HomeMy Public PortalAboutBrewster 2012 Report on the Examination of the Basic Financial Statements
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
TABLE OF CONTENTS
PAGE
Independent Auditor’s Report 1 – 2
Management’s Discussion and Analysis 3 – 10
Basic Financial Statements
Statement of Net Assets 11
Statement of Activities 12 – 13
Governmental Funds – Balance Sheet 14
Governmental Funds – Statement of Revenues, Expenditures, and
Changes in Fund Balances
15
Reconciliation of the Governmental Funds Balance Sheet Total
Fund Balances to the Statement of Net Assets
16
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
17
General Fund – Statement of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual
18
Proprietary Funds – Statement of Net Assets 19
Proprietary Funds – Statement of Revenues, Expenses, and
Changes in Fund Net Assets
20
Proprietary Funds – Statement of Cash Flows 21
Fiduciary Funds – Statement of Fiduciary Net Assets 22
Fiduciary Funds – Statement of Changes in Fiduciary Net Assets 23
Notes to Basic Financial Statements 24 – 56
Required Supplementary Information:
Other Post Employment Benefits – Schedules of Funding Progress and
Employer Contributions
57– 58
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, 2012, which collectively comprise the Town’s basic
financial statements as listed in the table of contents. These financial statements are the responsibility of
the 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 and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free 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 the 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,
2012, and the respective changes in financial position, and, where applicable, cash flows thereof for the
year then ended in conformity with accounting principles generally accepted in the United States of
America.
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In accordance with Government Auditing Standards, we have also issued our report dated March 21,
2013, on our consideration of the Town of Brewster, Massachusetts’ internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to provide
an opinion on the internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
The management’s discussion and analysis on pages 3 through 10, and other post employment benefits
information: schedules of funding progress and employer contributions on pages 57 through 58 are not a
required part of the basic financial statements but are 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
March 21, 2013
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Management’s Discussion and Analysis
As management of the Town of Brewster (the Town), we offer readers of the Town’s financial statements this
narrative overview and analysis of the financial activities of the Town for the fiscal year ended June 30, 2012.
We encourage readers to consider this information in addition to the statements and notes.
The Town complies with financial reporting requirements issued by the Governmental Accounting Standards
Board (GASB). GASB is the authoritative standard setting body that provides guidance on how to prepare
financial statements in conformity with accounting principles generally accepted in the United States of America
(GAAP). Users of these financial statements, such as investors and rating agencies, rely on the GASB to establish
consistent reporting standards for all governments in the United States. This consistent application is the only
way users can assess the financial condition of one government compared to others.
Financial Highlights
• The assets of the Town exceeded its liabilities at the close of the fiscal year by $85.8 million (net assets). Of
this amount, $8.6 million is considered unrestricted (unrestricted net assets).
• The unrestricted net assets of the Town’s governmental activities are $4.8 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 $3.7 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 $1.135 million, or 1.34%, from fiscal 2011. Within this total,
net assets of governmental activities increased by $499 thousand, a .71% increase from fiscal 2011. Also, net
assets of business-type activities increased by $636 thousand or 4.44% from 2011.
• At June 30, 2012, the Town’s governmental funds had combined ending fund balances of $15.2 million. The
combined governmental funds balances increased by $174 thousand, a 1.16% increase over the prior year’s
ending fund balances.
• The Town’s general fund reported a fund balance of $9.4 million at the end of fiscal 2012. The unassigned
fund balance for the general fund was $6.55 million or 19% of total general fund expenditures. A total of
$868 thousand of the assigned fund balance was designated for funding the fiscal year 2013 budget.
• The total cost of all Town services for fiscal 2012 was $41 million, $36 million of which was for
governmental activities, and $5 million of which was for business-type activities.
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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).
Both of the government-wide financial statements distinguish functions that are principally supported by taxes
and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a
significant portion of their costs through user fees or charges (business-type activities). The governmental
activities include general government, public safety, education, public works, human services, culture and
recreation, employee benefits, debt service, and state and county assessments. The business-type activities
include water and golf department services.
Fund Financial Statements – A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. Fund accounting is used to ensure and
demonstrate compliance with finance related legal requirements. All of the funds can be divided into three main
categories: governmental funds, proprietary funds and fiduciary funds.
Governmental Funds – governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental funds statements focus on near-term inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information
may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better understand
the long-term impact of the government’s near-term financing decisions. Both, the Governmental Funds Balance
Sheet and the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances provide
a reconciliation to facilitate this comparison between governmental funds and governmental activities.
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The Town of Brewster adopts an annual appropriated budget for its general fund. A budgetary comparison
statement has been provided for the general fund to demonstrate compliance with this budget.
Proprietary Funds – Enterprise funds are used to report the same functions presented as business-type activities
in the government-wide financial statements. The Town has two enterprise funds:
Water Enterprise Fund accounts for the water activity of the Town.
Golf Enterprise Fund accounts for the golf activity of the Town.
Fiduciary Funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. Fiduciary funds are not reflected in the government-wide financial statements, as the resources of
those funds are not available to support the Town’s own programs. The accounting used for fiduciary funds is
much like that used for proprietary funds.
Private-purpose trust funds and agency funds are each reported and combined into a single, aggregate presentation
in the fiduciary funds 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 $85,799,495 at the close of fiscal year 2012. 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, and is $66,914,727, or
78% 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.
An additional portion of the net assets totaling $10,255,029 (12 % of total) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net assets totaling
$8,629,739 (10% of total) may be used to meet the government’s ongoing obligations to its citizens and creditors.
The Town increased its total liabilities by $120,562 over fiscal 2011, while total net assets increased by
$1,135,339, or 1.34%. Net assets of governmental activities increased by $499,912, a .71% increase from fiscal
2011. Net assets of business-type activities increased by $636,147 or 4.4% from 2011. There was an increase of
$310,045 in net assets reported in connection with the water business-type activity, and an increase of $326,102 in
net assets in connection with the golf department business-type activity, respectively.
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Increase Increase Increase
FY 2012 FY 2011 (Decrease)FY 2012 FY 2011 (Decrease)FY 2012 FY 2011 (Decrease)
Assets:
Current assets 19,102,302$ 19,748,418$ (646,116)$ 6,249,233$ 4,824,662$ 1,424,571$ 25,351,535$ 24,573,080$ 778,455$
Noncurrent assets (excluding capital)1,803,550 2,402,533 (598,983) 54,371 67,732 (13,361) 1,857,921 2,470,265 (612,344)
Capital assets 63,857,637 62,842,006 1,015,631 20,513,498 20,439,339 74,159 84,371,135 83,281,345 1,089,790
Total assets 84,763,489 84,992,957 (229,468) 26,817,102 25,331,733 1,485,369 111,580,591 110,324,690 1,255,901
Liabilities:
Current liabilities (excluding debt)1,678,163 2,090,087 (411,924) 179,727 203,238 (23,511) 1,857,890 2,293,325 (435,435)
Noncurrent liabilities (excluding debt)3,876,432 3,066,055 810,377 659,845 499,013 160,832 4,536,277 3,565,068 971,209
Current debt 1,450,712 1,513,955 (63,243) 2,665,712 1,060,000 1,605,712 4,116,424 2,573,955 1,542,469
Noncurrent debt 6,919,316 7,983,186 (1,063,870) 8,351,189 9,245,000 (893,811) 15,270,505 17,228,186 (1,957,681)
Total liabilities 13,924,623 14,653,283 (728,660) 11,856,473 11,007,251 849,222 25,781,096 25,660,534 120,562
Net Assets:
Capital assets net of related debt 55,712,504 53,676,233 2,036,271 11,202,223 10,203,426 998,797 66,914,727 63,879,659 3,035,068
Restricted 10,255,029 10,667,384 (412,355) - - - 10,255,029 10,667,384 (412,355)
Unrestricted 4,871,333 5,996,057 (1,124,724) 3,758,406 4,121,056 (362,650) 8,629,739 10,117,113 (1,487,374)
Total net assets 70,838,866$ 70,339,674$ 499,192$ 14,960,629$ 14,324,482$ 636,147$ 85,799,495$ 84,664,156$ 1,135,339$
Revenues
Program Revenues:
Charges for services 1,790,448$ 1,867,382$ (76,934)$ 5,999,874$ 6,029,202$ (29,328)$ 7,790,322$ 7,896,584$ (106,262)$
Operating grants and contributions 3,877,058 3,339,179 537,879 91,837 81,234 10,603 3,968,895 3,420,413 548,482
Capital grants and contributions 673,224 2,633,625 (1,960,401) - - - 673,224 2,633,625 (1,960,401)
General Revenues:
Real Estate and personal property taxes 24,709,086 23,544,463 1,164,623 - - - 24,709,086 23,544,463 1,164,623
Tax Liens 61,887 110,720 (48,833) - - - 61,887 110,720 (48,833)
Motor vehicle and other excise taxes 1,171,768 1,134,493 37,275 - - - 1,171,768 1,134,493 37,275
Hotel/Motel Tax 1,101,275 936,645 164,630 - - - 1,101,275 936,645 164,630
Penalties and interest on taxes 157,821 124,171 33,650 - - - 157,821 124,171 33,650
Payments in Lieu of Taxes 6,845 6,829 16 - - - 6,845 6,829 16
Nonrestricted grants and contributions 1,878,129 1,789,065 89,064 - - - 1,878,129 1,789,065 89,064
Unrestricted investment income 38,472 55,780 (17,308) - - - 38,472 55,780 (17,308)
Other revenues 83,697 49,565 34,132 - - - 83,697 49,565 34,132
Total Revenues 35,549,710 35,591,917 (42,207) 6,091,711 6,110,436 (18,725) 41,641,421 41,702,353 (60,932)
Expenses:
General Government 3,099,361 2,753,158 346,203 - - - 3,099,361 2,753,158 346,203
Public Safety 5,532,435 4,851,059 681,376 - - - 5,532,435 4,851,059 681,376
Education 16,377,385 16,238,810 138,575 - - - 16,377,385 16,238,810 138,575
Public Works 1,908,356 1,936,659 (28,303) - - - 1,908,356 1,936,659 (28,303)
Human Services 549,319 582,580 (33,261) - - - 549,319 582,580 (33,261)
Culture and Recreation 984,809 922,979 61,830 - - - 984,809 922,979 61,830
Employee Benefits 6,232,782 5,917,308 315,474 - - - 6,232,782 5,917,308 315,474
State and County Assessments 541,459 513,684 27,775 - - - 541,459 513,684 27,775
Interest 348,580 366,503 (17,923) - - - 348,580 366,503 (17,923)
Golf - - - 3,105,915 3,120,372 (14,457) 3,105,915 3,120,372 (14,457)
Water - - - 1,831,831 1,787,312 44,519 1,831,831 1,787,312 44,519
Total Expenses 35,574,486 34,082,740 1,491,746 4,937,746 4,907,684 30,062 40,512,232 38,990,424 1,521,808
Increase/(Decrease) in Net Assets before
contributions to permanent endowments and
transfers (24,776) 1,509,177 (1,533,953) 1,153,965 1,202,752 (48,787) 1,129,189 2,711,929 (1,582,740)
Contributions to permanent endowments 6,150 6,450 12,600 - - - 6,150 6,450 12,600
Transfers 517,818 710,893 (193,075) (517,818) (710,893) 193,075 - - -
Change in Net Assets 499,192 2,226,520 (1,714,428) 636,147 491,859 144,288 1,135,339 2,718,379 (1,570,140)
Net Assets - beginning 70,339,674 68,113,154 2,226,520 14,324,482 13,832,623 491,859 84,664,156 81,945,777 2,718,379
Net Assets - ending 70,838,866$ 70,339,674$ 499,192$ 14,960,629$ 14,324,482$ 636,147$ 85,799,495$ 84,664,156$ 1,135,339$
Town of Brewster - Financial Highlights
Total
Governmental Business-type Primary
Activities Activities 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, unassigned fund balance may serve as a useful measure of a government’s net resources available for
spending at the end of the fiscal year.
As of the end of the current fiscal year, governmental funds reported combined ending fund balances of
$15,288,056, a $174,316 increase from the prior year’s ending fund balance.
The general fund is the primary operating fund. At the end of the current fiscal year, unassigned fund balance of
the general fund was $6,555,303, while total fund balance stood at $9,409,962. As a measure of the general
fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund
expenditures. Unassigned fund balance represents 19% of total general fund expenditures, while total fund
balance represents 28% of that same amount.
The stabilization fund has accumulated a fund balance of $3,152,106 which represents 9.29% of general fund
expenditures: $1.1 million of the total fund balance has been committed for compliance with the requirements of
GASB Statement No. 45. These funds can be used for general or capital purposes upon Town Meeting approval.
General Fund Budget Highlights
During the fiscal year the operating budget was amended by $1,593,801 (at two Special Town Meetings) to fund
prior year’s unpaid bills, fire and police department expenses, natural resources expenses, school building capital
improvements, culture and recreation, general government debt expenses and public works expenses. The Town
budgeted $30.1 million in revenues and $35.1 million in expenditures, drawing on transfers and prior year’s
surplus to finance the difference. At year end, $474,649 of unexpended appropriation balances was closed out to
unassigned 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, 2012, amounts to $84,371,135 net of accumulated depreciation. The investment in capital assets
includes land, buildings and improvements, capital improvements (other than buildings), machinery, equipment
and vehicles, infrastructure, and construction in progress.
The governmental activities capital assets (net of accumulated depreciation) were increased by $1,015,631 during
the current fiscal year while the business-type activities capital assets (net of accumulated depreciation) increased
by $74,159. Total depreciation was $2.4 million, resulting in a total government-wide increase to capital assets
(net of accumulated depreciation) of $1,089,790. The following major capital asset acquisitions occurred during
the fiscal year:
• The Town purchased two parcels of Open Space property in Fiscal 2012 with funds from the Community
Preservation Act, obtaining 9.05 acres for open space, watershed protection, conservation and protection
of forest habitat, wildlife, and passive recreation.
• CPA Historic Fund & Budget Reserve Accounts contributed $250,000 towards the Brewster Meeting
House preservation project. The Brewster Meeting House was originally built in 1834. The total project
was approximately $1.6 million.
Increase Increase Increase
FY 2012 FY 2011 (Decrease)FY 2012 FY 2011 (Decrease)FY 2012 FY 2011 (Decrease)
Land 37,877,192$ 37,427,192$ 450,000$ 2,874,212$ 2,874,212$ -$ 40,751,404$ 40,301,404$ 450,000$
Construction in Progress 153,164 1,274,559 (1,121,395) 479,123 2,993,337 (2,514,214) 632,287 4,267,896 (3,635,609)
38,030,356 38,701,751 (671,395) 3,353,335 5,867,549 (2,514,214) 41,383,691 44,569,300 (3,185,609)
Buildings and improvements 14,931,237 15,133,050 (201,813) 4,686,363 1,837,619 2,848,744 19,617,600 16,970,669 2,646,931
Improvements (other than buildings)1,553,469 726,781 826,688 - - - 1,553,469 726,781 826,688
Machinery, Equipment, and Vehicles 4,105,370 3,933,576 171,794 917,071 638,283 278,788 5,022,441 4,571,859 450,582
Infrastructure 5,237,205 4,346,848 890,357 11,556,729 12,095,888 (539,159) 16,793,934 16,442,736 351,198
25,827,281 24,140,255 1,687,026 17,160,163 14,571,790 2,588,373 42,987,444 38,712,045 4,275,399
Total Capital Assets 63,857,637$ 62,842,006$ 1,015,631$ 20,513,498$ 20,439,339$ 74,159$ 84,371,135$ 83,281,345$ 1,089,790$
Activities Activities Government
Capital Assets
(Net of Depreciation)
Total
Governmental Business-type Primary
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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, 2012, totaled $16,526,975. Within this total, business-type activities have debt of
$9,245,000 that is fully supported by their respective program revenues, and governmental activities debt is
$7,281,975. Total debt consists of the following:
Outstanding Outstanding
Governmental Activities June 30, 2012 June 30, 2011
School Construction 1,650,000$ 2,085,000$
Library Construction 200,000 250,000
MWPAT Title V - Septic 118,575 128,100
Police Station 1,350,000 1,520,000
Road Betterments - Millstone Rd 25,000 50,000
Road Betterments - Commons Way Rd 40,000 60,000
Road Betterments - Meetinghouse Rd 50,000 75,000
MWPAT #97-1156 Title V - Septic 93,400 103,800
Land Purchase 555,000 620,000
Road Betterments - Kings Grant Road 120,000 150,000
Road Betterments - Barons Way Road 60,000 75,000
Land Purchase 1,840,000 1,960,000
Road Betterments - Fiddler's Lane 80,000 100,000
Road Betterments - Herringbrook Lane 50,000 65,000
Road Betterments - 2008 140,000 165,000
Punkhorn Land Acquisition 625,000 675,000
Road Betterments - 2010 285,000 324,880
Total Governmental Activities 7,281,975$ 8,406,780$
Outstanding Outstanding
Business-type Activities June 30, 2012 June 30, 2011
Golf Course 5,180,000$ 5,685,000$
Golf Course Irrigation 200,000 300,000
Water offices/garage 1,975,000 2,100,000
Water Mains 1,190,000 1,340,000
Standpipe #2 - 65,000
Standpipe Rehabilitation 140,000 210,000
Slough Road 510,000 550,000
Water Betterments - Fiddler's Lane 50,000 55,000
Total Business-type Activities 9,245,000$ 10,305,000$
Grand Total - All long-term debt 16,526,975$ 18,711,780$
Outstanding Debt at Year End
Please refer to Notes 5 and 9 for further discussion of the major capital asset and debt activity.
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Economic Factors and Next Year’s Budgets & Rate
The Town’s leadership (elected and appointed officials) considered many factors when setting the fiscal 2013
budget and tax rates including the following:
• The Fiscal 2013 tax rate was set at $7.92, a $.48 cent increase over Fiscal 2012. The excess levy capacity was
$136,919.
• The Board of Selectmen voted during their classification hearing to maintain the same tax rate for all classes
of property.
• Fiscal 2013 budgetary issues were Health Care Reform, Pension obligations, and reduction in State Aid for
both the Town and Nauset Regional School District,
• The Town meeting voters did approve a $199,000 Proposition 2 1/2 General Override for Public Safety
Staffing. Two (2) Firefighter/Paramedics, one (1) Police Officer and related benefit costs were included in
the Override sum.
• The Nauset Regional School District received approval from the Massachusetts School Building Authority for
the Replacement of Roof and Windows at the Regional High School. The project is estimated at $6.49
million with the Green Repair Program Grant award of $2.43 million. The Brewster voters approved the
Propositions 2 ½ Debt Exclusion override in October of 2011.
• MSBA reimbursement for a school roof has allowed the Town to set aside over one million dollars towards
GASB45/OPEB funding.
• The Town was awarded $1,362,000 of Stimulus Funds for the Stony Brook Salt Marsh Fish Passage
Restoration Project in FY 2010. The Restoration Project was completed in November of 2011. Two
additional NOAA projects are currently in progress, those being Lower Mill Pond and the culvert at Paines
Creek Beach leading to Freemans Pond.
• The Fire Department was awarded a FEMA/Department of Homeland Security Grant to provide Regionalized
Communications for the Towns of Dennis, Orleans, Brewster, Eastham and Wellfleet. The Grant was for
$348,000 with each community also contributing 10% towards radio purchases and related training seminars.
• Town citizens voted to approve the construction of a fifth (5th) Well for the Town via a Debt authorization for
$3.22 million. Engineering was completed during FY12 and construction started early March 2012.
Request for Information
This financial report is designed to provide a general overview of the Town of Brewster’s finances for all those
with an interest in the government’s finances. Questions concerning any of the information provided in this
report or request for additional financial information should be addressed to the Finance Director, 2198 Main
Street, Brewster, MA 02631.
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
ASSETS
CURRENT:
CASH AND SHORT-TERM INVESTMENTS 15,638,691$ 5,218,036$ 20,856,727$
INVESTMENTS 1,138,688 - 1,138,688
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
REAL ESTATE AND PERSONAL PROPERTY TAXES 396,446 - 396,446
TAX LIENS 370,688 - 370,688
MOTOR VEHICLE EXCISE TAXES 95,405 - 95,405
USER FEES - 1,023,466 1,023,466
DEPARTMENTAL AND OTHER 204,647 - 204,647
INTERGOVERNMENTAL 1,146,621 - 1,146,621
SPECIAL ASSESSMENTS 101,458 6,962 108,420
DEFERRED AMOUNT ON REFUNDING 9,658 769 10,427
NONCURRENT:
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
INTERGOVERNMENTAL 1,089,392 - 1,089,392
SPECIAL ASSESSMENTS 682,106 48,985 731,091
DEFERRED AMOUNT ON REFUNDING 32,052 5,386 37,438
CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 63,857,637 20,513,498 84,371,135
TOTAL ASSETS 84,763,489 26,817,102 111,580,591
LIABILITIES
CURRENT:
ACCOUNTS PAYABLE 1,584,049 64,391 1,648,440
ACCRUED INTEREST 64,114 115,336 179,450
LANDFILL POSTCLOSURE CARE COSTS 30,000 - 30,000
CAPITAL LEASES 162,602 40,747 203,349
BONDS AND NOTES PAYABLE 1,288,110 2,624,965 3,913,075
NONCURRENT:
LANDFILL POSTCLOSURE CARE COSTS 463,500 - 463,500
POSTEMPLOYMENT BENEFITS 3,412,932 659,845 4,072,777
CAPITAL LEASES 742,266 131,189 873,455
BONDS AND NOTES PAYABLE 6,177,050 8,220,000 14,397,050
TOTAL LIABILITIES 13,924,623 11,856,473 25,781,096
NET ASSETS
INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 55,712,504 11,202,223 66,914,727
RESTRICTED FOR:
STREETS 534,492 - 534,492
PERMANENT FUNDS:
EXPENDABLE 116,706 - 116,706
NONEXPENDABLE 132,438 - 132,438
OTHER PURPOSES 9,471,393 - 9,471,393
UNRESTRICTED 4,871,333 3,758,406 8,629,739
TOTAL NET ASSETS 70,838,866$ 14,960,629$ 85,799,495$
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF NET ASSETS
JUNE 30, 2012
PRIMARY GOVERNMENT
See accompanying notes to the basic financial statements
- 11 -
OPERATING CAPITAL
CHARGES FOR GRANTS AND GRANTS AND NET (EXPENSE)
FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS REVENUE
PRIMARY GOVERNMENT:
GOVERNMENTAL ACTIVITIES:
GENERAL GOVERNMENT 3,099,361$ 269,032$ 188,151$ 736$ (2,641,442)$
PUBLIC SAFETY 5,532,435 387,903 1,347,916 45,295 (3,751,321)
EDUCATION 16,377,385 99,076 1,030,117 - (15,248,192)
PUBLIC WORKS 1,908,356 585,295 8,079 615,614 (699,368)
HUMAN SERVICES 549,319 76,049 79,647 11,579 (382,044)
CULTURE & RECREATION 984,809 373,093 204,483 - (407,233)
EMPLOYEE BENEFITS 6,232,782 - 1,018,665 - (5,214,117)
STATE & COUNTY ASSESSMENTS 541,459 - - - (541,459)
INTEREST 348,580 - - - (348,580)
TOTAL GOVERNMENTAL ACTIVITIES 35,574,486 1,790,448 3,877,058 673,224 (29,233,756)
BUSINESS-TYPE ACTIVITIES:
GOLF 3,105,915 3,574,516 7,695 - 476,296
WATER 1,831,831 2,425,358 84,142 - 677,669
TOTAL BUSINESS-TYPE ACTIVITIES 4,937,746 5,999,874 91,837 - 1,153,965
TOTAL PRIMARY GOVERNMENT 40,512,232$ 7,790,322$ 3,968,895$ 673,224$ (28,079,791)$
(continued)
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2012
PROGRAM REVENUES
See accompanying notes to the basic financial statements
- 12 -
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
CHANGES IN NET ASSETS:
NET (EXPENSE) REVENUE FROM PREVIOUS PAGE (29,233,756)$ 1,153,965$ (28,079,791)$
GENERAL REVENUES:
REAL ESTATE AND PERSONAL PROPERTY TAXES,
NET OF TAX REFUNDS PAYABLE 24,709,086 - 24,709,086
TAX LIENS 61,887 - 61,887
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,171,768 - 1,171,768
HOTEL/MOTEL TAX 1,101,275 - 1,101,275
PENALTIES AND INTEREST ON TAXES 157,821 - 157,821
PAYMENTS IN LIEU OF TAXES 6,845 - 6,845
GRANTS AND CONTRIBUTIONS NOT RESTRICTED
TO SPECIFIC PROGRAMS 1,878,129 - 1,878,129
UNRESTRICTED INVESTMENT INCOME 38,472 - 38,472
CONTRIBUTIONS TO PERMANENT FUNDS 6,150 - 6,150
MISCELLANEOUS 83,697 - 83,697
TRANSFERS, NET 517,818 (517,818) -
TOTAL GENERAL REVENUES AND TRANSFERS 29,732,948 (517,818) 29,215,130
CHANGE IN NET ASSETS 499,192 636,147 1,135,339
NET ASSETS:
BEGINNING OF YEAR 70,339,674 14,324,482 84,664,156
END OF YEAR 70,838,866$ 14,960,629$ 85,799,495$
(concluded)
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2012
PRIMARY GOVERNMENT
See accompanying notes to the basic financial statements
- 13 -
TOWN OF BREWSTER, MASSACHUSETTS
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2012
NONMAJOR TOTAL
COMMUNITY GOVERNMENTAL GOVERNMENTAL
ASSETS GENERAL PRESERVATION FUNDS FUNDS
CASH AND SHORT-TERM INVESTMENTS 9,588,023$ 3,237,173$ 2,813,495$ 15,638,691$
INVESTMENTS 1,138,688 - - 1,138,688
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
REAL ESTATE AND PERSONAL PROPERTY TAXES 396,446 - - 396,446
TAX LIENS 370,688 - - 370,688
MOTOR VEHICLE EXCISE TAXES 95,405 - - 95,405
DEPARTMENTAL AND OTHER 428 18,385 185,834 204,647
INTERGOVERNMENTAL 1,634,088 - 601,925 2,236,013
SPECIAL ASSESSMENTS - - 783,564 783,564
TOTAL ASSETS 13,223,766$ 3,255,558$ 4,384,818$ 20,864,142$
LIABILITIES AND FUND BALANCES
LIABILITIES:
ACCOUNTS PAYABLE 1,527,227$ 12,161$ 44,661$ 1,584,049$
DEFERRED REVENUES 2,286,577 18,385 1,503,890 3,808,852
NOTES PAYABLE - - 183,185 183,185
TOTAL LIABILITIES 3,813,804 30,546 1,731,736 5,576,086
FUND BALANCES:
NONSPENDABLE - - 132,438 132,438
RESTRICTED - 3,225,012 2,621,583 5,846,595
COMMITTED 1,826,605 - - 1,826,605
ASSIGNED 1,028,054 - - 1,028,054
UNASSIGNED 6,555,303 - (100,939) 6,454,364
TOTAL FUND BALANCES 9,409,962 3,225,012 2,653,082 15,288,056
TOTAL LIABILITIES AND FUND BALANCES 13,223,766$ 3,255,558$ 4,384,818$ 20,864,142$
See accompanying notes to the basic financial statements
- 14 -
NONMAJOR TOTAL
COMMUNITY GOVERNMENTAL GOVERNMENTAL
GENERAL PRESERVATION FUNDS FUNDS
REVENUES:
REAL ESTATE AND PERSONAL PROPERTY TAXES,
NET OF TAX REFUNDS 24,857,982$ -$ -$ 24,857,982$
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,158,083 - - 1,158,083
INTERGOVERNMENTAL 3,340,478 278,425 1,426,079 5,044,982
PAYMENTS IN LIEU OF TAXES 6,845 - - 6,845
PENALTIES & INTEREST ON TAXES 131,767 - - 131,767
FINES & FORFEITS 28,175 - - 28,175
CHARGES FOR SERVICES 613,184 - 1,304,607 1,917,791
HOTEL/MOTEL TAX 948,120 - - 948,120
INVESTMENT INCOME 37,635 8,359 1,570 47,564
CONTRIBUTIONS AND DONATIONS - - 128,841 128,841
DEPARTMENTAL AND OTHER 1,178,665 737,180 282,968 2,198,813
TOTAL REVENUES 32,300,934 1,023,964 3,144,065 36,468,963
EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT 2,645,663 842,759 47,902 3,536,324
PUBLIC SAFETY 5,067,362 - 398,034 5,465,396
EDUCATION 15,804,330 - 245,136 16,049,466
PUBLIC WORKS 1,780,861 - 979,462 2,760,323
HUMAN SERVICES 520,757 - 53,910 574,667
CULTURE & RECREATION 732,448 - 275,665 1,008,113
EMPLOYEE BENEFITS 5,394,546 - 6,359 5,400,905
STATE & COUNTY ASSESSMENTS 541,459 - - 541,459
DEBT SERVICE
PRINCIPAL 1,124,805 - - 1,124,805
INTEREST 344,093 1,789 5,125 351,007
TOTAL EXPENDITURES 33,956,324 844,548 2,011,593 36,812,465
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (1,655,390) 179,416 1,132,472 (343,502)
OTHER FINANCING SOURCES (USES)
OPERATING TRANSFERS IN 2,716,444 - 55,414 2,771,858
OPERATING TRANSFERS OUT (55,414) (371,391) (1,827,235) (2,254,040)
TOTAL OTHER FINANCING SOURCES (USES)2,661,030 (371,391) (1,771,821) 517,818
NET CHANGE IN FUND BALANCES 1,005,640 (191,975) (639,349) 174,316
FUND BALANCES AT BEGINNING OF YEAR 8,404,322 3,416,987 3,292,431 15,113,740
FUND BALANCES AT END OF YEAR 9,409,962$ 3,225,012$ 2,653,082$ 15,288,056$
TOWN OF BREWSTER, MASSACHUSETTS
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FISCAL YEAR ENDED JUNE 30, 2012
See accompanying notes to the basic financial statements
- 15 -
TOTAL GOVERNMENTAL FUND BALANCES 15,288,056$
CAPITAL ASSETS (NET) USED IN GOVERNMENTAL ACTIVITIES ARE NOT FINANCIAL RESOURCES
AND, THEREFORE, ARE NOT REPORTED IN THE FUNDS 63,857,637
ACCOUNTS RECEIVABLE ARE NOT AVAILABLE TO PAY FOR CURRENT-PERIOD
EXPENDITURES AND, THEREFORE, ARE DEFERRED IN THE FUNDS 3,808,852
IN THE STATEMENT OF ACTIVITIES, INTEREST IS ACCRUED ON OUTSTANDING LONG-TERM DEBT,
WHEREAS IN GOVERNMENTAL FUNDS INTEREST IS NOT REPORTED UNTIL DUE (64,114)
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 (7,281,975)
CAPITAL LEASES (904,868)
DEFERRED AMOUNT ON REFUNDING 41,710
POSTEMPLOYMENT BENEFITS (3,412,932)
LANDFILL POSTCLOSURE CARE COSTS (493,500)
NET EFFECT OF REPORTING LONG-TERM LIABILITIES (12,051,565)
NET ASSETS OF GOVERNMENTAL ACTIVITIES 70,838,866$
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, 2012
See accompanying notes to the basic financial statements
- 16 -
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 174,316$
GOVERNMENTAL FUNDS REPORT CAPITAL OUTLAYS AS EXPENDITURES. HOWEVER, IN THE
STATEMENT OF ACTIVITIES THE COST OF THOSE ASSETS IS ALLOCATED OVER THEIR
ESTIMATED USEFUL LIVES AND REPORTED AS DEPRECIATION EXPENSE.
CAPITAL OUTLAY 2,628,660
DEPRECIATION EXPENSE (1,613,029)
NET EFFECT OF REPORTING CAPITAL ASSETS 1,015,631
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 (913,103)
THE ISSUANCE OF LONG-TERM DEBT (E.G., BONDS) PROVIDES CURRENT FINANCIAL
RESOURCES TO GOVERNMENTAL FUNDS, WHILE THE REPAYMENT OF THE PRINCIPAL OF LONG-
TERM DEBT CONSUMES THE FINANCIAL RESOURCES OF GOVERNMENTAL FUNDS. NEITHER
TRANSACTION, HOWEVER, HAS ANY EFFECT ON NET ASSETS. ALSO, GOVERNMENTAL FUNDS
REPORT THE EFFECT OF ISSUANCE COSTS, PREMIUMS, DISCOUNTS, AND SIMILAR ITEMS WHEN
DEBT IS FIRST ISSUED, WHEREAS THESE AMOUNTS ARE DEFERRED AND AMORTIZED IN THE
STATEMENT OF ACTIVITIES.
DEBT SERVICE PRINCIPAL PAYMENTS 1,124,805
DEFERRED AMOUNT ON REFUNDING (9,658)
NET EFFECT OF REPORTING LONG-TEM DEBT 1,115,147
SOME EXPENSES REPORTED IN THE STATEMENT OF ACTIVITIES DO NOT REQUIRE THE USE OF
CURRENT FINANCIAL RESOURCES AND, THEREFORE, ARE NOT REPORTED AS EXPENDITURES
IN THE GOVERNMENTAL FUNDS.
NET CHANGE IN POSTEMPLOYMENT BENEFITS (831,877)
NET CHANGE IN CAPITAL LEASE S (94,507)
NET CHANGE IN LANDFILL POSTCLOSURE CARE ACCRUAL 21,500
NET CHANGE IN ACCRUED INTEREST ON LONG-TERM DEBT 12,085
NET EFFECT OF RECORDING LONG-TERM LIABILITIES (892,799)
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES 499,192$
TOWN OF BREWSTER, MASSACHUSETTS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2012
See accompanying notes to the basic financial statements
- 17 -
ACTUAL
ORIGINAL FINAL BUDGETARY VARIANCE
BUDGET BUDGET AMOUNTS OVER(UNDER)
REVENUES:
REAL ESTATE AND PERSONAL PROPERTY TAXES,
NET OF TAX REFUNDS 24,518,875$ 24,518,875$ 24,857,982$ 339,107$
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,055,000 1,055,000 1,158,083 103,083
INTERGOVERNMENTAL 2,292,189 2,292,189 2,310,234 18,045
PAYMENTS IN LIEU OF TAXES 6,800 6,800 6,845 45
PENALTIES & INTEREST ON TAXES 82,000 82,000 131,767 49,767
FINES & FORFEITS 18,000 18,000 28,175 10,175
HOTEL/MOTEL TAX 905,000 905,000 948,120 43,120
INVESTMENT INCOME 34,000 34,000 24,957 (9,043)
DEPARTMENTAL AND OTHER 1,276,000 1,276,000 1,791,849 515,849
TOTAL REVENUES 30,187,864 30,187,864 31,258,012 1,070,148
EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT 3,083,656 3,253,904 3,104,945 148,959
PUBLIC SAFETY 5,008,496 5,587,050 5,490,047 97,003
EDUCATION 16,105,754 16,316,195 16,257,509 58,686
PUBLIC WORKS 1,755,668 2,109,122 2,007,868 101,254
HUMAN SERVICES 522,962 546,262 539,974 6,288
CULTURE & RECREATION 761,816 911,482 904,240 7,242
EMPLOYEE BENEFITS 4,420,896 4,420,896 4,375,518 45,378
STATE & COUNTY ASSESSMENTS 536,952 536,952 541,459 (4,507)
DEBT SERVICE
PRINCIPAL 1,049,925 1,124,805 1,124,805 -
INTEREST 299,262 332,520 332,514 6
TOTAL EXPENDITURES 33,545,387 35,139,188 34,678,879 460,309
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (3,357,523) (4,951,324) (3,420,867) 1,530,457
OTHER FINANCING SOURCES (USES):
OPERATING TRANSFERS IN 1,480,267 2,079,243 2,716,444 637,201
OPERATING TRANSFERS OUT (30,000) (30,000) (55,414) (25,414)
TOTAL OTHER FINANCING SOURCES (USES)1,450,267 2,049,243 2,661,030 611,787
NET CHANGE IN FUND BALANCE (1,907,256) (2,902,081) (759,837) 2,142,244
BUDGETARY FUND BALANCE, BEGINNING OF YEAR 5,016,870 5,016,870 5,016,870 -
BUDGETARY FUND BALANCE, END OF YEAR 3,109,614$ 2,114,789$ 4,257,033$ 2,142,244$
See accompanying notes to the basic financial statements
TOWN OF BREWSTER, MASSACHUSETTS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FISCAL YEAR ENDED JUNE 30, 2012
BUDGETED AMOUNTS
- 18 -
ASSETS GOLF WATER TOTAL
CURRENT:
CASH AND SHORT-TERM INVESTMENTS 1,050,273$ 4,167,763$ 5,218,036$
USER FEES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:- 1,023,466 1,023,466
SPECIAL ASSESSMENTS - 6,962 6,962
DEFERRED AMOUNT ON REFUNDING - 769 769
TOTAL CURRENT ASSETS 1,050,273 5,198,960 6,249,233
NONCURRENT:
SPECIAL ASSESSMENTS - 48,985 48,985
DEFERRED AMOUNT ON REFUNDING - 5,386 5,386
CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 9,952,726 10,560,772 20,513,498
TOTAL NONCURRENT ASSETS 9,952,726 10,615,143 20,567,869
TOTAL ASSETS 11,002,999 15,814,103 26,817,102
LIABILITIES
CURRENT:
ACCOUNTS PAYABLE - 64,391 64,391
ACCRUED INTEREST 83,817 31,519 115,336
CAPITAL LEASES PAYABLE 40,747 - 40,747
BONDS AND NOTES PAYABLE 635,000 1,989,965 2,624,965
TOTAL CURRENT LIABILITIES 759,564 2,085,875 2,845,439
NONCURRENT:
POSTEMPLOYMENT BENEFITS 456,589 203,256 659,845
CAPITAL LEASES PAYABLE 131,189 - 131,189
BONDS AND NOTES PAYABLE 4,745,000 3,475,000 8,220,000
TOTAL NONCURRENT LIABILITIES 5,332,778 3,678,256 9,011,034
TOTAL LIABILITIES 6,092,342 5,764,131 11,856,473
NET ASSETS
INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 4,572,726 6,629,497 11,202,223
UNRESTRICTED 337,931 3,420,475 3,758,406
TOTAL NET ASSETS 4,910,657$ 10,049,972$ 14,960,629$
See accompanying notes to the basic financial statements
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF NET ASSETS
JUNE 30, 2012
BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS
- 19 -
GOLF WATER TOTAL
OPERATING REVENUES:
CHARGES FOR SERVICES 3,574,516$ 2,425,358$ 5,999,874$
DEPARTMENTAL AND OTHER 7,695 84,142 91,837
TOTAL OPERATING REVENUES 3,582,211 2,509,500 6,091,711
OPERATING EXPENSES:
GENERAL SERVICES 2,428,663 1,298,394 3,727,057
DEPRECIATION 408,385 354,197 762,582
TOTAL OPERATING EXPENSES 2,837,048 1,652,591 4,489,639
OPERATING INCOME (LOSS)745,163 856,909 1,602,072
NON-OPERATING REVENUES (EXPENSES):
INTEREST EXPENSE (268,867) (179,240) (448,107)
INCOME (LOSS) BEFORE OPERATING TRANSFERS 476,296 677,669 1,153,965
OPERATING TRANSFERS:
OPERATING TRANSFERS OUT (150,194) (367,624) (517,818)
TOTAL OPERATING TRANSFERS (150,194) (367,624) (517,818)
CHANGE IN NET ASSETS 326,102 310,045 636,147
NET ASSETS AT BEGINNING OF YEAR 4,584,555 9,739,927 14,324,482
NET ASSETS AT END OF YEAR 4,910,657$ 10,049,972$ 14,960,629$
See accompanying notes to the basic financial statements
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
FISCAL YEAR ENDED JUNE 30, 2012
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS
- 20 -
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FISCAL YEAR ENDED JUNE 30, 2012
GOLF WATER TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES:
RECEIPTS FROM CUSTOMERS AND USERS 3,582,211$ 2,474,723$ 6,056,934$
PAYMENTS TO SUPPLIERS (1,150,468) (604,876) (1,755,344)
PAYMENTS TO EMPLOYEES (1,166,905) (652,341) (1,819,246)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,264,838 1,217,506 2,482,344
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
OPERATING TRANSFERS OUT (150,194) (367,624) (517,818)
NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES (150,194) (367,624) (517,818)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
PROCEEDS FROM THE ISSUANCE OF BONDS AND NOTES - 1,599,965 1,599,965
PRINCIPAL PAYMENTS ON BONDS AND NOTES (605,000) (455,000) (1,060,000)
PRINCIPAL PAYMENTS ON CAPITAL LEASES (46,410) - (46,410)
ACQUISITION AND CONSTRUCTION OF CAPITAL ASSETS - (618,395) (618,395)
INTEREST EXPENSE (278,450) (184,035) (462,485)
NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES (929,860) 342,535 (587,325)
NET INCREASE (DECREASE) IN CASH AND SHORT TERM INVESTMENTS 184,784 1,192,417 1,377,201
CASH AND SHORT TERM INVESTMENTS - BEGINNING OF YEAR 865,489 2,975,346 3,840,835
CASH AND SHORT TERM INVESTMENTS- END OF YEAR 1,050,273$ 4,167,763$ 5,218,036$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
OPERATING INCOME (LOSS)745,163$ 856,909$ 1,602,072$
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
DEPRECIATION 408,385 354,197 762,582
(INCREASE) DECREASE IN ACCOUNTS RECEIVABLE - (34,778) (34,778)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE - (8,364) (8,364)
INCREASE (DECREASE) IN POSTEMPLOYMENT BENEFITS 111,290 49,542 160,832
TOTAL ADJUSTMENTS 519,675 360,597 880,272
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,264,838$ 1,217,506$ 2,482,344$
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS
See accompanying notes to the basic financial statements
- 21 -
TOWN OF BREWSTER, MASSACHUSETTS
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET ASSETS
JUNE 30, 2012
PRIVATE
PURPOSE AGENCY
TRUST FUNDS FUNDS
ASSETS
CASH AND SHORT-TERM INVESTMENTS 62,938$ 198,887$
LIABILITIES
ACCOUNTS PAYABLE - 7,637
OTHER LIABILITIES - 191,250
TOTAL LIABILITIES - 198,887
NET ASSETS
HELD IN TRUST FOR OTHER PURPOSES 62,938$ -$
See accompanying notes to the basic financial statements
- 22 -
PRIVATE
PURPOSE
TRUST FUNDS
ADDITIONS:
INVESTMENT INCOME:78$
DEDUCTIONS:
EDUCATIONAL SCHOLARSHIPS 1,000
CHANGE IN NET ASSETS (922)
NET ASSETS AT BEGINNING OF YEAR 63,860
NET ASSETS AT END OF YEAR 62,938$
TOWN OF BREWSTER, MASSACHUSETTS
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FISCAL YEAR ENDED JUNE 30, 2012
See accompanying notes to the basic financial statements
- 23 -
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 24 -
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying basic financial statements of the Town of Brewster, Massachusetts (the Town) have
been prepared in accordance with accounting principles generally accepted in the United States of
America (GAAP). The Governmental Accounting Standards Board (GASB) is the recognized standard-
setting body for establishing governmental accounting and financial reporting principles. The following is
a summary of the more significant Town accounting policies:
A. Reporting Entity
Primary Government
The Town is a municipal corporation that is governed by an elected five member 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 equity interest of approximately 48.21% in the joint
venture.
Name Purpose Address
Annual
Assessment
Nauset Regional To provide education services 78 Eldredge Parkway $ 8,648,613
School District Orleans, MA 02653
Cape Cod Regional
Technical High
School
To provide vocational education 351 Pleasant Lake Ave
Harwich, MA 02645
$ 694,838
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 25 -
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, 2012
- 26 -
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
Government-Wide Financial Statements
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses
are recorded when the liabilities are incurred. Real estate and personal property taxes are recognized as
revenues in the fiscal year for which they are levied. Grants and similar items are recognized as revenue
as soon as all eligibility requirements imposed by the provider have been met.
The statement of activities demonstrates the degree to which the direct expenses of a particular function
or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include the following:
a. Charges to customers or applicants who purchase, use, or directly benefit from goods, services,
or privileges provided by a given function or segment.
b. Grants and contributions that are restricted to meeting the operational requirements of a
particular function or segment.
c. Grants and contributions that are restricted to meeting the capital requirements of a particular
function or segment.
Taxes and other items not identifiable as program revenues are reported as general revenues.
For the most part, the effect of interfund activity has been removed from the government-wide financial
statements. Exceptions are charges between the general fund and the various enterprise funds. Elimination
of these charges would distort the direct costs and program revenues reported for the functions affected.
Fund Financial Statements
Governmental Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting,
revenues are recognized when susceptible to accrual (i.e., when they become both measurable and
available). Measurable means the amount of the transaction can be determined and available means
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
Expenditures are recorded when the related fund liability is incurred, except for interest on general long-
term debt which is recognized when due, and the noncurrent portion of landfill post closure care costs,
capital leases, and other post-employment benefits (OPEB) which are recognized when the obligations are
expected to be liquidated with current expendable available resources.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 27 -
In applying the susceptible to accrual concept to intergovernmental revenues, there are essentially two
types of revenues. In one, moneys must be expended on the specific purpose or project before any
amounts will be paid to the Town; therefore, revenues are recognized based upon the expenditures
incurred. In the other, moneys are virtually unrestricted and are usually revocable only for failure to
comply with prescribed compliance requirements. These resources are reflected as revenues at the time of
receipt or earlier if the susceptible to accrual criteria are met.
The Town considers property taxes as available if they are due and collected within 60 days after fiscal
year-end. Licenses and permits, user charges, fines and forfeitures, and miscellaneous revenues are
recorded as revenues when received. Investment earnings are recorded as earned.
The Town reports the following major governmental funds:
The General fund is the primary operating fund of the Town. It is used to account for all financial
resources, except those that are required to be accounted for in another fund.
The Community Preservation fund is a special revenue fund used to account for the accumulation
of resources to purchase open space, assist in development of affordable housing, and
preservation of historic property.
The Nonmajor Governmental funds consist of other special revenue, capital projects and
permanent funds that are aggregated and presented in the nonmajor governmental funds column
on the governmental funds financial statements. The following describes the general use of these
fund types:
• The Special Revenue fund is used to account for the proceeds of specific revenue sources
(other than permanent funds or capital projects funds) that are restricted by law or
administrative action to expenditures for specified purposes.
• The Capital Projects fund is used to account for financial resources to be used for the
acquisition or construction of major capital facilities (other than those financed by enterprise
and trust funds).
• The Permanent fund is used to account for financial resources that are legally restricted to the
extent that only earnings, not principal, may be used for purposes that support the
governmental programs.
Proprietary Fund Financial Statements
Proprietary fund financial statements are reported using the flow of economic resources measurement
focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and
expenses are recorded when the liabilities are incurred.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 28 -
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with the proprietary funds principal ongoing operations. All revenues and expenses not
meeting this definition are reported as nonoperating revenues and expenses.
The following major proprietary funds are reported:
The Water Enterprise fund is used to account for water activities.
The Golf Enterprise fund is used to account for golf activities.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements are reported using the flow of economic resources measurement focus
and use the accrual basis of accounting. Fiduciary funds are used to account for assets held by the Town
in a trustee capacity for others that cannot be used to support the governmental programs.
The following fiduciary fund types are reported:
The Private-Purpose Trust fund is used to account for trust arrangements, other than those
properly reported in the permanent fund (nonmajor governmental funds), under which principal
and investment income exclusively benefit individuals, private organizations, or other
governments.
The Agency fund is used to account for assets held in a purely custodial capacity.
Government-Wide and Fund Financial Statements
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally
are followed in the government-wide, proprietary fund, and fiduciary funds financial statements to the
extent that those standards do not conflict with or contradict guidance of the Governmental Accounting
Standards Board. Governments also have the option of following subsequent private-sector guidance for
their business-type activities and enterprise funds, subject to this same limitation. The Town has elected
not to follow subsequent private-sector guidance.
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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 29 -
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.
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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 30 -
Special Assessments
Governmental activities special assessments consist primarily of Road Betterments, and Title V
receivables which are recorded as receivables in the fiscal year accrued. Since the receivables are secured
via the lien process, these assets are considered 100% collectable and therefore do not report an allowance
for uncollectibles.
Departmental and Other
Departmental and other receivables consist primarily of ambulance receivables and are recorded as
receivables in the fiscal year accrued. The allowance for uncollectibles for the ambulance receivables is
estimated based on historical trends and specific account analysis.
Intergovernmental
Various federal and state grants for operating and capital purposes are applied for and received annually.
For non-expenditure driven grants, receivables are recognized as soon as all eligibility requirements
imposed by the provider have been met. For expenditure driven grants, receivables are recognized when
the qualifying expenditures are incurred and all other grant requirements are met.
These receivables are considered 100% collectible and therefore do not report an allowance for
uncollectibles.
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) and
construction in progress, 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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 31 -
Capital assets (excluding land and construction in progress) are depreciated on a straight-line basis. The
estimated useful lives of capital assets are as follows:
The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend
asset lives are not capitalized and are treated as expenses when incurred. Improvements are capitalized.
Governmental Fund Financial Statements
Capital asset costs are recorded as expenditures in the fiscal year of purchase for the various funds.
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.
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, 2012
- 32 -
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.
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 of Massachusetts 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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 33 -
• 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)
The Town uses the following criteria for fund balance classification:
• For nonspendable fund balance: includes amounts that cannot be spent because they are either
(1) not in spendable form or (2) legally or contractually required to be maintained intact.
• For restricted fund balance: when constraints placed on the use of the resources are either (1)
externally imposed by creditors, grantors, contributors, or laws or regulations of other
governments; or (2) imposed by law trough constitutional provisions or enabling legislation.
• For committed fund balance: (1) the government’s highest level of decision-making authority and
(2) the formal action that is required to be taken to establish (and modify or rescind) a fund
balance commitment.
• For assigned fund balance: (1) the body or official authorized to assign amounts to a specific
purpose and (2) the policy established by the governing body pursuant to which the authorization
is given.
• For unassigned fund balance: is the residual classification for the general fund. In other
governmental funds, if expenditures incurred for specific purposes exceeded the amounts
restricted, committed, or assigned to those purposes, it may be necessary to report a negative
unassigned fund balance.
The Town uses the following criteria for fund balance policies and procedures:
• When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balance is available, the unrestricted amount will be considered to have been spent.
• When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund
balance is available, the least restricted amount will be considered to have been spent.
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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 34 -
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.
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.
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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 35 -
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.
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 2012 approved budget authorized
$32,353,451 in current year appropriations and other amounts to be raised and $1,191,936 in carryover
articles carried over from previous fiscal years. Supplemental appropriations of $1,593,801 were
approved at two Special Town Meetings for fiscal year 2012.
The Finance Director has the responsibility to ensure that budgetary controls are maintained and
monitored through the accounting system.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 36 -
B. Budgetary – GAAP Reconciliation
For budgetary financial reporting purposes, the Uniform Municipal Accounting System basis of
accounting (established by the Commonwealth) is followed, which differs from the GAAP basis of
accounting. A reconciliation of budgetary-basis to GAAP-basis results for the general fund for the fiscal
year ended June 30, 2012, is presented below:
C. Deficit Fund Balances
Individual fund deficits exist within the special revenue, capital project fund, and water enterprise funds.
These individual deficits will be eliminated through subsequent fiscal year budget transfers, grants, and/or
proceeds from long-term debt during fiscal year 2013.
Net change in fund balance - budgetary basis (759,837)$
Basis of accounting differences:
Increase in revenue for on-behalf payments - MTRS 1,018,665
Increase in expenditures for on-behalf payments - MTRS (1,018,665)
Increase in revenue for the MWPAT subsidy 11,579
Increase in expenditures for the MWPAT subsidy (11,579)
Net Stabilization fund activity 12,678
Adjustment for current year articles 1,701,986
Adjustment for current year encumbrances 159,878
Adjustment for expenditures from prior year encumbrances (109,065)
Net change in fund balance - GAAP basis 1,005,640$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 37 -
NOTE 3 – DEPOSITS AND INVESTMENTS
State and local statutes place certain limitations on the nature of deposits and investments available to the
Town. Deposits (including demand deposits, term deposits and certificates of deposit) in any one financial
institution may not exceed certain levels unless collateralized by the financial institutions involved.
Deposits
Custodial Credit Risk - Deposits
Custodial credit risk is the risk that in the event of bank failure, the Town’s deposits may not be
returned. Massachusetts General Law Chapter 44, Section 55, limits the deposits “in a bank or
trust company, or banking company to an amount not exceeding sixty percent (60%) of the
capital and surplus of such bank or trust company or banking company, unless satisfactory
security is given to it by such bank or trust company or banking company for such excess.”
The Town does not have a formal deposit policy for custodial credit risk.
The Town carries deposits that are fully insured by the Federal Deposit Insurance Corporation
(FDIC), and the Depositor’s Insurance Fund (DIF). The Town also carries deposits that are
uninsured, uncollateralized, or collateral held by the pledging bank’s trust department not in the
Town’s name.
The following table illustrates how much of the Town’s bank deposits are insured or
collateralized, and how much of the Town’s bank deposits are uninsured, uncollateralized, or
collateral held by the pledging bank’s trust department not in the Town’s name as of June 30,
2012:
TOTAL BANK BALANCES 20,922,098$
BANK BALANCES COVERED BY DEPOSIT INSURANCE
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)1,354,520
DEPOSITOR'S INSURANCE FUND (DIF)15,266,985
TOTAL BANK BALANCES COVERED BY DEPOSIT INSURANCE 16,621,505
BALANCES SUBJECT TO CUSTODIAL CREDIT RISK
BANK BALANCES COLLATERALIZED WITH SECURITIES HELD
BY THE PLEDGING FINANCIAL INSTITUTION'S TRUST
DEPARTMENT OR AGENT BUT NOT IN THE TOWN'S NAME 2,233,558
BANK BALANCES UNINSURED AND UNCOLLATERALIZED 2,067,035
TOTAL BANK BALANCES SUBJECT TO CUSTODIAL CREDIT RISK 4,300,593
TOTAL BANK BALANCES 20,922,098$
On October 3, 2008, FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor
through December 31, 2013.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 38 -
Investments
Investments can also be made in securities issued by or unconditionally guaranteed by the U.S.
government or agencies that have a maturity of less than one year from the date of purchase, repurchase
agreement guaranteed by the U.S. government or agencies that have a maturity of less than one year from
the date of purchase, repurchase agreements guaranteed by such securities with maturity dates of no more
than 90 days from the date of purchase, and units in the Massachusetts Municipal Depository Trust
(MMDT). The Treasurer of the Commonwealth of Massachusetts oversees the financial management of
the MMDT, a local investment pool for cities, towns, and other state and local agencies within the
Commonwealth. The Town’s fair value of its investment in MMDT represents their value of the pool’s
shares. The Town’s Trust Funds have expanded investment powers including the ability to invest in
equity securities, corporate bonds, annuities and other specified investments.
The composition of the Town’s bank recorded deposits and investments fluctuates depending primarily
on the timing of property tax receipts, proceeds from borrowings, collections of state and federal aid, and
capital outlays throughout the year.
• Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. For short-term investments that were purchased using surplus revenues,
Massachusetts General Law Chapter 44, Section 55, limits the Town’s investments to the top
rating issued by at least one nationally recognized statistical rating organization (NRSROs).
Presented below is the actual rating as of year end for each investment type of the Town.
Investment type Fair value
Minimum
Legal
Rating Unrated
Certificate of Deposit 1,138,688$ N/A 1,138,688$
Rating as of
Year End
• Custodial Credit Risk
For an investment, this is the risk that, in the event of a failure by the counterparty, the Town will
not be able to recover the value of its investments or collateral security that are in possession of
an outside party. The Town has no custodial credit risk exposure because the certificate of deposit
is fully insured by the FDIC and or the DIF. The Town does not have an investment policy for
custodial credit risk.
• Interest Rate Risk
Interest rate risk is the risk of changes in market interest rates which will adversely affect the fair
value of an investment. Generally, the longer the maturity of an investment, the greater the risk of
its fair value to change with the market interest rates. The Town does not have a formal
investment policy that limits investment maturities as a means of managing its exposure to fair
value losses arising from increasing interest rates.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 39 -
Information about the sensitivity of the fair values of the Town’s investments to market interest
rate fluctuations is as follows:
Investment
maturities
(in years)
Investment type Fair value 1-5
Other Investments:
Certificate of Deposit 1,138,688$ 1,138,688$
• Concentration of Credit Risk
The Town places no limit on the amount the government may invest in any one issuer. More than
5% of the Town’s investments are in the following securities:
Issuer
Percentage of
Total
Investments
Certificate of Deposit - Cape Cod 5 Cent Savings Bank 100.00%
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 40 -
NOTE 4 – RECEIVABLES
The receivables at June 30, 2012 for the Town’s individual major and nonmajor governmental funds, in
the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
The receivables at June 30, 2012, for the enterprise funds consist of the following:
Allowance
Gross for Net
Receivables:Amount Uncollectibles Amount
Real estate and personal property taxes 399,746$ (3,300)$ 396,446$
Tax liens 370,688 - 370,688
Motor vehicle and other excise taxes 147,364 (51,959) 95,405
Departmental and other 441,712 (237,065) 204,647
Intergovernmental 2,236,013 - 2,236,013
Special assessments 783,564 - 783,564
Total 4,379,087$ (292,324)$ 4,086,763$
Allowance
Gross for Net
Receivables:Amount Uncollectibles Amount
Water
User fees 1,023,466$ -$ 1,023,466$
Special Assessments 55,947 - 55,947
Total 1,079,413$ -$ 1,079,413$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 41 -
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 Community Governmental
Receivable Type:Fund Preservation Funds Total
Property Taxes 185,968$ -$ -$ 185,968$
Tax Liens 370,688 - - 370,688
Motor vehicle & other excise taxes 95,405 - - 95,405
Departmental and other 428 18,385 185,834 204,647
Intergovernmental 1,634,088 - 534,492 2,168,580
Special assessments - - 783,564 783,564
Total 2,286,577$ 18,385$ 1,503,890$ 3,808,852$
Deferred Revenue Analysis
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 42 -
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended June 30, 2012, was as follows:
Beginning Ending
Governmental Activities:Balance Increases Decreases Balance
Capital assets not being depreciated:
Land 37,427,192$ 450,000$ -$ 37,877,192$
Construction in progress 1,274,559 209,977 (1,331,372) 153,164
Total capital assets not being depreciated 38,701,751 659,977 (1,331,372) 38,030,356
Capital assets being depreciated:
Building and improvements 24,423,023 - 417,127 24,840,150
Capital improvement (other than buildings)1,081,482 52,591 864,245 1,998,318
Machinery, equipment, and vehicles 8,517,233 826,151 (46,171) 9,297,213
Infrastructure 7,990,759 1,089,941 50,000 9,130,700
Total capital assets being depreciated 42,012,497 1,968,683 1,285,201 45,266,381
Less accumulated depreciation for:
Building and improvements (9,289,973) (618,940) - (9,908,913)
Capital improvement (other than buildings)(354,701) (90,148) - (444,849)
Machinery, equipment, and vehicles (4,583,657) (654,357) 46,171 (5,191,843)
Infrastructure (3,643,911) (249,584) - (3,893,495)
Total accumulated depreciation (17,872,242) (1,613,029) 46,171 (19,439,100)
Total capital assets being depreciated, net 24,140,255 355,654 1,331,372 25,827,281
Total governmental activities capital assets, net 62,842,006$ 1,015,631$ -$ 63,857,637$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 43 -
Depreciation expense was charged to functions/programs of the primary government as follows:
General government 101,725$
Public safety 605,126
Education 394,599
Public works 386,139
Human services 27,519
Culture and recreation 97,921
Total depreciation expense - governmental activities 1,613,029$
Water 354,197$
Golf 408,385
Total depreciation expense - business-type activities 762,581$
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 2,993,337 439,995 (3,056,099) 377,233
Total capital assets not being depreciated 5,867,549 439,995 (3,056,099) 3,251,445
Capital assets being depreciated:
Buildings and improvements 2,683,617 - 2,990,886 5,674,503
Machinery, equipment, and vehicles 2,116,130 396,744 - 2,512,874
Infrastructure 20,249,346 - 65,214 20,314,560
Total capital assets being depreciated 25,049,093 396,744 3,056,100 28,501,937
Less accumulated depreciation for:
Buildings and improvements (845,999) (142,141) - (988,140)
Machinery, equipment, and vehicles (1,477,847) (117,956) - (1,595,803)
Infrastructure (8,153,457) (502,484) - (8,655,941)
Total accumulated depreciation (10,477,303) (762,581) - (11,239,884)
Total capital assets being depreciated, net 14,571,790 (1,265,066) 3,056,100 17,262,053
Total business-type activites capital assets, net 20,439,339$ 74,158$ - 20,513,498$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 44 -
NOTE 6 – CAPITAL LEASES
The Town has entered into lease agreements as lessee for financing the acquisition of two Ferrara fire
pumper trucks, a street sweeper, seven mowers, and thirty six respirators. The lease agreements qualify as
capital leases for accounting purposes and, therefore, have been recorded at the present value of the future
minimum lease payments as of the inception date.
The assets acquired through the capital leases are as follows:
Governmental
Activities
Assets:
Vehicles 1,075,349$
Machinery & Equipment 476,720
Less: Accumulated depreciation (359,222)
1,192,847$
The future minimum lease obligations and the net present value of the minimum lease payments as of
June 30, 2012, are as follows:
Governmental
Year Ending June 30 Activities
2013 247,631$
2014 247,631
2015 208,759
2016 208,759
2017 107,632
2018 107,632
2019 107,632
Total minimum lease payments 1,235,676
Less: amounts representing interest (158,872)
Present value of minimum lease payments 1,076,804$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 45 -
NOTE 7 – INTERFUND TRANSFERS
Interfund transfers for the fiscal year ended June 30, 2012, are summarized as follows:
(1) Represents budgeted transfers from the various funds to the general fund.
(2) Represents other transfers.
Nonmajor
General Governmental
Operating Transfers Out:Fund Funds Total
Nonmajor Governmental Funds 1,712,996$ -$ 1,712,996$ (1)
Nonmajor Governmental Funds 114,239 - 114,239 (2)
Water Enterprise Fund 367,624 - 367,624 (1)
Golf Enterprise Fund 150,194 - 150,194 (1)
Community Preservation Fund 371,391 - 371,391 (1)
General Fund - 55,414 55,414 (2)
Total 2,716,444$ 55,414$ 2,771,858$
Operating Transfers In:
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 46 -
NOTE 8 – SHORT-TERM FINANCING
Under state law, and with the appropriate authorization, the Town is authorized to borrow funds on a
temporary basis as follows:
• To fund current operations prior to the collection of revenues by issuing revenue anticipation notes
(RANS).
• To fund grants prior to reimbursement by issuing grant anticipation notes (GANS).
• To fund Capital project costs incurred prior to selling permanent debt by issuing bond anticipation
notes (BANS).
• To fund current project costs and other approved expenditures incurred, that are anticipated to be
reimbursed by the Commonwealth through the issuance of State Aid anticipation notes (SAANS).
Short-term loans are general obligations of the Town and maturity dates are governed by statute. Interest
expenditures for short-term borrowings are accounted for in the general fund.
The following is a summary of changes in short-term debt for the year ended June 30, 2012:
Type Purpose
Rate
(%)
Due
Date
Balance at
June 30, 2011
Renewed/
Issued
Retired/
Redeemed
Balance at
June 30, 2012
Governmental Funds
BAN Building Improvements 1.00 2/23/2012 100,000$ -$ (100,000)$ -$
BAN Land Acquisition 0.99 11/30/2011 180,000 - (180,000) -
BAN Crosby Mansion Septic 0.75 2/22/2013 - 100,000 - 100,000
BAN Allen Drive Road Betterment 0.55 6/18/2013 - 83,185 - 83,185
Total Governmental Funds 280,000 183,185 (280,000) 183,185
Business - Type Activities
BAN New Water Pump Station 0.55 6/18/2013 - 1,599,965 - 1,599,965
Total:280,000$ 1,783,150$ (280,000)$ 1,783,150$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 47 -
NOTE 9 – LONG-TERM DEBT
The Town is subject to a dual-level, general debt limit: the normal debt limit and the double debt limit.
Such limits are equal to 5% and 10%, respectively, of the valuation of taxable property in the Town as
last equalized by the Commonwealth’s Department of Revenue. Debt may be authorized up to the normal
debt limit without state approval. Authorizations under the double debt limit however require the approval
of the Commonwealth’s Emergency Finance Board. Additionally, there are many categories of general
long-term debt which are exempt from the debt limit but are subject to other limitations.
The following is a summary of the changes in long-term debt for the year ended June 30, 2012:
Bonds and Notes Payable Schedule -Governmental Funds
Project
Interest
Rate (%)
Outstanding at
June 30, 2011 Issued
Redeemed/
Refunded
Outstanding at
June 30, 2012
School 3.74 2,085,000$ -$ 435,000$ 1,650,000$
Library 3.74 250,000 - 50,000 200,000
MWPAT Title V Septic Var 103,800 - 10,400 93,400
Police Station 3.89 1,520,000 - 170,000 1,350,000
Road Betterments 3.59 50,000 - 25,000 25,000
Road Betterments 3.62 60,000 - 20,000 40,000
Road Betterments 3.62 75,000 - 25,000 50,000
MWPAT Title V Septic 3.59 128,100 - 9,525 118,575
Land Acquisition 3.64 620,000 - 65,000 555,000
Road Betterments 3.64 150,000 - 30,000 120,000
Road Betterments 3.64 75,000 - 15,000 60,000
Land Acquisition 4.49 675,000 - 50,000 625,000
Land Acquisition 4.49 1,285,000 - 85,000 1,200,000
Road Betterments 4.49 100,000 - 20,000 80,000
Road Betterments 4.49 65,000 - 15,000 50,000
Road Betterments 3.96 165,000 - 25,000 140,000
Land Acquisition 3.84 675,000 - 35,000 640,000
Road Betterments 3.84 237,000 - 27,000 210,000
Road Betterments 3.84 87,880 - 12,880 75,000
Total 8,406,780$ -$ 1,124,805$ 7,281,975$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 48 -
The annual debt service requirements for principal and interest for Governmental bonds and notes
outstanding at June 30, 2012 are as follows:
Bonds and Notes Payable Schedule -Water and Golf Enterprise Funds
The annual debt service requirements for principal and interest for water and golf enterprise funds bonds
and notes outstanding at June 30, 2012 are as follows:
Project
Interest
Rate (%)
Outstanding at
June 30, 2011 Issued
Redeemed/
Refunded
Outstanding at
June 30, 2012
Golf Course 3.92 5,685,000$ -$ 505,000$ 5,180,000$
Golf Course 3.64 300,000 - 100,000 200,000
Water Mains 3.89 1,340,000 - 150,000 1,190,000
Standpipe #2 3.80 65,000 - 65,000 -
Standpipe Rehabilitation 3.62 210,000 - 70,000 140,000
Water Betterments - Slough Rd 3.64 550,000 - 40,000 510,000
Water Betterments - Slough Rd 4.49 55,000 - 5,000 50,000
Water Offices/Garage 3.96 2,100,000 - 125,000 1,975,000
Total 10,305,000$ -$ 1,060,000$ 9,245,000$
Fiscal Year Principal Interest Total
2013 1,025,000$ 414,945$ 1,439,945$
2014 1,050,000 368,245 1,418,245
2015 915,000 322,670 1,237,670
2016 945,000 278,670 1,223,670
2017 975,000 232,014 1,207,014
2018-2022 3,470,000 498,734 3,968,734
2023-2027 745,000 112,110 857,110
2,028 120,000 5,160 125,160
Total 9,245,000$ 2,232,548$ 11,477,548$
Fiscal Year Principal Interest Total
2013 1,104,925$ 301,061$ 1,405,986$
2014 1,064,925 256,070 1,320,995
2015 1,014,925 209,967 1,224,892
2016 980,400 165,163 1,145,563
2017 495,400 132,659 628,059
2018-2022 1,776,400 371,819 2,148,219
2023-2027 725,000 116,085 841,085
2028-2031 120,000 13,913 133,913
Total 7,281,975$ 1,566,737$ 8,848,712$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 49 -
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
$544,696 from scheduled annual payments in FY 2012 from the MSBA for completed school
construction projects.
Loans Authorized and Unissued
As of June 30, 2012, the Town has loans authorized and unissued as follows:
Date
Description Authorized Amount
Septage Betterments 5/6/1996 28,600$
Land Acquisition - Matthews Property 5/3/2010 380,000
Road betterments - Hazel Lane 5/3/2010 10,420
Crosby mansion 11/15/2010 100,000
Road betterments - Allen Drive 5/2/2011 96,620
Well #6 water main construction 11/7/2011 3,220,000
Land Acquisition - Jackson 11/7/2011 25,000
Land Acquisition - Siedel 11/7/2011 20,000
Road betterments - Prell Circle 5/7/2012 75,940
3,956,580$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 50 -
Changes in Long-term Liabilities
The following is a summary of changes in long-term liabilities for the year ended June 30, 2012:
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, 2012:
Beginning Ending Current
Governmental Activities:Balance Additions Reductions Balance Portion
Landfill postclosure care costs 515,000$ -$ (21,500)$ 493,500$ 30,000$
Capital Lease 810,361 94,507 - 904,868 162,602
Postemployment benefits 2,581,055 831,877 - 3,412,932 -
Bonds and notes payable 8,406,780 - (1,124,805) 7,281,975 1,104,925
Total governmental activities
long-term liabilities 12,313,196$ 926,384$ (1,146,305)$ 12,093,275$ 1,297,527$
Beginning Ending Current
Business-Type Activities:Balance Additions Reductions Balance Portion
Postemployment benefits 499,013$ 160,832$ - 659,845$ -$
Capital Lease - 171,936 - 171,936 40,747
Bonds and notes payable 10,305,000 - (1,060,000) 9,245,000 1,025,000
Total business-type activities
long-term liabilities 10,804,013$ 332,768$ (1,060,000)$ 10,076,781$ 1,065,747$
Total Long-Town's Town's
Term Debt Estimated Indirect
Agency Outstanding Share Debt
Nauset Regional School District 1,880,000$ 48.21%906,348$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 51 -
NOTE 10 – RISK FINANCING
The Town is exposed to various risks of loss related to torts; theft of, damage to or destruction of assets;
errors and omissions; injuries to employees; employee’s health and life; and natural disasters.
Buildings are fully insured against fire, theft, and natural disaster to the extent that losses exceed $1,000
per incident. The fully insurable value of Town buildings and contents is $44,446,296.
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 2012.
The Town is a member of the Cape Cod Municipal Health Group, (CCMHG) which is a Massachusetts
Municipal Joint Health Insurance purchase group. The Group includes fourteen Towns, five school
districts, five fire districts, six water districts, one recreation authority, one education collaborative,
Veterans Services of Cape Cod, Barnstable County, Orleans/Brewster/Eastham Groundwater Protection
District and Cape Cod Regional Transit Authority as participants. In addition, the Group entered into a
Joint Negotiation Purchase of Health Coverage with the Dukes County Municipal Health Group which
consists of Dukes County Commissioners; the Towns of Chilmark, Edgartown, Gosnold, Oak Bluffs,
Tisbury, West Tisbury, and Aquinnah; Martha’s Vineyard Refuse Disposal and Resource Recovery
District; Martha’s Vineyard Commission; Martha’s Vineyard Land Bank Commission; Oak Bluffs Water
District; Martha’s Vineyard Regional School District; Up-Island Regional School District; Martha’s
Vineyard Charter School; and Martha’s Vineyard Transit Authority. 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 Medicare 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 four Medicare Choice plans: Medicare HMO Blue, Managed Blue for Seniors, Tufts Medicare
Preferred, and medicare Preferred Prime (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. In addition to the
traditional HPHC, PPO and EPO plans, the group also offers so-called “Rate Saver” options based upon
these plans, with selected benefit reductions, in order to provide lower premium options. Also, the Group
has adopted a contributory dental insurance plan (self-funded) and a voluntary dental plan, which was
premium based through June 30, 2007 and changed to a self funded basis effective July 1, 2007. These
plans are administered by Delta Dental Plan of Massachusetts for monthly administrative fee, based on
the number of subscribers.
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, Rate Saver plans, 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 the number of individual and family plan subscribers for
that particular month.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 52 -
The Group has a specific excess medical and prescription drug claims reinsurance contract with an
insurance carrier covering claims paid in excess of $5000,000, and $300,000 per individual, to a lifetime
maximum amount payable of $2,000,000 at June 30, 2012 and 2011 respectively, for the traditional
medical indemnity plan. The Group reinsures its Carveout A plan with a policy with a $50,000 specific
deductible. The Group does not reinsure its 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 185 Town of Brewster employees and 92
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, 2012, the Cape Cod Municipal Health Group had total assets of $38,475,624, total
liabilities of $17,630,349 (including $17,367,706 in estimated benefits obligations), and a total surplus of
$20,845,275.
NOTE 11. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions, requires the following disclosures with regard to the retiree medical,
dental, and life insurance benefits:
Plan Description. The Post Retirement Benefits Plan of the Town of Brewster (The Plan) is a single-
employer defined benefit healthcare plan administered by the Town of Brewster. The Plan provides
medical, dental and life insurance benefits to eligible retirees and their spouses. Town meeting vote is the
authority to establish and amend benefit provisions to the Town. The Town has accepted various sections
of Massachusetts General laws Chapter 32B to provide ½ of the premium cost of retirees’ health and life
insurance costs.
Funding Policy. The contribution requirements of plan members and the Town are established and may
be amended by local by-law. The required contribution is based on projected pay-as-you-go financing
requirements. For Fiscal Year 2011, the estimated total Town premiums plus implicit costs for the retiree
medical program are $651,388.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 53 -
Annual OPEB Cost and Net OPEB Obligation. The Town’s annual other postemployment benefit
(OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an
amount actuarially determined in accordance with the parameters of GASBS No. 45. The ARC represents
a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The following table shows the components of the Town’s annual OPEB cost for the fiscal year, the
amount actually contributed to the plan, and changes in the Town’s net OPEB obligation to the plan:
The Town’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for 2012 and the three preceding years were as follows:
Funded Status and Funding Progress. As of June 30, 2010, the most recent actuarial valuation date, the
plan was 0.0% funded. The actuarial accrued liability for benefits was $22.293 million, and the actuarial
value of assets was $0.0 million, resulting in an unfunded actuarial accrued liability (UAAL) of $22.293
million. The covered payroll (annual payroll of active employees covered by the plan) was $10.692
million, and the ratio of the UAAL to the covered payroll was 208.5%.
Annual required contribution 1,602,743$
Interest on net OPEB obligation 154,002
Adjustment to annual required contribution (ARC)(112,648)
Annual OPEB cost (expense)1,644,097
Contributions made (651,388)
Increase in net OPEB obligation 992,709
Net OPEB obligation - beginning of year 3,080,068$
Net OPEB obligation - end of year 4,072,777$
Fiscal Year
Ended
Annual OPEB
Cost
Percentage of
Annual OPEB
Cost
Contributed
Increase in
Net OPEB
Obligation
Net OPEB
Obligation
6/30/2009 $ 1,490,990 29.28% $ 1,054,493 $ 1,054,493
6/30/2010 $ 1,591,858 34.27% $ 1,046,291 $ 2,100,784
6/30/2011 $ 1,549,783 36.81% $ 979,284 $ 3,080,068
6/30/2012 $ 1,644,097 39.62% $ 992,709 $ 4,072,777
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
- 54 -
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined
regarding the funded status of the plan and the annual required contributions of the employer are subject
to continual revision as actual results are compared with past expectations and new estimates are made
about the future. The schedule of funding progress, presented as required supplementary information
following the notes to the financial statements, presents multiyear trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued
liabilities for benefits.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on
the substantive plan (the plan as understood by the employer and the plan members) and include the types
of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and assumptions used
include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued
liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the June 30, 2010, actuarial valuation, the projected unit credit actuarial cost method with amortization
payments increasing at 4.5% was used. Under this method, the normal cost and actuarial liability are both
based on an accrual of projected benefits over the period for which benefits are accrued. The normal cost
is the actuarial present value of one year’s benefit accrual on this basis. The actuarial accrued liability is
the actuarial present value of the projected benefit times the ration of past service to total service. The
actuarial assumptions included a 5.0% investment rate of return (net of administrative expenses), which is
a blended rate of the expected long-term investment returns on plan assets and on the employer’s own
investments calculated based on the funded level of the plan at the valuation date, and an annual
healthcare cost trend rate of 10.0% decreasing by .75% for 6 years and by 0.50% for 1 year to an ultimate
level of 5.00% per year. The actuarial value of assets was determined using market value. The UAAL is
being amortized with increasing payments at 4.5% over 30 years at transition. The remaining amortization
period at July 1, 2012, was 26 years.
NOTE 12 – 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, 2012
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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, 2012, 2011, and 2010 were $1,381,855, $1,313,399 and $1,203,862,
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 $1,018,665 for fiscal year 2012. 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 13 – COMMITMENTS AND CONTINGENCIES
The Town participates in a number of federal award programs. Although the grant programs have been
audited in accordance with the provisions of the Single Audit Act Amendments of 1996 through June 30,
2012, these programs are still subject to financial and compliance audits. The amount, if any, of
expenditures which may be disallowed by the granting agencies cannot be determined at this time,
although it is believed the amount, if any, would not be material.
The Town’s landfill was capped in 2000 by order of the Department of Environmental Protection (DEP).
The Town is responsible for post-closure monitoring of the site for thirty years (19 years remaining), and
the estimated liability has been recorded in the Statement of Net Assets, Governmental Activities. The
$493,500 reported as landfill post-closure liability at June 30, 2012 is based on what it would cost to
perform all post-closure care at June 30, 2012. 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, 2012, cannot be ascertained, management believes any resulting liability should not materially affect
the financial position at June 30, 2012.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2012
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NOTE 14 – IMPLEMENTATION OF NEW GASB PRONOUNCMENTS
During fiscal year 2012, the following GASB pronouncements were implemented:
The GASB issued Statement #57
OPEB Measurement by Agent Employers and Agent Multiple-
Employer Plans. This pronouncement required no additional disclosure and did not impact the basic
financial statements.
The GASB issued Statement #59
Financial Instruments Omnibus. This pronouncement required no
additional disclosure and did not impact the basic financial statements.
The GASB issued Statement #62
, Codification of Accounting and Financial Reporting Guidance
Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. This pronouncement required
no additional disclosure and did not impact the basic financial statements.
The GASB issued Statement #64
, Derivative Instruments: Application of Hedge Accounting Termination
Provisions, an amendment of GASB Statement No. 53. This pronouncement required no additional
disclosure and did not impact the basic financial statements.
Future GASB Pronouncements:
The GASB issued Statement #60
, Accounting and Financial Reporting for Service Concession
Arrangements, which is required to be implemented in fiscal year 2013.
The GASB issued Statement #61
, The Financial Reporting Entity: Omnibus, which is required to be
implemented in fiscal year 2013.
The GASB issued Statement #63
, Financial Reporting of Deferred Outflows of Resources, Deferred
Inflows of Resources, and Net Position, which is required to be implemented in fiscal year 2013.
The GASB issued Statement #65
, Items previously reported as Assets and Liabilities, which is required
to be implemented in fiscal year 2014.
The GASB issued Statement #66
, Technical Corrections – 2012 – an amendment of GASB Statements
No. 10 and No. 62, which is required to be implemented in fiscal year 2014.
The GASB issued Statement #67
, Financial Reporting for Pension Plans – an amendment of GASB
Statement No. 25, which is required to be implemented in fiscal year 2014.
The GASB issued Statement #68
, Accounting and Financial Reporting for Pensions – an amendment of
GASB Statement No. 27, which is required to be implemented in fiscal year 2015.
Management is reviewing the impact of these pronouncements will have on the basic financial statements.
TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS
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Schedules of Funding Progress and Employer Contributions
The following schedules are presented in accordance with GASB Statement No. 45:
Projected Schedule of Funding Progress:
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
Actuarial
Accrued
Liability (AAL) -
Entry Age
(b)
Unfunded AAL
(UAAL)
(b - a)
Funded
Ratio
(a/b)
Covered
Payroll
(c)
UAAL as a
Percentage of
Covered Payroll
[(b - a)/c]
7/1/2008 -$ 19,960,683$ 19,960,683$ 0.0%10,503,689$ 190.0%
7/1/2010 -$ 22,292,830$ 22,292,830$ 0.0%10,692,405$ 208.5%
Schedule of Employer Contributions :
Year Ended
June 30
Annual
OPEB Cost
Percentage of
Annual
OPEB Cost
Contributed
Increase in
Net OPEB
Obligation
Net OPEB
Obligation
2009 $1,490,990 29.28%1,054,493$ 1,054,493$
2010 $1,591,858 34.27%1,046,291$ 2,100,784$
2011 $1,549,783 36.81%979,284$ 3,080,068$
2012 $1,644,097 39.62%992,709$ 4,072,777$
The required information presented above was determined as part of the actuarial valuations at the dates
indicated. Additional information as of the latest actuarial valuation follows:
Valuation date June 30, 2010
Discount Rate 5.00%
Medical Trend 10.00% decreasing by 0.75% for 6 years and by .50% for 1
year to an ultimate level of 5.00% per year.
Cost Method Projected Unit Credit Cost Method
Amortization Method 30 Year Open, Amortization Payments Increasing at 4.50%
Remaining Amortization Period July 1, 2012 – 26 years
TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS
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Plan Participants:
Current retirees, beneficiaries, and dependants 101
Current active members/participants 176
Total 277