HomeMy Public PortalAboutCarteret Port Authority Audit 2022BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret,
County of Middlesex, State of New Jersey)
Financial Statements and Supplementary Schedules
For the year ended December 31, 2022
(With Independent Auditor’s Report thereon)
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Financial Statements and Supplementary Schedules
For the year ended December 31, 2022
CONTENTS
Page
Independent Auditor’s Report 1-3
Independent Auditor’s Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on and Audit
of Financial Statements Performed in Accordance
with Government Auditing Standards 5-6
Management’s Discussion and Analysis 7-9
Statement of Net Position 11
Statement of Revenues, Expenses and Change in Net Position 12
Statement of Cash Flows 13
Notes to Financial Statements 15-26
Required Supplementary Information:
Schedule I – Schedule of Authority’s Proportionate Share
of the Net Pension Liability – PERS 27
Schedule II – Schedule of Authority Contributions – PERS 28
Notes to the Required Supplemental Information 29
Other Supplementary Information:
Schedule III – Schedule of Revenues and Costs Compared to Budget 31
Schedule IV – Schedule of Revenues, Expenses and Changes in
Unrestricted and Restricted Net Position 32
Schedule V – Schedule of Unrestricted Cash Receipts, Cash
Disbursements and Changes in Cash 33
Board of Commissioners 34
General Comments and Recommendations 35-36
This page intentionally left blank
INDEPENDENT AUDITOR’S REPORT
To the Chairman and Commissioners
of the Borough of Carteret Municipal Port Authority
County of Middlesex
Carteret, New Jersey 07008
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the business-type activities of the Borough of
Carteret Municipal Port Authority (hereafter referred to as the “Authority”), a component unit of the
Borough of Carteret, County of Middlesex, State of New Jersey, as of and for the year ended December 31,
2022, and the related notes to the financial statements, which collectively comprise the Authority’s basic
financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the business-type activities of the Authority, as of December 31, 2022, and
the respective changes in financial position for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Basis for Opinion
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; and in compliance with audit standards
prescribed by the Local Finance Board and by the Division of Local Government Services, Department of
Community Affairs, State of New Jersey. Our responsibilities under those standards are further described
in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of the Authority, and to meet our other ethical responsibilities, in accordance
with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management 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, and for 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.
1
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue
as a going concern for twelve months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing
standards, Government Auditing Standards and audit standards prescribed by the Local Finance Board
and by the Division of Local Government Services, Department of Community Affairs, State of New
Jersey will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing
Standards and audit standards prescribed by the Local Finance Board and by the Division of Local
Government Services, Department of Community Affairs, State of New Jersey, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit.
x Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements.
x Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is
expressed.
x Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Authority’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control-related
matters that we identified during the audit.
2
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and other required supplementary information as listed in the table of contents, 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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Authority’s basic financial statements. The schedule of revenues and costs compared to
budget, schedule of revenues, expenses and changes in unrestricted and restricted net position and the
schedule of unrestricted cash receipts, cash disbursements and changes in cash are presented for purposes
of additional analysis, and are not a required part of the basic financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the basic financial statements. The information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in
the United States of America. In our opinion, the schedule of revenues and costs compared to budget,
schedule of revenues, expenses and changes in unrestricted and restricted net position and the schedule of
unrestricted cash receipts, cash disbursements and changes in cash are fairly stated, in all material
respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 21,
2023 on our consideration of the Authority’s internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on 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 Authority’s internal control over
financial reporting and compliance.
HOLMAN FRENIA ALLISON, P.C.
Certified Public Accountants
October 21, 2023
Lakewood, New Jersey
3
This page intentionally left blank
4
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Chairman and Commissioners
of the Borough of Carteret Municipal Port Authority
County of Middlesex
Carteret, New Jersey 07008
We have audited, in accordance with the 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 and audit requirements as prescribed by Local
Finance Board and by the Division of Local Government Services, Department of Community Affairs,
State of New Jersey, the financial statements of the business-type activities of the Borough of Carteret
Municipal Port Authority as of and for the year ended December 31, 2022, and the related notes to the
financial statements, which collectively comprise the Borough of Carteret Municipal Port Authority’s
basic financial statements and have issued our report thereon dated October 21, 2023.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Borough of Carteret
Municipal Port Authority's internal control over financial reporting (internal control) to determine the
audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on
the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Borough
of Carteret Municipal Port Authority’s internal control. Accordingly, we do not express an opinion on the
effectiveness of Borough of Carteret Municipal Port Authority’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were
not identified. Given these limitations, during our audit we did not identify any deficiencies in internal
control that we consider to be material weaknesses. However, material weaknesses may exist that have
not ben identified
5
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Borough of Carteret Municipal Port
Authority's financial statements are free from material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit, and
accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards
and audit requirements as prescribed by the Division of Local Government Services, Department of
Community Affairs, State of New Jersey.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Borough of
Carteret Municipal Port Authority’s internal control or on compliance. This report is an integral part of an
audit performed in accordance with Government Audit Standards and audit requirements as prescribed by
the Local Finance Board and by the Division of Local Government Services, Department of Community
Affairs, and State of New Jersey in considering the entity’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
HOLMAN FRENIA ALLISON, P.C.
Certified Public Accountants
October 21, 2023
Lakewood, New Jersey
6
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A COMPONENT UNIT OF THE BOROUGH OF CARTERET,
COUNTY OF MIDDLESEX, STATE OF NEW JERSEY)
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 2022
As management of Borough of Carteret Municipal Port Authority (the “Authority”), we offer readers of the
Authority’s financial statements this narrative overview and analysis of the financial activities of the Authority for
the year ended December 31, 2022. The intent of this narrative is to look at Authority’s overall financial
performance in terms easily understood by the lay person. Please read this in conjunction with the Authority’s
financial statements which begin on page 11. Notes to the financial statements will provide the reader with
additional useful information and they begin on page 15.
FINANCIAL HIGHLIGHTS
¾ The assets and deferred outflows of resources of the Authority exceeded its liabilities and deferred
inflows of resources at December 31, 2022 by $4,090,442. In 2021 the excess of assets and deferred
outflows of resources over liabilities and deferred inflows of resources was $3,230,694.
¾ During 2022 the Authority operated at a surplus of $859,748. In 2021 the Authority operated at a surplus
of $977,414.
¾ The Authority increased their assets and deferred outflows of resources by $857,923 and increase their
liabilities and deferred inflows of resources by $1,825 in 2022.
OVERVIEW OF THE FINANCIAL STATEMENTS
The Authority’s basic financial statements are comprised of two components: Authority financial statements and
notes to the basic financial statements.
Reporting on the Authority as a Whole
The Authority is a self-supporting entity and follows enterprise fund reporting. The Authority’s financial
statements are presented using the economic resources measurement focus and the accrual basis of accounting in
accordance with generally accepted accounting principles as promulgated by GASB. Enterprise fund statements
reflect short-term and long-term financial information about the activities and operations of the Authority. These
statements are presented in a manner similar to a private business. While detailed subfund information is not
presented, separate accounts are maintained for each program and certain restricted funds or accounts have been
established as required by bond resolutions and agreements. See the notes to the financial statements for summary
of the Authority’s significant accounting policies.
7
FINANCIAL ANALYSIS
Authority’s net position is a useful indicator of the Authority’s financial condition. At the end of 2022, the
Authority’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by
$4,090,442.
Statements of Net Position
At the end of 2022 the net position of the Authority increased $859,748 mainly as a result of the increase in the
NJSP dock lease collected in the current year, as well as the revenues from their fuel sales.
Net Position Breakdown
8
Statements of Revenues, Expenses and Changes in Net Position
The Statement of Revenue, Expenses and Changes in Net Position shows the cost of the operations and the
revenues offsetting these costs. A summary of these activities follows:
Local Subsidy constituted 46% of the total governmental activities revenues received by the Authority in 2022.
In 2021 the local subsidy constituted 54% of total revenues. The Boat slip rentals, NJSP dock lease and Fuel sales
constituted for 50% in 2022. In 2021 the Boat slip rentals constituted 50%.
Total expenses increased 884.2% in the 2022 while decreasing 34.2% in 2021.
Budgetary Highlights
The Authority had total actual revenues in deficit of budgeted revenues of $71,011 in 2022. The Board anticipates
in 2023 that actual revenues will exceed the budgeted revenues.
The Authority spent $58,794 less than originally anticipated in the operating budget for 2022.
ECONOMIC FACTORS AND NEXT YEARS BUDGET
In 2022, the Authority was able to cover all its appropriations through the local subsidy and other revenues
generated from the operations of the Authority. In 2022 the local subsidy amounted to 46% of total operating
revenue collected and revenues from activities constituted 54%. Comparatively, in 2021 the local subsidy
represented 50% of the total operating revenue and revenues from the Authority’s activities constituted 50%.
Authority adopted their 2022 budget on March 28, 2023.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Authority’s finances for all of those with an
interest in the Authority’s finances. Questions concerning any of the information provided in this report, or
requests for additional financial information should be addressed to the Treasurer of the Borough of Carteret
Municipal Port Authority, 61 Cooke Avenue, Carteret, New Jersey, 07008.
9
This page intentionally left blank
10
2022
ASSETS
Current assets:
Unrestricted assets:
Cash and cash equivalents (Note 3) 4,056,362$
Prepaid expenses 41,448
Total current unrestricted assets 4,097,810
Total assets 4,097,810
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions (Note 5) 235
Total deferred outflow of resources 235
Total assets and deferred outflow of resources 4,098,045$
LIABILITIES
Non-current unrestricted liabilities:
Net pension liability (Note 5) 4,177$
Total non-current unrestricted liabilities 4,177
Total liabilities 4,177
DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions (Note 5) 3,426
Total deferred inflow of resources 3,426
Total liabilities and deferred inflow of resources 7,603
NET POSITION
Unrestricted net position
Renewal and replacement reserve 3,120,000
Unreserved 970,442
Total net position 4,090,442
Total liabilities, deferred inflow of resources and net position 4,098,045$
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Statement of Net Position
December 31, 2022
The accompanying notes to the financial statements are an integral part of this statement.
11
2022
Operating revenues:
Local subsidy 500,000$
Boat slip rentals 248,888
NJ state police dock lease 107,542
Fuel sales 232,604
Miscellaneous 7,965
Total operating revenues 1,096,999
Operating expenses:
Administration 40,374
Cost of Providing Services 208,867
Total operating expenses 249,241
Net income from operations 847,758
Non-operating revenues:
Interest income 11,990
Total non-operating revenues 11,990
Change in net position 859,748
Net position, January 1 3,230,694
Net position, December 31 4,090,442$
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Statement of Revenues, Expenses and Change in Net Position
For the year ended December 31, 2022
The accompanying notes to the financial statements are an integral part of this statement.
12
2022
Cash flows from operating activities:
Cash received from service users 596,999$
Cash received from local subsidy 499,999
Cash paid to suppliers and employees (206,754)
Net cash flows from operating activities 890,244
Cash flows from investing activities:
Interest received 11,990
Net cash flows from investing activities 11,990
Change in cash 902,234
Cash and cash equivalents, January 1 3,154,128
Cash and cash equivalents, December 31 4,056,362$
Reconciliation of net income to cash flows
from operating activities:
Net change from operations 847,757
Items which did not use cash:
Unbudgeted pension expense (1,965)
Working capital changes which provided (used) cash:
Prepaid expenses 44,452
Net cash flows from operating activities 890,244$
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Statement of Cash Flows
For the year ended December 31, 2022
The accompanying notes to the financial statements are an integral part of this statement.
13
This page intentionally left blank
14
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared in conformity with generally accepted accounting
principles as prescribed by the Governmental Accounting Standards Board (GASB).
Reporting Entity
The Borough of Carteret Municipal Port Authority (the “Authority”), was created by Ordinance of the Borough
of Carteret (the “Borough”) on September 4, 2003. The purpose of the Authority is to exercise all of the powers
and privileges granted by the Port Authority Law of New Jersey (N.J.S.A. 40:68A et seq) and to thereby
advance the interests of the residents of the Borough of Carteret by developing, operating, maintaining and
expanding all lawful activities pertaining to the waterfront throughout the Borough on properties owned or
otherwise controlled by the Authority now or in the future. The Authority is governed by five Members and one
alternate member, all in accordance with the statute and the terms of the enabling Ordinance. The Members
have the authority to exercise all of the powers and privileges provided under the law. The powers include the
ability to sue or be sued in its corporate name, the power to establish and collect rates, rentals and other charges,
the authority to acquire, construct, operate, manage and maintain facilities, the authority to buy and sell real and
personal property, and the authority to issue debt for acquiring or constructing any facility or permanent
improvement.
The primary criterion for including activities with the Authority’s reporting entity, as set forth in Section 2100 of
the GASB Codification of Governmental Accounting and Financial Reporting Standards, is whether:
the organization is legally separate (can sue or be sued in their own name);
the Authority holds the corporate powers of the organization;
the Authority appoints a voting majority of the organization’s board
the Authority is able to impose its will on the organization;
the organization has the potential to impose a financial benefit/burden on the Authority
there is a fiscal dependency by the organization on the Authority.
There were no additional entities required to be included in the reporting entity under the criteria as described
above.
The Authority is a component unit of the Borough. The Authority issues separate financial statements from the
Borough. However, if the Borough presented its financial statements in accordance with GAAP, these financial
statements would be included in the Borough’s on a blended basis.
General
The Authority currently operates binocular rentals located on Borough owned property along with a marina on
the waterfront and a fueling station. In 2014, the Authority rebuilt the miniature golf course which was
destroyed by Superstorm Sandy in 2012. As a public body, under existing statute, the Authority is exempt from
both federal and state taxes.
Basis of Accounting
The financial statements of the Authority have been prepared on the accrual basis of accounting and in
accordance with generally accepted accounting principles (“GAAP”) applicable to enterprise funds of
state and local governments.
15
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Accounting (continued)
All activities of the Authority are accounted for within a single proprietary (enterprise) fund. Proprietary
funds are used to account for operations that are (a) financed and operated in a manner similar to private
business enterprise where the intent of the governing body is that the cost (expenses, including depreciation)
of providing goods or services to the general public on a continuing basis be financed or recovered primarily
through user charges; or (b) where the governing body has decided that periodic determination of revenues
earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy,
management control, accountability, or other purposes.
The accounting and financial reporting treatment applied to the Authority is determined by its measurement
focus. The transactions of the Authority are accounted for on a flow of economic resources measurement
focus. With this measurement focus, all assets, liabilities and deferred inflow or outflow of resources
associated with the operations are included on the statement of net position. Net position (i.e., total assets net
of total liabilities) are segregated into invested in capital assets, net of related debt and unrestricted
components.
Use of Estimates
The process of preparing financial statements in conformity with generally accepted accounting principles
requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and
expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial
statements. Accordingly, upon settlement, actual results may differ from estimated amount.
Prepaid Expenses
Prepaid expenses recorded on the financial statements represent lease payments and also payments disbursed to
the Borough of Carteret to be paid on their behalf for expenses incurred.
Cash and Cash Equivalents
New Jersey Authorities are required by N.J.S.A. 40A:5-14 to deposit public funds in a bank or trust company
having its place of business in the State of New Jersey and organized under the laws of the United States of
America or State of New Jersey or the New Jersey Cash Management Fund. N.J.S.A. 40A:5-15.1 provides a list
of securities which may be purchased by New Jersey Authorities. The Authority is required to deposit funds in
public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act
(“GUDPA”). GUDPA was enacted in 1970 to protect governmental units from a loss of funds on deposit with a
failed banking institution in New Jersey. N.J.S.A. 17:9-42 requires governmental units to deposit public funds
only in public depositories located in New Jersey, when the funds are secured in accordance with the Act.
For the statements of cash flows, the Authority combines the unrestricted cash and cash equivalents with the
restricted cash and cash equivalents. The Authority considers investments with maturities of three months or
less at the time of purchase to be cash equivalents.
16
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Capital Expenditures
The Authority has authorized expenditures for the development of the waterfront on Borough owned properties.
The Authority has treated these expenditures as a contribution to the Borough and therefore has not capitalized
them on their books and records.
Compensated Absences
Authority employees are not entitled to compensated absences for unused vacation, holiday and sick time.
Operating Revenues and Expenses
The Authority recognizes revenue on the accrual basis earned.
The Authority classifies all fees and charges to provide services as operating revenue and all other income as
nonoperating revenue.
Equity Classifications
Equity is classified as net position and can be displayed in three components as follows:
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.
Restricted net position – Consists of net position with constraints placed on use either by (1) external groups
such as creditors, grantors, contributors, laws or regulations of other governments; or (2) law through
constitutional provisions or enabling legislation.
Unrestricted net position – All other net position that do not meet the definition of "restricted" or “net
investment in capital assets".
Budgets and Budgetary Accounting
Each year the Authority adopts a budget which is approved by the State of New Jersey, Department of Community
Affairs, Division of Local Government Services. The budget may be amended by resolution of the Board of
Commissioners of the Authority. The budgetary basis of accounting is utilized to determine if the Authority has
sufficient cash to operate. As such, certain items such depreciation expense is not included in budgetary expenses.
Deferred Outflows and Deferred Inflows of Resources
In addition to assets, the statement of net 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.
17
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred Outflows and Deferred Inflows of Resources (continued)
In addition to liabilities, the statement of net 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 future periods and so will not be recognized as an inflow of resources (revenue) until
that time.
Pensions Section
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 pension plan’s fiduciary net
position 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, 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.
Recent Accounting Pronouncements – The Governmental Accounting Standards Board (GASB) is the
accepted standard-setting body for establishing governmental accounting and financial reporting principles.
GASB adopts accounting statements to be used by governmental units when reporting financial position and
results of operations in accordance with accounting principles generally accepted in the United States of
America (GAAP). The municipalities in the State of New Jersey do not prepare their financial statements in
accordance with GAAP and thus do not comply with all of the GASB pronouncements. The following GASB
pronouncement effective for the current year did have a significant impact on the Authority’s financial
statements.
Accounting Pronouncements Adopted in Current Year
The following GASB Statements became effective for the fiscal year ended December 31, 2022:
x Statement No. 87, Leases.
x Statement No. 93, Replacement of Interbank Offered Rates.
x Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for
Internal Revenue Code Section 457 Deferred Compensation Plans – an amendment of GASB Statements
No. 14 and No. 84 and a supersession of GASB Statement No. 32. Requirements of this pronouncement
related to paragraphs 4 and 5 were implemented in the prior year.
Management has determined that the implementation of these Statements did not have a significant impact on
the Authority’s financial statements.
Accounting Pronouncements Effective in Future Reporting Periods
The following accounting pronouncements will become effective in future reporting periods:
x Statement No. 96, Subscription-Based Information Technology Arrangements. The requirements of this
Statement are effective for fiscal years beginning after June 15, 2022.
x Statement No. 100, Accounting Changes and Error Corrections – an amendment of GASB Statement No.
62.The requirements of this Statement are effective for fiscal years beginning after June 15, 2023.
18
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
x Statement No. 101, Compensated Absences. The requirements of this Statement are effective for fiscal
years beginning after December 15, 2023.
Management has not yet determined the potential impact these Statements will have on the Authority’
financial statements.
Subsequent Events
The Authority has evaluated subsequent events occurring after December 31, 2022 through October 21, 2023,
which is the date the financial statements were available to be issued.
NOTE 2: DONATED MATERIALS AND SERVICES
The Authority does not pay rent to the Borough for the use of the Borough’s property. The Borough may
provide other services in the form of meeting space, administration, use of office equipment and supplies. The
Borough may also engage in similar activities associated with the Authority’s purpose. The monetary value of
these donated materials and services has not been established.
NOTE 3: CASH AND CASH EQUIVALENTS
The Authority is governed by the deposit limitations of New Jersey state law. The deposits held at December
31, 2022 reported at fair value are as follows:
Carrying
Value
2022
Type:
Deposits:
Demand deposits $4,056,362
Total deposits $4,056,362
Reconciliation to Statement of Net Position:
Current unrestricted assets:
Cash and cash equivalents $4,056,362
Total cash and cash equivalents $4,056,362
Custodial Credit Risk
Custodial credit risk is the risk that, in the event of a bank failure, the Authority’s deposits may not be
returned. The Authority does not have a deposit policy for custodial credit risk. As of December 31, 2022,
the Authority’s bank balance of $4,056,362 was insured or collateralized as follows:
19
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE: 4: OPERATING LEASE
The Authority leases three coin-operated binoculars for $500 each, annually. The Authority is not obligated to
any future payments and can cancel at any time.
NOTE 5: PENSION OBLIGATIONS
Public Employees’ Retirement System (PERS)
Plan Description - The State of New Jersey, Public Employees' Retirement System (PERS) is a cost-sharing
multiple-employer defined benefit pension plan administered by the State of New Jersey, Division of
Pensions and Benefits (the Division). For additional information about PERS, please refer to Division's
Annual Comprehensive Financial Report (ACFR), which can be found at
http://www.nj.gov/treasury/pensions/financial-reports.shtml.
The vesting and benefit provisions are set by N.J.S.A. 43:15A. PERS provides retirement, death and disability
benefits. All benefits vest after ten years of service.
The following represents the membership tiers for PERS:
Tier Definition
1 Members who were enrolled prior to July 1, 2007
2 Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008
3 Members who were eligible to enroll on or after November 2, 2008 and prior to May 22, 2010
4 Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011
5 Members who were eligible to enroll on or after June 28, 2011
Service retirement benefits of 1/55th of final average salary for each year of service credit is available to tiers
1 and 2 members upon reaching age 60 and to tier 3 members upon reaching age 62. Service retirement
benefits of 1/60th of final average salary for each year of service credit is available to tier 4 members upon
reaching age 62 and tier 5 members upon reaching age 65.
Early retirement benefits are available to tiers 1 and 2 members before reaching age 60, tiers 3 and 4 with 25
or more years of service credit before age 62 and tier 5 with 30 or more years of service credit before age 65.
Benefits are reduced by a fraction of a percent for each month that a member retires prior to the age at which
a member can receive full early retirement benefits in accordance with their respective tier. Tier 1 members
can receive an unreduced benefit from age 55 to age 60 if they have at least 25 years of service. Deferred
retirement is available to members who have at least 10 years of service credit and have not reached the
service retirement age for the respective tier.
Basis of Presentation – The schedules of employer allocations and the schedules of pension amounts by
employer (collectively, the Schedules) present amounts that are considered elements of the financial
statements of PERS or its participating employers. Accordingly, they do not purport to be a complete
presentation of the financial position or changes in financial position of PERS or the participating employers.
The accompanying Schedules were prepared in accordance with U.S. generally accepted accounting
principles. Such preparation requires management of PERS to make a number of estimates and assumptions
20
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
relating to the reported amounts. Due to the inherent nature of these estimates, actual results could differ from
those estimates.
Contributions – The contribution policy for PERS is set by N.J.S.A. 43:15A and requires contributions by
active members and contributing employers. State legislation has modified the amount that is contributed by
the State. The State's pension contribution is based on an actuarially determined amount, which includes the
employer portion of the normal cost and an amortization of the unfunded accrued liability. Funding for
noncontributory group insurance benefits is based on actual claims paid. For the fiscal year 2021, the State's
pension contribution was less than the actuarial determined amount. The local employers' contribution
amounts are based on an actuarially determined rate, which includes the normal cost and unfunded accrued
liability. Chapter 19, P.L. 2009 provided an option for local employers of PERS to contribute 50% of the
normal and accrued liability contribution amounts certified for payments due in State fiscal year 2009. Such
employers will be credited with the full payment and any such amounts will not be included in their unfunded
liability. The actuaries will determine the unfunded liability of those retirement systems, by employer, for the
reduced normal and accrued liability contributions provided under this law. This unfunded liability will be
paid by the employer in level annual payments over a period of 15 years beginning with the payments due in
the fiscal year ended June 30, 2012 and will be adjusted by the rate of return on the actuarial value of assets.
For the year ended December 31, 2022, the Authority’s contractually required contribution to PERS plan was
$349.
Components of Net Pension Liability – At December 31, 2022, the Authority’s proportionate share of the
PERS net pension liability was $4,177. The net pension liability was measured as of June 30, 2022. The total
pension liability used to calculate the net pension liability was determined using update procedures to roll
forward the total pension liability from an actuarial valuation as of July 1, 2021, which was rolled forward to
June 30, 2022. The Authority’s proportion of the net pension liability was based on the Authority’s actual
contributions to the plan relative to the total of all participating employers’ contributions for the year ended
June 30, 2022. The Authority’s proportion measured as of June 30, 2022, was 0.0000276754% which was a
decrease of 0.0000001613% from its proportion measured as of June 30, 2021.
Pension Expense/(Credit) and Deferred Outflows/Inflows of Resources – At December 31, 2022, the
Authority’s proportionate share of the PERS expense/(credit), calculated by the plan as of the June 30, 2022
measurement date is ($1,616). At December 31, 2022, the Authority reported deferred outflows of resources
and deferred inflows of resources related to PERS from the following sources:
21
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
22
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
The Authority will amortize the above sources of deferred outflows and inflows related to PERS over the
following number of years:
23
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
The following is a summary of the deferred outflows of resources and deferred inflows of resources related to
PERS that will be recognized in future periods:
Actuarial Assumptions – The total pension liability for the June 30, 2022 measurement date was determined
by using an actuarial valuation as of July 1, 2021, which was rolled forward to June 30, 2022. This actuarial
valuation used the following actuarial assumptions:
24
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
Pre-retirement mortality rates were based on the Pub-2010 General Below-Median Income Employee
Mortality Table with an 82.2% adjustment for males and 101.4% adjustment for females, and with future
improvement from the base year of 2010 on a generational basis. Post-retirement mortality rates were based
on the Pub-2010 General Below-Median Income Healthy Retiree mortality table with a 91.4% adjustment for
males and 99.7% adjustment for females, and with future improvement from the base year of 2010 on a
generational basis. Disability retirement rates used to value disabled retirees were based on the Pub-2010
Non-Safety Disabled Retiree mortality table with a 127.7% adjustment for males and 117.2% adjustment for
females, and with future improvement from the base year of 2010 on a generational basis. Mortality
improvement is based on Scale MP-2021. The actuarial assumptions used in the July 1, 2021 valuation were
based on the results of an actuarial experience study for the period July 1, 2018 to June 30, 2021.
Long-Term Expected Rate of Return – In accordance with State statute, the long-term expected rate of
return on plan investments (7.00% at June 30, 2022) is determined by the State Treasurer, after consultation
with the Directors of the Division of Investments and Division of Pensions and Benefits, the board of trustees
and the actuaries. The long-term expected rate of return was determined using a building block method in
which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan
investment expense and inflation) are developed for each major asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic rates of return
for each major asset class included in PERS’s target asset allocation as of June 30, 2022 are summarized in
the following table:
25
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Notes to Financial Statements
For the year ended December 31, 2022
NOTE 5: PENSION OBLIGATIONS (continued)
Public Employees’ Retirement System (PERS) (continued)
Discount Rate - The discount rate used to measure the total pension liability was 7.00% as of June 30, 2022.
The projection of cash flows used to determine the discount rate assumed that contributions from plan
members will be made at the current member contribution rates and that contributions from employers and the
nonemployer contributing entity will be based on 78% of the actuarially determined contributions for the
State employer and 100% of actuarially determined contributions for the local employers. Based on those
assumptions, the plan’s fiduciary net position was projected to be available to make projected future benefit
payments of current plan members. Therefore, the long-term expected rate of return on plan investments was
applied to all projected benefit payments to determine the total pension liability.
Sensitivity of the Authority’s proportionate share of the Net Pension Liability to Changes in the
Discount Rate – The following presents the Authority’s proportionate share of the net pension liability
calculated using the discount rate as disclosed above, as well as what the Authority’s proportionate share of
the net pension 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:
NOTE 6: RISK MANAGEMENT
The Authority is exposed to various risk of loss related to torts, theft of, damage to and destruction of assets;
errors and omissions; injuries to employees; and natural disaster. The Authority has not obtained any
insurance and may not be properly insured for various risks including workers’ compensation, general
liability, or employee theft.
NOTE 7: RELATED PARTY TRANSACTIONS
All of the Authority’s revenues are received from the Borough either in the form of a direct local subsidy or
miscellaneous revenues derived from Borough owned assets.
NOTE 8: RENEWAL AND REPLACEMENT RESERVE AND NET POSITION
The Authority budgets an annual amount to be allocated to the renewal and replacement reserve. For 2022,
That amount was $3,120,000. Total net position for the authority is $4,090,442. The remaining $970,442 is
Unreserved.
26
Sc
h
e
d
u
l
e
I
20
2
2
2
0
2
1
2
0
2
0
2
0
1
9
2
0
1
8
2
0
1
7
2
0
1
6
2
0
1
5
2
0
1
4
2
0
1
3
Au
t
h
o
r
i
t
y
'
s
p
r
o
p
o
r
t
i
o
n
o
f
t
h
e
n
e
t
p
e
n
s
i
o
n
l
i
a
b
i
l
i
t
y
(a
s
s
e
t
)
0
.
0
0
0
0
3
%
0
.
0
0
0
0
3
%
0
.
0
0
0
0
3
%
0
.
0
0
0
0
6
%
0
.
0
0
0
0
6
%
0
.
0
0
0
0
6
%
0
.
0
0
0
0
6
%
0
.
0
0
0
0
6
%
0
.
0
0
0
0
6
%
0
.
0
0
0
0
6
%
Au
t
h
o
r
i
t
y
'
s
p
r
o
p
o
r
t
i
o
n
a
t
e
s
h
a
r
e
o
f
t
h
e
n
e
t
pe
n
s
i
o
n
l
i
a
b
i
l
i
t
y
(
a
s
s
e
t
)
4
,
1
7
7
$
3
,
2
9
8
$
4
,
5
1
7
$
1
0
,
1
5
1
$
1
1
,
2
2
4
$
1
3
,
4
1
8
$
1
7
,
2
3
6
$
1
3
,
0
0
3
$
1
1
,
0
8
4
$
1
0
,
8
1
1
$
Au
t
h
o
r
i
t
y
'
s
c
o
v
e
r
e
d
-
e
m
p
l
o
y
e
e
p
a
y
r
o
l
l
2
,
8
9
0
$
3
,
3
3
3
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
N
/
A
Au
t
h
o
r
i
t
y
'
s
p
r
o
p
o
r
t
i
o
n
a
t
e
s
h
a
r
e
o
f
t
h
e
n
e
t
pe
n
s
i
o
n
l
i
a
b
i
l
i
t
y
(
a
s
s
e
t
)
a
s
a
p
e
r
c
e
n
t
a
g
e
o
f
i
t
s
co
v
e
r
e
d
-
e
m
p
l
o
y
e
e
p
a
y
r
o
l
l
1
4
4
.
5
3
%
9
8
.
9
5
%
1
1
2
.
9
3
%
2
5
3
.
7
8
%
2
8
0
.
6
0
%
3
3
5
.
4
5
%
4
3
0
.
9
0
%
3
2
5
.
0
8
%
2
7
7
.
1
0
%
N
/
A
Pla
n
f
i
d
u
c
i
a
r
y
n
e
t
p
o
s
i
t
i
o
n
a
s
a
p
e
r
c
e
n
t
a
g
e
o
f
th
e
t
o
t
a
l
p
e
n
s
i
o
n
l
i
a
b
i
l
i
t
y
6
2
.
9
1
%
7
0
.
3
3
%
5
8
.
3
2
%
5
6
.
2
7
%
5
3
.
6
0
%
4
8
.
1
0
%
4
0
.
1
4
%
4
7
.
9
3
%
5
2
.
0
8
%
4
8
.
7
2
%
BO
R
O
U
G
H
O
F
C
A
R
T
E
R
E
T
M
U
N
I
C
I
P
A
L
P
O
R
T
A
U
T
H
O
R
I
T
Y
LA
S
T
T
E
N
F
I
S
C
A
L
Y
E
A
R
S
*
PU
B
L
I
C
E
M
P
L
O
Y
E
E
S
'
R
E
T
I
R
E
M
E
N
T
S
Y
S
T
E
M
SC
H
E
D
U
L
E
O
F
A
U
T
H
O
R
I
T
Y
'
S
P
R
O
P
O
R
T
I
O
N
A
T
E
S
H
A
R
E
O
F
T
H
E
N
E
T
P
E
N
S
I
O
N
L
I
A
B
I
L
I
T
Y
(A
C
o
m
p
o
n
e
n
t
U
n
i
t
o
f
t
h
e
B
o
r
o
u
g
h
o
f
C
a
r
t
e
r
e
t
,
C
o
u
n
t
y
o
f
M
i
d
d
l
e
s
e
x
,
S
t
a
t
e
o
f
N
e
w
J
e
r
s
e
y
)
27
Sc
h
e
d
u
l
e
I
I
20
2
2
2
0
2
1
2
0
2
0
2
0
1
9
2
0
1
8
2
0
1
7
2
0
1
6
2
0
1
5
2
0
1
4
2
0
1
3
Co
n
t
r
a
c
t
u
a
l
l
y
r
e
q
u
i
r
e
d
c
o
n
t
r
i
b
u
t
i
o
n
3
4
9
$
3
2
6
$
3
0
3
$
5
4
8
$
5
6
7
$
5
3
4
$
5
1
7
$
4
9
8
$
4
7
6
$
4
7
6
$
Co
n
t
r
i
b
u
t
i
o
n
s
i
n
r
e
l
a
t
i
o
n
t
o
t
h
e
co
n
t
r
a
c
t
u
a
l
l
y
r
e
q
u
i
r
e
d
c
o
n
t
r
i
b
u
t
i
o
n
(
3
4
9
)
(
3
2
6
)
(
3
0
3
)
(
5
4
8
)
(
5
6
7
)
(
5
3
4
)
(
5
1
7
)
(
4
9
8
)
(
4
7
6
)
(
4
7
6
)
Co
n
t
r
i
b
u
t
i
o
n
d
e
f
i
c
i
e
n
c
y
(
e
x
c
e
s
s
)
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
Au
t
h
o
r
i
t
y
'
s
c
o
v
e
r
e
d
-
e
m
p
l
o
y
e
e
p
a
y
r
o
l
l
7
,
5
0
0
$
2
,
8
9
0
$
3
,
3
3
3
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
4
,
0
0
0
$
Co
n
t
r
i
b
u
t
i
o
n
s
a
s
a
p
e
r
c
e
n
t
a
g
e
o
f
c
o
v
e
r
e
d
-
em
p
l
o
y
e
e
p
a
y
r
o
l
l
4
.
6
5
%
1
1
.
2
8
%
9
.
0
9
%
1
3
.
7
0
%
1
4
.
1
8
%
1
3
.
3
5
%
1
2
.
9
3
%
1
2
.
4
5
%
1
1
.
9
0
%
1
1
.
9
0
%
BO
R
O
U
G
H
O
F
C
A
R
T
E
R
E
T
M
U
N
I
C
I
P
A
L
P
O
R
T
A
U
T
H
O
R
I
T
Y
LA
S
T
T
E
N
F
I
S
C
A
L
Y
E
A
R
S
*
PU
B
L
I
C
E
M
P
L
O
Y
E
E
S
'
R
E
T
I
R
E
M
E
N
T
S
Y
S
T
E
M
SC
H
E
D
U
L
E
O
F
A
U
T
H
O
R
I
T
Y
C
O
N
T
R
I
B
U
T
I
O
N
S
(A
C
o
m
p
o
n
e
n
t
U
n
i
t
o
f
t
h
e
B
o
r
o
u
g
h
o
f
C
a
r
t
e
r
e
t
,
C
o
u
n
t
y
o
f
M
i
d
d
l
e
s
e
x
,
S
t
a
t
e
o
f
N
e
w
J
e
r
s
e
y
)
28
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A COMPONENT UNITY OF THE BOROUGH OF CARTERET, COUNTY OF MIDDLESEX,
STATE OF NEW JERSEY)
Notes to the Required Supplementary Information
For the year ended December 31, 2022
Public Employees' Retirement System (PERS)
Changes of Benefit Terms
The June 30, 2022 measurement date includes three changes to the plan provisions, only one of which had an impact
on the Total Pension Liability. Chapter 226, P.L. 2021 reopened the Prosecutors Part of PERS and made
membership in the Prosecutors Part of PERS mandatory for all prosecutors.
Changes of Assumptions
The discount rate used as of June 30, measurement date is as follows:
Year Rate Year Rate Year Rate
2022 7.00% 2019 6.28% 2016 3.98%
2021 7.00% 2018 5.66% 2015 4.90%
2020 7.00% 2017 5.00% 2014 5.39%
The long-term expected rate of return used as of June 30, measurement date is as follows:
Year Rate Year Rate Year Rate
2022 7.00% 2019 7.00% 2016 7.65%
2021 7.00% 2018 7.00% 2015 7.90%
2020 7.00% 2017 7.00% 2014 7.90%
The mortality assumption was updated upon the direction from the Division of Pensions and Benefits.
29
This page intentionally left blank
30
Schedule III
Variance December 31,
Original Final Favorable 2021
Budget Budget Actual (Unfavorable) Actual
Revenues:
Operating revenues:
Local subsidy 500,000$ 500,000$ 500,000$ -$ 500,000$
Boat slip rentals 210,000 210,000 248,888 38,888 162,460
NJ state police dock lease 100,000 100,000 107,542 7,542 162,912
Fuel sales 365,000 365,000 232,604 (132,396) 162,157
Miscellaneous 5,000 5,000 7,965 2,965 11,917
Total operating revenues 1,180,000 1,180,000 1,096,999 (83,001) 999,446
Non-operating revenues:
Interest income - - 11,990 11,990 3,293
Total non-operating revenues - - 11,990 11,990 3,293
Total revenues 1,180,000 1,180,000 1,108,989 (71,011) 1,002,739
Operating appropriations:
Administration
Salaries and wages 5,000 5,000 7,500 (2,500) 2,890
Fringe benefits 2,500 2,500 1,022 1,478 704
Other expenses 45,000 45,000 33,817 11,183 -
Total administration 52,500 52,500 42,339 10,161 3,594
Cost of providing services
Other expenses 257,500 257,500 208,867 48,633 23,824
Total cost of providing services 257,500 257,500 208,867 48,633 23,824
Total operating appropriations 310,000 310,000 251,206 58,794 27,418
Other non-operating appropriations:
Renewal and replacement reserve 3,120,000 3,120,000 - 3,120,000 -
Less: total unrestricted net position utilized (2,250,000) (2,250,000) - (2,250,000) -
Net variance -$ -$ 857,783$ 857,783$ 975,321$
Reconciliation of change in net position to Statement of Net Position:
Add: unbudgeted pension credit 1,965 2,093
Change in net position per Statement of Revenues, Expenses
and Changes in Net Position 859,748$ 977,414$
(With comparative totals for the year ended December 31, 2021)
For the year ended December 31, 2022
Schedule of Revenues and Costs Compared to Budget
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
31
Schedule IV
December 31, December 31,
Unrestricted Restricted 2022 2021
Operating revenues:
Local subsidy 500,000$ -$ 500,000$ 500,000$
Boat slip rentals 248,888 - 248,888 162,460
NJ state police dock lease 107,542 - 107,542 162,912
Fuel sales 232,604 - 232,604 162,157
Miscellaneous 7,965 - 7,965 11,917
Total operating revenues 1,096,999 - 1,096,999 999,446
Operating expenses:
Administration 40,374 - 40,374 1,501
Cost of Providing Services 208,867 - 208,867 23,824
Total operating expenses 249,241 - 249,241 25,325
Net income from operations 847,758 - 847,758 974,121
Non-operating revenues (expenses):
Interest income 11,990 - 11,990 3,293
Total non-operating revenues (expenses) 11,990 - 11,990 3,293
Change in net position 859,748 - 859,748 977,413
Net position, January 1 3,230,694 - 3,230,694 2,253,280
Net position, December 31 4,090,442$ -$ 4,090,442$ 3,230,694$
Total
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
Schedule of Revenues, Expenses and Changes in Net Position
Restricted and Unrestricted
For the year ended December 31, 2022
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
(With comparative totals for the year ended December 31, 2021)
32
Schedule V
December 31, Deember 31,
Operating Change Fund 2022 2021
Cash, January 1 3,154,128$ -$ 3,154,128$ 2,274,220$
Cash receipts:
Boat slip rentals 248,887 - 248,887 162,460
NJ state police dock lease 107,542 - 107,542 162,912
Fuel sales 232,604 232,604 162,157
Miscellaneous 7,965 - 7,965 11,917
Local subsidy 500,000 - 500,000 500,000
Interest Income 11,990 - 11,990 3,293
Total cash receipts 1,108,988 - 1,108,988 1,002,739
Total cash available 4,263,116 - 4,263,116 3,276,959
Cash disbursements:
Operating 206,754 - 206,754 122,831
Total cash disbursements 206,754 - 206,754 122,831
Cash, December 31 4,056,362$ -$ 4,056,362$ 3,154,128$
Total
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
Schedule of Cash Receipts, Cash Disbursements and Changes in Cash
Unrestricted
For the year ended December 31, 2022
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
(With comparative totals for the year ended December 31, 2021)
33
BOROUGH OF CARTERET MUNICIPAL PORT AUTHORITY
(A Component Unit of the Borough of Carteret, County of Middlesex, State of New Jersey)
Board of Commissioners
December 31, 2022
Position
Hank D’Orsi ……………………………………………………... Chairman
Joseph Caliguari …………………………………………………. Vice Chairman
Vincent Bellino…………………………………………………... Commissioner
Wesley Kaskiw…………………………………………………… Commissioner
Honorable Mayor Daniel J. Reiman……………………………… Commissioner
Joseph Wutkowski……………………………………………... Commissioner/Alternate
34
To the Chairman and Commissioners
of the Borough of Carteret Municipal Port Authority
County of Middlesex
Carteret, New Jersey 07008
We have audited the financial accounts and transactions of the Borough of Carteret Municipal Port
Authority, County of Middlesex, State of New Jersey for the year ended December 31, 2022. In
accordance with requirements prescribed by the Division of Local Government Services, Department of
Community Affairs, State of New Jersey, the following are the General Comments and Recommendations
for the year then ended.
GENERAL COMMENTS AND RECOMMENDATIONS
Contracts and Agreements Required to be advertised by (N.J.S.A.40A:11-4)
N.J.S.A.40A:11-4 - Every contract or agreement, for the performance of any work or furnishing or hiring
of any materials or supplies, the cost or the contract price whereof is to be paid with or out of public funds
not included within the terms of Section 3 of this act, shall be made or awarded only by the governing
body of the contracting unit after public advertising for bids and bidding therefore, except as is provided
otherwise in this act or specifically by any other Law. No work, materials or supplies shall be undertaken,
acquired or furnished for a sum exceeding in the aggregate $44,000 except by contract or agreement.
It is pointed out that the Members of the Authority have the responsibility of determining whether the
expenditures in any category will exceed the statutory minimum within the fiscal year. Where question
arises as to whether any contract or agreement might result in violation of the statute, the solicitor's
opinion should be sought before a commitment is made.
Review of the minutes and financial transactions did not identify any bids requested by public advertising.
The minutes indicate that resolutions were adopted authorizing the awarding of contracts or agreements
for "Professional Services," per N.J.S.A.40A:11-5.
Inasmuch as the system of records did not provide for an accumulation of payments for categories for the
performance of any work or the furnishing or hiring of any materials or supplies, the results of such an
accumulation could not reasonably be ascertained. Disbursements were reviewed, however, to determine
whether any clear-cut violations existed. The results or our examination did not disclose any
discrepancies.
The examination of expenditures revealed individual payments, contracts or agreements in excess of
$6,600 from January 1, 2022 through December 31, 2022 "for the performance of any work or the
furnishing or hiring of any materials or supplies", other than those where bids had been previously sought
by public advertisement or where a resolution had been previously adopted under the provision of
(N.J.S.A.40A:11-6.1).
35
Contracts and Agreements Required to be advertised by (N.J.S.A.40A:11-4) (continued)
The supporting documentation indicated that quotes were requested for all items that required them.
Examination of Bills
A test check of paid bills was made and each bill, upon proper approval, was considered as a separate and
individual contract unless the records disclosed it to be a part payment or estimate. The results of the
examination did not disclose certain discrepancies with respect to signatures, certification or supporting
documentation.
Payroll Fund
The examination of the payroll account included the detailed computation of various deductions or other
credits from the payroll of the Authority employees and ascertained that the accumulated withholdings
were disbursed to the proper agencies.
Budget Adoption
The State of New Jersey requires that the Authority’s operating and capital budgets be approved and
adopted for each fiscal year. The Authority adopted its operating budget on March 28, 2023.
Acknowledgment
We received the complete cooperation of all the Authority Officials and employees and we greatly
appreciate the courtesies extended to the members of the audit team.
Should you have any questions concerning our comments or recommendations, or should you desire any
assistance in implementing our recommendations, please call us.
Respectfully Submitted,
HOLMAN FRENIA ALLISON, P.C.
Certified Public Accountants
October 21, 2023
Lakewood, New Jersey
36