HomeMy Public PortalAboutBrewster 2016 Report on the Examination of the Basic Financial Statements
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
TABLE OF CONTENTS
PAGE
Independent Auditor’s Report 1 - 2
Management’s Discussion and Analysis 3 – 10
Basic Financial Statements
Statement of Net Position 11
Statement of Activities 12 – 13
Governmental Funds – Balance Sheet 14
Governmental Funds – Statement of Revenues, Expenditures, and
Changes in Fund Balances
15
Reconciliation of the Governmental Funds Balance Sheet Total
Fund Balances to the Statement of Net Position
16
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
17
General Fund – Statement of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual
18
Proprietary Funds - Statement of Net Position
Proprietary Funds – Statement of Revenues, Expenses, and
Changes in Fund Net Position
Proprietary Funds – Statements of Cash Flows
19
20
21
Fiduciary Funds – Statement of Fiduciary Net Position 22
Fiduciary Funds – Statement of Changes in Fiduciary Net Position 23
Notes to Basic Financial Statements 24– 65
Required Supplementary Information:
Barnstable County Retirement System Schedules:
Schedules of Funding Progress and Employer Contributions
66
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
TABLE OF CONTENTS
Schedule of the Town’s Proportionate Share of the Net Pension Liability
Schedule of Town’s Contribution
PAGE
67
68
Massachusetts Teachers Retirement System Schedule:
Schedule of the State’s Proportionate Share of the Net Pension Liability
69
Other Postemployment Benefit Plan Schedules:
Schedules of Funding Progress and Employer Contributions
70 – 71
Notes to Required Supplementary Information
72
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, 2016, and the related notes to the financial
statements, which collectively comprise the Town’s basic financial statements as listed in the table of
contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the Town of Brewster, Massachusetts, as of June 30,
2016, and the respective changes in financial position and, where applicable, cash flows thereof for the
year then ended in accordance with accounting principles generally accepted in the United States of
America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, Barnstable’s County Retirement System schedules of funding
progress, employer contributions, Town’s proportionate share of the net pension liability, Town’s
contribution, and Massachusetts Teachers Retirement system’s proportionate share of the net
pension liability, and other post-employment benefits – schedules of funding progress and employer
contributions and notes to the retirement system on pages 3 – 10 and 66 –68, 69, 70 – 71 and 72 be
presented to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
November 18, 2016
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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, 2016.
We encourage readers to consider this information in addition to the statements and notes.
The Town complies with financial reporting requirements issued by the Governmental Accounting Standards
Board (GASB). GASB is the authoritative standard setting body that provides guidance on how to prepare
financial statements in conformity with accounting principles generally accepted in the United States of America
(GAAP). Users of these financial statements, such as investors and rating agencies, rely on the GASB to establish
consistent reporting standards for all governments in the United States. This consistent application is the only
way users can assess the financial condition of one government compared to others.
Financial Highlights
• The assets of the Town exceeded its liabilities at the close of the fiscal year by $69.2 million (net position).
• The unrestricted negative net position of the Town’s governmental activities are -$17.4 million. The
unrestricted net position of the Town’s business-type activities are $341 Thousand 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 position increased by $2.0 million from fiscal 2015. Within this total, net position
of governmental activities increades by $1.6 million from fiscal 2015. Also, net position of business-type
activities increased by $381 thousand from 2015.
• At June 30, 2016, the Town’s governmental funds had combined ending fund balances of $14.1 million. The
combined governmental funds balance increased by $3.2 million, a 29.2% increase over the prior year’s
ending fund balances.
• The Town’s general fund reported a fund balance of $8.8 million at the end of fiscal 2016. The unassigned
fund balance for the general fund was $5.7 million or 15% of total general fund expenditures. A total of $827
thousand of the assigned fund balance was designated for funding the fiscal year 2017 budget.
• The total cost of all Town services for fiscal 2016 was $46 million, $41 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 position presents information on all assets and liabilities, with the difference between the two
reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of
whether the financial position is improving or deteriorating.
The statement of activities presents information showing how the government’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future periods, (e.g., uncollected taxes).
Both of the government-wide financial statements distinguish functions that are principally supported by taxes
and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a
significant portion of their costs through user fees or charges (business-type activities). The governmental
activities include general government, public safety, education, public works, human services, culture and
recreation, employee benefits, debt service, and state and county assessments. The business-type activities
include water and golf department services.
Fund Financial Statements – A fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. Fund accounting is used to ensure and
demonstrate compliance with finance related legal requirements. All of the funds can be divided into three main
categories: governmental funds, proprietary funds and fiduciary funds.
Governmental Funds – governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental funds statements focus on near-term inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information
may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better understand
the long-term impact of the government’s near-term financing decisions. Both, the Governmental Funds Balance
Sheet and the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances provide
a reconciliation to facilitate this comparison between governmental funds and governmental activities.
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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, postemployment benefits trust, 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”, “postemployment benefits trust”, and “agency funds”, respectively.
Notes to the basic financial statements – The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Government-wide Financial Analysis:
The chart on the following page summarizes key financial components of the Town’s financial statements.
As noted earlier, assets exceed liabilities by $69,174,402 at the close of fiscal year 2016. The Town is able to
report positive balances of net position, both for the government as a whole, and for its separate governmental and
business-type activities in total.
The largest component of the Town’s net position are its investment in capital assets (e.g., land, buildings,
machinery, and equipment), less any related outstanding debt used to acquire those assets, and is $77,350,474, or
112% of total net position. The Town uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the investment in the Town’s capital assets is reported net
of its related debt, it should be noted that the resources needed to repay this debt must be provided from other
sources, since the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of the net position totaling $8,896,901 (12.9% of total) represents resources that are subject
to external restrictions on how they may be used. The remaining balance of unrestricted net position is
($17,072,973).
The Town increased its total liabilities by $5,244,308 over fiscal 2015, and total net position increased by
$1,992,562 or 2.97%. Net position of governmental activities increased by $1,611,340, a 3.0% increase from
fiscal 2015. Net position of business-type activities increased by $381,222 or 2.8% from 2015. There was a
increase of $341,410 in net position reported in connection with the water business-type activity, and an increase
of $39,812 in net position in connection with the golf department business-type activity, respectively.
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Increase Increase Increase
FY 2016 FY 2015 (Decrease)FY 2016 FY 2015 (Decrease)FY 2016 FY 2015 (Decrease)
Assets:
Current assets 20,453,770$ 18,169,892$ 2,283,878$ 5,073,086$ 6,109,322$ (1,036,236)$ 25,526,856$ 24,279,214$ 1,247,642$
Noncurrent assets (excluding capital)477,809 446,423 31,386 26,665 32,720 (6,055) 504,474 479,143 25,331
Capital assets 73,066,835 69,031,253 4,035,582 22,727,907 22,487,429 240,478 95,794,742 91,518,682 4,276,060
Total assets 93,998,414 87,647,568 6,350,846 27,827,658 28,629,471 (801,813) 121,826,072 116,277,039 5,549,033
Deferred Outflow of Resources:1,549,576 29,330 1,520,246 262,158 5,669 256,489 1,811,734 34,999 1,776,735
Liabilities:
Current liabilities (excluding debt)2,465,198 1,937,185 528,013 249,852 275,505 (25,653) 2,715,050 2,212,690 502,360
Noncurrent liabilities (excluding debt)25,239,036 22,497,573 2,741,463 4,726,756 4,206,010 520,746 29,965,792 26,703,583 3,262,209
Current debt 3,980,794 5,342,848 (1,362,054) 1,481,475 2,776,519 (1,295,044) 5,462,269 8,119,367 (2,657,098)
Noncurrent debt 8,473,773 4,197,477 4,276,296 7,757,622 7,897,081 (139,459) 16,231,395 12,094,558 4,136,837
Total liabilities 40,158,801 33,975,083 6,183,718 14,215,705 15,155,115 (939,410) 54,374,506 49,130,198 5,244,308
Deferred Inflows of Resources:76,034 - 76,034 12,864 - 12,864 88,898 - 88,898
Net Position:
Net investment in capital assets 63,830,648 63,684,588 146,060 13,519,826 11,851,143 1,668,683 77,350,474 75,535,731 1,814,743
Restricted 8,896,901 6,518,261 2,378,640 - - - 8,896,901 6,518,261 2,378,640
Unrestricted (17,414,394) (16,501,034) (913,360) 341,421 1,628,882 (1,287,461) (17,072,973) (14,872,152) (2,200,821)
Total net position 55,313,155$ 53,701,815$ 1,611,340$ 13,861,247$ 13,480,025$ 381,222$ 69,174,402$ 67,181,840$ 1,992,562$
Revenues
Program Revenues:
Charges for services 2,185,933$ 1,954,050$ 231,883$ 6,729,653$ 6,066,772$ 662,881$ 8,915,586$ 8,020,822$ 894,764$
Operating grants and contributions 3,751,480 3,533,495 217,985 86,795 65,983 20,812 3,838,275 3,599,478 238,797
Capital grants and contributions 953,490 560,999 392,491 - - - 953,490 560,999 392,491
General Revenues:
Real Estate and personal property taxes 29,016,875 27,684,177 1,332,698 - - - 29,016,875 27,684,177 1,332,698
Tax Liens 82,570 124,471 (41,901) - - - 82,570 124,471 (41,901)
Motor vehicle and other excise taxes 1,431,019 1,349,787 81,232 - - - 1,431,019 1,349,787 81,232
Hotel/Motel Tax and Meals Tax 1,306,320 1,250,849 55,471 - - - 1,306,320 1,250,849 55,471
Penalties and interest on taxes 177,214 183,757 (6,543) - - - 177,214 183,757 (6,543)
Payments in Lieu of Taxes 6,878 6,873 5 - - - 6,878 6,873 5
Nonrestricted grants and contributions 1,977,699 1,842,184 135,515 - - - 1,977,699 1,842,184 135,515
Unrestricted investment income 39,070 28,022 11,048 - - - 39,070 28,022 11,048
Bond Premium 372,027 - 372,027 - - - 372,027 - 372,027
Other revenues 33,330 23,039 10,291 - - - 33,330 23,039 10,291
Total Revenues 41,333,905 38,541,703 2,792,202 6,816,448 6,132,755 683,693 48,150,353 44,674,458 3,475,895
Expenses:
General Government 3,399,120 3,422,159 (23,039) - - - 3,399,120 3,422,159 (23,039)
Public Safety 6,027,652 5,988,962 38,690 - - - 6,027,652 5,988,962 38,690
Education 18,582,078 18,244,760 337,318 - - - 18,582,078 18,244,760 337,318
Public Works 2,448,758 2,623,354 (174,596) - - - 2,448,758 2,623,354 (174,596)
Human Services 900,986 1,622,408 (721,422) - - - 900,986 1,622,408 (721,422)
Culture and Recreation 975,094 1,131,219 (156,125) - - - 975,094 1,131,219 (156,125)
Employee Benefits 7,623,466 6,718,312 905,154 - - - 7,623,466 6,718,312 905,154
State and County Assessments 636,425 585,310 51,115 - - - 636,425 585,310 51,115
Interest 261,563 258,352 3,211 - - - 261,563 258,352 3,211
Golf - - - 3,226,663 3,014,138 212,525 3,226,663 3,014,138 212,525
Water - - - 2,083,461 2,028,036 55,425 2,083,461 2,028,036 55,425
Total Expenses 40,855,142 40,594,836 260,306 5,310,124 5,042,174 267,950 46,165,266 45,637,010 528,256
Increase/(Decrease) in Net Position before contributions
to permanent endowments and transfers 478,763 (2,053,133) 2,531,896 1,506,324 1,090,581 415,743 1,985,087 (962,552) 2,947,639
Contributions to permanent endowments 7,475 1,300 6,175 - - - 7,475 1,300 6,175
Transfers 1,125,102 844,487 280,615 (1,125,102) (844,487) (280,615) - - -
Change in Net Position 1,611,340 (1,207,346) 2,818,686 381,222 246,094 135,128 1,992,562 (961,252) 2,953,814
Net Position - beginning 53,701,815 54,909,161 (1,207,346) 13,480,025 13,233,931 246,094 67,181,840 68,143,092 (961,252)
Net Position - ending 55,313,155$ 53,701,815$ 1,611,340$ 13,861,247$ 13,480,025$ 381,222$ 69,174,402$ 67,181,840$ 1,992,562$
Town of Brewster - Financial Highlights
Total
Governmental Business-type Primary
Activities Activities Government
- 7 -
Financial analysis of the Government’s Funds
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental funds – The focus of governmental funds is to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing financing requirements. In
particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for
spending at the end of the fiscal year.
As of the end of the current fiscal year, governmental funds reported combined ending fund balances of
$14,112,394 a $3,185,449 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 $5,739,376, while total fund balance stood at $8,835,696. 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 14.7% of total general fund expenditures, while total fund
balance represents 22.6% of that same amount.
The stabilization fund has accumulated a fund balance of $2,064,083 which represents 5.3% of general fund
expenditures. The funds can be used for general or capital purposes upon Town Meeting approval.
General Fund Budget Highlights
During the fiscal year the operating budget was amended by $1,192,410 (at two Special Town Meetings) to fund
fire and police equipment and expenses, education expenses, human services expense, culture and recreation
expenses, general government equipment and expenses and public works equipment and expenses. The Town
budgeted $34.5 million in revenues and $40.2 million in expenditures, drawing on transfers and prior year’s
surplus to finance the difference. At year end, $520,447 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, 2016, amounts to $95,794,742 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 $4,035,582 during
the current fiscal year while the business-type activities capital assets (net of accumulated depreciation) increased
by $240,478. Total depreciation was $2.7 million, resulting in a total government-wide increase to capital assets
(net of accumulated depreciation) of $4,276,060.
Increase Increase
FY 2016 FY 2015 (Decrease)FY 2016 FY 2015 (Decrease)FY 2016 FY 2015
Land 39,529,192$ 39,229,192$ 300,000$ 2,874,212$ 2,874,212$ -$ 42,403,404$ 42,103,404$
Construction in Progress 2,981,200 224,693 2,756,507 389,206 389,206 - 3,370,406 613,899
42,510,392 39,453,885 3,056,507 3,263,418 3,263,418 - 45,773,810 42,717,303
Buildings and improvements 16,290,165 16,572,796 (282,631) 4,311,579 4,348,605 (37,026) 20,601,744 20,921,401
Improvements (other than buildings)3,525,871 2,982,059 543,812 - - - 3,525,871 2,982,059
Machinery, Equipment, and Vehicles 3,337,978 3,337,736 242 910,567 936,963 (26,396) 4,248,545 4,274,699
Infrastructure 7,402,429 6,684,777 717,652 14,242,343 13,938,443 303,900 21,644,772 20,623,220
30,556,443 29,577,368 979,075 19,464,489 19,224,011 240,478 50,020,932 48,801,379
Total Capital Assets 73,066,835$ 69,031,253$ 4,035,582$ 22,727,907$ 22,487,429$ 240,478$ 95,794,742$ 91,518,682$
Activities Activities Government
Capital Assets
(Net of Depreciation)
Total
Governmental Business-type Primary
- 9 -
Long Term Debt - The Town’s debt burden is reasonable in relation to other communities its size. Outstanding
long-term debt, as of June 30, 2016 totaled $17,777,091. Within this total, business-type activities have debt of
$8,830,113 that is fully supported by their respective program revenues, and governmental activities debt is
$8,946,978. Total debt consists of the following:
Outstanding Outstanding
Governmental Activities June 30, 2016 June 30, 2015
Land Purchase - Copelas 590,000$ 625,000$
Road Betterments - Prell Circle 45,000 55,000
Road Betterments - Allen Drive 60,000 70,000
Ebeneezer Lane Road Bett 104,720 -
S. Pond DR/Captain Fitz Rd 122,354 -
School Renovations 2,908,104 -
Road Repairs 2,000,000 -
School Construction - 385,000
Library Construction - 50,000
MWPAT Title V 80,000 90,000
Punkhorn Land Acquisition - 6/30/11 500,000 535,000
Heights Road Betterments - 6/30/11 110,000 135,000
Lane Road Betterments - 6/30/11 35,000 45,000
Police Station 670,000 840,000
MWPAT #97-1156 Title V 51,800 62,200
Land Purchase 300,000 360,000
Road Betterments - Kings Grant Road - 30,000
Road Betterments - Barons Way Road - 15,000
Land Purchase 1,305,000 1,435,000
Road Betterments - Fiddler's Lane 15,000 30,000
Road Betterments - Herringbrook Lane 10,000 20,000
Road Betterments - 2008 40,000 65,000
Total Governmental Activities 8,946,978$ 4,847,200$
Outstanding Outstanding
Business-type Activities June 30, 2016 June 30, 2015
Golf Course 2,865,000$ 3,490,000$
Well Access Road 274,945 -
Water 840,168 -
WELL #6 & WATER MAIN - 2,405,000 2,540,000
Water offices/garage 1,475,000 1,600,000
Water Mains 590,000 740,000
Slough Road 350,000 390,000
Water Betterments - Fiddler's Lane 30,000 35,000
Total Business-type Activities 8,830,113$ 8,795,000$
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 2017
budget and tax rates including the following:
• The Fiscal 2017 tax rate was set at $8.39, a $.04 cent decrease over Fiscal 2016. The excess levy capacity
was $139,225.
• The Board of Selectmen voted during their classification hearing to maintain the same tax rate for all classes
of property.
• Fiscal 2016 budgetary issues were Health Care Reform, Pension obligations, and State Aid for both the Town
and Nauset Regional School District,
• GASB45/OPEB Funding: Brewster Invested $1,123,000 with the HSCB in FY 2014 and is committed to an
annual contribution. The Fiscal 2015 contribution was $25,000, increasing to $50,000 in Fiscal 2016 and
$75,000 in Fiscal 2017. The June 30, 2016 Balance in this fund is $1,299,332.
• Coastal Zone Management awarded Brewster a $155,000 Green Infrastructure for Coastal Resilience Pilot
Grant. These funds are for the removal of a parking lot at Breakwater Landing, restoration of dune habitat,
providing a seasonal boardwalk and relocation of 30 parking spaces to a less vulnerable location.
• Approximately $250,904 of Chapter 90 Highway Funds was expended on Design & Engineering
Services/Pavement Management Study for local roadway repairs and construction. Approximately $450,000
Chapter 90 Highway Funds will be expended in Fiscal 2017.
• The Town secured $10,000,000 via two Proposition 2 ½ Override approvals – one for Roadway Repairs &
Resurfacing. A $2 million in roadway project is underway and is expected to be completed in the Fall of
2017. Brewster voters approved the Design and Construction of a new Fire Station. Construction is expected
to start in the fall of 2017.
• Fiscal 2016 Community Preservation Projects include funding for Land Acquisition, Historical Captain Elijah
Cobb House and Grant/Loan Programs for Affordable Housing.
Request for Information
This financial report is designed to provide a general overview of the Town of Brewster’s finances for all those
with an interest in the government’s finances. Questions concerning any of the information provided in this
report or request for additional financial information should be addressed to the Finance Director, 2198 Main
Street, Brewster, MA 02631.
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
CURRENT:
CASH AND SHORT-TERM INVESTMENTS 17,959,127$ 4,067,516$ 22,026,643$
INVESTMENTS 1,159,361 - 1,159,361
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
REAL ESTATE AND PERSONAL PROPERTY TAXES 346,596 - 346,596
TAX LIENS 428,731 - 428,731
MOTOR VEHICLE EXCISE TAXES 98,807 - 98,807
USER FEES - 1,001,219 1,001,219
DEPARTMENTAL AND OTHER 232,715 - 232,715
INTERGOVERNMENTAL 126,734 - 126,734
SPECIAL ASSESSMENTS 101,699 4,351 106,050
NONCURRENT:
RESTRICTED ASSETS:
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
SPECIAL ASSESSMENTS 477,809 26,665 504,474
CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 73,066,835 22,727,907 95,794,742
TOTAL ASSETS 93,998,414 27,827,658 121,826,072
DEFERRED OUTFLOWS OF RESOURCES
RELATED TO PENSIONS 1,549,576 262,158 1,811,734
TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 95,547,990 28,089,816 123,637,806
LIABILITIES
CURRENT:
ACCOUNTS PAYABLE 2,273,467 174,800 2,448,267
RETAINAGE PAYABLE 85,234 - 85,234
ACCRUED INTEREST 86,997 75,052 162,049
LANDFILL POSTCLOSURE CARE COSTS 19,500 - 19,500
CAPITAL LEASES 184,398 64,459 248,857
BONDS AND NOTES PAYABLE 3,796,396 1,417,016 5,213,412
NONCURRENT:
LANDFILL POSTCLOSURE CARE COSTS 341,000 - 341,000
POSTEMPLOYMENT BENEFITS 5,898,100 1,053,737 6,951,837
NET PENSION LIABILITY 18,999,936 3,673,019 22,672,955
CAPITAL LEASES 392,373 117,622 509,995
BONDS AND NOTES PAYABLE 8,081,400 7,640,000 15,721,400
TOTAL LIABILITIES 40,158,801 14,215,705 54,374,506
DEFERRED INFLOWS OF RESOURCES
RELATED TO PENSIONS 76,034 12,864 88,898
NET POSITION
NET INVESTMENT IN CAPITAL ASSETS 63,830,648 13,519,826 77,350,474
RESTRICTED FOR:
CAPITAL PROJECTS (1,426,986) - (1,426,986)
PERMANENT FUNDS:
EXPENDABLE 119,114 - 119,114
NONEXPENDABLE 150,388 - 150,388
OTHER PURPOSES 10,054,385 - 10,054,385
UNRESTRICTED (17,414,394) 341,421 (17,072,973)
TOTAL NET POSITION 55,313,155$ 13,861,247$ 69,174,402$
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2016
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 3,399,120$ 732,099$ 36,980$ 85,000$ (2,545,041)$
PUBLIC SAFETY 6,027,652 337,114 1,122,140 - (4,568,398)
EDUCATION 18,582,078 132,067 1,180,332 - (17,269,679)
PUBLIC WORKS 2,448,758 532,068 22,684 841,048 (1,052,958)
HUMAN SERVICES 900,986 73,100 197,813 7,442 (622,631)
CULTURE & RECREATION 975,094 379,485 186,186 20,000 (389,423)
EMPLOYEE BENEFITS 7,623,466 - 1,005,345 - (6,618,121)
STATE & COUNTY ASSESSMENTS 636,425 - - - (636,425)
INTEREST 261,563 - - - (261,563)
TOTAL GOVERNMENTAL ACTIVITIES 40,855,142 2,185,933 3,751,480 953,490 (33,964,239)
BUSINESS-TYPE ACTIVITIES:
GOLF 3,226,663 3,830,721 16,258 - 620,316
WATER 2,083,461 2,898,932 70,537 - 886,008
TOTAL BUSINESS-TYPE ACTIVITIES 5,310,124 6,729,653 86,795 - 1,506,324
TOTAL PRIMARY GOVERNMENT 46,165,266$ 8,915,586$ 3,838,275$ 953,490$ (32,457,915)$
(continued)
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2016
PROGRAM REVENUES
See accompanying notes to the basic financial statements
- 12 -
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
CHANGES IN NET POSITION:
NET (EXPENSE) REVENUE FROM PREVIOUS PAGE (33,964,239)$ 1,506,324$ (32,457,915)$
GENERAL REVENUES:
REAL ESTATE AND PERSONAL PROPERTY TAXES,
NET OF TAX REFUNDS PAYABLE 29,016,875 - 29,016,875
TAX LIENS 82,570 - 82,570
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,431,019 - 1,431,019
HOTEL/MOTEL & MEALS TAX 1,306,320 - 1,306,320
PENALTIES AND INTEREST ON TAXES 177,214 - 177,214
PAYMENTS IN LIEU OF TAXES 6,878 - 6,878
GRANTS AND CONTRIBUTIONS NOT RESTRICTED
TO SPECIFIC PROGRAMS 1,977,699 - 1,977,699
BOND PREMIUM 372,027 - 372,027
UNRESTRICTED INVESTMENT INCOME 39,070 - 39,070
CONTRIBUTIONS TO PERMANENT FUNDS 7,475 - 7,475
MISCELLANEOUS 33,330 - 33,330
TRANSFERS, NET 1,125,102 (1,125,102) -
TOTAL GENERAL REVENUES AND TRANSFERS 35,575,579 (1,125,102) 34,450,477
CHANGE IN NET POSITION 1,611,340 381,222 1,992,562
NET POSITION:
BEGINNING OF YEAR 53,701,815 13,480,025 67,181,840
END OF YEAR 55,313,155$ 13,861,247$ 69,174,402$
(concluded)
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2016
PRIMARY GOVERNMENT
See accompanying notes to the basic financial statements
- 13 -
TOWN OF BREWSTER, MASSACHUSETTS
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2016
NONMAJOR TOTAL
COMMUNITY ROAD GOVERNMENTAL GOVERNMENTAL
ASSETS GENERAL PRESERVATION IMPROVEMENTS FUNDS FUNDS
CASH AND SHORT-TERM INVESTMENTS 9,362,583$ 3,506,396$ 1,225,558$ 3,864,590$ 17,959,127$
INVESTMENTS 1,159,361 - - - 1,159,361
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
REAL ESTATE AND PERSONAL PROPERTY TAXES 346,596 - - - 346,596
TAX LIENS 428,731 - - - 428,731
MOTOR VEHICLE EXCISE TAXES 98,807 - - - 98,807
DEPARTMENTAL AND OTHER 778 17,373 - 214,564 232,715
INTERGOVERNMENTAL - - - 126,734 126,734
SPECIAL ASSESSMENTS - - - 579,508 579,508
TOTAL ASSETS 11,396,856$ 3,523,769$ 1,225,558$ 4,785,396$ 20,931,579$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES
LIABILITIES:
ACCOUNTS PAYABLE 1,842,939$ 35,750$ 308,653$ 86,125$ 2,273,467$
RETAINAGE PAYABLE - - 85,234 - 85,234
NOTES PAYABLE - - 1,500,000 1,430,818 2,930,818
TOTAL LIABILITIES 1,842,939 35,750 1,893,887 1,516,943 5,289,519
DEFFERRED INFLOWS OF RESOURCES:
UNAVAILABLE REVENUE 718,221 17,373 - 794,072 1,529,666
FUND BALANCES:
NONSPENDABLE - - - 150,388 150,388
RESTRICTED 372,027 3,470,646 - 3,321,678 7,164,351
COMMITTED 1,660,203 - - - 1,660,203
ASSIGNED 1,064,090 - - - 1,064,090
UNASSIGNED 5,739,376 - (668,329) (997,685) 4,073,362
TOTAL FUND BALANCES 8,835,696 3,470,646 (668,329) 2,474,381 14,112,394
TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES
AND FUND BALANCES 11,396,856$ 3,523,769$ 1,225,558$ 4,785,396$ 20,931,579$
See accompanying notes to the basic financial statements
- 14 -
NONMAJOR TOTAL
COMMUNITY ROAD GOVERNMENTAL GOVERNMENTAL
GENERAL PRESERVATION IMPROVEMENTS FUNDS FUNDS
REVENUES:
REAL ESTATE AND PERSONAL PROPERTY TAXES,
NET OF TAX REFUNDS 29,154,663$ -$ -$ -$ 29,154,663$
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,415,205 - - - 1,415,205
INTERGOVERNMENTAL 2,754,141 291,928 - 992,610 4,038,679
PAYMENTS IN LIEU OF TAXES 6,878 - - - 6,878
PENALTIES & INTEREST ON TAXES 146,210 - - - 146,210
FINES & FORFEITS 36,064 - - - 36,064
CHARGES FOR SERVICES 538,501 - - 1,856,023 2,394,524
HOTEL/MOTEL & MEALS TAX 1,306,320 - - - 1,306,320
INVESTMENT INCOME 38,890 7,135 - 57,020 103,045
CONTRIBUTIONS AND DONATIONS - - - 170,992 170,992
DEPARTMENTAL AND OTHER 1,597,966 983,866 - 136,607 2,718,439
TOTAL REVENUES 36,994,838 1,282,929 - 3,213,252 41,491,019
EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT 3,392,680 349,929 - 139,949 3,882,558
PUBLIC SAFETY 5,886,267 - - 387,536 6,273,803
EDUCATION 18,042,859 - - 288,189 18,331,048
PUBLIC WORKS 2,125,653 123,480 2,668,329 912,349 5,829,811
HUMAN SERVICES 729,345 131,932 - 96,702 957,979
CULTURE & RECREATION 862,612 91,298 - 396,738 1,350,648
EMPLOYEE BENEFITS 6,277,494 - - 29,221 6,306,715
STATE & COUNTY ASSESSMENTS 636,425 - - - 636,425
DEBT SERVICE
PRINCIPAL 1,035,400 - - - 1,035,400
INTEREST 188,598 1,208 - 13,657 203,463
TOTAL EXPENDITURES 39,177,333 697,847 2,668,329 2,264,341 44,807,850
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (2,182,495) 585,082 (2,668,329) 948,911 (3,316,831)
OTHER FINANCING SOURCES (USES)
PROCEEDS FROM BONDS AND NOTES - - 2,000,000 3,135,178 5,135,178
PROCEEDS FROM CAPITAL LEASES 242,000 - - - 242,000
OPERATING TRANSFERS IN 2,814,613 - - 668,433 3,483,046
OPERATING TRANSFERS OUT (668,433) (326,961) - (1,362,550) (2,357,944)
TOTAL OTHER FINANCING SOURCES (USES)2,388,180 (326,961) 2,000,000 2,441,061 6,502,280
NET CHANGE IN FUND BALANCES 205,685 258,121 (668,329) 3,389,972 3,185,449
FUND BALANCES AT BEGINNING OF YEAR 8,630,011 3,212,525 - (915,591) 10,926,945
FUND BALANCES AT END OF YEAR 8,835,696$ 3,470,646$ (668,329)$ 2,474,381$ 14,112,394$
TOWN OF BREWSTER, MASSACHUSETTS
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FISCAL YEAR ENDED JUNE 30, 2016
See accompanying notes to the basic financial statements
- 15 -
TOTAL GOVERNMENTAL FUND BALANCES 14,112,394$
CAPITAL ASSETS (NET) USED IN GOVERNMENTAL ACTIVITIES ARE NOT FINANCIAL RESOURCES
AND, THEREFORE, ARE NOT REPORTED IN THE FUNDS 73,066,835
ACCOUNTS RECEIVABLE ARE NOT AVAILABLE TO PAY FOR CURRENT-PERIOD
EXPENDITURES AND, THEREFORE, ARE DEFERRED IN THE FUNDS 1,529,666
IN THE STATEMENT OF ACTIVITIES, INTEREST IS ACCRUED ON OUTSTANDING LONG-TERM DEBT,
WHEREAS IN GOVERNMENTAL FUNDS INTEREST IS NOT REPORTED UNTIL DUE (86,997)
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 (8,946,978)
CAPITAL LEASES (576,771)
NET PENSION LIABILITY (18,999,936)
DEFERRED OUTFLOWS OF RESOURCES 1,549,576
DEFERRED INFLOWS OF RESOURCES (76,034)
POSTEMPLOYMENT BENEFITS (5,898,100)
LANDFILL POSTCLOSURE CARE COSTS (360,500)
NET EFFECT OF REPORTING LONG-TERM LIABILITIES (33,308,743)
NET POSITION OF GOVERNMENTAL ACTIVITIES 55,313,155$
TOWN OF BREWSTER, MASSACHUSETTS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION
JUNE 30, 2016
See accompanying notes to the basic financial statements
- 16 -
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 3,185,449$
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 5,905,186
DEPRECIATION EXPENSE (1,869,604)
NET EFFECT OF REPORTING CAPITAL ASSETS 4,035,582
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 (149,639)
THE ISSUANCE OF LONG-TERM DEBT (E.G., BONDS) PROVIDES CURRENT FINANCIAL
RESOURCES TO GOVERNMENTAL FUNDS, WHILE THE REPAYMENT OF THE PRINCIPAL OF LONG-
TERM DEBT CONSUMES THE FINANCIAL RESOURCES OF GOVERNMENTAL FUNDS. NEITHER
TRANSACTION, HOWEVER, HAS ANY EFFECT ON NET ASSETS. ALSO, GOVERNMENTAL FUNDS
REPORT THE EFFECT OF ISSUANCE COSTS, PREMIUMS, DISCOUNTS, AND SIMILAR ITEMS WHEN
DEBT IS FIRST ISSUED, WHEREAS THESE AMOUNTS ARE DEFERRED AND AMORTIZED IN THE
STATEMENT OF ACTIVITIES.
PROCEEDS FROM BONDS AND NOTES (5,135,178)
PROCEEDS FROM CAPITAL LEASES (242,000)
DEBT SERVICE PRINCIPAL PAYMENTS 1,035,400
CAPITAL LEASE - PRINCIPAL PAYMENTS 237,077
NET EFFECT OF REPORTING LONG-TEM DEBT (4,104,701)
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 (886,520)
NET CHANGE IN LANDFILL POSTCLOSURE CARE ACCRUAL 19,500
NET CHANGE IN DEFERRED OUTFLOWS OF RESOURCES 1,520,246
NET CHANGE IN DEFERRED INFLOWS OF RESOURCES (76,034)
NET CHANGE IN ACCRUED INTEREST ON LONG-TERM DEBT (58,100)
NET CHANGE IN NET PENSION LIABILITY (1,874,443)
NET EFFECT OF RECORDING LONG-TERM LIABILITIES (1,355,351)
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 1,611,340$
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, 2016
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 28,878,335$ 28,878,335$ 29,154,663$ 276,328$
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,186,000 1,186,000 1,415,205 229,205
INTERGOVERNMENTAL 1,738,130 1,738,130 1,747,182 9,052
PAYMENTS IN LIEU OF TAXES 6,800 6,800 6,878 78
PENALTIES & INTEREST ON TAXES 87,000 87,000 146,210 59,210
FINES & FORFEITS 22,000 22,000 36,064 14,064
HOTEL/MOTEL & MEALS TAX 1,169,868 1,169,868 1,306,320 136,452
INVESTMENT INCOME 20,000 20,000 29,298 9,298
DEPARTMENTAL AND OTHER 1,350,331 1,350,331 2,136,467 786,136
TOTAL REVENUES 34,458,464 34,458,464 35,978,287 1,519,823
EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT 3,713,898 3,796,305 3,677,716 118,589
PUBLIC SAFETY 5,726,118 6,300,856 6,106,463 194,393
EDUCATION 18,308,694 18,400,694 18,391,051 9,643
PUBLIC WORKS 2,151,101 2,452,802 2,453,360 (558)
HUMAN SERVICES 937,051 1,010,074 1,003,669 6,405
CULTURE & RECREATION 915,902 984,443 967,067 17,376
EMPLOYEE BENEFITS 5,407,282 5,407,282 5,278,311 128,971
STATE & COUNTY ASSESSMENTS 599,255 599,255 636,425 (37,170)
DEBT SERVICE
PRINCIPAL 1,035,400 1,035,400 1,035,400 -
INTEREST 190,709 190,709 191,157 (448)
TOTAL EXPENDITURES 38,985,410 40,177,820 39,740,619 437,201
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (4,526,946) (5,719,356) (3,762,332) 1,957,024
OTHER FINANCING SOURCES (USES):
OPERATING TRANSFERS IN 1,536,206 1,985,663 2,814,613 828,950
OPERATING TRANSFERS OUT - (562,868) (668,433) (105,565)
TOTAL OTHER FINANCING SOURCES (USES)1,536,206 1,422,795 2,146,180 723,385
NET CHANGE IN FUND BALANCE (2,990,740) (4,296,561) (1,616,152) 2,680,409
BUDGETARY FUND BALANCE, BEGINNING OF YEAR 6,466,670 6,466,670 6,466,670 -
BUDGETARY FUND BALANCE, END OF YEAR 3,475,930$ 2,170,109$ 4,850,518$ 2,680,409$
TOWN OF BREWSTER, MASSACHUSETTS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FISCAL YEAR ENDED JUNE 30, 2016
BUDGETED AMOUNTS
See accompanying notes to the basic financial statements
- 18 -
ASSETS GOLF WATER TOTAL
CURRENT:
CASH AND SHORT-TERM INVESTMENTS 921,003$ 3,146,513$ 4,067,516$
USER FEES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:- 1,001,219 1,001,219
SPECIAL ASSESSMENTS - 4,351 4,351
TOTAL CURRENT ASSETS 921,003 4,152,083 5,073,086
NONCURRENT:
SPECIAL ASSESSMENTS - 26,665 26,665
CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 9,202,785 13,525,122 22,727,907
TOTAL NONCURRENT ASSETS 9,202,785 13,551,787 22,754,572
TOTAL ASSETS 10,123,788 17,703,870 27,827,658
DEFERRED OUTFLOWS OF RESOURCES
RELATED TO PENSIONS 171,571 90,587 262,158
TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 10,295,359 17,794,457 28,089,816
LIABILITIES
CURRENT:
ACCOUNTS PAYABLE - 174,800 174,800
ACCRUED INTEREST 43,675 31,377 75,052
CAPITAL LEASES PAYABLE 64,459 - 64,459
BONDS AND NOTES PAYABLE 886,903 530,113 1,417,016
TOTAL CURRENT LIABILITIES 995,037 736,290 1,731,327
NONCURRENT:
POSTEMPLOYMENT BENEFITS 712,514 341,223 1,053,737
NET PENSION LIABILITY 2,147,129 1,525,890 3,673,019
CAPITAL LEASES PAYABLE 117,622 - 117,622
BONDS AND NOTES PAYABLE 2,205,000 5,435,000 7,640,000
TOTAL NONCURRENT LIABILITIES 5,182,265 7,302,113 12,484,378
TOTAL LIABILITIES 6,177,302 8,038,403 14,215,705
DEFERRED INFLOWS OF RESOURCES
RELATED TO PENSIONS 8,419 4,445 12,864
NET POSITION
NET INVESTMENT IN CAPITAL ASSETS 5,928,801 7,591,025 13,519,826
UNRESTRICTED (1,819,163) 2,160,584 341,421
TOTAL NET POSITION 4,109,638$ 9,751,609$ 13,861,247$
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2016
BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS
See accompanying notes to the basic financial statements
- 19 -
GOLF WATER TOTAL
OPERATING REVENUES:
CHARGES FOR SERVICES 3,830,721$ 2,898,932$ 6,729,653$
DEPARTMENTAL AND OTHER 16,258 70,537 86,795
TOTAL OPERATING REVENUES 3,846,979 2,969,469 6,816,448
OPERATING EXPENSES:
GENERAL SERVICES 2,623,111 1,510,474 4,133,585
DEPRECIATION 453,147 360,896 814,043
TOTAL OPERATING EXPENSES 3,076,258 1,871,370 4,947,628
OPERATING INCOME (LOSS)770,721 1,098,099 1,868,820
NON-OPERATING REVENUES (EXPENSES):
INTEREST EXPENSE (150,405) (212,091) (362,496)
INCOME (LOSS) BEFORE OPERATING TRANSFERS 620,316 886,008 1,506,324
OPERATING TRANSFERS:
OPERATING TRANSFERS OUT (580,504) (544,598) (1,125,102)
CHANGE IN NET POSITION 39,812 341,410 381,222
NET POSITION AT BEGINNING OF YEAR 4,069,826 9,410,199 13,480,025
NET POSITION AT END OF YEAR 4,109,638$ 9,751,609$ 13,861,247$
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FISCAL YEAR ENDED JUNE 30, 2016
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS
See accompanying notes to the basic financial statements
- 20 -
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FISCAL YEAR ENDED JUNE 30, 2016
GOLF WATER TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES:
RECEIPTS FROM CUSTOMERS AND USERS 3,846,979$ 2,912,396$ 6,759,375$
PAYMENTS TO SUPPLIERS (1,217,786) (739,620) (1,957,406)
PAYMENTS TO EMPLOYEES (1,246,242) (677,623) (1,923,865)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,382,951 1,495,153 2,878,104
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
OPERATING TRANSFERS OUT (580,504) (544,598) (1,125,102)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
NET PROCEEDS FROM THE ISSUANCE/RETIREMENT OF BONDS AND NOTES 26,903 (270,887) (243,984)
PRINCIPAL PAYMENTS ON BONDS AND NOTES (625,000) (455,000) (1,080,000)
PRINCIPAL PAYMENTS ON CAPITAL LEASES (110,519) - (110,519)
ACQUISITION AND CONSTRUCTION OF CAPITAL ASSETS (116,458) (938,062) (1,054,520)
INTEREST EXPENSE (159,880) (203,463) (363,343)
NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES (984,954) (1,867,412) (2,852,366)
NET INCREASE (DECREASE) IN CASH AND SHORT TERM INVESTMENTS (182,507) (916,857) (1,099,364)
CASH AND SHORT TERM INVESTMENTS - BEGINNING OF YEAR 1,103,510 4,063,370 5,166,880
CASH AND SHORT TERM INVESTMENTS- END OF YEAR 921,003$ 3,146,513$ 4,067,516$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
OPERATING INCOME (LOSS)770,721$ 1,098,099$ 1,868,820$
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
DEPRECIATION 453,147 360,896 814,043
(INCREASE) DECREASE IN ACCOUNTS RECEIVABLE - (57,074) (57,074)
(INCREASE) DECREASE IN DEFERRED OUTFLOWS OF RESOURCES (168,257) (88,232) (256,489)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE - (24,806) (24,806)
INCREASE (DECREASE) IN DEFERRED INFLOWS OF RESOURCES 8,419 4,445 12,864
INCREASE (DECREASE) IN NET PENSION LIABILITY 211,826 150,537 362,363
INCREASE (DECREASE) IN POSTEMPLOYMENT BENEFITS 107,095 51,288 158,383
TOTAL ADJUSTMENTS 612,230 397,054 1,009,284
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,382,951$ 1,495,153$ 2,878,104$
BUSINESS TYPE ACTIVITIES - ENTERPRISE FUNDS
See accompanying notes to the basic financial statements
- 21 -
TOWN OF BREWSTER, MASSACHUSETTS
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2016
POSTEMPLOYMENT PRIVATE
BENEFITS PURPOSE AGENCY
TRUST TRUST FUNDS FUNDS
ASSETS
CASH AND SHORT-TERM INVESTMENTS -$ 59,470$ 95,707$
INVESTMENTS 1,299,332 - -
TOTAL ASSETS 1,299,332 59,470 95,707
LIABILITIES
ACCOUNTS PAYABLE - - 19,861
OTHER LIABILITIES - - 75,846
TOTAL LIABILITIES - - 95,707
NET POSITION
NET POSITION - HELD IN TRUST FOR OPEB AND OTHER PURPOSES 1,299,332$ 59,470$ -$
See accompanying notes to the basic financial statements
- 22 -
POSTEMPLOYMENT PRIVATE
BENEFITS PURPOSE
TRUST TRUST FUNDS
ADDITIONS:
CONTRIBUTIONS:
PRIVATE DONATIONS
CONTRIBUTIONS FROM GOVERNMENT 50,000$ -$
NET INVESTMENT INCOME (LOSS):
INVESTMENT INCOME 23,077 242
TOTAL ADDITIONS 73,077 242
DEDUCTIONS:
EDUCATION - 1,000
CHANGE IN NET POSITION 73,077 (758)
NET POSITION AT BEGINNING OF YEAR 1,226,255 60,228
NET POSITION AT END OF YEAR 1,299,332$ 59,470$
TOWN OF BREWSTER, MASSACHUSETTS
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FISCAL YEAR ENDED JUNE 30, 2016
See accompanying notes to the basic financial statements
- 23 -
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 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 46.28% in the joint
venture.
Name Purpose Address
Annual
Assessment
Nauset Regional To provide education services 78 Eldredge Parkway $ 9,770,277
School District Orleans, MA 02653
Cape Cod Regional
Technical High
School
To provide vocational education 351 Pleasant Lake Ave
Harwich, MA 02645
$ 723,538
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 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 position and the statement of activities)
report information on all of the non-fiduciary activities of the primary government. Governmental
activities, which are primarily supported by taxes and intergovernmental revenues, are reported separately
from business-type activities, which are supported primarily by user fees and charges.
Fund Financial Statements
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds,
even though fiduciary funds are excluded from the government-wide financial statements. Major
individual governmental funds and major individual enterprise funds are reported as separate columns in
the fund financial statements. Nonmajor funds are aggregated and displayed in a single column.
Major Fund Criteria
A fund is considered major if it is the primary operating fund of the Town or it meets the
following criteria:
a. If the total assets, 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, 2016
- 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, net pension liability, and other postemployment benefits (OPEB) which are recognized
when the obligations are expected to be liquidated with current expendable available resources.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 27 -
In applying the susceptible to accrual concept to intergovernmental revenues, there are essentially two
types of revenues. In one, moneys must be expended on the specific purpose or project before any
amounts will be paid to the Town; therefore, revenues are recognized based upon the expenditures
incurred. In the other, moneys are virtually unrestricted and are usually revocable only for failure to
comply with prescribed compliance requirements. These resources are reflected as revenues at the time of
receipt or earlier if the susceptible to accrual criteria are met.
The Town considers property taxes as available if they are due and collected within 60 days after fiscal
year-end. Licenses and permits, user charges, fines and forfeitures, and miscellaneous revenues are
recorded as revenues when received. Investment earnings are recorded as earned.
The Town reports the following major governmental funds:
The General fund is the primary operating fund of the Town. It is used to account for all financial
resources, except those that are required to be accounted for in another fund.
The Community Preservation fund is a special revenue fund used to account for the accumulation
of resources to purchase open space, assist in development of affordable housing, or preservation
of historic property under the guidelines of the Community Preservation Act of the Massachusetts
general laws.
The Road Improvements fund is a capital projects fund used to account for the costs of roadway
improvements.
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, 2016
- 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.
The Postemployment Benefit Trust is used to account for the assets held that will fund the long
term liability associated with the Towns retiree’s health benefits.
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, 2016
- 29 -
E. Fair Value Measurements
The Town reports required types of financial instruments in accordance with the fair value standards.
These standards require an entity to maximize the use of observable inputs (such as quoted prices in
active markets) and minimize the use of unobservable inputs (such as appraisals or valuation techniques)
to determine fair value. Fair value standards also require the government to classify these financial
instruments into a three-level hierarchy, based on the priority of inputs to the valuation technique or in
accordance with net asset value practical expedient rules, which allow for either Level 2 or Level 3
depending on lock up and notice periods associated with the underlying funds. Instruments measured and
reported at fair value are classified and disclosed in one of the following categories:
Level 1 – Quoted prices are available in active markets for identical instruments as of the reporting date.
Instruments, which are generally included in this category, include actively traded equity and debt
securities, U.S. government obligations, and mutual funds with quoted market prices in active markets.
Level 2 – Pricing inputs are other than quoted in active markets, which are either directly or indirectly
observable as of the reporting date, and fair value is determined through the use of models or other
valuation methodologies. Certain fixed income securities, primarily corporate bonds, are classified as
Level 2 because fair values are estimated using pricing models, matrix pricing, or discounted cash flows.
Level 3 – Pricing inputs are unobservable for the instrument and include situations where there is little, if
any, market activity for the instrument. The inputs into the determination of fair value require significant
management judgment or estimation. In some instances the inputs used to measure fair value may fall into
different levels of the fair value hierarchy and is based on the lowest level of input that is significant to
the fair value measurement. Market price is affected by a number of factors, including the type of
instrument and the characteristics specific to the instrument. Instruments with readily available active
quoted prices generally will have a higher degree of market price observability and a lesser degree of
judgment used in measuring fair value. It is reasonably possible that change in values of these instruments
will occur in the near term and that such changes could materially affect amounts reported in these
financial statements. For more information on the fair value of the Town’s financial instruments, see Note
3 – Fair Value Measurements.
F. Accounts Receivable
Government-Wide and Fund Financial Statements
The recognition of revenue related to accounts receivable reported in the government-wide financial
statements and proprietary and fiduciary funds financial statements are reported under the accrual basis of
accounting. The recognition of revenue related to accounts receivable reported in the governmental funds
financial statements are reported under the modified accrual basis of accounting.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 30 -
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, 2016
- 31 -
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.
G. Inventories
Government-Wide and Fund Financial Statements
Inventories of the governmental funds and the water and golf enterprise funds are recorded as
expenditures at the time of purchase. Such inventories are not material in total to the basic financial
statements, and therefore are not reported.
H. Capital Assets
Government-Wide and Proprietary Fund Financial Statements
Capital assets, which include land, vehicles, buildings and improvements, capital improvements,
machinery and equipment, 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 funds financial statements. Capital assets
are recorded at historical cost, or at estimated historical cost, if actual historical cost is not available.
Donated capital assets are recorded at the estimated fair market value at the date of donation. Except for
the capital assets of the governmental activities column in the government-wide financial statements,
construction period interest is capitalized on constructed capital assets if material.
All purchases and construction costs in excess of $15,000, and all land costs, are capitalized at the date of
acquisition or construction, respectively, with expected useful lives of five years or greater.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 32 -
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.
I. Interfund Receivables and Payables
During the course of its operations, transactions occur between and within individual funds that may
result in amounts owed between funds.
Government-Wide Financial Statements
Transactions of a buyer/seller nature between and within governmental funds are eliminated from the
governmental activities in the statement of net position. Any residual balances outstanding between the
governmental activities and business-type activities are reported in the statement of net position as
"internal balances".
Fund Financial Statements
Transactions of a buyer/seller nature between and within funds are not eliminated from the individual
fund statements. Receivables and payables resulting from these transactions are classified as "Due from
other funds" or "Due to other funds" on the balance sheet.
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, 2016
- 33 -
J. Interfund Transfers
During the course of its operations, resources are permanently reallocated between and within funds.
These transactions are reported as operating transfers in and operating transfers out.
Government-Wide Financial Statements
Operating transfers between and within governmental funds are eliminated from the governmental
activities in the statement of net position. Any residual balances outstanding between the governmental
activities and business-type activities are reported in the statement of activities as "Transfers, net".
Fund Financial Statements
Operating transfers between and within funds are not eliminated from the individual fund statements and
are reported as operating transfers in and operating transfers out.
K. Deferred Outflows/Inflows of Resources
Government-Wide Financial Statements (Net Position)
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future period(s) and so will not be recognized as
an outflow of resources (expense/ expenditure) until then. The Town reported deferred outflows of
resource related to pensions in this category.
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until that time. The Town reported deferred inflows of resource related
to pensions in this category.
Governmental Fund Financial Statements
In addition to liabilities, the governmental funds balance sheet will sometimes report a separate section
for deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents assets that have been recorded in the governmental fund financial statements but the
revenue is not available and so will not be recognized as an inflow of resources (revenue) until it becomes
available. The Town has recorded unavailable revenue as deferred inflows of resources in the
governmental funds balance sheet. Unavailable revenue is recognized as revenue in the conversion to the
government-wide (full accrual) financial statements.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 34 -
L. Net Position and Fund Equity
Government-Wide Financial Statements (Net Position)
Net position are classified into three components:
a. Net investment in capital assets – consists of capital assets including restricted capital assets, net
of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages,
notes, or other borrowings that are attributable to the acquisition, construction, or improvement of
those assets.
b. Restricted net position – Consists of net position with constraints placed on the use either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other
governments; or (2) law through constitutional provisions or enabling legislation.
Net position have been “restricted” for the following:
• Capital Projects represent various ongoing capital projects at June 30, 2016.
• Permanent funds -expendable represents amounts held in trust for which the expenditures are
restricted by various trust agreements.
• Permanent funds -nonexpendable represents amounts held in trust for which only investment
earnings may be expended.
• Other specific purpose represents restrictions placed on assets from outside parties.
c. Unrestricted net position – All other net position that do not meet the definition of “restricted” or
“net investment in capital assets.”
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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 35 -
• For unassigned fund balance: is the residual classification for the general fund. In other
governmental funds, if expenditures incurred for specific purposes exceeded the amounts
restricted, committed, or assigned to those purposes, it may be necessary to report a negative
unassigned fund balance.
The Town uses the following criteria for fund balance policies and procedures:
• When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balance is available, the unrestricted amount will be considered to have been spent.
• When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund
balance is available, and the least restricted amount will be considered to have been spent.
M. Long-term debt
Government-Wide and Proprietary Fund Financial Statements
Long-term debt is reported as liabilities in the government-wide and proprietary fund statement of net
position. Material bond premiums and discounts are deferred and amortized over the life of the bonds
using the effective interest method. Bonds payable are reported net of the applicable bond premium or
discount.
Governmental Fund Financial Statements
The face amount of governmental funds long-term debt is reported as other financing sources. Bond
premiums and discounts, as well as issuance costs, are recognized in the current period. Bond premiums
are reported as other financing sources and bond discounts are reported as other financing uses. Issuance
costs, whether or not withheld from the actual bond proceeds received, are reported as general
government expenditures.
N. Investment Income
Excluding the permanent funds, investment income derived from major and nonmajor governmental
funds is legally assigned to the general fund unless otherwise directed by Massachusetts General Laws
(MGL).
O. Compensated Absences
Employees are granted sick and vacation leave in varying amounts. Upon retirement, termination or
death, certain employees are compensated for unused sick and vacation leave (subject to certain
limitations) at their then current rates of pay. The total amount of sick and vacation costs to be paid in
future years is not material to the basic financial statements and has not been recorded on the basic
financial statements.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 36 -
P. Net Pension Liability
Governmental Accounting Standards Board (GASB) Statement #68 requires employers participating in a
cost-sharing pension plan to recognize pension liabilities as employees provide services to the
government and earn their pension benefits. Employers participating in cost-sharing plans are required to
recognize their proportionate share of the plan’s collective pension amounts for all benefits provided
through the plan including the net pension liability, deferred outflows of resources, deferred inflows of
resources, and pension expense.
Q. Post Retirement Benefits
Government-Wide and Fund Financial Statements
In addition to providing pension benefits, health and life insurance coverage is provided for retired
employees and their survivors in accordance with Chapter 32B, of Massachusetts General Laws, under
various contributory plans. The cost of providing health and life insurance is recognized by recording the
employer's 50% share of insurance premiums in the general fund in the fiscal year paid. All benefits are
provided through third-party insurance carriers and health maintenance organizations that administer,
assume, and pay all claims.
R. Use of Estimates
Government-Wide and Fund Financial Statements
The preparation of the accompanying financial statements in conformity with accounting principles
generally accepted in the United States of America, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and
expenditures/expenses during the reporting period. Actual results could vary from estimates that were
used.
S. Total Column
Government-Wide Financial Statements
The total column presented on the government-wide financial statements represents consolidated financial
information.
Fund Financial Statements
The total column on the fund financial statements is presented only to facilitate financial analysis. Data in
this column is not comparable to the consolidated financial information.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 37 -
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 2016 approved budget authorized
$36,762,826 in current year appropriations and other amounts to be raised and $2,222,584 in carryover
articles carried over from previous fiscal years. Supplemental appropriations of $1,192,410 were
approved at two Special Town Meetings for fiscal year 2016.
The Finance Director has the responsibility to ensure that budgetary controls are maintained and
monitored through the accounting system.
B. Budgetary – GAAP Reconciliation
For budgetary financial reporting purposes, the Uniform Municipal Accounting System basis of
accounting (established by the Commonwealth) is followed, which differs from the GAAP basis of
accounting. A reconciliation of budgetary-basis to GAAP-basis results for the general fund for the fiscal
year ended June 30, 2016, is presented below:
Net change in fund balance - budgetary basis (1,616,152)$
Basis of accounting differences:
Increase in revenue for on-behalf payments - MTRS 999,518
Increase in expenditures for on-behalf payments - MTRS (999,518)
Increase in revenue for the MWPAT subsidy 7,442
Increase in expenditures for the MWPAT subsidy (7,442)
Net Stabilization fund activity 9,592
Adjustment for current year articles 1,660,203
Adjustment for current year encumbrances 237,431
Adjustment for expenditures from prior year encumbrances (85,389)
Net change in fund balance - GAAP basis 205,685$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 38 -
C. Excess of Expenditures over Appropriations
For the fiscal year ended June 30, 2016, actual expenditures exceeded appropriations for the snow and
ice. This over-expenditure will be funded by available funds during fiscal year 2017, as is allowed by
Massachusetts general laws (MGL).
D. Deficit Fund Balances
Individual fund deficits exist within the special revenue, capital project funds, and golf capital project
fund. These individual deficits will be eliminated through subsequent fiscal year budget transfers, grants,
and/or proceeds from long-term debt during fiscal year 2017.
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), Share Insurance Fund (SIF), 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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 39 -
The following table illustrates how much of the Town’s bank deposits are insured 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, 2016:
Total Bank Balances 22,063,906$
Bank Balances Covered by Deposit Insurance
Federal Deposit Insurance Corporation (FDIC)1,003,827
Share Insurance Fund (SIF)1,357,700
Depositor's Insurance Fund (DIF)15,579,064
Total Bank Balances Covered by Deposit Insurance 17,940,591
Balances Subject to Custodial Credit Risk
Bank Balances Collaterallized with Securities Held
by the Pledging Financial Institution's Trust
Department or Agent but not in the Town's Name 3,007,496
Bank Balances Uninsured and Uncollateralized 1,115,819
Total Bank Balances Subject to Custodial Credit Risk 4,123,315
Total Bank Balances 22,063,906$
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).
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 40 -
Presented below are the actual rating as of year-end for each investment type of the Town.
Investment type Fair value
Minimum
Legal
Rating Unrated
State Retirees Benefits Trust Fund (SRBT) -
HCST OPEB Master Trust 1,299,332$ N/A 1,299,332$
Cetrificate of Deposit 1,159,361 N/A 1,159,361
Total Investments 2,458,693$ 2,458,693$
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 investment in the State Retirees Benefit Trust Fund is not exposed to
custodial credit risk because the investment is registered in the name of the Town. The investment
in the Certificate of Deposit is not exposed to custodial risk because it is fully insured by the
Federal Depositors Insurance Corporation (FDIC) and the Depositors Insurance Fund (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.
Information about the sensitivity of the fair values of the Town’s investments to market interest
rate fluctuations are as follows:
Investment
maturities
(in years)
Investment type Fair value Less than 1
State Retirees Benefits Trust Fund (SRBT) -
HCST OPEB Master Trust 1,299,332$ 1,299,332$
Certificate of Deposit 1,159,361 1,159,361
Total Investment 2,458,693$ 2,458,693$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 41 -
• Concentration of Credit Risk
The Town places no limit on the amount the government may invest in any one issuer. More than
5% of the Town’s investments are in the following securities:
Issuer
Percentage of
Total
Investments
State Retirees Benefits Trust Fund (SRBT) -
HCST OPEB Master Trust 52.85%
Certificate of Deposit 47.15%
Fair Market Value of Investments
The Town holds investments that are measured at fair value on a recurring basis. Because investing is not
a core part of the Town’s mission, the Town determines that the disclosures related to these investments
only need to be disaggregated by the major type. The Town chooses a tabular format for disclosing the
levels within the fair value hierarchy.
The Town categorizes its fair value measurement within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the assets. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs
are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
Investment Type June 30, 2016
Quoted Price in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs (Level 3)
Investment measured at fair value
Certificate of Deposit 1,159,361$ 1,159,361$ -$ -$
Investments measured at the net asset value (NAV)
State Retirees Benefits Trust - (SRBT)1,299,332
Investments measured at amortized cost
Massachusetts Municipal Depository Trust - (MMDT)1,576,226
Total Investments 4,034,919$
Fair Value Measurements Using
Certificates of deposits classified in Level 1 of the fair value hierarchy are valued using prices quoted in
active markets for those securities.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 42 -
State Retirees Benefits Trust (SRBT) investments are valued using the net assets value method. This
investment pool was established by the Treasurer of the Commonwealth of Massachusetts, who serves as
Trustee. SRBT is administered by the Pension Reserves Investment Management Board (PRIM). The fair
values of the positions in each investment Pool are the same as the value of each Pool’s shares. The Town
does not have the ability to control any of the investment decisions relative to its funds in SRBT.
Massachusetts Municipal Depository Trust (MMDT) investments are valued at amortizated cost. Under
the amortized cost method an investment is valued initially at its cost and adjusted for the amount of
interest income accrued each day over the term of the investment to account for any difference between
the initial cost and the amount payable at its maturity. If amortized cost is determined not to approximate
fair value, the value of the portfolio securities will be determined under procedures established by the
Advisor.
NOTE 4 – RECEIVABLES
The receivables at June 30, 2016 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, 2016, for the water enterprise fund consists of the following:
Allowance
Gross for Net
Receivables:Amount Uncollectibles Amount
Real estate and personal property taxes 349,346$ (2,750)$ 346,596$
Tax liens 428,731 - 428,731
Motor vehicle and other excise taxes 165,910 (67,103) 98,807
Departmental and other 315,057 (82,342) 232,715
Intergovernmental 126,734 - 126,734
Special assessments 579,508 - 579,508
Total 1,965,286$ (152,195)$ 1,813,091$
Allowance
Gross for Net
Receivables:Amount Uncollectibles Amount
Water
User fees 1,001,219$ -$ 1,001,219$
Special Assessments 31,016 - 31,016
Total 1,032,235$ -$ 1,032,235$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 43 -
Governmental funds report deferred inflows of resources in connection with receivables for revenues that
are not considered to be available to liquidate liabilities of the current period. Governmental funds also
defer revenue recognition in connection with revenues that have been received, but not yet earned. At the
end of the current fiscal year, the component of deferred inflows of resources reported in the
governmental funds is as follows:
Nonmajor
General Community Governmental
Deferred Inflows:Fund Preservation Funds Total
Deferred Property Taxes 718,221$ 17,373$ 519,071$ 1,254,665$
Deferred Other Revenue - - 275,001 275,001
Total 718,221$ 17,373$ 794,072$ 1,529,666$
Deferred Inflows of Resources Analysis
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 44 -
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended June 30, 2016, was as follows:
Beginning Decrease/Ending
Governmental Activities:Balance Increases Adjustments Balance
Capital assets not being depreciated:
Land 39,229,192$ 300,000$ -$ 39,529,192$
Construction in progress 224,693 2,756,507 - 2,981,200
Total capital assets not being depreciated 39,453,885 3,056,507 - 42,510,392
Capital assets being depreciated:
Building and improvements 28,417,709 319,751 - 28,737,460
Capital improvement (other than buildings)3,910,210 798,822 - 4,709,032
Machinery, equipment, and vehicles 10,653,091 699,943 - 11,353,034
Infrastructure 11,429,188 1,030,163 - 12,459,351
Total capital assets being depreciated 54,410,198 2,848,679 - 57,258,877
Less accumulated depreciation for:
Building and improvements (11,844,913) (602,382) - (12,447,295)
Capital improvement (other than buildings)(928,151) (255,010) - (1,183,161)
Machinery, equipment, and vehicles (7,315,355) (699,701) - (8,015,056)
Infrastructure (4,744,411) (312,511) - (5,056,922)
Total accumulated depreciation (24,832,830) (1,869,604) - (26,702,434)
Total capital assets being depreciated, net 29,577,368 979,075 - 30,556,443
Total governmental activities capital assets, net 69,031,253$ 4,035,582$ -$ 73,066,835$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 45 -
Depreciation expense was charged to functions/programs of the primary government as follows:
General government 151,794$
Public safety 643,776
Education 440,748
Public works 446,731
Human services 26,255
Culture and recreation 160,300
Total depreciation expense - governmental activities 1,869,604$
Water 360,896$
Golf 453,147
Total depreciation expense - business-type activities 814,043$
Governmental Activities:
Business-Type Activities:
Beginning Decreases/Ending
Business-Type Activities:Balance Increases Adjustments Balance
Capital assets not being depreciated:
Land 2,874,212$ -$ -$ 2,874,212$
Construction in progress 389,206 - - 389,206
Total capital assets not being depreciated 3,263,418 - - 3,263,418
Capital assets being depreciated:
Buildings and improvements 5,674,503 33,139 - 5,707,642
Machinery, equipment, and vehicles 2,967,064 150,987 - 3,118,051
Infrastructure 24,093,362 870,395 - 24,963,757
Total capital assets being depreciated 32,734,929 1,054,521 - 33,789,450
Less accumulated depreciation for:
Buildings and improvements (1,325,898) (70,165) - (1,396,063)
Machinery, equipment, and vehicles (2,030,101) (177,383) - (2,207,484)
Infrastructure (10,154,919) (566,495) - (10,721,414)
Total accumulated depreciation (13,510,918) (814,043) - (14,324,961)
Total capital assets being depreciated, net 19,224,011 240,478 - 19,464,489
Total business-type activites capital assets, net 22,487,429$ 240,478$ -$ 22,727,907$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 46 -
NOTE 6 – CAPITAL LEASES
The Town has entered into lease agreements as lessee for financing the acquisition of two Ferrara fire
pumper trucks, two ambulances, two golf course aerators, a golf course Procore processor, and seven
mowers. 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:
Primary
Government
Assets:
Vehicles 1,334,166$
Machinery & Equipment 333,902
Less: Accumulated depreciation (796,746)
871,322$
The future minimum lease obligations and the net present value of the minimum lease payments as of
June 30, 2016, are as follows:
Governmental
Year Ending June 30 Activities
2017 276,623$
2018 276,623
2019 211,155
2020 50,907
Total minimum lease payments 815,308
Less: amounts representing interest (56,456)
Present value of minimum lease payments 758,852$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 47 -
NOTE 7 – INTERFUND TRANSFERS
Interfund transfers for the fiscal year ended June 30, 2016, are summarized as follows:
(1) Represents budgeted transfers from the various funds to the general fund.
(2) Represents budgeted transfers from the general fund to various funds
(3) Represents other transfers
NOTE 8 – SHORT-TERM FINANCING
Under state law, and with the appropriate authorization, the Town is authorized to borrow funds on a
temporary basis as follows:
• To fund current operations prior to the collection of revenues by issuing revenue anticipation notes
(RANS).
• To fund grants prior to reimbursement by issuing grant anticipation notes (GANS).
• To fund Capital project costs incurred prior to selling permanent debt by issuing bond anticipation
notes (BANS).
• To fund current project costs and other approved expenditures incurred, that are anticipated to be
reimbursed by the Commonwealth through the issuance of State Aid anticipation notes (SAANS).
Short-term loans are general obligations of the Town and maturity dates are governed by statute. Interest
expenditures and expenses for short-term borrowings are accounted for in the general fund, and enterprise
funds respectively.
Nonmajor
General Governmental
Operating Transfers Out:Fund Funds Total
Nonmajor Governmental Funds 1,356,520$ -$ 1,356,520$ (1)
Nonmajor Governmental Funds 6,030 - 6,030 (3)
Golf Enterprise Fund 580,504 - 580,504 (1)
Water Enterprise Fund 544,598 - 544,598 (1)
Community Preservation Fund 326,961 - 326,961 (1)
General Fund - 562,868 562,868 (2)
General Fund - 105,565 105,565 (3)
Total 2,814,613$ 668,433$ 3,483,046$
Operating Transfers In:
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 48 -
The following is a summary of changes in short-term debt for the year ended June 30, 2016:
Type Purpose
Rate
(%)
Due
Date
Balance at
June 30, 2015
Renewed/
Issued
Retired/
Redeemed
Balance at
June 30, 2016
Governmental Funds
BAN Eddy School Renovation 0.50 3/16/2016 2,908,104$ -$ (2,908,104)$ -$
BAN Land Acquisition 0.45 8/21/2015 400,000 - (400,000) -
BAN Eddy and Stony Brook Renovation 0.70 11/20/2015 470,750 - (470,750) -
BAN Crosby Mansion Septic 0.50 2/19/2016 32,500 - (32,500) -
BAN DPW Equipment 0.50 11/20/2015 66,112 - (66,112) -
BAN DPW Compactor 0.60 11/20/2015 10,987 - (10,987) -
BAN Eddy School Roof 0.60 3/16/2016 232,824 - (232,824) -
BAN Eddy School 0.80 11/18/2016 - 255,300 - 255,300
BAN Stony Brook Windows 0.90 11/18/2016 - 78,900 - 78,900
BAN Road Repairs 0.80 11/18/2016 - 2,296,000 - 2,296,000
BAN Private Road 1.25 11/18/2016 - 300,618 - 300,618
Total Governmental Funds 4,121,277 2,930,818 (4,121,277) 2,930,818
Business - Type Activities
BAN Various Water Projects 0.60 3/16/2016 1,386,000 - (1,386,000) -
BAN Golf Course Improvements 0.50 11/20/2015 200,000 - (200,000) -
BAN Golf Course 0.65 11/18/2016 - 160,000 - 160,000
BAN Golf Workman Vehicle 0.75 11/18/2016 - 66,903 - 66,903
Total Business Type Activities 1,586,000 226,903 (1,586,000) 226,903
Total:5,707,277$ 3,157,721$ (5,707,277)$ 3,157,721$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 49 -
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, 2016:
Bonds and Notes Payable Schedule -Governmental Funds
Project
Interest
Rate (%)
Outstanding at
June 30, 2015 Issued
Redeemed/
Refunded
Outstanding at
June 30, 2016
School 3.74 385,000$ -$ 385,000$ -$
Library 3.74 50,000 - 50,000 -
MWPAT Title V Septic Var 62,200 - 10,400 51,800
Police Station 3.89 840,000 - 170,000 670,000
MWPAT Title V Septic 3.59 90,000 - 10,000 80,000
Land Acquisition 3.64 360,000 - 60,000 300,000
Road Betterments 3.64 30,000 - 30,000 -
Road Betterments 3.64 15,000 - 15,000 -
Land Acquisition 4.49 475,000 - 50,000 425,000
Land Acquisition 4.49 960,000 - 80,000 880,000
Road Betterments 4.49 30,000 - 15,000 15,000
Road Betterments 4.49 20,000 - 10,000 10,000
Road Betterments 3.96 65,000 - 25,000 40,000
Land Acquisition 3.84 535,000 - 35,000 500,000
Road Betterments 3.84 135,000 - 25,000 110,000
Road Betterments 3.84 45,000 - 10,000 35,000
Road Betterments 3.00 55,000 - 10,000 45,000
Road Betterments 3.00 70,000 - 10,000 60,000
Land Acquisition 3 - 3.50 625,000 - 35,000 590,000
Road Betterments 2.5 - 4.0 - 104,720 - 104,720
Road Betterments 2.5 - 4.0 - 122,354 - 122,354
School Renovations 2.5 - 4.0 - 2,908,104 - 2,908,104
Road Betterments 2.5 - 4.0 - 2,000,000 - 2,000,000
Total 4,847,200$ 5,135,178$ 1,035,400$ 8,946,978$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 50 -
The annual debt service requirements for principal and interest for Governmental bonds and notes
outstanding at June 30, 2016 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, 2016 are as follows:
Fiscal Year Principal Interest Total
2017 865,578$ 314,129$ 1,179,707$
2018 820,400 277,337 1,097,737
2019 785,400 243,464 1,028,864
2020 785,400 212,573 997,973
2021 610,200 181,363 791,563
2022-2026 2,470,000 585,405 3,055,405
2027-2031 1,795,000 227,862 2,022,862
2032-2036 815,000 59,875 874,875
Total 8,946,978$ 2,102,008$ 11,048,986$
Project
Interest
Rate (%)
Outstanding at
June 30, 2015 Issued
Redeemed/
Refunded
Outstanding at
June 30, 2016
Golf Course 3.92 3,490,000$ -$ 625,000$ 2,865,000$
Water Mains 3.89 740,000 - 150,000 590,000
Water Betterments - Slough Rd 3.64 390,000 - 40,000 350,000
Water Betterments - Fiddler's Ln 4.49 35,000 - 5,000 30,000
Water Offices/Garage 3.96 1,600,000 - 125,000 1,475,000
Well #6 3 - 3.50 2,540,000 - 135,000 2,405,000
Well Access Road 2.5 - 4.0 - 274,945 - 274,945
Water 2.5 - 4.0 - 840,168 - 840,168
Total 8,795,000$ 1,115,113$ 1,080,000$ 8,830,113$
Fiscal Year Principal Interest Total
2017 1,190,113$ 342,481$ 1,532,594$
2018 1,225,000 286,914 1,511,914
2019 1,255,000 229,545 1,484,545
2020 1,290,000 180,682 1,470,682
2021 370,000 130,413 500,413
2022-2026 1,805,000 451,403 2,256,403
2027-2031 1,105,000 180,160 1,285,160
2032-2036 590,000 41,775 631,775
Total 8,830,113$ 1,843,373$ 10,673,486$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 51 -
Loans Authorized and Unissued
As of June 30, 2016, the Town has loans authorized and unissued as follows:
Date
Description Authorized Amount
Eddy School - Roof Replacement 5/5/2014 255,300$
Golf Course Improvement 11/18/2013 160,000
Stony School - Window Replacement 5/5/2014 78,900
Road Repair & Resurfacing 5/4/2015 8,000,000
Road Betterment - Tower Hill 5/4/2015 394,233
Road Betterments - Moss/Common 5/4/2015 112,386
Library Parking Lot 9/21/2015 302,000
Golf Utility Vehicles 9/2/2015 77,000
Fire Station 11/16/2015 13,500,000
Town Hall Window Replacement 5/2/2016 55,000
DPW Compactors/Containers 5/2/2016 282,000
Intergrated Water Resources 5/2/2016 75,000
Leona Terrace Road Betterments 5/2/2016 148,483
23,440,302$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 52 -
Changes in Long-term Liabilities
The following is a summary of changes in long-term liabilities for the year ended June 30, 2016:
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, 2016:
Total Long-Town's Town's
Term Debt Estimated Indirect
Agency Outstanding Share Debt
Nauset Regional School District 3,506,060$ 46.28%1,622,605$
Beginning Ending Current
Governmental Activities:Balance Additions Reductions Balance Portion
Landfill postclosure care costs 380,000$ -$ (19,500)$ 360,500$ 19,500$
Capital Leases 571,848 242,000 (237,077) 576,771 184,398
Postemployment benefits 5,011,580 886,520 - 5,898,100 -
Net pension liability 17,125,493 1,874,443 - 18,999,936 -
Bonds and notes payable 4,847,200 5,135,178 (1,035,400) 8,946,978 865,578
Total governmental activities
long-term liabilities 27,936,121$ 8,138,141$ (1,291,977)$ 34,782,285$ 1,069,476$
Beginning Ending Current
Business-Type Activities:Balance Additions Reductions Balance Portion
Postemployment benefits 895,354$ 158,383$ -$ 1,053,737$ -$
Net Pension Liability 3,310,656 362,363 - 3,673,019 -
Capital Lease 292,600 - (110,519) 182,081 64,459
Bonds and notes payable 8,795,000 1,115,113 (1,080,000) 8,830,113 1,190,113
Total business-type activities
long-term liabilities 13,293,610$ 1,635,859$ (1,190,519)$ 13,738,950$ 1,254,572$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 53 -
NOTE 10 – GOVERNMENTAL FUND BALANCE CLASSIFICATIONS
The Town has classified its governmental fund balances with the following hierarchy.
Nonmajor
General Community Road Governmental
Fund Preservation Improvements Funds Total
Fund Balances
Nonspendable:
Permanent Fund Principal -$ -$ -$ 150,388$ 150,388$
Restricted For:
General Government - - - 699,913 699,913
Public Safety - - - 1,276,476 1,276,476
Education - - - 91,533 91,533
Public Works - - - 539,055 539,055
Human Services - - - 147,603 147,603
Culture & Recreration - - - 317,642 317,642
Employee Benefits - - - 130,342 130,342
Bond Premium 372,027 - - - 372,027
Community Preservation - 3,470,646 - - 3,470,646
Expendable Trust Funds - - - 119,114 119,114
372,027 3,470,646 - 3,321,678 7,164,351
Committed To:
Continuing Appropriations
General Government 262,803 - - - 262,803
Public Safety 396,471 - - - 396,471
Education 272,438 - - - 272,438
Public Works 340,165 - - - 340,165
Human Services 273,872 - - - 273,872
Culture & Recreation 104,454 - - - 104,454
Debt Service 10,000 - - - 10,000
1,660,203 - - - 1,660,203
Assigned To:
Encumbered For:
General Government 30,614 - - - 30,614
Public Safety 65,784 - - - 65,784
Education 136,446 - - - 136,446
Public Works 3,752 - - - 3,752
Human Services 500 - - - 500
Employee Benefits 335 - - - 335
Subsequent Years Expenditures 826,659 - - - 826,659
1,064,090 - - - 1,064,090
Unassigned
General Fund 3,675,293 - - - 3,675,293
General Stabilization Fund 2,064,083 - - - 2,064,083
Nonmajor Governmental Funds - - - (239,028) (239,028)
Nonmajor Capital Projects
Public Safety - - - (255,408) (255,408)
Education - - - (334,199) (334,199)
Public Works - - (668,329) - (668,329)
Culture & Recreation - - - (169,050) (169,050)
5,739,376 - (668,329) (997,685) 4,073,362
Total Governmental Fund Balances 8,835,696$ 3,470,646$ (668,329)$ 2,474,381$ 14,112,394$
`
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 54 -
NOTE 11 – STABILIZATION FUND
The Town has established one fund where the Town has set aside amounts for emergency and capital
needs. This fund consists of the following:
The Stabilization fund is used to account for any appropriation, as approved by a 2/3 vote at the
annual or special town meeting for additions or reductions to the fund. Any interest shall be
added to and become part of the fund. The Stabilization fund balance is $2,064,083 as of June 30,
2016. The fund was established under chapter 40, sub-section 5B of the Massachusetts General
Law.
NOTE 12 – RISK FINANCING
The Town is exposed to various risks of loss related to torts; theft of, damage to or destruction of assets;
errors and omissions; injuries to employees; employee’s health and life; and natural disasters.
Buildings are fully insured against fire, theft, and natural disaster to the extent that losses exceed $1,000
per incident. The fully insurable value of Town buildings and contents is $48,222,384.
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 2016.
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, six 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
now consists of Dukes County Commissioners; the Towns of Chilmark, Edgartown, Gosnold, Oak Bluffs,
Tisbury, West Tisbury, and Aquinnah; Martha’s Vineyard Refuse Disposal and Resource Recovery
District; Martha’s Vineyard Commission; Martha’s Vineyard Land Bank Commission; Oak Bluffs Water
District; Martha’s Vineyard Regional School District; Up-Island Regional School District; Martha’s
Vineyard Charter School; and Martha’s Vineyard Transit Authority.
Health benefits plans for active employees and non-Medicare eligible retirees consist of a traditional
medical indemnity plan, two Preferred Provider Organization (PPO) plans and two Exclusive Provider
Organization (EPO) plans. All active employee plans are self-funded with Blue Cross and Blue Shield of
Massachusetts (BCBSMA) and Harvard Pilgrim Health Care (HPHC) as third party administrators. The
Group offers six health plans for Medicare eligible retirees, which include two self-funded Medicare
Supplement Medical plans with fully insured Medicare Prescription Drug Plans (PDP’s), one of which is
administered by BCBSMA and one by HPHC, one fully insured Medicare Supplement with a PDP
provided by Tufts Health Plan, one HMO Medicare wrap plan fully insured by BCBSMA, and two fully
insured Medicare Advantage HMO plans, one of which is from BCBSMA and one from Tufts Health
Plan.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 55 -
Prior to July 1, 2012, the Group offered two benefit options for each EPO and PPO plan: the Legacy
option and the Rate Saver option. On July 1, 2012, the Group changed its plan designs following
applicable law to do so. The plan design changes resulted in a single option for each EPO and each PPO.
These options are similar in plan design to the Group Insurance Commission’s “benchmark plan” and
include additional member cost-sharing features. The Group has adopted a contributory dental insurance
plan (self-funded) and a voluntary dental plan, which was premium based through June 30, 2007 and
changed to a self funded basis effective July 1, 2007. These plans are administered by Delta Dental Plan
of Massachusetts for a monthly administrative fee, based on the number of subscribers. Effective July 1,
2009 the group adopted a voluntary fully funded vision plan from EyeMed Vision Care. The vision plan
is optional for employers.
The Master Health Plus, Blue Care Elect Preferred PPO plan, Network Blue EPO plan, and Medex 2 plan
are on a claims-paid basis, and are administered by Blue Cross Blue Shield of Massachusetts for a
monthly administration fee based on the number of individual, single parent/single child, and family plan
subscribers for that particular month. Medex 2 is combined with a fully insured PDP provided by Blue
Cross Blue Shield and called Blue Medicare RX.
The Harvard Pilgrim EPO Plan, Harvard Pilgrim PPO plan, and Harvard Pilgrim Health Care Medicare
Enhance plan are on a claims-paid basis, and are administered by Harvard Pilgrim Health Care for a
monthly administration fee based on the number of individual and family plan subscribers for that
particular month. Medicare Enhance is combined with a fully insured PDP from Coventry First Health.
On July 1, 2014 the Group joined with two other Massachusetts municipal joint purchase groups to create
the first Massachusetts Municipal Pooling Arrangement (MMRA). The policy year is July 1 through June
30. All participants share the same rates for coverage of claims exceeding $300,000. There is no
Aggregating Specific Deductible. If claims experience is below projections, participants are dividend
eligible on a collective and proportional basis. Participating governmental entities have agreed to
participate for a minimum of three years.
The Group does not reinsure its Medex and HPHC Medicare Enhance plans. The policy period covers
claims incurred within 12 months and paid within 24 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 191 Town of Brewster employees and 120
retirees/surviving spouses who participate in the Group’s health care programs. The Town contributes
75% of the premium cost for employees and 50% of the premium cost for retirees and surviving spouses.
As of June 30, 2015 the Cape Cod Municipal Health Group had total assets of $33,983,737, total
liabilities of $13,833,948 (including $13,321,782 in estimated benefits obligations), and a total surplus of
$20,149,789.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 56 -
NOTE 13 - 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 2016, the estimated total Town premiums plus implicit costs for the retiree
medical program are $636,701.
Annual OPEB Cost and Net OPEB Obligation. The Town’s annual other postemployment benefit
(OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an
amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC
represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year
and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty
years. The following table shows the components of the Town’s annual OPEB cost for the fiscal year, the
amount actually contributed to the plan, and changes in the Town’s net OPEB obligation to the plan:
Annual required contribution 1,603,732$
Interest on net OPEB obligation 324,881
Adjustment to annual required contribution (ARC)(247,009)
Annual OPEB cost (expense)1,681,604
Contributions made (636,701)
Increase in net OPEB obligation 1,044,903
Net OPEB obligation - beginning of year 5,906,934
Net OPEB obligation - end of year 6,951,837$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 57 -
The Town’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for 2016 and the seven preceding years were as follows:
Funded Status and Funding Progress. As of June 30, 2014, the most recent actuarial valuation date, the
plan was 6.39% funded. The actuarial accrued liability for benefits was $18.163 million, and the actuarial
value of assets was $1.161 million, resulting in an unfunded actuarial accrued liability (UAAL) of
$17.002 million. The covered payroll (annual payroll of active employees covered by the plan) was
$13.348 million, and the ratio of the UAAL to the covered payroll was 127.4%.
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.
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
6/30/2013 $ 1,312,737 29.28% $ 928,407 $ 5,001,184
6/30/2014 $ 1,395,154 111.01% $ (153,560) $ 4,847,624
6/30/2015 $ 1,576,152 32.79% $ 1,059,310 $ 5,906,934
6/30/2016 $ 1,681,604 37.86% $ 1,044,903 $ 6,951,837
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 58 -
In the June 30, 2014, actuarial valuation, the projected unit credit actuarial cost method with amortization
payments increasing at 4.0% 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 5.50% 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 2.0% for 1 year and 0.5% for 6 years to an ultimate rate
of 5.0% per year. The actuarial value of assets was determined using market value. The UAAL is being
amortized with increasing payments at 4.0% over 30 years at transition. The remaining amortization
period at July 1, 2016, was 22 years.
NOTE 14 – PENSION PLANS
A. Plan Descriptions
The Town contributes to the Barnstable County Retirement System (The System), a multiple-employer,
cost sharing contributory defined benefit pension plan was established in 1937, under Massachusetts
General Law (MGL), Chapter 32, and is regulated by the Massachusetts Public Employee Retirement
Administration Commission (PERAC). Substantially all employees are members of the 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 issues a publically available audited financial report that may be obtained by contacting
the system at 3195 Main Street Barnstable, Ma 02630. The MTRS issues a publically available
audited financial report that may be obtained by contacting MTRS at One Charles Park, Cambridge,
Massachusetts 02142-1206.
B. Benefits
The System and MTRS provide retirement, disability and death benefits to plan members and
beneficiaries. Massachusetts Contributory Retirement System benefits are with certain exceptions,
uniform from system to system. The System provides for retirement allowance benefits up to a maximum
of 80% of an employees highest three year average annual rate of regular compensation for those hired
prior to April 2, 2012. For persons who became employees on or after April 2, 2012, average salary is the
average annual rate of regular compensation received during the five consecutive years that produce the
highest average, or, if greater, during the last five years (whether or not consecutive) preceding
retirement. Benefit payments are based upon an employee’s age, length of creditable service, level of
compensation, and group classification.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 59 -
Employees who become permanently and totally disabled for further duty may be eligible to receive
a disability retirement allowance. The amount of benefits to be received in such cases is dependent
on several factors, including whether or not the disability is work related, the employee’s age, years
of creditable service, level of compensation, veterans’ status and group classification.
Employees who resign from service are entitled to request a refund of their accumulated total
deductions. Survivor benefits are extended to eligible beneficiaries of employees whose death occurs
prior to or following retirement.
Cost-of living adjustments granted between 1981 and 1997, and any increase in other benefits
imposed by the Commonwealth of Massachusetts’ state law during those years are borne by the
Commonwealth and are deposited in to the pension fund. Cost-of-living adjustments granted after
1997 must be approved by the system and all costs are borne by the system.
C. Contributions
Barnstable County Retirement System
Chapter 32 of MGL governs the contributions of plan members and member employees. Active plan
employees are required to contribute to the system at rates ranging from 5 to 9% and of their gross
regular compensation. The rate is keyed to the date upon which an employee’s membership
commences. Employees hired on or after January 1, 1979, contribute an additional 2.0% of annual
regular compensation in excess of $30,000. The member units are required to pay into the system, a
legislatively mandated actuarial determined contribution that is apportioned among the employers
based on active current payroll. The Town’s proportionate share of the required contribution
equaled its actual contribution for the year ended June 30, 2016 which was $1,946,029 and 19.65%
of covered payroll, actuarially determined as an amount that when combined with plan member
contributions, is expected to finance the costs of benefits earned by plan members during the year,
with an additional amount to finance any unfunded accrued liability.
Massachusetts Teachers’ Retirement System
As required by State statutes, teachers of the Town are covered by the Massachusetts Teachers
Retirement System (MTRS). Plan members (at varying rates of annual covered compensation) and
the Commonwealth of Massachusetts fund contributes to the MTRS. The Pension benefits and
administrative expenses paid by the Teachers Retirement Board are the legal responsibility of the
Commonwealth of Massachusetts, and thus the Town is not required to contribute. The
Commonwealth of Massachusetts contributed “on-behalf” payments to the MTRS totaling $999,518
for fiscal year 2016. In accordance with GASB Statement No. 68, these on-behalf” payments have
been recorded in the general fund as intergovernmental revenues and pension expenditures.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 60 -
D. Pension Liabilities, Pension Expense, and Deferred Ouflows/Inflows of Resources Related to
Pensions
Pension Liabilities
At June 30, 2016 the Town reported a liability of $22,672,955 for its proportionate share of the net
pension liability. The net pension liability was measured as of December 31, 2015 and the total
pension liability used to calculate the net pension liability was determined by an actuarial valuation
as of January 1, 2014. Accordingly, updated procedures were used to roll forward the total pension
liability to the measurement date. The Town’s proportion of the net pension liability was based on a
projection of the Town’s long-term share of contributions to the pension plan relative to the
projected contributions of all participating members. At December 31, 2015, the Town’s proportion
was 3.60% which was a minor decrease from its proportion measured as of December 31, 2014.
Pension Expense and Deferred Outflows/Inflows of Resources
For the year ended June 30, 2016 the Town recognized pension expense of $2,494,998. At June 30,
2016 the Town reported deferred outflows/inflows of resources related to pensions of $1,722,836
from the net difference between projected and actual investment earnings on pension plan
investments. Since the system performs an actuarial valuation bi-annually, there are no reported
differences between expected and actual experience or changes of assumptions as of December 31,
2015.
The deferred inflows/(outflows) of resources related to pensions will be recognized in future pension
expense are as follows:
Measurment Period Year ended June
30 Amount
2017 436,705$
2018 436,705
2019 436,705
2020 428,001
2021 (15,280)
Total Balance of Deferred Inflows 1,722,836$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 61 -
E. Actuarial assumptions
The total pension liability was determined by an actuarial valuation as of January 1, 2014 using the
following actuarial assumptions, applied to all periods included in the measurement that was
updated to December 31, 2015.
Valuation date January 1, 2014
Actuarial cost method Entry age normal cost method
Amortization method Payments increase at 4.0% except for 2010 early retirement
incentive, which is a level payment.
Remaining amortization period 22 years from July 1, 2014 for 2002 and 2003 Early
Retirement Incentives, retiree’s sheriff’s liability and
remaining unfunded liability, and 8 years from July 1, 2014
for 2010 Early Retirement Incentive.
Asset valuation method Sum of actuarial value at the beginning of the year,
contributions and investment earnings based on the actuarial
interest assumption less benefit payments and operating
expenses plus 20% of the market value at the end of the year
in excess of that sum, plus additional adjustment toward
market value as necessary so that the final actuarial value is
within 20% of market value.
Inflation rate 4.0%
Projected salary increases Varies by length of service with ultimate rates of 4.25% for
Group 1, 4.50% for Group 2 and 4.75% for Group 4.
Cost of living adjustments 3.0% of the first $15,000 of retirement income
Rates of retirement Varies based upon age for general employees, police and fire
employees
Rates of disability For general employees, it was assumed that 45% of all
disabilities are ordinary (55% are service connected). For
police and fire employees, 10% of all disabilities are assumed
to be ordinary (90% are service connected).
Mortality rates:
Pre-retirement The RP-2000 Employee Mortality Table projected
generationally with a Scale AA from 2010.
Healthy retiree The RP-2000 Healthy Annuitant Mortality Table projected
generationally with a Scale AA from 2010.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 62 -
Disabled retiree The RP-2000 Healthy Annuitant Mortality Table set forward
three years for males only projected generationally with Scale
AA from 2010.
Investment rate of return/discount 7.75%, net of pension plan investment expense, including
inflation previously 7.875%
The long-term expected rate of return on pension plan investments was determined using a building block
method in which best-estimate ranges of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected future real rates of
return by the target asset allocation percentage and by adding expected inflation. Best estimates of
arithmetic real rates of return for each major asset class included in the pension plan’s target asset
allocation as of January 1, 2014 are summarized in the following table:
Asset Class Target Allocation
Long-Term Expected
Real Rate of Return
Domestic equity 6.60%20.00%
International developed markets equity 7.10%16.00%
International emrging markets equity 9.40%7.00%
Core fixed income 2.20%13.00%
High yield fixed income 4.70%10.00%
Real estate 4.40%10.00%
Commodities 4.40%4.00%
Hedge fund, GTAA, risk parity 3.90%10.00%
Private equity 11.70%10.00%
For the year ended January 1, 2014 the System’s annual money-weighted rate of return on pension
plan investments was 0.57%. The money-weighted rate of return expresses investment performance,
net of pension plan investment expense, adjusted for the changing amounts actually invested,
measured monthly.
F. Discount Rate
The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used
to determine the discount rate assumed plan member contributions will be made at the current
contribution rate and that contributions will be made at rates equal to the actuarially determined
contribution rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to
be available to make all projected future benefit payments of current members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 63 -
G. Sensitivity of the net pension liability to changes on the discount rate
The following presents the net pension liability, calculated using the discount rate of 7.75%, as well as
what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point
lower (6.75%) or 1 percentage point higher (8.75%) than the current rate:
1% Decrease
(6.75%)
Current
Discount Rate
(7.75%)
1% Increase
(8.75%)
Brewster share of the net
pension liability 28,752,683$ 22,672,955$ 17,513,165$
Detailed information about the pension plan’s fiduciary net pension is available in a separately issued
Barnstable County retirement system financial report.
NOTE 15 – COMMITMENTS AND CONTINGENCIES
The Town participates in a number of federal award programs. However the Town is not subject to the
provisions of the Single Audit Act Amendments of 1996, since the Town did not expend more than
$750,000 of federal awards during the period ended June 30, 2016. These programs may still be subject to
financial and compliance audits. Accordingly, the amount of expenditures which may be disallowed by
the granting agencies cannot be determined at this time, although it is believed the amount, if any, would
not be material.
The Town’s landfill was capped in 2000 by order of the Department of Environmental Protection (DEP).
The Town is responsible for post-closure monitoring of the site for thirty years (15 years remaining), and
the estimated liability has been recorded in the Statement of Net Position, Governmental Activities. The
$360,500 reported as landfill post-closure liability at June 30, 2016 is based on what it would cost to
perform all post-closure care at June 30, 2016. 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, 2016, cannot be ascertained, management believes any resulting liability should not materially affect
the financial position at June 30, 2016.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 64 -
NOTE 16 – IMPLEMENTATION OF NEW GASB PRONOUNCMENTS
During fiscal year 2016, the following GASB pronouncements were implemented:
The GASB issued Statement #72. Fair Value Measurement and Application, which is required to be
implemented in 2016. Management’s current assessment is that this pronouncement will not have a
significant impact on the Basic Financial Statements.
The GASB issued Statement #76, The Hierarchy of Generally Accepted Accounting Principles for State and
Local Governments, which is required to be implemented in 2016. Management’s current assessment
is that this pronouncement will not have a significant impact on the Basic Financial Statements.
The GASB issued Statement #79, Tax Abatement Disclosures which is required to be implemented in
2015. Management’s current assessment is that this pronouncement will not have a significant
impact on the Basic Financial Statements.
Future GASB Pronouncements:
The GASB issued Statement #73, Accounting and Financial Reporting for Pension and Related Assets that
are not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statement 67
and 68. The provisions of this Statement are effective for 2016 – except those provisions that address
employers and governmental non-employer contributing entities for pensions that are not within the
scope of Statements 68, which are effective for 2017. Management’s current assessment is that this
pronouncement will not have a significant impact on the Basic Financial Statements.
The GASB issued Statement #74, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans, which is required to be implemented in 2017. Management’s current assessment is that
this pronouncement will not have a significant impact on the Basic Financial Statements.
The GASB issued Statement #75, Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions, which is required to be implemented in 2018. Management’s current assessment is
that this pronouncement will have a significant impact on the Basic Financial Statements.
The GASB issued Statement #77, Tax Abatement Disclosures which is required to be implemented in
2017. Management’s current assessment is that this pronouncement will not have a significant
impact on the Basic Financial Statements.
The GASB issued Statement #78, Pension Provided through Certain Multiple-Employer Defined Benefit
Pension Plans, which is required to be implemented in 2017. Management’s current assessment is that
this pronouncement will not have a significant impact on the Basic Financial Statements.
The GASB issued Statement #80, Blending Pequirements for Certain Component Units – an amendment of
GASB Statement #14, which is required to be implemented in 2017. Management’s current
assessment is that this pronouncement will not have a significant impact on the Basic Financial
Statements.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
- 65 -
The GASB issued Statement #81, Irrevocable Split-Interest Agreements, which is required to be
implemented in 2018. Management’s current assessment is that this pronouncement will not have a
significant impact on the Basic Financial Statements.
The GASB issued Statement #82, Pension Issues – an amendment of GASB Statements No. 67, No. 68,
and No. 73, which is required to be implemented in 2017. Management’s current assessment is that
this pronouncement will not have a significant impact on the Basic Financial Statements.
TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
BARNSTABLE COUNTY RETIREMENT SYSTEM
JUNE 30, 2016
The following schedules are presented in accordance with GASB Statement No. 27:
Schedules 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]
1/1/2014 776,973,700$ 1,353,810,101$ 576,836,401$ 57.4% 253,920,106$ 227.2%
1/1/2012 651,063,981 1,173,483,848 522,419,867 55.5% 239,437,303 218.2%
1/1/2010 554,876,554 1,030,210,321 475,333,767 53.9% 234,374,075 202.8%
1/1/2008 520,089,855 966,564,614 446,474,759 53.8% 249,971,296 178.6%
Schedule of Employer Contributions
Fiscal Year
Ended June 30
Annual
Required
Contributions
(A)
Actual
Contributions
Percentage
Contributed
(B)
Actual
Contributions
(B/A)
Town's Percentage of
System Wide Actual
Contributions
2016 $ 53,626,351 $ 53,626,351 100% 1,946,029$ 3.63%
2014 52,473,575 52,473,575 100% 1,885,218 3.59%
2012 46,702,087 46,702,087 100% 1,381,855 2.96%
2011 43,807,158 43,807,158 100% 1,313,399 3.00%
2010 43,893,051 43,893,051 100% 1,219,950 2.78%
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
BARNSTABLE COUNTY RETIREMENT SYSTEM
JUNE 30, 2016
The following schedules are presented in accordance with GASB Statement No. 68
Schedule of the Town’s Proportionate Share of the Net Pension Liability
December 31, 2014 December 31, 2015
Town's proportion of the net pension liability 3.62%3.60%
Town's proportionate share of the net pension liability 20,436,149$ 22,672,955$
Town's covered-employee payroll 9,494,687$ 9,902,884$
Town's proportionate share of the net pension liability as a
percentage of it's covered-employee payroll 215.24%228.95%
Plan fiduciary net position as a percentage of the total
pension liability 60.43%58.10%
Note: This schedule is intended to present information for 10 years. Until a 10 year trend is compiled by
the (System), information is presented for those years for which the information is available.
See notes to Required Supplementary Information
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
BARNSTABLE COUNTY RETIREMENT SYSTEM
JUNE 30, 2016
December 31 ,2014 December 31 ,2015
Actuarily determined contribution 1,885,218$ 1,946,029$
Contribution in relation to the actuarilly
determined contribution (1,885,218) (1,946,029)
Contribution deficency (excess)-$ -$
Town's covered-employee payroll 9,494,687$ 9,902,884$
Contribution as a percentage of covered -
employee payroll 19.86%19.65%
SCHEDULE OF TOWNS CONTRIBUTION
Note: This Town schedule is intended to present information for 10 years. Until a 10 year trend is
compiled by the (System), information is presented for those years for which the information is available.
See notes to Required Supplementary Information
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
MASSACHUSETTS TEACHERS RETIREMNT SYSTEM
JUNE 30, 2016
SCHEDULE OF THE STATE’S PROPORTIONATE SHARE OF THE NET PENSION
LIABILITY
Teacher’s Pension Plan
2015 2016
Towns' proportion of the net pension
liability (asset)0%0%
Commonweath's proportion of the net
peansion liability (assets)100%100%
Commonwealth's proportionate share of
the net pension liability associated with
the district 9,511,918$ 12,323,157$
Employer pension expense and revenue
for Commonwealth support 660,839$ 999,518$
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS
JUNE 30, 2016
The following schedules are presented in accordance with GASB Statement No. 45:
Schedules of Funding Progress and Employer Contributions
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]
6/30/2008 -$ 19,960,683$ 19,960,683$ 0.0% 10,503,689$ 190.0%
6/30/2010 -$ 22,292,830$ 22,292,830$ 0.0% 10,692,405$ 208.5%
6/30/2012 -$ 14,718,311$ 14,718,311$ 0.0% 11,896,588$ 123.7%
6/30/2014 1,161,457$ 18,163,401$ 17,001,944$ 6.4% 13,348,103$ 127.4%
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$
2013 $1,312,737 29.28% 928,407$ 5,001,184$
2014 $1,395,154 111.01% (153,560)$ 4,847,624$
2015 $1,576,152 32.79% 1,059,310$ 5,906,934$
2016 $1,681,604 37.86% 1,044,903$ 6,951,837$
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, 2014
Discount Rate 4.50%
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS
JUNE 30, 2016
Medical Trend:
Under 65
10.0% decreasing by 2.0% for 1 year and 0.5% for 6 years
to an ultimate rate of 5.0% per year.
Over 65
Cost Method
10.0% decreasing by 0.5% for 10 years to an ultimate level
of 5.0% per year
Projected Unit Credit Cost Method
Amortization Method 30 Year Open, Amortization Payments Increasing at 4.0%
Remaining Amortization Period 22 years
Plan Participants:
Current retirees, beneficiaries, and dependants 129
Current active members/participants 186
Total 315
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
BARNSTABLE COUNTY RETIREMENT SYSTEM
JUNE 30, 2016
Pension Plan Schedules
A. Schedule of the Town’s Proportionate Share of the Net Pension Liability
The Schedule of Town’s Proportionate Share of the Net Pension Liability details the allocated percentage of
the net pension liability; the proportionate share of the net pension liability, and the covered employee payroll.
It also demonstrates the net position as a percentage of the pension liability and the net pension liability as a
percentage of covered payroll.
B. Schedule of Town’s Contribution
Governmental employees are required to pay an annual appropriation as established by PERAC. The total
appropriation includes the amounts to pay the pension portion of each member’s retirement allowance, an
amount to amortize the actuarially determined unfunded liability to zero in accordance with the System’s
funding schedule, and additional appropriations in accordance with adopted early retirement incentive
programs. The appropriations are payable on July 1, and January 1. The Town may choose to pay the entire
appropriation in July at a discounted rate. Accordingly, actual contributions may be less than the “total
appropriation”. The pension fund appropriation is allocated to the Town based in covered payroll.
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