721 476,721 2026 390,000 209,560 599,560 2027-2031 1,255,000 48,000 1,303,000 2032-2036 680,000 72,614 752,614 Total 3,915,000$ 763,150$ 4,678,150$ Date Description Authorized Amount Road Repair & Resurfacing 5/5/2014 5,750,000$ Fire Station 11/16/2015 548,503 DPW Dump Truck 5/7/2018 33,305 DPW Building Roof 5/7/2018 250,000 Private Road Betterement North Pond 5/7/2018 21,276 Land Acquisition - WH Besse 5/7/2018 155,100 Tri Town Septic Demo 12/3/2018 33,131 Fuel Depot 5/6/2019 100,000 6,891,315$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 51 - Changes in Long-term Liabilities The following is a summary of changes in long-term liabilities for the year ended June 30, 2021: The governmental activities long-term liabilities are generally liquidated by the general fund. Beginning Ending Current Governmental Activities:Balance Additions Reductions Balance Portion Bonds and notes payable 18,960,200$ -$ (1,475,200)$ 17,485,000$ 1,380,000$ Add: Unamortized Premiums 575,121 - (77,393) 497,728 70,208 Total Bond Payable 19,535,321 - (1,552,593) 17,982,728 1,450,208 Landfill postclosure care costs 313,700 - (32,900) 280,800 39,244 Capital Leases 814,774 - (204,446) 610,328 176,040 Postemployment benefits 14,741,552 - (2,279,608) 12,461,944 - Net pension liability 23,176,947 - (1,176,681) 22,000,266 - Total governmental activities long-term liabilities 58,582,294$ -$ (5,246,228)$ 53,336,066$ 1,665,492$ Beginning Ending Current Business-Type Activities:Balance Additions Reductions Balance Portion Postemployment benefits 1,809,283$ -$ (72,954)$ 1,736,329$ -$ Net Pension Liability 4,450,836 - (568,436) 3,882,400 - Bonds and notes payable 4,320,000 - (405,000) 3,915,000 405,000 Total business-type activities long-term liabilities 10,580,119$ -$ (1,046,390)$ 9,533,729$ 405,000$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 52 - Overlapping Debt The Town pays assessments under formulas which include debt service payments to other governmental agencies providing services to the Town, (commonly referred to as overlapping debt). The following summary sets forth the long-term debt of such governmental agencies and the estimated share being financed by the Town as of June 30, 2021: Total Long-Town's Town's Term Debt Estimated Indirect Agency Outstanding Share Debt Nauset Regional School District 2,625,000$ 48.00% 1,260,000$ Cape Cod Regional Technical High School 62,730,000 6.55% 4,108,815$ Barnstable County 23,750,645 4.67% 1,109,155 89,105,645 6,477,970 TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 53 - NOTE 10 – GOVERNMENTAL FUND BALANCE CLASSIFICATIONS The Town has classified its governmental fund balances with the following hierarchy. Nonmajor General Community Governmental Fund Preservation Funds Total Fund Balances Nonspendable: Permanent Fund Principal -$ -$ 150,388$ 150,388$ Restricted For: General Government - - 2,280,295 2,280,295 Public Safety - - 2,641,957 2,641,957 Education - - 314,704 314,704 Public Works - - 918,323 918,323 Human Services - - 272,760 272,760 Culture & Recreration - - 515,653 515,653 Employee Benefits - - 97,830 97,830 Bond Premium 175,690 - - 175,690 Community Preservation - 3,736,952 - 3,736,952 Expendable Trust Funds - - 147,994 147,994 175,690 3,736,952 7,189,516 11,102,158 Committed To: Continuing Appropriations General Government 768,961 - - 768,961 Public Safety 545,988 - - 545,988 Education 353,419 - - 353,419 Public Works 341,830 - - 341,830 Human Services 7,518 - - 7,518 Culture & Recreation 24,286 - - 24,286 2,042,002 - - 2,042,002 Assigned To: Encumbered For: General Government 33,443 - - 33,443 Public Safety 47,363 - - 47,363 Education 134,021 - - 134,021 Public Works 24,855 - - 24,855 Human Services 1,550 - - 1,550 Employee Benefits 46,000 - - 46,000 Subsequent Years Expenditures 1,513,218 - - 1,513,218 Stabilization Fund - Capital Imp 500,168 - - 500,168 2,300,618 - - 2,300,618 Unassigned General Fund 5,577,376 - - 5,577,376 General Stabilization Fund 2,990,811 - - 2,990,811 Nonmajor Governmental Funds - - (764,610) (764,610) Nonmajor Capital Projects Public Works - - (588,247) (588,247) Human Services - - (48,305) (48,305) 8,568,187 - (1,401,162) 7,167,025 Total Governmental Fund Balances 13,086,497$ 3,736,952$ 5,938,742$ 22,762,191$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 54 - NOTE 11 – STABILIZATION FUND The Town has established two funds where the Town has set aside amounts for emergency and capital needs. These funds consist of the following:  The Stabilization fund is used to account for any appropriation, as approved by a 2/3 vote at the annual or special town meeting for additions or reductions to the fund. Any interest shall be added to and become part of the fund. The Stabilization fund balance is $2,990,811 as of June 30, 2021. The fund was established under chapter 40, sub-section 5B of the Massachusetts General Law.  The Stabilization Capital Improvements fund is used to account for future capital projects for the Town. Any interest shall be added to and become part of the fund. The Stabilization fund balance is $500,168 as of June 30, 2021. The fund was established under chapter 40, sub-section 5B of the Massachusetts General Law. NOTE 12 – RISK FINANCING The Town is exposed to various risks of loss related to torts; theft of, damage to or destruction of assets; errors and omissions; injuries to employees; employee’s health and life; and natural disasters. Buildings are fully insured against fire, theft, and natural disaster to the extent that losses exceed $1,000 per incident. The fully insurable value of Town buildings and contents is $96,060,955. The Town is insured for general liability; however, Chapter 258 of the Massachusetts General Laws limits the Town’s liability to a maximum of $100,000 per claim in all matters except in actions relating to federal civil rights, eminent domain and breach of contract. Such claims are charged to the general fund. There were no such claims in 2021. The Town is a member of the Cape Cod Municipal Health Group, (CCMHG) which is a Massachusetts Municipal Joint Health Insurance purchase group formed pursuant to Massachusetts General Laws. The Group includes thirteen Towns, six school districts, five fire districts, six water districts, one recreation authority, one education collaborative, Veterans Services of Cape Cod, Barnstable County, Barnstable County Retirement Association, Cape Light Compact, and Cape Cod Regional Transit Authority as participants. In addition, the Group entered into a Joint Negotiation Purchase of Health Coverage with the Dukes County Municipal Health Group which now consists of Dukes County Commissioners; the Towns of Chilmark, Edgartown, Gosnold, Oak Bluffs, Tisbury, West Tisbury, and Aquinnah; Martha’s Vineyard Refuse Disposal and Resource Recovery District; Martha’s Vineyard Commission; Martha’s Vineyard Land Bank Commission; Oak Bluffs Water District; Martha’s Vineyard Regional School District; Up- Island Regional School District; Martha’s Vineyard Charter School; and Martha’s Vineyard Transit Authority. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 55 - Health benefits plans for active employees and non-Medicare eligible retirees consist of a traditional medical indemnity plan, two Preferred Provider Organization (PPO) plans and two Exclusive Provider Organization (EPO) plans. All active employee plans are self-funded with Blue Cross and Blue Shield of Massachusetts (BCBSMA) and Harvard Pilgrim Health Care (HPHC) as third party administrators. The Group offers six health plans for Medicare eligible retirees, which include two self-funded Medicare Supplement Medical plans with fully insured Medicare Prescription Drug Plans (PDP’s), one of which is administered by BCBSMA and one by HPHC, one fully insured Medicare Supplement plan with a PDP provided by Tufts Health Plan, one HMO Medicare wrap plan fully insured by BCBSMA, and two fully insured Medicare Advantage HMO plans, one of which is from BCBSMA and one from Tufts Health Plan. The Group has adopted a contributory dental insurance plan (self-funded) and a voluntary dental plan, which was premium based through June 30, 2007 and changed to a self funded basis effective July 1, 2007. These plans are administered by Delta Dental Plan of Massachusetts for a monthly administrative fee, based on the number of subscribers. Dental plans are optional for employees. Effective July 1, 2009 the group adopted a voluntary fully insured vision plan from EyeMed Vision Care. The vision plan is optional for employers, but employers may not offer both contributory and voluntary plans. The Master Health Plus, Blue Care Elect Preferred PPO plan, Network Blue EPO plan, and Medex 2 plan are on a claims-paid basis, and are administered by Blue Cross Blue Shield of Massachusetts for a monthly administration fee based on the number of individual, single parent/single child, and family plan subscribers for that particular month. Medex 2 is combined with a fully insured Medicare PDP provided by Blue Cross Blue Shield and called Blue Medicare RX. The Harvard Pilgrim EPO Plan, Harvard Pilgrim PPO plan, and Harvard Pilgrim Health Care Medicare Enhance plan (Medical Portion) are on a claims-paid basis, and are administered by Harvard Pilgrim Health Care for a monthly administration fee based on the number of individual and family plan subscribers for that particular month. Medicare Enhance is combined with a fully insured PDP from Aetna Medicare RX Plan. In 2014 the Group along with two other Massachusetts municipal joint purchase groups entered into a reinsurance pooling agreement the Massachusetts Municipal Reinsurance Arrangement Series of Sentinel Indemnity, LLC (MMRA). The first such reinsurance pooling agreement established in Massachusetts. The policy year is July 1 through June 30. All participants share the same rates for coverage of claims exceeding $300,000 up to $800,000. There is no Aggregating Specific Deductible. If claims experience is below projections, participants are dividend eligible on a collective and proportional basis. Participating governmental entities have agreed to participate for a minimum of three years. In addition, the group has a specific excess medical and prescription drug claims reinsurance contract with an insurance carrier covering claims paid in excess of $800,000 per individual. The policy period covers claims incurred within 12 months and paid within 24 months. The Group does not reinsure its Medex and Medicare Enhance Medical plans. The Group’s Board may deal with certified surpluses and deficits through the rate setting process and this is the preferred method. Alternatively, the Group may deal with certified surpluses and deficits by making direct distributions to members in the case of a certified surplus or may require direct payments from members in the case of a certified deficit. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 56 - The Group provides health care coverage for employees that qualify for and select health care coverage as an employee benefit as well as retired employees. There are 195 Town of Brewster employees and 187 retirees/surviving spouses who participate in the Group’s health care programs. The Town contributes 75% of the premium cost for employees, and 50% of the premium costs for retirees and surviving spouses. As of June 30, 2021 the Cape Cod Municipal Health Group had total assets of $80,561,805 total liabilities of $13,782,679 (including $11,430,770 in estimated benefits obligations), and a total surplus of $66,779,126. NOTE 13 - POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS The GASB Standards for Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, requires the following disclosures in the financial statements related to the retiree medical, and life insurance benefits: Plan Description. The Town of Brewster other postemployment benefits plan “the plan” is a single- employer defined benefit healthcare plan administered by the Town of Brewster. The Plan provides medical, and life insurance benefits to eligible retirees and their spouses. The Town Meeting vote is the authority to establish and amend benefit provisions to the Town. The Town has accepted various sections of Massachusetts General Laws Chapter 32B to provide 50%of the premium cost of retirees’ health and life insurance costs. Funding Policy. The contribution requirements of plan members and the Town are established and may be amended by Town Meeting vote. The required contribution is based on projected pay-as-you-go financing requirements. For Fiscal Year 2021, total Town premiums plus implicit costs for the retiree medical program was $731,652. The Town also made a contribution to an OPEB Trust for $250,000 for a total contribution during the measurement period of $981,652 to be reported on the financial statements for the fiscal year ending June 30, 2021. The Commonwealth of Massachusetts passed special legislation that has allowed the Town to establish a postemployment benefit trust fund and to enable the Town to begin pre-funding its other postemployment benefits (OPEB) liabilities. During 2021, the Town prefunded future OPEB liabilities totaling $250,000 by contributing funds to the other postemployment benefit fund in excess of the pay as you go required contribution. These funds are reported with the Fiduciary funds financial statements. As of June 30, 2021, the balance of this fund totaled $3,136,620. GASB Statement #75 – OPEB Employer Financial Reporting Summary of Significant Accounting Policies – For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB and OPEB expenses, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 57 - Measurement Date - GASB #75 requires the net OPEB liability to be measured as of a date no earlier than the end of the employer’s prior fiscal year and no later than the end of the employer’s current fiscal year, consistently applied from period to period. Accordingly, the net OPEB liability was measured as of June 30, 2021 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2020. Plan Membership – The following table represents the Plan’s membership as June 30, 2020: Active Members 191 Inactive members or beneficiaries currently receiving benefits 182 Total 373 Components of OPEB Liability – The following table represents the components of the Plan’s OPEB liability as of June 30, 2021: Total OPEB Liability 17,334,893$ Less: OPEB plan's fiduciary net position (3,136,620) Net OPEB Liability 14,198,273$ The OPEB plan's fiduciary net position as a percentage of the total OPEB liability 18.09% TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 58 - Significant Actuarial Methods and Assumptions – The plan’s total OPEB liability, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified, that was updated to June 30, 2021 to be in accordance with GASB Statement #75. Valuation Date:June 30, 2020 Actuarial Cost Method:Entry Age Normal - Level Percentage Payroll Asset-Valuation Method:Market value Inflation:3.25% Discount rate 7.00% as of June 30, 2021 Investment Rate of Return 7.00% Salary Increases:Service-related increases for group 1 (excluding teachers) and group 2 employees: 6.00% decreasing over 11 years to an ultimate level of 4.00%. Service-related increases for group 4 employees: 7.00% decreasing over 8 years to an ultimate level of 4.50%. Service related increases for Teachers 7.5% decreasing over 20 years to an ultimate level of 4.0%. Healthcare trend rates: Cape Cod Municipal Health Group Nonmedicare: 2.50% for 1 year, then 6.75% decreasing by 0.25% each year to an ultimate level of 4.5% per year Medicare: 2.50 for 1 year, then 6.75% decreasing by 0.25% each year to an ultimate level of 4.5% per year Pre-Retirement Mortality: Healthy non-teachers RP-2014 Blue Collar Employee Mortality Table projected generationally with scale MP-2017 Healthy teachers PUB-2010 Teachers Employee head count weighted Mortality Table projected generationally with scale MP-2020 Post-Retirement Mortality: Healthy non-teachers RP-2014 Blue Collar Healthy Annuitant Mortaity Table projected generationally with scale MP-2017 Healthy teachers PUB-2010 Teachers healthy retiree head count weighted Mortality Table projected generationally with Scale MP-2020. Disabled non-teachers RP-2014 Blue Collar Healthy Annuitant Mortality Table set forward one year projected generationally with scale MP-2017 Disabled teachers PUB-2010 Teachers healthy retiree head count weighted Mortality Table and projected generationally with Scale mp-2020 TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 59 - Development of Long - Term Rate The long-term expected rate of return on OPEB plan investments was determined using a building block method in which expected future rates of return (expected returns, net of inflation) are developed for each major asset class. These returns 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. The target allocation as of June 30, 2021 and projected arithmetic real rates of return for each major asset class, after deducting inflation, but before investment expenses, used in the derivation of the long-term expected investment rate of return assumption are summarized in the following table. Long-Term Target Expected Real Allocation Rate of Return Domestic equity 22.00%6.28% International developed markets equity 12.00%7.00% International emerging markets equity 5.00%8.82% Core fixed income 15.00%0.38% High- yield fixed income 8.00%2.97% Real Estate 10.00%3.50% Commodities 4.00%3.45% Hedge fund, GTAA, Risk parity 10.00%2.35% Private equity 14.00%10.11% Total 100.00% Asset Class Discount Rate – The discount rate used to measure the total OPEB liability was 7.00% as of June 30, 2021. The OPEB plan fiduciary net position was projected to be available to make all projected future benefits payments of current plan members. Therefore, the long – term expected rate of return on OPEB plan investment was applied to all periods of projected benefit payments to determine the OPEB liability. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 60 - Changes in the Net OPEB Liability Total OPEB Plan Fiduciary Net OPEB Liablity Net Position Liability (a)(b)(a) - (b) Balance at June 30, 2020 18,750,725$ 2,199,890$ 16,550,835$ Charges for the year: Service cost 533,728 - 533,728 Interest 1,372,066 - 1,372,066 Difference between expected and actual experience (999,626) - (999,626) Changes in assumptions (1,590,348) - (1,590,348) Net Investment Income - 686,730 (686,730) Employer Contributions - 981,652 (981,652) Benefit payments, including refunds of member contributions (731,652) (731,652) - Net Changes (1,415,832) 936,730 (2,352,562) Balance at June 30, 2021 17,334,893$ 3,136,620$ 14,198,273$ Increase (Decrease) Sensitivity of the net OPEB liability to changes in the discount rate – The following table presents the Plan’s net OPEB liability, calculated using the discount rate of 7.00% as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1 percentage- point lower (6.00%) or 1 percentage-point higher (8.00%) than the current rate. Current 1% Decrease Discount Rate 1% Increase (6.00%)(7.00%)(8.00%) Net OPEB liability 16,434,109$ 14,198,273$ 12,342,876$ Sensitivity of the net OPEB liability to changes in the healthcare trend rate – The following table presents the net other postemployment benefit liability, as well as what the net OPEB liability would be if it were calculated using a health care trend rate that is 1 percentage-point lower or 1 percentage-point higher. Current 1% Decrease Trend 1% Increase Net OPEB liability 12,009,901$ 14,198,273$ 16,894,885$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 61 - At June 30, 2021 the Town reported deferred outflows of resources and deferred inflows of resources related to other postemployment benefits of $281,403 and $5,936,828. The balances of the deferred outflows and inflows as of June 30, 2021 consist of the following: Deferred Deferred Outflows Inflows of Resources of Resources Total Difference between expected and actual experience 281,403$ (833,020)$ (551,617)$ Changes of assumptions - (4,763,546) (4,763,546) Net difference between projected and actual earnings - (340,262) (340,262) Total Deferred Outflows (Inflows) of Resources 281,403$ (5,936,828)$ (5,655,425)$ Deferred Category The Town’s net deferred outflows of resources and deferred inflows of resources related to other postemployment benefits will be recognized in future years other postemployment benefits are as follows: Period Year ended June 30 Amount 2022 (1,987,493)$ 2023 (1,985,626) 2024 (614,234) 2025 (636,410) 2026 (431,662) Deferred Inflows/Outflows Recognized in Future Years (5,655,425)$ Changes of Assumption – The Discount Rate and Investment Rate of Return had decreased from 7.25% to 7.00% Changes in Plan Provisions – None TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 62 - NOTE 14 – PENSION PLANS A. Plan Descriptions The Town contributes to the Barnstable County Retirement Association (The Association), a multiple- employer, cost sharing contributory defined benefit pension plan, under Massachusetts General Law (MGL), Chapter 32, and is regulated by the Massachusetts Public Employee Retirement Administration Commission (PERAC). Substantially all employees are members of the Association except for public school teachers and certain school administrators. The Association issues a publically available audited financial report that may be obtained by contacting the association at 3195 Main Street Barnstable, MA 02630. The Town is a member of the Massachusetts Teachers’ Retirement System (MTRS), a cost-sharing multi- employer defined benefit plan. MTRS is managed by the Commonwealth of Massachusetts (Commonwealth) on behalf of municipal teachers and municipal teacher retirees. The Commonwealth is a nonemployer contributor and is responsible for 100% of the contributions and future benefit requirements of the MTRS. The MTRS covers certified teachers in cities (except Boston), towns, regional school districts, charter schools, educational collaboratives, and Quincy College. The MTRS is part of the Commonwealth’s reporting entity and the audited financial report may be obtained by visiting http://www.mass.gov/osc/publications-and-reports/financial-reports/. The MTRS report may also be obtained by contacting MTRS at One Charles Park, Cambridge, Massachusetts 02142-1206. Special Funding Situation The Commonwealth is a nonemployer contributor and is required by statue to make 100% of all actuarially determined employer contributions on behalf of the Town to the MTRS. Therefore, the Town is considered to be in a special funding situation as defined by GASB Statement No.68, Accounting and Financial Reporting for Pensions and the Commonwealth is a nonemployer contributor in MTRS. Since the Town does not contribute directly to MTRS, there is no net pension liability to recognize. The total of the Commonwealth provided contributions have been allocated based on each employer’s covered payroll to the total covered payroll of employers in MTRS as of the measurement date of June 30, 2020. The Town’s portion of the collective pension expense, contributed by the Commonwealth, of $1,862,076 is reported in the general fund as intergovernmental revenue and pension expense in the current fiscal year. The portion of the Commonwealth’s collective net pension liability associated with the Town is $15,075,789 as of the measurement date. The “Association” and the MTRS are contributory defined benefit plans and membership in both the “Association” and the MTRS is mandatory upon commencement of employment for all permanent, full- time employees. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 63 - B. Benefits The Association and MTRS provide retirement, disability and death benefits to plan members and beneficiaries. Massachusetts Contributory Retirement System benefits are with certain exceptions, uniform from system to system. The Association provides for retirement allowance benefits up to a maximum of 80% of an employees highest three year average annual rate of regular compensation for those hired prior to April 2, 2012. For persons who became employees on or after April 2, 2012, average salary is the average annual rate of regular compensation received during the five consecutive years that produce the highest average, or, if greater, during the last five years (whether or not consecutive) preceding retirement. Benefit payments are based upon an employee’s age, length of creditable service, level of compensation, and group classification. Employees become vested after ten years of creditable service. Employees who become permanently and totally disabled for further duty may be eligible to receive a disability retirement allowance. The amount of benefits to be received in such cases is dependent on several factors, including whether or not the disability is work related, the employee’s age, years of creditable service, level of compensation, veterans’ status and group classification. Employees who resign from service are entitled to request a refund of their accumulated total deductions. Survivor benefits are extended to eligible beneficiaries of employees whose death occurs prior to or following retirement. Cost-of living adjustments granted between 1981 and 1997, and any increase in other benefits imposed by the Commonwealth of Massachusetts’ state law during those years are borne by the Commonwealth and are deposited in to the pension fund. Cost-of-living adjustments granted after 1997 must be approved by the Association and all costs are borne by the Association. C. Contributions Barnstable County Retirement Association Chapter 32 of MGL governs the contributions of plan members and member employees. Active plan employees are required to contribute to the Association at rates ranging from 5 to 9% and of their gross regular compensation. The percentage rate is keyed to the date upon which an employee’s membership commences. Employees hired on or after January 1, 1979, contribute an additional 2.0% of annual regular compensation in excess of $30,000. The member units are required to pay into the Association, a legislatively mandated actuarial determined contribution that is apportioned among the employers based on the covered payroll. The Town’s proportionate share of the required contribution for the year ended June 30, 2021 which was $2,606,211 and 21.87% of covered payroll, actuarially determined as an amount that when combined with plan member contributions, is expected to finance the costs of benefits earned by plan members during the year, with an additional amount to finance any unfunded accrued liability. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 64 - D. Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions Pension Liabilities At June 30, 2021 the Town reported a liability of $25,882,666 for its proportionate share of the net pension liability. The net pension liability was measured as of December 31, 2020 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of January 1, 2020. Accordingly, updated procedures were used to roll forward the total pension liability to the measurement date. The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term share of contributions to the pension plan relative to the projected contributions of all participating members actuarially determined. At December 31, 2020, the Town’s proportion was 3.51% which was a slight decrease from the last measurement. Pension Expense and Deferred Outflows/Inflows of Resources For the year ended June 30, 2021 the Town recognized pension expense of $2,737,332. At June 30, 2021 the Town reported deferred outflows and inflows of resources related to pensions of $3,274,844 and $3,471,481 respectively. The balances of deferred outflows and inflows as June 30, 2021 consist of the following: Deferred Deferred Outflows Inflows of Resources of Resources Total Difference between expected and actual experience -$ (141,706)$ (141,706)$ Changes of Assumption 2,276,335 - 2,276,335 Net difference between projected and actual investment earnings on pension plan investments - (3,020,159) (3,020,159) Contributions and proportionate share of contributions 998,509 (309,616) 688,893 Total Deferred Outflows (Inflows) of Resources 3,274,844$ (3,471,481)$ (196,637)$ Deferred Category The Town’s net deferred outflows/inflows of resources related to pensions will be recognized in future pension expense are as follows: Period Year ended June 30 Amount 2022 55,503$ 2023 600,950 2024 (795,492) 2025 (141,531) 2026 83,933 Deferred Inflows/Outflows Recognized in Future Years (196,637)$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 65 - E. Actuarial assumptions The total pension liability was determined by an actuarial valuation as of January 1, 2020, using the following actuarial assumptions, applied to all periods included in the measurement date that was rolled forward to December 31, 2020: Valuation date……………………………… January 1, 2020 Actuarial cost method……………………… Entry Age Actuarial Cost Method. Amortization method……………………… Appropriations increase at 5.28% per year through fiscal 2034 with a smaller payment in fiscal 2035 Projected salary increases…………………..3.25% Investment Rate of Return/Discount Rate…..7.15% Cost of living adjustments………………… 3.0% of the first $18,000 Mortality Rates: Pre-Retirement……………The RP-2014 Blue Collar Employee Mortality Table projected generationally with Scale MP-2017 Healthy Retiree…………...The RP-2014 Blue Collar Healthy Annuitant Mortality Table projected generationally with Scale MP-2017 Disabled Retiree………….The RP-2014 Blue Collar Healthy Annuitant Mortality Table set forward one year and projected generationally with Scale MP-2017. Investment policy The Pension Plan’s policy in regard to the allocation of invested assets is established by PRIT. Plan assets are managed on a total return basis with a long-term objective of achieving a fully funded status for the benefits provided through the pension plan. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 66 - F. 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 expected future real rates of return (expected returns, net of inflation) are developed for each major asset class. These returns 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 adding expected inflation. The target allocation (approved by the board) and projected arithmetic real rates of return for each major asset class, after deducting inflation, but before investment expenses, used in the deviation of the long term expected investment rate of return assumption are summarized in the following table: Asset Class Target Allocation Long-Term Expected Real Rate of Return Domestic equity 22.00%6.28% International developed markets equity 12.00%7.00% International emerging markets equity 5.00%8.82% Core fixed income 15.00%0.38% High-yield fixed income 8.00%2.97% Real estate 10.00%3.50% Timber 4.00%3.45% Hedge fund, GTAA, Risk parity 10.00%2.35% Private equity 14.00%10.11% Total 100.00% For the year ended December 31, 2020 the annual money weighted rate of return on pension Plan Investments, Net of Pension Plan Investment expense was 12.20%. The money weighted rate of return expenses investment performance, net of the investment expense, adjusted for the changing amounts actually invested, measured monthly. G. Discount Rate The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the plan fiduciary net position (FNP) was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability, as of December 31, 2020. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 67 - H. Sensitivity of the net pension liability to changes on the discount rate The following presents the net pension liability, calculated using the discount rate of 7.15%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.15%) or 1 percentage point higher (8.15%) than the current rate: 1% Decrease (6.15%) Current Discount Rate (7.15%) 1% Increase (8.15%) The Town's proportionate share of the net pension liability 35,007,154$ 25,882,666$ 18,215,490$ Detailed information about the pension plan’s fiduciary net pension is available in a separately issued Barnstable County Retirement Association financial report. NOTE 15 – COMMITMENTS AND CONTINGENCIES The Town participates in a number of federal award programs. Although the grant programs have been audited in accordance with the provisions of the Single Audit Act Amendments of 1996 through June 30, 2021, these programs are still subject to financial and compliance audits. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although it is believed the amount, if any, would not be material. The Town’s landfill was capped in 2000 by order of the Department of Environmental Protection (DEP). The Town is responsible for postclosure monitoring of the site for ten years (10 years remaining), and the estimated liability has been recorded in the Statement of Net Position, Governmental Activities. The $280,800 reported as landfill postclosure liability at June 30, 2021 is based on what it would cost to perform all post-closure care at June 30, 2021. Actual costs may be higher due to inflation, changes in technology or changes in regulations. Various legal actions and claims are pending. Litigation is subject to many uncertainties, and the outcome of individual litigated matters is not always predictable. Although the amount of liability, if any, at June 30, 2021, cannot be ascertained, management believes any resulting liability should not materially affect the financial position at June 30, 2021. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 68 - NOTE 16 – COVID-19 On March 10, 2020, the Massachusetts Governor declared a state of emergency in response to the coronavirus outbreak. The World Health Organization officially declared the novel Coronavirus (COVID- 19) a pandemic the following day. In an attempt to slow the spread of COVID-19, governments issued various stay at home orders that caused global economic shutdowns and substantial financial market impact. Starting in March 2020, the Governor continued to issue orders allowing governments to operate and carry out essential functions safely. These included modifying the state’s Open Meeting Law, issuing a stay-at-home order, and introducing a phased approach to reopening State businesses. The Town is considered an essential business and closed to the public, but departments remained operational and most employees continued to perform their daily duties. In Fiscal Year 2021 the Town has incurred unanticipated costs specifically related to the pandemic. On March 27, 2020 the United States Federal Government established the Coronavirus Aid, Relief and Economic Security (CARES) Act in response to the economic downfall caused by the COVID-19 pandemic. This Act requires that the payment of funds be used only to cover expenses that; are necessary expenditures incurred due to the public health emergency with respect to COVID-19. The Commonwealth and communities throughout the Commonwealth were awarded a portion of the federal funding. In addition to the funding from the CARES Act, there are several other federal and state grants available to help offset these unanticipated costs. The full extent of the financial impact cannot be determined as of the date of the financial statements. NOTE 17 – RESTATEMENT DUE TO A CHANGE IN ACCOUNTING STANDARDS Beginning net position of the governmental activities and the nonmajor governmental funds has been revised to reflect the implementation of GASB Statement #84. The revised balances are summarized in the table shown below: 6/30/2020 Implementation Previously of GASB 6/30/2020 Reported Statements #84 Revised Balances Fiduciary Funds Balances Government-Wide Financial Statements Governmental activities 47,377,429$ 81,406$ 47,458,835$ Governmental Funds Nonmajor governmental funds 5,047,632$ 81,406$ 5,129,038$ TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 69 - NOTE 18 – IMPLEMENTATION OF NEW GASB PRONOUNCMENTS During fiscal year 2021, the following GASB pronouncements were implemented: The GASB issued Statement #84, Fiduciary Activities, was implemented in 2021. Management’s current assessment is that this pronouncement did not have a significant impact on the Basic Financial Statements. The GASB issued Statement #90, Majority Equity Interests – an Amendment of GASB Statements No.14 and No.61, was implemented in 2021. Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. Future GASB Pronouncements: The GASB issued Statement #87, Leases, which is required to be implemented in 2022. Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. The GASB issued Statement #89, Accounting for Interest Cost Incurred before the End of a Construction Period, which is required to be implemented in 2022. Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. The GASB issued Statement #91, Conduit Debt Obligations – which is required to be implemented in 2023. Earlier application is encouraged. The primary objectives of this statement is to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. . Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. The GASB issued Statement #92, Omnibus 2020, which is required to be implemented in 2022. Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. The GASB issued Statement #93, Replacement of Interbank Offered Rates, which is required to be implemented in 2022. Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. The GASB issued Statement #94, Public-Private and Public Partnerships and Availability Payment Arrangements, which is required to be implemented in 2023. Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. The GASB issued Statement #96, Subscription-Based Information Technology Arrangements, which is required to be implemented in 2023. Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. TOWN OF BREWSTER, MASSACHUSETTS NOTES TO BASIC FINANCIAL STATEMENTS JUNE 30, 2021 - 70 - The GASB issued Statement #97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Service Code 457 Deferred Compensation Plans, which is required to be implemented in 2022. Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. The GASB issued Statements #98, The Annual Comprehensive Financial Report The requirements of this Statement are effective for fiscal years ending after December 15, 2021. Management’s current assessment is that this pronouncement will not have a significant impact on the Basic Financial Statements. TOWN OF BREWSTER, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION BARNSTABLE COUNTY RETIREMENT ASSOCIATION JUNE 30, 2021 Schedule of the Town’s Proportionate Share of the Net Pension Liability December 31, 2020 December 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016 December 31, 2015 December 31, 2014 Town's proportion of the net pension liability 3.51%3.68%3.72%3.68%3.47%3.60%3.62% Town's proportionate share of the net pension liability 25,882,666$ 27,627,783$ 29,398,461$ 25,055,361$ 24,381,943$ 22,672,955$ 20,436,149$ Town's covered-employee payroll 11,919,076$ 11,221,114$ 10,957,745$ 10,398,846$ 9,735,188$ 9,902,884$ 9,494,687$ Town's proportionate share of the net pension liability as a percentage of it's covered-employee payroll 217.15%246.21%268.29%240.94%250.45%228.95%215.24% Plan fiduciary net position as a percentage of the total pension liability 66.82%62.34%57.63%61.86%57.28%58.10%60.43% Note: This schedule is intended to present information for 10 years. Until a 10 year trend is compiled, information is presented for those years for which the information is available. See notes to Required Supplementary Information - 71 - TOWN OF BREWSTER, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION BARNSTABLE COUNTY RETIREMENT ASSOCIATION JUNE 30, 2021 December 31 ,2020 December 31 ,2019 December 31 ,2018 December 31 ,2017 December 31 ,2016 December 31 ,2015 December 31 ,2014 Actuarily determined contribution 2,606,211$ 2,421,198$ 2,342,130$ 2,197,453$ 1,967,090$ 1,946,029$ 1,885,218$ Contribution in relation to the actuarilly determined contribution (2,606,211) (2,431,289) (2,342,130) (2,197,453) (1,967,090) (1,946,029) (1,885,218) Contribution deficency (excess)-$(10,091)$ -$-$-$-$-$ Town's covered-employee payroll 11,919,076$ 11,221,114$ 10,957,745$ 10,398,846$ 9,735,188$ 9,902,884$ 9,494,687$ Contribution as a percentage of covered - employee payroll 21.87%21.67%21.37%21.13%20.21%19.65%19.86% SCHEDULE OF TOWNS CONTRIBUTION Note: This Town schedule is intended to present information for 10 years. Until a 10 year trend is compiled, information is presented for those years for which the information is available. See notes to Required Supplementary Information - 72 - TOWN OF BREWSTER, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION MASSACHUSETTS TEACHERS RETIREMENT SYSTEM JUNE 30, 2021 Schedule of the Commonwealth’s Collective amounts of the Net Pension Liability The Commonwealth of Massachusetts is a nonemployer contributor and is required by statue to make all actuarially determined employer contributions on behalf of the member employers which creates a special funding situation. Since the Town does not contribute directly to MTRS, there is no net pension liability to recognize. This schedule discloses the Commonwealth’s 100% share of the collective net pension liability that is associated with the Town; the portion of the collective pension expense as both revenue and pension expense recognized by the Town; and the Plan’s fiduciary net position as a percentage of total liability. Commonwealth's Town's Expense 100% Share of the and Revenue Plan Fiduciary Net Net Pension Recognized for the Position as a Liability Associated Commonwealth's Percentage of the with the Town Support Total Pension Liability 2021 15,075,789$ 1,862,076$ 50.67% 2020 13,621,740 1,651,872 53.95% 2019 12,597,747 1,276,599 54.84% 2018 12,722,094 1,327,842 54.25% 2017 13,320,299 1,358,758 52.73% 2016 12,323,157 999,518 55.38% 2015 9,511,918 660,839 61.64% Fiscal Year Note: This schedule is intended to present information for 10 years. Until a 10-year trend is compiled, information is presented for those years for which information is available. See notes to required supplementary information. - 73 - TOWN OF BREWSTER, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS JUNE 30, 2021 Schedule of the Town’s Net OPEB Liability and Related Ratios June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Total OPEB Liability Service Cost 533,728$ 542,478$ 1,010,441$ 1,032,989$ 1,200,462$ Interest 1,372,066 1,335,290 920,650 857,050 686,109 Differences between expected and actual experience (999,626) -1,117,981 844,215 - Changes of assumptions (1,590,348) (606,679) (1,273,555) (6,891,871) (2,577,803) Benefit Payments (731,652) (791,361) (707,276) (554,673) (530,788) Net Change in total OPEB liability (1,415,832) 479,728 1,068,241 (4,712,290) (1,222,020) Total OPEB liability-beginning 18,750,725 18,270,997 17,202,756 21,915,046 23,137,066 Total OPEB liability-ending (a)17,334,893 18,750,725 18,270,997 17,202,756 21,915,046 Plan fiduciary net position Contributions-employer 981,652 991,361 807,276 609,673 605,788 Net investment income 686,730 38,566 106,780 125,456 199,756 Benefit payments (731,652) (791,361) (707,276) (554,673) (530,788) Net change in plan fiduciary net position 936,730 238,566 206,780 180,456 274,756 Plan fiduciary net position - beginning 2,199,890 1,961,324 1,754,544 1,574,088 1,299,332 Plan fiduciary net position - ending (b)3,136,620 2,199,890 1,961,324 1,754,544 1,574,088 Town's net OPEB liability-ending (a)-(b)14,198,273$ 16,550,835$ 16,309,673$ 15,448,212$ 20,340,958$ Plan fiduciary net position as a percentage of total OPEB liability 18.09%11.73%10.73%10.20%7.18% Covered-employee payroll 17,245,477 N/A 16,171,858 N/A 15,756,605 Plan's net OPEB liability as a percentage of covered-employee payroll 82.33%N/A 100.85%N/A 129.09% Note: This schedule is intended to present information for 10 years. Until a 10-year trend is compiled, information is presented for those years for which information is available See notes to required supplementary information. - 74 - TOWN OF BREWSTER, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS JUNE 30, 2021 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Acuarially determined contribution 1,470,762$ 1,502,340$ 1,455,051$ 1,143,921$ 1,105,238$ Contributions in relation to the actuarially determined contribution (981,652) (991,360) (807,276) (609,673) (605,788) Contribution deficiency (excess)489,110$ 510,980$ 647,775$ 534,248$ 499,450$ Covered-employee payroll 17,245,477$ N/A 16,171,858$ N/A 15,756,605$ Contributions as a percentage of covered- employee payroll 5.69%N/A 4.99%N/A 3.84% Schedule of the Town's Contribution Note: This schedule is intended to present information for 10 years. Until a 10-year trend is compiled, information is presented for those years for which information is available. See notes to required supplementary information. - 75 - TOWN OF BREWSTER, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION OTHER POSTEMPLOYMENT BENEFITS JUNE 30, 2021 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Annual money-weighted rate of return, net of investment expense N/A N/A N/A N/A 5.44% Schedule of Investment Return Note: This schedule is intended to present information for 10 years. Until a 10-year trend is compiled, information is presented for those years for which information is available. See notes to required supplementary information. - 76 - TOWN OF BREWSTER NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2021 Pension Plan Schedules A.Schedule of the Town’s Proportionate Share of the Net Pension Liability The Schedule of Town’s Proportionate Share of the Net Pension Liability details the allocated percentage of the net pension liability; the proportionate share of the net pension liability, and the covered employee payroll. It also demonstrates the net position as a percentage of the pension liability and the net pension liability as a percentage of covered payroll. B.Schedule of Town’s Contribution Governmental employees are required to pay an annual appropriation as established by PERAC. The appropriation includes the amounts to pay the pension portion of each member’s retirement allowance, an amount to amortize the actuarially determined unfunded liability to zero in accordance with the System’s funding schedule, and additional appropriations in accordance with adopted early retirement incentive programs. The appropriations are payable on July 1, and January 1. The Town may choose to pay the entire appropriation in July at a discounted rate. Accordingly, actual contributions may be less than the “total appropriation”. The pension fund appropriation is allocated to the Town based on covered payroll. C. Schedule of the Commonwealth’s Collective amounts of the Net Pension Liability The Commonwealth of Massachusetts is a nonemployer contributor and is required by statute to make all actuarially determined employer contributions on behalf of the member employers which creates a special funding situation. Since the Town does not contribute directly to MTRS, there is no net pension liability to recognize. This schedule discloses the Commonwealth’s 100% share of the collective net pension liability that is associated with the Town; the portion of the collective pension expense as both a revenue and pension expense recognized by the Town; and the Plan’s fiduciary net position as a percentage of the total pension liability. D.Changes in Plan Provisions – None Other Postemployment Benefits Schedules A.Schedule of the Town’s Net OPEB Liability and Related Ratios The Schedule of the Town’s Net OPEB Liability and Related Ratios presents multi-year trend information on changes in the plan’s total OPEB liability, changes in the plan’s net position, and ending net OPEB liability. It also demonstrates the plan’s net position as a percentage of the total liability and the plan’s net OPEB liability as a percentage of covered-employee payroll. B.Schedule of the Town’s Contribution The Schedule of the Town’s contributions includes the Town’s annual required contribution to the plan, along with the contribution made in relation to the actuarially determined contribution. The Town is not required to fully fund this contribution. - 77 - TOWN OF BREWSTER NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2021 C.Schedule of Investment Return The Schedule of Investment Return includes the money-weighted investment return on the Plan’s other postemployment assets, net of investment expense. D.Changes in Provisions - None - 78 -