HomeMy Public PortalAboutBrewster 2006 Report on the Examination of the Basic Financial Statements
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
TABLE OF CONTENTS
PAGE
Independent Auditor’s Report 1
Management’s Discussion and Analysis 2 – 9
Basic Financial Statements
Statement of Net Assets 10
Statement of Activities 11 – 12
Governmental Funds – Balance Sheet 13
Governmental Funds – Statement of Revenues, Expenditures, and
Changes in Fund Balances
14
Reconciliation of the Governmental Funds Balance Sheet Total
Fund Balances to the Statement of Net Assets
15
Reconciliation of the Statements of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
16
General Fund – Statement of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual
17
Proprietary Funds – Statement of Net Assets 18
Proprietary Funds – Statement of Revenues, Expenses, and
Changes in Fund Net Assets
19
Proprietary Funds – Statement of Cash Flows 20
Fiduciary Funds – Statement of Fiduciary Net Assets 21
Fiduciary Funds – Statement of Changes in Fiduciary Net Assets 22
Notes to Basic Financial Statements 23 – 50
R. E. BROWN & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
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 Board of Selectmen
Town of Brewster, Massachusetts
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, 2006, which collectively comprise the Town of Brewster,
Massachusetts’ basic financial statements as listed in the table of contents. These financial statements are the
responsibility of Town of Brewster, Massachusetts’ management. 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our 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, 2006, and the respective
changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
The management’s discussion and analysis on pages 2 through 9 is not a required part of the basic financial
statements but is supplementary information required by accounting principles generally accepted in the United
States of America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
R. E. Brown & Company
June 4, 2007
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Management’s Discussion and Analysis
As management of the Town of Brewster (the “Town”), we offer readers of these basic financial statements this
narrative overview and analysis of the financial activities for the fiscal year ended June 30, 2006. This is the third
year our financial statements have been prepared under the Governmental Accounting Standards Board Statement
Number 34 – Basic Financial Statements and Management’s Discussion and Analysis for State and Local
Governments. We encourage readers to consider the information presented in this report.
Financial Highlights
• The assets of the Town exceeded its liabilities at the close of the fiscal year by $69 million (net assets). Of
this amount, $15.8 million is considered unrestricted (unrestricted net assets).
• The unrestricted net assets of the Town’s governmental activities are $11.9 million and may be used to meet
the government’s ongoing obligations to citizens and creditors. The unrestricted net assets of the Town’s
business-type activities are $3.88 million and may be used to meet the ongoing obligations of the Town’s
water and golf department business-type activities.
• The government’s total net assets increased by $955 thousand, or 1.40%, in fiscal 2006. Within this total, net
assets of governmental activities increased by $909 thousand, a 1.6% increase over fiscal 2005. Also, net
assets of business-type activities increased by $46 thousand or .42% over 2005.
• At June 30, 2006, the Town’s governmental funds had a combined ending fund balance of $10.6 million. The
combined governmental funds balance increased by $1.87 million a 21% increase from the prior year’s
ending fund balance.
• The Town’s general fund reported a fund balance of $5.65 million at the end of fiscal 2006. The unreserved
fund balance for the general fund was $4.26 million or 15% of total general fund expenditures. A total of
$503 thousand of the unreserved fund balance was designated for funding the fiscal year 2007 budget.
• The total cost of all Town services for fiscal 2006 was $35.7 million, $31.0 million of which was for
governmental activities, and $4.7 million of which was for business-type activities.
• The Town bonded $2,972,000 in fiscal 2006. The bond is comprised of $945 thousand for land acquisition,
$750 thousand for installation of a town water main, $477 thousand for two road betterment projects and $800
thousand for a golf course irrigation project.
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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 assets presents information on all assets and liabilities, with the difference between the two
reported as net assets. Over time, increases or decreases in net assets 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 assets changed during the
most recent fiscal year. All changes in net assets 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 and earned
but unused vacation/sick leave).
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 fund 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.
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.
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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:
¾ Water Enterprise Fund accounts for the water activity of the Town.
¾ 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 agency funds are each reported and combined into a single, aggregate presentation
in the fiduciary fund financial statements under the captions “private purpose trust funds” and “agency funds”,
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 $69,060,757 at the close of fiscal year 2006. The Town is able to
report positive balances in all categories of net assets, both for the government as a whole, and for its separate
governmental and business-type activities.
The largest component of the Town’s net assets are its investment in capital assets (e.g., land, buildings,
machinery, and equipment, less any related outstanding debt used to acquire those assets), is $48,702,106 or
70.52% of total net assets. 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.
The second largest component of the Town’s net assets are its unrestricted net assets totaling $15,828,994
(22.92%), which may be used to meet the government’s ongoing obligations to its citizens and creditors.
The Town’s total liabilities increased by $1,785,975 over fiscal 2005, while total assets increased by $2,741,928,
or 2.93%. Net assets of governmental activities increased by $909,557, a 1.6% increase from fiscal 2005. Net
assets of business-type activities increased by $46,396 or .42% from 2005. There was a decrease of $38,588 in net
assets reported in connection with the water business-type activities, and an increase of $84,984 in net assets in
connection with the golf department business-type activity, respectively.
An additional portion of the net assets totaling $4,529,657 (6.56%) represents resources that are subject to
external restrictions on how they may be used.
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Increase Increase Increase
FY 2006 FY 2005 (Decrease) FY 2006 FY 2005 (Decrease) FY 2006 FY 2005 (Decrease)
Assets:
Current Assets 15,645,731$ 13,173,995$ 2,471,736$ 4,046,293$ 4,316,529$ (270,236)$ 19,692,024$ 17,490,524$ 2,201,500$
Noncurrent Assets (excluding capital) 6,085,229 6,693,246 (608,017) 20,688 73,206 (52,518) 6,105,917 6,766,452 (660,535)
Capital Assets 50,508,950 49,482,743 1,026,207 19,955,254 19,780,498 174,756 70,464,204 69,263,241 1,200,963
Total Assets 72,239,910 69,349,984 2,889,926 24,022,235 24,170,233 (147,998) 96,262,145 93,520,217 2,741,928
Liabilities:
Current Liabilities (excluding debt) 1,470,547 1,539,753 (69,206) 157,810 157,204 606 1,628,357 1,696,957 (68,600)
Noncurrent Liabilities (excluding debt) 1,188,000 625,000 563,000 - - - 1,188,000 625,000 563,000
Current Debt 3,037,429 2,060,425 977,004 870,000 1,745,000 (875,000) 3,907,429 3,805,425 102,004
Noncurrent Debt 8,687,602 8,178,031 509,571 11,790,000 11,110,000 680,000 20,477,602 19,288,031 1,189,571
Total Liabilities 14,383,578 12,403,209 1,980,369 12,817,810 13,012,204 (194,394) 27,201,388 25,415,413 1,785,975
Net Assets:
Capital Assets Net of Related Debt 41,382,912 42,432,619 (1,049,707) 7,319,194 7,257,883 61,311 48,702,106 49,690,502 (988,396)
Restricted 4,529,657 2,705,307 1,824,350 - - - 4,529,657 2,705,307 1,824,350
Unrestricted 11,943,763 11,808,849 134,914 3,885,231 3,900,146 (14,915) 15,828,994 15,708,995 119,999
Total Net Assets 57,856,332$ 56,946,775$ 909,557$ 11,204,425$ 11,158,029$ 46,396$ 69,060,757$ 68,104,804$ 955,953$
Revenues
Program Revenues:
Charges for Services 1,681,299$ 1,709,252$ (27,953)$ 5,608,241$ 5,476,243$ 131,998$ 7,289,540$ 7,185,495$ 104,045$
Operating Grants and Contributions 2,606,241 2,660,059 (53,818) 71,902 70,496 1,406 2,678,143 2,730,555 (52,412)
Capital Grants and Contributions 3,321,767 999,720 2,322,047 - - - 3,321,767 999,720 2,322,047
General Revenues:
Real Estate and Personal Property Taxes 20,162,546 19,183,312 979,234 - - - 20,162,546 19,183,312 979,234
Tax Liens 132,141 42,114 90,027 - - - 132,141 42,114.00 90,027
Motor Vehicle and Other Excise Taxes 1,306,954 1,412,291 (105,337) - - - 1,306,954 1,412,291 (105,337)
Hotel/Motel Tax 474,344 499,942 (25,598) - - - 474,344 499,942 (25,598)
Penalties and Interest on Taxes 104,018 96,858 7,160 - - - 104,018 96,858 7,160
Payments in Lieu of Taxes 6,784 6,800 (16) - - - 6,784 6,800 (16)
Nonrestricted Grants and Contributions 704,035 608,614 95,421 - - - 704,035 608,614 95,421
Unrestricted Investment Income 489,894 204,346 285,548 - - - 489,894 204,346 285,548
Other Revenues 12,061 54,537 (42,476) - - - 12,061 54,537 (42,476)
Total Revenues 31,002,084 27,477,845 3,524,239 5,680,143 5,546,739 133,404 36,682,227 33,024,584 3,657,643
Expenses:
General Government 4,593,687 3,109,646 1,484,041 - - - 4,593,687 3,109,646 1,484,041
Public Safety 4,045,173 3,878,292 166,881 - - - 4,045,173 3,878,292 166,881
Education 14,421,539 14,853,060 (431,521) - - - 14,421,539 14,853,060 (431,521)
Public Works 2,544,630 1,131,011 1,413,619 - - - 2,544,630 1,131,011 1,413,619
Human Services 513,411 456,648 56,763 - - - 513,411 456,648 56,763
Culture and Recreation 599,541 635,844 (36,303) - - - 599,541 635,844 (36,303)
Employee Benefits 3,283,397 2,926,385 357,012 - - - 3,283,397 2,926,385 357,012
State and County Assessments 469,867 401,778 68,089 - - - 469,867 401,778 68,089
Interest 506,232 472,547 33,685 - - - 506,232 472,547 33,685
Golf - - - 3,135,704 2,767,761 367,943 3,135,704 2,767,761 367,943
Water - - - 1,613,093 1,507,544 105,549 1,613,093 1,507,544 105,549
Total Expenses 30,977,477 27,865,211 3,112,266 4,748,797 4,275,305 473,492 35,726,274 32,140,516 3,585,758
Transfers 884,950 786,427 98,523 (884,950) (786,427) (98,523) - - -
Change in Net Assets 909,557 399,061 510,496 46,396 485,007 (438,611) 955,953 884,068 71,885
Net Assets - Beginning 56,946,775 56,547,714 399,061 11,158,029 10,673,022 485,007 68,104,804 67,220,736 884,068
Net Assets - Ending 57,856,332$ 56,946,775$ 909,557$ 11,204,425$ 11,158,029$ 46,396$ 69,060,757$ 68,104,804$ 955,953$
TOWN of BREWSTER - FINANCIAL HIGHLIGHTS
Governmental
Activities
Business-type
Activities
Total
Primary Government
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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, unreserved 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
$10,654,012 a $1,877,562 increase over the prior year’s ending fund balances.
The general fund is the primary operating fund. At the end of the current fiscal year, unreserved fund balance of
the general fund was $4,261,893, while total fund balance stood at $5,650,362. As a measure of the general
fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund
expenditures. Unreserved fund balance represents 15.04% of total general fund expenditures, while total fund
balance represents 19.94% of that same amount.
General Fund Budget Highlights
During the fiscal year the operating budget was amended by $1,513,573 at two Special Town Meetings to fund
land acquisition, capital equipment purchases for education, public safety and public works, and road maintenance
and drainage projects. The Town budgeted $25 million in revenues and $29.3 in expenditures, drawing on
transfers and prior year’s surplus to finance the difference. At year end, $349,395 of unexpended appropriation
balances was closed out to undesignated fund balance.
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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, 2006, amounts to $70,464,201, net of accumulated depreciation. The investment in capital assets
includes land, buildings, improvements (other than buildings), machinery and equipment, vehicles, infrastructure,
and construction in progress.
The governmental activities capital assets (net of accumulated depreciation) increased by $1,026,207 during the
current fiscal year while the business-type activities capital assets (net of accumulated depreciation) increased by
$174,756. Total depreciation was $1.89 million, resulting in a total government-wide increase to capital assets
(net of accumulated depreciation) of $1,200,963.
Increase Increase Increase
FY 2006 FY 2005 (Decrease) FY 2006 FY 2005 (Decrease) FY 2006 FY 2005 (Decrease)
Land 28,037,512$ 40,557,901$ (12,520,389)$ 2,874,212$ 2,874,212$ -$ 30,911,724$ 43,432,113$ (12,520,389)$
Buildings and improvements 17,521,660 4,595,972 12,925,688 2,109,788 2,064,352 45,436 19,631,448 6,660,324 12,971,124
Improvements (other than buildings) 579,709 1,821,337 (1,241,628) 622,724 - 622,724 1,202,433 1,821,337 (618,904)
Machinery, Equipment, and Vehicles 2,335,636 2,234,213 101,423 - 692,743 (692,743) 2,335,636 2,926,956 (591,320)
Infrastructure 1,857,315 273,320 1,583,995 13,579,396 13,970,333 (390,937) 15,436,711 14,243,653 1,193,058
Construction in Progress 177,118 - 177,118 769,134 178,858 590,276 946,252 178,858 767,394
Total Capital Assets 50,508,950$ 49,482,743$ 1,026,207$ 19,955,254$ 19,780,498$ 174,756$ 70,464,204$ 69,263,241$ 1,200,963$
Capital Assets
(Net of Depreciation)
Governmental
Activities
Business-type
Activities
Total
Primary
Government
- 8 -
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, 2006, totaled $22,260,031. Within this total, business-type activities have debt of
$12,660,000, that is fully supported by their respective program revenues, and governmental activities debt is
$9,600,031. Total debt consists of the following:
Outstanding Outstanding
Governmental Activities June 30, 2006 June 30, 2005
School Construction 4,225,000$ 4,650,000$
Library Construction 500,000 550,000
MWPAT Title V - Sewer 175,729 185,254
Road Betterments - Blueberry Rd 46,500 62,000
Road Betterments - Beach Plum Rd 60,000 75,000
Police Station 2,380,000 2,550,000
Road Betterments - Highlands Rd 55,000 70,000
Road Betterments - Millstone Rd 195,000 225,000
Road Betterments - Commons Way Rd 160,000 180,000
Road Betterments - Meetinghouse Rd 225,000 255,000
MWPAT #97-1156 Title V - Sewer 155,802 166,202
Land Purchase 945,000 -
Road Betterments - Kings Grant Road 307,000 -
Road Betterments - Barons Way Road 170,000 -
Total Governmental Activities 9,600,031$ 8,968,456$
Outstanding Outstanding
Business-type Activities June 30, 2006 June 30, 2005
Golf Course 7,885,000$ 8,260,000$
Golf Course Irrigation 800,000 -
Water Mains 2,120,000 2,275,000
Telemetry System 75,000 95,000
Water Betterments - Sears Road 5,000 10,000
Water Betterments - Williams Drive 25,000 30,000
Standpipe #2 425,000 500,000
Standpipe Rehabilitation 575,000 650,000
Slough Road 750,000 -
Total Business-type Activities 12,660,000$ 11,820,000$
Grand Total - All long-term debt 22,260,031$ 20,788,456$
Outstanding Debt at Year End
Please refer to Notes 5 and 8 for further discussion of the major capital and debt activity.
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Economic Factors and Next Year’s Budgets and Rates
• The Town Meeting voted to institute the Modified Community Preservation Act from the former Land
Bank in FY2006, resulting in a first year surcharge match of $571,000 and a 2nd year match of $597,000.
• Brewster’s allocation of CPA revenues are 50% for Open Space, 10% for Community Housing and 10%
for Historic Preservation. The Town received in FY2006 the sums of $500,000 from the Dennis Water
District and $250,000 in Self-Help Grant funds. These funds were used towards the purchase of
approximately 50 acres for the protection of the groundwater supply. In FY07, the Town received and
additional $500,000 from the Dennis Water District towards the purchase of this phased purchase and
$500,000 from the State Safe Water Drinking Act.
• The Fiscal Year 2007 Tax Rate was set at $5.47, a decrease of $.11 cents from FY2006. Fiscal Year 2007
was a Revaluation year for Brewster. A successful general override under Proposition 2 ½ was voted
favorably by the voters, resulting in additional staffing for the Fire Dept. The override amount was
$130,000.
• The Board of Selectmen voted during their classification hearing to maintain the same tax rate for all
classes of property.
• Approximately seven hundred thousand dollars was spent on Improvements to both Private and Town
Owned Roads.
• Approximately six hundred thousand was spent on Improvements to the local Elementary School.
• Health Care and Pension Costs continue to rise, although for FY07 the increase was manageable.
• GASB 45 required the public to be educated on Post Retirement Benefits and the funding requirements
that will be imposed on the Town. This requirement was accomplished.
• In FY06 the Town received MSBA reimbursement for an elementary school roof renovation project.
These funds, or a portion thereof, may be used to initially fund requirements under GASB45. The sum
received was approx $963 thousand.
Request for Information
This financial report is designed to provide a general overview of the Town of Brewster’s finances for all those
with an interest in the government’s finances. Questions concerning any of the information provided in this
report or request for additional financial information should be addressed to the Finance Director, 2198 Main
Street, Brewster, MA 02631.
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
ASSETS
CURRENT:
CASH AND SHORT-TERM INVESTMENTS 14,054,197$ 3,982,566$ 18,036,763$
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
REAL ESTATE AND PERSONAL PROPERTY TAXES 236,383 - 236,383
TAX LIENS 373,430 - 373,430
MOTOR VEHICLE EXCISE TAXES 105,616 - 105,616
USER FEES - 60,475 60,475
DEPARTMENTAL AND OTHER 115,417 - 115,417
INTERGOVERNMENTAL 658,611 - 658,611
SPECIAL ASSESSMENTS 102,077 3,252 105,329
NONCURRENT:
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
INTERGOVERNMENTAL 5,597,724 - 5,597,724
SPECIAL ASSESSMENTS 487,505 20,688 508,193
CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 50,508,950 19,955,254 70,464,204
TOTAL ASSETS 72,239,910 24,022,235 96,262,145
LIABILITIES
CURRENT:
ACCOUNTS PAYABLE 1,301,726 66,388 1,368,114
OTHER LIABILITIES 8,459 325 8,784
ACCRUED INTEREST 110,862 91,097 201,959
BONDS AND NOTES PAYABLE 3,037,429 870,000 3,907,429
LANDFILL POSTCLOSURE CARE COSTS 49,500 - 49,500
NONCURRENT:
BONDS AND NOTES PAYABLE 8,687,602 11,790,000 20,477,602
LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS 1,188,000 - 1,188,000
TOTAL LIABILITIES 14,383,578 12,817,810 27,201,388
NET ASSETS
INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 41,382,912 7,319,194 48,702,106
RESTRICTED FOR:
STREETS 658,611 - 658,611
PERMANENT FUNDS:
EXPENDABLE 91,472 - 91,472
NONEXPENDABLE 102,438 - 102,438
OTHER PURPOSES 3,677,136 - 3,677,136
UNRESTRICTED 11,943,763 3,885,231 15,828,994
TOTAL NET ASSETS 57,856,332$ 11,204,425$ 69,060,757$
See accompanying notes to the basic financial statements
PRIMARY GOVERNMENT
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF NET ASSETS
JUNE 30, 2006
- 10 -
OPERATING CAPITALCHARGES FORGRANTS AND GRANTS AND NET (EXPENSE)FUNCTIONS/PROGRAMSEXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS REVENUEPRIMARY GOVERNMENT:GOVERNMENTAL ACTIVITIES:GENERAL GOVERNMENT 4,593,687$ 196,968$ 14,297$ 1,983,534$ (2,398,888)$ PUBLIC SAFETY 4,045,173 202,442 936,017 177,118 (2,729,596) EDUCATION 14,421,539 97,244 1,086,129 963,657 (12,274,509) PUBLIC WORKS 2,544,630 758,917 26,804 180,497 (1,578,412) HUMAN SERVICES 513,411 139,001 16,874 16,961 (340,575) CULTURE & RECREATION 599,541 286,727 61,477 - (251,337) EMPLOYEE BENEFITS 3,283,397 - 464,643 - (2,818,754) STATE & COUNTY ASSESSMENTS 469,867 - - - (469,867) INTEREST 506,232 - - - (506,232) TOTAL GOVERNMENTAL ACTIVITIES 30,977,477 1,681,299 2,606,241 3,321,767 (23,368,170) BUSINESS-TYPE ACTIVITIES:GOLF 3,135,704 3,822,185 2,290 - 688,771 WATER 1,613,093 1,786,056 69,612 - 242,575 TOTAL BUSINESS-TYPE ACTIVITIES 4,748,797 5,608,241 71,902 - 931,346 TOTAL PRIMARY GOVERNMENT 35,726,274$ 7,289,540$ 2,678,143$ 3,321,767$ (22,436,824)$ (continued)See accompanying notes to the basic financial statements PROGRAM REVENUESTOWN OF BREWSTER, MASSACHUSETTSSTATEMENT OF ACTIVITIESFISCAL YEAR ENDED JUNE 30, 2006- 11 -
GOVERNMENTAL BUSINESS-TYPEACTIVITIESACTIVITIES TOTALCHANGES IN NET ASSETS:NET (EXPENSE) REVENUE FROM PREVIOUS PAGE (23,368,170)$ 931,346$ (22,436,824)$ GENERAL REVENUES:REAL ESTATE AND PERSONAL PROPERTY TAXES,NET OF TAX REFUNDS PAYABLE 20,162,546 - 20,162,546 TAX LIENS 132,141 - 132,141 MOTOR VEHICLE AND OTHER EXCISE TAXES 1,306,954 - 1,306,954 HOTEL/MOTEL TAX 474,344 - 474,344 PENALTIES AND INTEREST ON TAXES 104,018 - 104,018 PAYMENTS IN LIEU OF TAXES 6,784 - 6,784 GRANTS AND CONTRIBUTIONS NOT RESTRICTEDTO SPECIFIC PROGRAMS 704,035 - 704,035 UNRESTRICTED INVESTMENT INCOME 489,894 - 489,894 MISCELLANEOUS 12,061 - 12,061 TRANSFERS, NET 884,950 (884,950) - TOTAL GENERAL REVENUES AND TRANSFERS 24,277,727 (884,950) 23,392,777 CHANGE IN NET ASSETS 909,557 46,396 955,953 NET ASSETS:BEGINNING OF YEAR56,946,775 11,158,029 68,104,804 END OF YEAR57,856,332$ 11,204,425$ 69,060,757$ (concluded)See accompanying notes to the basic financial statements PRIMARY GOVERNMENTTOWN OF BREWSTER, MASSACHUSETTSSTATEMENT OF ACTIVITIESFISCAL YEAR ENDED JUNE 30, 2006- 12 -
TOWN OF BREWSTER, MASSACHUSETTSGOVERNMENTAL FUNDSBALANCE SHEETJUNE 30, 2006 NONMAJOR TOTALCOMMUNITY GOVERNMENTAL GOVERNMENTALASSETSGENERAL PRESERVATION FUNDS FUNDSCASH AND SHORT-TERM INVESTMENTS 6,885,331$ 2,180,513$ 4,988,353$ 14,054,197$ RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:REAL ESTATE AND PERSONAL PROPERTY TAXES 236,383 - - 236,383 TAX LIENS 373,430 - - 373,430 MOTOR VEHICLE EXCISE TAXES 105,616 - - 105,616 DEPARTMENTAL AND OTHER - 12,403 103,014 115,417 INTERGOVERNMENTAL 5,597,724 - 658,611 6,256,335 SPECIAL ASSESSMENTS - - 589,582 589,582 TOTAL ASSETS13,198,484$ 2,192,916$ 6,339,560$ 21,730,960$ LIABILITIES AND FUND BALANCESLIABILITIES:ACCOUNTS PAYABLE 1,261,510$ 5$ 40,211$ 1,301,726$ OTHER LIABILITIES 8,459 - - 8,459 DEFERRED REVENUES 6,278,153 12,403 1,351,207 7,641,763 NOTES PAYABLE - 2,125,000 - 2,125,000 TOTAL LIABILITIES7,548,122 2,137,408 1,391,418 11,076,948 FUND BALANCES:RESERVED FOR:ENCUMBRANCES AND CONTINUING APPROPRIATIONS 1,388,469 - - 1,388,469 PERPETUAL PERMANENT FUNDS - - 102,438 102,438 UNRESERVEDDESIGNATED FOR SUBSEQUENT YEARS' EXPENDITURES 503,557 - - 503,557 UNDESIGNATED REPORTED IN:GENERAL FUND 3,758,336 - - 3,758,336 SPECIAL REVENUE FUNDS - - 4,335,747 4,335,747 CAPITAL PROJECTS FUNDS - 55,508 418,485 473,993 PERMANENT FUNDS - - 91,472 91,472 TOTAL FUND BALANCES5,650,362 55,508 4,948,142 10,654,012 TOTAL LIABILITIES AND FUND BALANCES13,198,484$ 2,192,916$ 6,339,560$ 21,730,960$ See accompanying notes to the basic financial statements - 13 -
NONMAJOR TOTAL
COMMUNITY GOVERNMENTAL GOVERNMENTAL
GENERAL PRESERVATION FUNDS FUNDS
REVENUES:
REAL ESTATE AND PERSONAL PROPERTY TAXES,
NET OF TAX REFUNDS 20,294,542$ -$ -$ 20,294,542$
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,307,733 - - 1,307,733
INTERGOVERNMENTAL 3,699,253 821,315 426,077 4,946,645
PAYMENTS IN LIEU OF TAXES 6,784 - - 6,784
PENALTIES & INTEREST ON TAXES 82,746 - - 82,746
FINES & FORFEITS 57,133 - - 57,133
CHARGES FOR SERVICES 831,935 - 1,048,359 1,880,294
HOTEL/MOTEL TAX 474,344 - - 474,344
INVESTMENT INCOME 364,376 63,140 162,820 590,336
CONTRIBUTIONS AND DONATIONS - 500,000 41,968 541,968
DEPARTMENTAL AND OTHER 872,061 598,912 107,055 1,578,028
TOTAL REVENUES 27,990,907 1,983,367 1,786,279 31,760,553
EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT 2,027,757 2,125,000 90,958 4,243,715
PUBLIC SAFETY 4,148,939 - 252,582 4,401,521
EDUCATION 14,040,928 - 915,235 14,956,163
PUBLIC WORKS 1,939,362 - 333,688 2,273,050
HUMAN SERVICES 603,842 - 74,849 678,691
CULTURE & RECREATION 549,833 - 53,715 603,548
EMPLOYEE BENEFITS 3,283,397 - - 3,283,397
STATE & COUNTY ASSESSMENTS 469,867 - - 469,867
DEBT SERVICE 1,279,989 - - 1,279,989
TOTAL EXPENDITURES 28,343,914 2,125,000 1,721,027 32,189,941
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (353,007) (141,633) 65,252 (429,388)
OTHER FINANCING SOURCES (USES)
PROCEEDS FROM BONDS AND NOTES - 945,000 477,000 1,422,000
OPERATING TRANSFERS IN 2,200,558 - 690,000 2,890,558
OPERATING TRANSFERS OUT (350,000) (29,188) (1,626,420) (2,005,608)
TOTAL OTHER FINANCING SOURCES (USES) 1,850,558 915,812 (459,420) 2,306,950
NET CHANGE IN FUND BALANCES 1,497,551 774,179 (394,168) 1,877,562
FUND BALANCES AT BEGINNING OF YEAR 4,152,811 (718,671) 5,342,310 8,776,450
FUND BALANCES AT END OF YEAR 5,650,362$ 55,508$ 4,948,142$ 10,654,012$
See accompanying notes to the basic financial statements
TOWN OF BREWSTER, MASSACHUSETTS
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FISCAL YEAR ENDED JUNE 30, 2006
- 14 -
TOTAL GOVERNMENTAL FUND BALANCES 10,654,012$
CAPITAL ASSETS (NET) USED IN GOVERNMENTAL ACTIVITIES ARE NOT FINANCIAL RESOURCES
AND, THEREFORE, ARE NOT REPORTED IN THE FUNDS 50,508,950
ACCOUNTS RECEIVABLE ARE NOT AVAILABLE TO PAY FOR CURRENT-PERIOD
EXPENDITURES AND, THEREFORE, ARE DEFERRED IN THE FUNDS 7,641,763
IN THE STATEMENT OF ACTIVITIES, INTEREST IS ACCRUED ON OUTSTANDING LONG-TERM DEBT,
WHEREAS IN GOVERNMENTAL FUNDS INTEREST IS NOT REPORTED UNTIL DUE (110,862)
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 (9,600,031)
LANDFILL POSTCLOSURE CARE COSTS (1,237,500)
NET EFFECT OF REPORTING LONG-TERM LIABILITIES (10,837,531)
NET ASSETS OF GOVERNMENTAL ACTIVITIES 57,856,332$
See accompanying notes to the basic financial statements
TOWN OF BREWSTER, MASSACHUSETTS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET ASSETS
FISCAL YEAR ENDED JUNE 30, 2006
- 15 -
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 1,877,562$
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 1,839,958
DEPRECIATION EXPENSE (813,751)
NET EFFECT OF REPORTING CAPITAL ASSETS 1,026,207
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 (758,469)
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.
PROCEEDS FROM BONDS AND NOTES (1,422,000)
DEBT SERVICE PRINCIPAL PAYMENTS 790,425
NET EFFECT OF REPORTING LONG-TEM DEBT (631,575)
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 LANDFILL POSTCLOSURE CARE ACCRUAL (587,500)
NET CHANGE IN ACCRUED INTEREST ON LONG-TERM DEBT (16,668)
NET EFFECT OF RECORDING LONG-TERM LIABILITIES (604,168)
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES 909,557$
See accompanying notes to the basic financial statements
TOWN OF BREWSTER, MASSACHUSETTS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2006
- 16 -
ACTUAL
ORIGINAL FINAL BUDGETARY VARIANCE
BUDGET BUDGET AMOUNTS OVER(UNDER)
REVENUES:
REAL ESTATE AND PERSONAL PROPERTY TAXES,
NET OF TAX REFUNDS 19,955,348$ 19,955,348$ 20,294,542$ 339,194$
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,125,000 1,125,000 1,307,733 182,733
INTERGOVERNMENTAL 2,243,104 2,243,104 3,217,649 974,545
PAYMENTS IN LIEU OF TAXES 6,800 6,800 6,784 (16)
PENALTIES & INTEREST ON TAXES 46,000 46,000 82,746 36,746
FINES & FORFEITS 8,000 8,000 57,133 49,133
HOTEL/MOTEL TAX 419,350 419,350 474,344 54,994
INVESTMENT INCOME 50,000 50,000 364,376 314,376
DEPARTMENTAL AND OTHER 1,214,850 1,214,850 1,703,996 489,146
TOTAL REVENUES 25,068,452 25,068,452 27,509,303 2,440,851
EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT 2,216,642 2,515,778 2,446,947 68,831
PUBLIC SAFETY 4,138,244 4,566,644 4,459,667 106,977
EDUCATION 14,179,255 14,293,140 14,249,717 43,423
PUBLIC WORKS 1,722,143 2,141,943 2,118,640 23,303
HUMAN SERVICES 456,224 697,724 682,707 15,017
CULTURE & RECREATION 565,059 567,211 557,663 9,548
EMPLOYEE BENEFITS 2,828,852 2,837,552 2,816,283 21,269
STATE & COUNTY ASSESSMENTS 424,285 424,285 469,867 (45,582)
DEBT SERVICE 1,286,629 1,286,629 1,263,578 23,051
TOTAL EXPENDITURES 27,817,333 29,330,906 29,065,069 265,837
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (2,748,881) (4,262,454) (1,555,766) 2,706,688
OTHER FINANCING SOURCES (USES):
OPERATING TRANSFERS IN 1,202,338 1,736,193 2,200,558 464,365
OPERATING TRANSFERS OUT - (350,000) (350,000) -
TOTAL OTHER FINANCING SOURCES (USES) 1,202,338 1,386,193 1,850,558 464,365
NET CHANGE IN FUND BALANCE (1,546,543) (2,876,261) 294,792 3,171,053
BUDGETARY FUND BALANCE, BEGINNING OF YEAR 3,957,910 3,957,910 3,957,910 -
BUDGETARY FUND BALANCE, END OF YEAR 2,411,367$ 1,081,649$ 4,252,702$ 3,171,053$
See accompanying notes to the basic financial statements
BUDGETED AMOUNTS
TOWN OF BREWSTER, MASSACHUSETTS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FISCAL YEAR ENDED JUNE 30, 2006
- 17 -
ASSETS GOLF WATER TOTAL
CURRENT:
CASH AND SHORT-TERM INVESTMENTS 708,431$ 3,274,135$ 3,982,566$
USER FEES, NET OF ALLOWANCE FOR UNCOLLECTIBLES: - 60,475 60,475
SPECIAL ASSESSMENTS - 3,252 3,252
TOTAL CURRENT ASSETS 708,431 3,337,862 4,046,293
NONCURRENT:
SPECIAL ASSESSMENTS - 20,688 20,688
CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 11,159,382 8,795,872 19,955,254
TOTAL NONCURRENT ASSETS 11,159,382 8,816,560 19,975,942
TOTAL ASSETS 11,867,813 12,154,422 24,022,235
LIABILITIES
CURRENT:
ACCOUNTS PAYABLE - 66,388 66,388
OTHER LIABILITIES - 325 325
ACCRUED INTEREST 24,725 66,372 91,097
BONDS AND NOTES PAYABLE 495,000 375,000 870,000
TOTAL CURRENT LIABILITIES 519,725 508,085 1,027,810
NONCURRENT:
BONDS AND NOTES PAYABLE 8,190,000 3,600,000 11,790,000
TOTAL LIABILITIES 8,709,725 4,108,085 12,817,810
NET ASSETS
INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 2,474,382 4,844,812 7,319,194
UNRESTRICTED 683,706 3,201,525 3,885,231
TOTAL NET ASSETS 3,158,088$ 8,046,337$ 11,204,425$
See accompanying notes to the basic financial statements
BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF NET ASSETS
JUNE 30, 2006
- 18 -
GOLF WATER TOTAL
OPERATING REVENUES:
CHARGES FOR SERVICES 3,822,185$ 1,786,056$ 5,608,241$
DEPARTMENTAL AND OTHER 2,290 69,612 71,902
TOTAL OPERATING REVENUES 3,824,475 1,855,668 5,680,143
OPERATING EXPENSES:
GENERAL SERVICES 2,327,173 1,095,085 3,422,258
DEPRECIATION 397,168 332,013 729,181
TOTAL OPERATING EXPENSES 2,724,341 1,427,098 4,151,439
OPERATING INCOME (LOSS) 1,100,134 428,570 1,528,704
NON-OPERATING REVENUES (EXPENSES):
INTEREST EXPENSE (411,363) (185,995) (597,358)
TOTAL NON-OPERATING REVENUES (EXPENSES), NET (411,363) (185,995) (597,358)
INCOME (LOSS) BEFORE OPERATING TRANSFERS 688,771 242,575 931,346
OPERATING TRANSFERS:
OPERATING TRANSFERS IN - 15,500 15,500
OPERATING TRANSFERS OUT (603,787) (296,663) (900,450)
TOTAL OPERATING TRANSFERS (603,787) (281,163) (884,950)
CHANGE IN NET ASSETS 84,984 (38,588) 46,396
NET ASSETS AT BEGINNING OF YEAR 3,073,104 8,084,925 11,158,029
NET ASSETS AT END OF YEAR 3,158,088$ 8,046,337$ 11,204,425$
FISCAL YEAR ENDED JUNE 30, 2006
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS
See accompanying notes to the basic financial statements
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
- 19 -
GOLF WATER TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES:
RECEIPTS FROM CUSTOMERS AND USERS 3,824,475$ 1,905,301$ 5,729,776$
PAYMENTS TO SUPPLIERS (1,287,249) (546,996) (1,834,245)
PAYMENTS TO EMPLOYEES (1,039,924) (552,718) (1,592,642)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,497,302 805,587 2,302,889
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
OPERATING TRANSFERS IN - 15,500 15,500
OPERATING TRANSFERS OUT (603,787) (296,663) (900,450)
NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES (603,787) (281,163) (884,950)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
PROCEEDS FROM THE ISSUANCE OF BONDS AND NOTES - 680,000 680,000
PRINCIPAL PAYMENTS ON BONDS AND NOTES (375,000) (500,000) (875,000)
ACQUISITION AND CONSTRUCTION OF CAPITAL ASSETS (308,868) (595,070) (903,938)
INTEREST EXPENSE (404,398) (187,725) (592,123)
NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES (1,088,266) (602,795) (1,691,061)
NET INCREASE (DECREASE) IN CASH AND SHORT TERM INVESTMENTS (194,751) (78,371) (273,122)
CASH AND SHORT TERM INVESTMENTS - BEGINNING OF YEAR 903,182 3,352,506 4,255,688
CASH AND SHORT TERM INVESTMENTS- END OF YEAR 708,431$ 3,274,135$ 3,982,566$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
OPERATING INCOME (LOSS)1,100,134$ 428,570$ 1,528,704$
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
DEPRECIATION 397,168 332,013 729,181
(INCREASE) DECREASE IN ACCOUNTS RECEIVABLE - 49,633 49,633
INCREASE (DECREASE) IN ACCOUNTS PAYABLE - 8,305 8,305
INCREASE (DECREASE) IN OTHER LIABILITIES - (12,934) (12,934)
TOTAL ADJUSTMENTS 397,168 377,017 774,185
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,497,302$ 805,587$ 2,302,889$
See accompanying notes to the basic financial statements
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FISCAL YEAR ENDED JUNE 30, 2006
- 20 -
PRIVATE
PURPOSE AGENCY
TRUST FUNDS FUNDS
ASSETS
CASH AND SHORT-TERM INVESTMENTS 63,037$ 197,367$
DEPARTMENTAL RECEIVABLE - 12,577
TOTAL ASSETS 63,037 209,944
LIABILITIES
ACCOUNTS PAYABLE - 3,253
OTHER LIABILITIES - 206,691
TOTAL LIABILITIES - 209,944
NET ASSETS
HELD IN TRUST FOR OTHER PURPOSES 63,037$ -$
See accompanying notes to the basic financial statements
TOWN OF BREWSTER, MASSACHUSETTS
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET ASSETS
JUNE 30, 2006
- 21 -
PRIVATE
PURPOSE
TRUST FUNDS
ADDITIONS:
INVESTMENT INCOME: 1,810$
DEDUCTIONS:
EDUCATIONAL SCHOLARSHIPS 1,000
CHANGE IN NET ASSETS 810
NET ASSETS AT BEGINNING OF YEAR 62,227
NET ASSETS AT END OF YEAR 63,037$
See accompanying notes to the basic financial statements
TOWN OF BREWSTER, MASSACHUSETTS
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FISCAL YEAR ENDED JUNE 30, 2006
- 22 -
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 23 -
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 Board of Selectmen (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 an eleven (11) member school
committee consisting of three (3) 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 approximately 49.22% equity interest in the joint
venture.
Name Purpose Address
Annual
Assessment
Nauset Regional To provide education services 78 Eldredge Parkway $ 7,885,497
School District Orleans, MA 02653
Cape Cod Regional
Technical High
School
To provide vocational education 351 Pleasant Lake Ave
Harwich, MA 02645
$ 744,668
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 24 -
The Cape Cod Regional Technical High School is governed by a twenty-one (21) 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 no equity interest 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) for the mutual advantage of the
Towns. A three member Board of Managers for the joint venture is appointed for oversight purposes, such
Board consisting of the chairman of each Town’s Board of Selectmen. An annual budget for the operation
and management of the facility is prepared by the facility superintendent and submitted to the Board of
Managers.
B. Government-Wide and Fund Financial Statements
Government-Wide Financial Statements
The government-wide financial statements (i.e., statement of net assets 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, liabilities, revenues, or expenditures/expenses of an individual
governmental or enterprise fund are at least 10 percent of the corresponding element (assets,
liabilities, etc.) for all funds of that category or type (total governmental or total enterprise
funds), and
b. If the total assets, liabilities, 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, 2006
- 25 -
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 landfill post closure care costs, which is recognized
when the obligation is expected to be liquidated with current expendable available resources.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 26 -
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:
¾ 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.
¾ 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, and
preservation of historic property.
¾ 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.
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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 27 -
The following major proprietary funds are reported:
¾ The Water Enterprise fund is used to account for water activities.
¾ 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:
¾ 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.
¾ The Agency fund is used to account for assets held in a purely custodial capacity.
Government-Wide and Fund Financial Statements
For the government-wide financial statements, and proprietary and fiduciary fund accounting, all
applicable Financial Accounting Standards Board (FASB) pronouncements issued on or prior to
November 30, 1989, are applied, unless those pronouncements conflict with or contradict GASB
pronouncements.
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. 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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 28 -
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.
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.
Departmental and Other
Departmental and other receivables consist primarily of Title V and ambulance receivables and are
recorded as receivables in the fiscal year accrued. The allowance for uncollectibles is estimated based on
historical trends and specific account analysis.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 29 -
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.
F. 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.
G. Capital Assets
Government-Wide and Proprietary Fund Financial Statements
Capital assets, which include land, vehicles, buildings and improvements, capital improvements,
machinery and equipment, and infrastructure (e.g., water mains, roadways, and similar items), are
reported in the applicable governmental or business-type activities column of the government-wide
financial statements, and the proprietary fund 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:
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, 2006
- 30 -
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.
H. 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 assets. Any residual balances outstanding between the
governmental activities and business-type activities are reported in the statement of net assets 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.
I. 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 assets. 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.
J. Deferred Revenue
Deferred revenue at the governmental fund financial statement level represents billed receivables that do
not meet the available criterion in accordance with the current financial resources measurement focus and
the modified accrual basis of accounting. Deferred revenue is recognized as revenue in the conversion to
the government-wide (full accrual) financial statements.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 31 -
K. Net Assets and Fund Equity
Government-Wide Financial Statements (Net Assets)
Net assets are classified into three components:
a. Invested in capital assets, net of related debt – 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 assets – Consists of net assets 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 assets have been “restricted” for the following:
• Streets represent amounts committed by the Commonwealth for the repair and/or construction
of streets.
• 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 assets – All other net assets that do not meet the definition of “restricted” or
“invested in capital assets, net of related debt.”
Fund Financial Statements (Fund Balances)
a. Fund balances consist of funds that are reserved for amounts, that are not available for
appropriation, that are legally restricted by outside parties for a specific future use, and
designations of fund balances that represent tentative management plans that are subject to
change.
Fund balances have been reserved for the following:
• Encumbrances and continuing appropriations represents amounts obligated under purchase
orders, contracts and other commitments for expenditures that are being carried over to the
ensuing fiscal year.
• Perpetual permanent funds represent amounts held in trust for which only investment
earnings may be expended.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 32 -
Fund balances have been designated for the following:
• Subsequent year's expenditures represents amounts appropriated for the fiscal year 2007
operating budget.
b. Undesignated fund balances – all other fund balances that do not meet the definition of
“reserved” or “designated.”
L. 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
assets. 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.
M. 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).
N. 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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 33 -
O. 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. For the fiscal year ended June 30, 2006, this expense/expenditure totaled
approximately $199,934. There were approximately 64 participants eligible to receive benefits at
June 30, 2006.
P. 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.
Q. 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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 34 -
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 2006 approved budget authorized
$26,680,199 in current year appropriations and other amounts to be raised and $1,137,134 in carryover
articles carried over from previous fiscal years. Supplemental appropriations of $1,513,573 were
approved at two Special Town Meetings for fiscal year 2006.
The Finance Director has the responsibility to ensure that budgetary controls are maintained and
monitored through the accounting system.
B. Budgetary – GAAP Reconciliation
For budgetary financial reporting purposes, the Uniform Municipal Accounting System basis of
accounting (established by the Commonwealth) is followed, which differs from the GAAP basis of
accounting. A reconciliation of budgetary-basis to GAAP-basis results for the general fund for the fiscal
year ended June 30, 2006, is presented below:
Net change in fund balance - budgetary basis 294,792$
Basis of accounting differences:
Increase in revenue for on-behalf payments - MTRS 464,643
Increase in expenditures for on-behalf payments - MTRS (464,643)
Increase in revenue for the MWPAT subsidy 16,961
Increase in expenditures for the MWPAT subsidy (16,961)
Adjustment for current year articles 1,219,026
Adjustment for current year encumbrances 169,442
Adjustment for expenditures from prior year encumbrances (185,709)
Net change in fund balance - GAAP basis 1,497,551$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 35 -
C. Excess of Expenditures over Appropriations
For the fiscal year ended June 30, 2006, actual expenditures exceeded appropriations for snow removal.
This over-expenditure will be funded by available funds during fiscal year 2007.
D. Deficit Fund Balances
Several individual fund deficits exist within the special revenue funds. These individual deficits will be
eliminated through subsequent fiscal year budget transfers and grants during fiscal year 2007.
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.
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.
The Town carries deposits that are fully insured by FDIC insurance, DIF insurance or collateralized with
securities held by the Town or the Town’s agent in the Town’s name. The Town also carries deposits that
are not collateralized and are uninsured. As of June 30, 2006, the bank balances of uninsured and
uncollateralized deposits are $1,079,973.
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.
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.
The Town did not hold or own any fixed income securities as of June 30, 2006.
Custodial Credit Risk – Investments
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 Town does not have an investment policy for custodial credit risk.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 36 -
Credit Risk
The Town has not adopted a formal policy related to Credit Risk.
NOTE 4 – RECEIVABLES
The receivables at June 30, 2006 for the Town’s individual major and nonmajor governmental funds, and
fiduciary funds in the aggregate, including the applicable allowances for uncollectible accounts, are as
follows:
The receivables at June 30, 2006, for the enterprise funds consist of the following:
Allowance
Gross for Net
Receivables: Amount Uncollectibles Amount
Real estate and personal property taxes 237,783$ (1,400)$ 236,383$
Tax liens 373,430 - 373,430
Motor vehicle and other excise taxes 119,616 (14,000) 105,616
Departmental and other 240,494 (112,500) 127,994
Intergovernmental 6,256,335 - 6,256,335
Special assessments 589,582 - 589,582
Total 7,817,240$ (127,900)$ 7,689,340$
Allowance
Gross for Net
Receivables: Amount Uncollectibles Amount
Water
User fees 60,475$ -$ 60,475$
Special Assessments 23,940 - 23,940
Total 84,415$ -$ 84,415$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 37 -
Governmental funds report deferred revenue 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, the various components of deferred revenue reported in the governmental funds
were as follows:
Nonmajor
General Land Governmental
Receivable Type: Fund Bank Funds Total
Property Taxes 201,383$ -$ -$ 201,383$
Tax Liens 373,430 - - 373,430
Motor vehicle & other excise taxes 105,616 - - 105,616
Departmental and other - 12,403 103,014 115,417
Intergovernmental 5,597,724 - 658,611 6,256,335
Special assessments - - 589,582 589,582
Total 6,278,153$ 12,403$ 1,351,207$ 7,641,763$
Deferred Revenue Analysis
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 38 -
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended June 30, 2006, was as follows:
Beginning Ending
Governmental Activities:Balance Increases Decreases Balance
Capital assets not being depreciated:
Land 28,037,512$ -$ -$ 28,037,512$
Construction in progress - 177,118 - 177,118
Total capital assets not being depreciated 28,037,512 177,118 - 28,214,630
Capital assets being depreciated:
Building and improvements 23,011,549 768,805 - 23,780,354
Capital improvement (other than buildings) 706,832 - - 706,832
Machinery, equipment, and vehicles 6,359,512 1,162,566 (352,866) 7,169,212
Infrastructure 4,351,425 84,335 - 4,435,760
Total capital assets being depreciated 34,429,318 2,015,706 (352,866) 36,092,158
Less accumulated depreciation for:
Building and improvements (5,646,971) (611,723) - (6,258,694)
Capital improvement (other than buildings) (93,170) (33,953) - (127,123)
Machinery, equipment, and vehicles (4,860,971) (325,471) 352,866 (4,833,576)
Infrastructure (2,382,975) (195,470) - (2,578,445)
Total accumulated depreciation (12,984,087) (1,166,617) 352,866 (13,797,838)
Total capital assets being depreciated, net 21,445,231 849,089 - 22,294,320
Total governmental activities capital assets, net 49,482,743$ 1,026,207$ -$ 50,508,950$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 39 -
Depreciation expense was charged to functions/programs of the primary government as follows:
General government 349,972$
Public safety 361,924
Education 135,451
Public works 261,272
Human services 4,238
Culture and recreation 53,760
Total depreciation expense - governmental activities 1,166,617$
Water 332,013$
Golf 397,168
Total depreciation expense - business-type activities 729,181$
Governmental Activities:
Business-Type Activities:
Beginning Ending
Business-Type Activities:Balance Increases Decreases Balance
Capital assets not being depreciated:
Land 2,874,212$ -$ -$ 2,874,212$
Construction in progress 178,858 590,276 - 769,134
Total capital assets not being depreciated 3,053,070 590,276 - 3,643,346
Capital assets being depreciated:
Buildings and improvements 2,476,050 112,858 - 2,588,908
Machinery, equipment, and vehicles 1,877,485 90,298 (41,608) 1,926,175
Infrastructure 18,950,754 110,505 - 19,061,259
Total capital assets being depreciated 23,304,289 313,661 (41,608) 23,576,342
Less accumulated depreciation for:
Buildings and improvements (411,699) (67,422) - (479,121)
Machinery, equipment, and vehicles (1,184,742) (160,317) 41,608 (1,303,451)
Infrastructure (4,980,420) (501,442) - (5,481,862)
Total accumulated depreciation (6,576,861) (729,181) 41,608 (7,264,434)
Total capital assets being depreciated, net 16,727,428 (415,520) - 16,311,908
Total business-type activites capital assets, net 19,780,498$ 174,756$ -$ 19,955,254$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 40 -
NOTE 6 – INTERFUND TRANSFERS
Interfund transfers for the fiscal year ended June 30, 2006, are summarized as follows:
(1) Represents budgeted and other transfers to supplement the operating budget.
(2) Represents budgeted transfers from the various funds to the general fund.
NOTE 7 – 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 and enterprise
funds respectively.
Nonmajor Water
General Governmental Enterprise
Operating Transfers Out: Fund Funds Fund Total
Nonmajor Governmental Funds 1,282,495$ -$ -$ 1,282,495$ (1)
Nonmajor Governmental Funds 3,925$ - - 3,925 (2)
Water Enterprise Fund 296,663 - - 296,663 (2)
Golf Enterprise Fund 588,287 - 15,500 603,787 (2)
Community Preservation Fund 29,188 - - 29,188 (1)
General Fund - 350,000 - 350,000 (1)
Total 2,200,558$ 350,000$ 15,500$ 2,566,058$
Operating Transfers In:
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 41 -
The following is a summary of changes in short-term debt for the year ended June 30, 2006:
Type Purpose
Rate
(%)
Due
Date
Balance at
June 30, 2005
Renewed/
Issued
Retired/
Redeemed
Balance at
June 30, 2006
BAN Land Acquisition 2.60 8/15/2005 325,000$ -$ (325,000)$ -$
BAN Land Acquisition 2.39 8/31/2005 945,000 - (945,000) -
BAN Land Acquisition 4.00 1/16/2007 - 2,125,000 - 2,125,000
Total Governmental Funds 1,270,000 2,125,000 (1,270,000) 2,125,000
BAN Water Main - Slough Road 2.45 8/31/2005 70,000 - (70,000) -
BAN Well #5 Rehabilitation 2.45 8/31/2005 165,000 - (165,000) -
BAN Golf Course Irrigation 2.39 8/31/2005 355,000 - (355,000) -
BAN Golf Course Irrigation 2.75 8/31/2005 445,000 - (445,000) -
Total Enterprise Funds 1,035,000 - (1,035,000) -
Total 2,305,000$ 2,125,000$ (2,305,000)$ 2,125,000$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 42 -
NOTE 8 – 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.
The following is a summary of the changes in long-term debt for the year ended June 30, 2006:
Bonds and Notes Payable Schedule -Governmental Funds
The annual debt service requirements for principal and interest for Governmental bonds and notes
outstanding at June 30, 2006 are as follows:
Project
Interest
Rate (%)
Outstanding at
June 30, 2005 Issued Redeemed
Outstanding at
June 30, 2006
School 5.15 4,650,000$ -$ 425,000$ 4,225,000$
Library 5.15 550,000 - 50,000 500,000
MWPAT Title V Septic Var 166,202 - 10,400 155,802
Road Betterments 4.20 62,000 - 15,500 46,500
Road Betterments 4.80 75,000 - 15,000 60,000
Police Station 5.51 2,550,000 - 170,000 2,380,000
Road Betterments 3.80 70,000 - 15,000 55,000
Road Betterments 3.59 225,000 - 30,000 195,000
Road Betterments 3.62 180,000 - 20,000 160,000
Road Betterments 3.62 255,000 - 30,000 225,000
MWPAT Title V Septic 3.59 185,254 - 9,525 175,729
Land Acquisition 3.64 - 945,000 - 945,000
Road Betterments 3.64 - 307,000 - 307,000
Road Betterments 3.64 - 170,000 - 170,000
Total 8,968,456$ 1,422,000$ 790,425$ 9,600,031$
Fiscal Year Principal Interest Total
2007 912,429$ 457,782$ 1,370,211$
2008 900,426 416,653 1,317,079
2009 900,425 375,028 1,275,453
2010 884,925 332,283 1,217,208
2011 859,926 290,013 1,149,939
2012-2016 4,030,100 819,965 4,850,065
2017-2021 1,081,800 148,458 1,230,258
2022-2026 30,000 2,500 32,500
Total 9,600,031$ 2,842,682$ 12,442,713$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 43 -
Bonds and Notes Payable Schedule -Water and Golf Enterprise Funds
The annual debt service requirements for principal and interest for water and golf enterprise fund bonds
and notes outstanding at June 30, 2006 are as follows:
Project
Interest
Rate (%)
Outstanding at
June 30, 2005 Issued Redeemed
Outstanding at
June 30, 2006
Golf Course 4.75 8,260,000$ -$ 375,000$ 7,885,000$
Golf Course 3.64 - 800,000 - 800,000
Water Mains 5.51 2,275,000 - 155,000 2,120,000
Telemetry 5.51 95,000 - 20,000 75,000
Water Betterments - Sears Rd 3.80 10,000 - 5,000 5,000
Water Betterments - Williams Dr 3.80 30,000 - 5,000 25,000
Standpipe #2 3.80 500,000 - 75,000 425,000
Standpipe Rehabilitation 3.62 650,000 - 75,000 575,000
Water Betterments - Slough Rd 3.64 - 750,000 - 750,000
Total 11,820,000$ 1,550,000$ 710,000$ 12,660,000$
Fiscal Year Principal Interest Total
2007 870,000$ 582,353$ 1,452,353$
2008 885,000 545,992 1,430,992
2009 905,000 508,358 1,413,358
2010 915,000 469,072 1,384,072
2011 920,000 428,263 1,348,263
2012-2016 4,360,000 1,527,720 5,887,720
2017-2021 3,630,000 498,045 4,128,045
2022-2026 175,000 18,375 193,375
Total 12,660,000$ 4,578,178$ 17,238,178$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 44 -
Loans Authorized and Unissued
As of June 30, 2006, the Town has loans authorized and unissued as follows:
Massachusetts School Building Authority Reimbursements
Chapter 645 of the Act of 1948 as amended (“Chapter 645”) created a statewide school building
assistance program. Pursuant to this program, cities and towns issued bonds for eligible school building
projects and were reimbursed over a period of years by the Commonwealth according to a statutory
percentage for such city or town.
Legislation enacted as part of the Commonwealth’s Fiscal 2001 budget repealed 645 and created a new
school building assistance program codified as Chapter 70B of the Massachusetts General Laws. Among
other changes, the new program includes grants for alternatives to construction and calculates grants for
each project based on a number of factors. The new legislation does not affect the reimbursement
percentages for bonds previously issued under Chapter 645, and the grants for certain “grandfathered”
projects will be based on the statutory percentages provided for in Chapter 645.
The Town has been approved for a 65% percent state school construction grant through the Massachusetts
School Building Authority (MSBA) to cover eligible project costs, including debt service associated with
the financing of these projects, subject to annual appropriation by the state legislature. The Town received
$963,658 in direct payments related to a school construction project and $660,666 from scheduled annual
payments in FY 2006 from the MSBA for completed school construction projects.
Date
Description Authorized Amount
Septic Loans Title V 11/19/2001 14,746$
Septage Betterments 5/6/1996 28,600
Septage Betterments 5/4/1998 2,597
Land Acquisition - Scarsella Road 5/5/2006 600,000
Land Acquisition - off Slough Road 5/5/2006 3,650,000
Total 4,295,943$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 45 -
Changes in Long-term Liabilities
The following is a summary of changes in long-term liabilities for the year ended June 30, 2006:
The governmental activities long-term liabilities are generally liquidated by the general fund.
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, 2006:
Total Long- Town's Town's
Term Debt Estimated Indirect
Agency Outstanding Share Debt
Barnstable County 285,000$ 4.39% 12,512$
Nauset Regional School District 10,609,825 49.22% 5,222,156
10,894,825$ 5,234,667$
Beginning Ending Current
Governmental Activities: Balance Additions Reductions Balance Portion
Bonds and notes payable 8,968,456$ 1,422,000$ (790,425)$ 9,600,031$ 912,429$
Landfill postclosure care costs 650,000 587,500 - 1,237,500 49,500
Total governmental activities
long-term liabilities 9,618,456$ 2,009,500$ (790,425)$ 10,837,531$ 961,929$
Beginning Ending Current
Business-Type Activities: Balance Additions Reductions Balance Portion
Bonds and notes payable 11,820,000$ 1,550,000$ (710,000)$ 12,660,000$ 870,000$
Total business-type activities
long-term liabilities 11,820,000$ 1,550,000$ (710,000)$ 12,660,000$ 870,000$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 46 -
NOTE 9 – 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 is $38,437,979.
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 2006.
The Town is a member of the Cape Cod Municipal Health Group, (CCMHG) which is a Massachusetts
Municipal Health Insurance Joint purchase group. The Group includes thirteen Towns, five school
districts, five fire districts, seven water districts, one recreation authority, one education collaborative,
Veterans Services of Cape Cod, Barnstable County and Cape Cod Regional Transit Authority as
participants. Health benefits consist of a traditional medical indemnity program and a Medex program
with Blue Cross Blue Shield of Massachusetts. The traditional medical indemnity program consists of
Master Health Plus and Master Health, Master Medical, and Master Medical Carveout plans. In addition,
the Group adopted an Exclusive Provider Organization plan with Harvard Pilgrim Health Care (HPHC)
and a self funded medi-wrap plan, Harvard Pilgrim Health Care Enhance Medicare. All of these plans are
self-funded. The Group adopted three Medicare Choice plans: Medicare HMO Blue, Managed Blue for
Seniors and Tufts Medicare Preferred (fully insured). The Group has adopted Blue Cross/Blue Shield
(BC/BS) Network Blue, a self-funded, Exclusive Provider Organization (EPO) plan as well as two
Preferred Provider Organization (PPO) plans. Blue Care Elect Preferred PPO is administered by BCBS,
and Harvard Pilgrim PPO is administered by HPHC. Both PPO plans are self-funded. Also, the Group has
adopted a contributory dental insurance plan (self-funded) and a voluntary (employee-pay-all/fully
insured premium) dental plan.
The traditional medical indemnity plans, Blue Care Elect Preferred PPO plan, Network Blue EPO plan,
and Medex 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.
The Harvard Pilgrim EPO Plan, Harvard Pilgrim PPO plan, and Harvard Pilgrim Health Care Enhance
Medicare plan are on a claims-paid basis, and are administered by Harvard Pilgrim health care for a
monthly administration fee based on a number of individual and family plan subscribers for that particular
month.
The contributory dental insurance plan is on a claims-paid basis for subscribers whose employers pay a
portion (50% or more) of the monthly cost. The voluntary dental plan is on a fixed premium basis for all
other subscribers (an employee pay-all plan). The contributory dental plan is administered by Delta
Dental Plan of Massachusetts for a monthly administration fee based on the number of subscribers. The
voluntary dental plan is fully insured by Delta Dental Plan of Massachusetts.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 47 -
The Group has a specific excess medical and prescription drug claims reinsurance contract with an
insurance carrier covering claims paid in excess of $150,000, and $150,000 per individual, to a lifetime
maximum amount payable of $2,000,000, and $2,000,000 at June 30, 2006 and 2005 respectively, for the
traditional medical indemnity, preferred provider organization (PPO), and exclusive provider organization
(EPO) plan contracts. The Group reinsures its Carveout A plan with a policy with a $50,000 specific
deductible. The Group does not reinsure it Medex and HPHC Medicare Enhance plans. The policy period
covers claims incurred within twelve months and paid within twenty-four months.
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.
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 215 Town of Brewster employees and 64
retirees who participate in the Group’s health care programs. The Town contributes 75% of the premium
cost for employees and 50% of the premium cost for retirees and surviving spouses.
As of June 30, 2006, the Cape Cod Municipal Health Group had total assets of $28,108,979, total
liabilities of $9,632,691 (including $9,055,897 in estimated benefits obligations), and a total surplus of
$18,476,288.
NOTE 10 – PENSION PLAN
A. Plan Descriptions
The Town contributes to the Barnstable County Contributory Retirement System (the “System”), a cost
sharing, multiple-employer, defined benefit pension plan administered by the Barnstable County
Retirement Board. Substantially all employees are members of the “System” except for public school
teachers and certain school administrators who are members of the Massachusetts Teachers’ Retirement
System (MTRS) to which the Town does not contribute.
The “System” and the MTRS are contributory defined benefit plans and membership in both the
“System” and the MTRS is mandatory upon commencement of employment for all permanent, full-time
employees. The “System” and the MTRS provide retirement, disability and death benefits to plan
members and beneficiaries.
Chapter 32 of the Massachusetts General Laws assigns authority to establish and amend benefit
provisions of the plan, and grant cost-of-living increases, to the State legislature. The “System” issues a
publicly available financial report, which can be obtained through the Commonwealth of Massachusetts,
Public Employee Retirement Administration Commission (“PERAC”), One Ashburton Place, Boston,
Massachusetts 02108.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 48 -
B. Funding Policies
Barnstable County Contributory Retirement System
Plan members are required to contribute to the “System” at rates ranging from 5% to 11% of annual
covered compensation. The Town is required to pay into the “System”, its share of the remaining system-
wide, actuarially determined, contribution plus administration costs, which are apportioned among the
employers, based on active covered payroll. The Commonwealth of Massachusetts reimburses the
“system” for a portion of the benefit payments for the cost of living increases. The contributions to the
“System” for years ended June 30, 2006, 2005, and 2004 were $910,000, $852,570, and $767,494
respectively, which were equal to its required contributions for each of these years.
Massachusetts Teachers’ Retirement System
Plan members (at varying rates of annual covered compensation) and the Commonwealth of
Massachusetts fund contributions to the MTRS. The Commonwealth of Massachusetts contributed “on-
behalf” payments to the MTRS totaling $464,643 for fiscal year 2006. In accordance with GASB
Statement No. 24, these on-behalf” payments have been recorded in the general fund as
intergovernmental revenues and pension expenditures.
NOTE 11 – COMMITMENTS AND CONTINGENCIES
The Town participates in a number of federal award programs. However the Town is not subject to the
provisions of the Single Audit Act Amendments of 1996, since the Town did not expend more than
$500,000 of federal awards during the period ended June 30, 2006.These programs may still be subject to
financial and compliance audits. Accordingly, the amount 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 post-closure monitoring of the site for thirty years (25 years remaining), and
the estimated liability has been recorded in the Statement of Net Assets, Governmental Activities. The
$1,237,500 reported as landfill post-closure liability at June 30, 2006 is based on what it would cost to
perform all post-closure care at June 30, 2006. 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, 2006, cannot be ascertained, management believes any resulting liability should not materially affect
the financial position at June 30, 2006.
.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 49 -
NOTE 12 – SUBSEQUENT EVENT
On March 15, 2007, the Town issued general obligation bonds refunding bonds series A of $8,590,000
and series B of $4,330,000 for the purpose of advance refunding a portion of the general obligation bonds
issued November 15, 1995, June 15, 1998, and March 1, 2000. Series A Principal is payable annually in
variable amounts beginning on March 1, 2008 through March 1, 2020. Interest is payable semi-annually
on September 1 and March 1 beginning on September 1, 2007. The coupon interest rate varies from 4% to
5% through the term of the loan. Series B Principal is payable annually in variable amounts beginning on
November 15, 2007 through November 15, 2015. Interest is payable semi-annually on November 15 and
May 15 beginning on May 1, 2007. The coupon interest rate varies from 4% to 5% through the term of
the loan.
NOTE 13 – PRIOR PERIOD RECLASSIFICATION
The following governmental fund has been restated to reflect the reclassification of the major
Stabilization Fund to the Nonmajor Governmental Funds at June 30, 2005.
Nonmajor
Stabilization Governmental
Description Fund Funds
Governmental fund balances at June 30, 2005,
as previously reported 1,899,453$ 3,442,857$
To reclass the major Stabilization fund to the
Nonmajor Governmental funds (1,899,453) 1,899,453
Governmental fund balances at June 30, 2005, as restated -$ 5,342,310$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
- 50 -
NOTE 14 – IMPLEMENTATION OF NEW GASB PRONOUNCEMENTS
During fiscal year 2006, the following GASB pronouncements were implemented:
GASB issued Statement #42, Accounting and Financial Reporting for Implementation of Capital Assets
and for Insurance Recoveries, which is required to be implemented in Fiscal 2006. This pronouncement
did not impact the basic financial statements.
GASB issued Statement #44, Economic Condition Reporting: The Statistical Section, which is required to
be implemented in Fiscal 2006. This new GASB establishes and modifies requirements related to
supplementary information presented in a statistical section. This pronouncement did not impact the basic
financial statements.
GASB issued Statement #46, Net Assets Restricted by Legislation an amendment of GASB Statement No.
34. This Statement clarifies that a legally enforceable enabling legislation restriction is one that a party
external to a government-such as citizens, public interest groups, or the judiciary-can compel a
government to honor. It requires governments to disclose the portion of total net assets that is restricted
by enabling legislation. This pronouncement did not impact the basic financial statements.
The GASB issued Statement #48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity
Transfers of Assets and Future Revenues which is required to be implemented in FY2008. Management
has elected to implement this GASB early. This pronouncement did not impact the basic financial
statements.
Other Future GASB Pronouncements:
The GASB issued Statement #43, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans, which is required to be implemented in Fiscal 2008. Since there is no legally established
separate trust for the postemployment benefit plan this pronouncement will not impact the basic financial
statements.
The GASB issued Statement #45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions, which is required to be implemented in Fiscal 2009. Management believes
this pronouncement will require additional disclosure and impact the basic financial statements.