HomeMy Public PortalAboutBrewster 2017 Report on the Examination of Basic Financial Statements
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
TABLE OF CONTENTS
PAGE
Independent Auditor’s Report 1 - 2
Management’s Discussion and Analysis 3 – 10
Basic Financial Statements
Statement of Net Position 11
Statement of Activities 12 – 13
Governmental Funds – Balance Sheet 14
Governmental Funds – Statement of Revenues, Expenditures, and
Changes in Fund Balances
15
Reconciliation of the Governmental Funds Balance Sheet Total
Fund Balances to the Statement of Net Position
16
Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
17
General Fund – Statement of Revenues, Expenditures, and
Changes in Fund Balance – Budget and Actual
18
Proprietary Funds - Statement of Net Position
Proprietary Funds – Statement of Revenues, Expenses, and
Changes in Net Position
Proprietary Funds – Statement of Cash Flows
19
20
21
Fiduciary Funds – Statement of Fiduciary Net Position 22
Fiduciary Funds – Statement of Changes in Fiduciary Net Position 23
Notes to Basic Financial Statements 24 – 68
Required Supplementary Information:
Barnstable County Retirement Association Schedules:
Schedule of Town’s Proportionate Share of the Net Pension Liability
69
Schedule of Town’s Contribution 70
TOWN OF BREWSTER, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
TABLE OF CONTENTS
PAGE
Massachusetts Teachers Retirement System Schedule:
Schedule of the Commonwealth’s Collective amounts of the Net Pension
Liability
71
Other Postemployment Benefit Plan Schedules:
Schedule of the Town’s Proportionate Share of the Net Other
Postemployment Benefit Liability
72
Schedule of the Town’s Contribution 73
Schedule of Investment Return 74
Schedules of Funding Progress and Employer Contributions 75
Actuarial Methods and Assumptions 76
Notes to Required Supplementary Information
77 - 78
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, 2017, 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, 2017, and the respective changes in financial position
and, where applicable, cash flows thereof and the respective budgetary comparison for the general fund 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 County Retirement Association schedules - Town’s proportionate share of the net pension liability, and
Town’s contribution, Massachusetts Teachers Retirement System’s schedule of the Commonwealth’s Collective amounts of
the Net Pension Liability, other post-employment benefits - schedule of the Town’s Proportionate Share of the Net Other
Postemployment Benefit Liability, schedule of the Town’s contribution, schedule of investment return, schedules of funding
progress and employer contributions, actuarial methods and assumptions, and notes to the required supplementary
information on pages 3 – 10, 69 –70, 71, 72 – 76 and 77 - 78 be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards
Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
March 7, 2018
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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, 2017.
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 $68.9 million (net position).
• The unrestricted negative net position of the Town’s governmental activities are -$19.8 million. The
unrestricted net position of the Town’s business-type activities are $424 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 decreased by -$233 thousand from fiscal 2016. Within this total, net
position of governmental activities decreased by -$1.4 million from fiscal 2016. Also, net position of
business-type activities increased by $1.2 million from 2016.
• At June 30, 2017, the Town’s governmental funds had combined ending fund balances of $19.6 million. The
combined governmental funds balance increased by $5.5 million, a 39.0% increase over the prior year’s
ending fund balances.
• The Town’s general fund reported a fund balance of $8.5 million at the end of fiscal 2017. The unassigned
fund balance for the general fund was $6.2 million or 15.6% of total general fund expenditures. A total of
$499 thousand of the assigned fund balance was designated for funding the fiscal year 2017 budget.
• The total cost of all Town services for fiscal 2017 was $49.8 million, $44.6 million of which was for
governmental activities, and $5.2 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.
- 5 -
The Town of Brewster adopts an annual appropriated budget for its general fund. A budgetary comparison
statement has been provided for the general fund to demonstrate compliance with this budget.
Proprietary Funds – Enterprise funds are used to report the same functions presented as business-type activities
in the government-wide financial statements. The Town has two enterprise funds:
Water Enterprise Fund accounts for the water activity of the Town.
Golf Enterprise Fund accounts for the golf activity of the Town.
Fiduciary Funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. Fiduciary funds are not reflected in the government-wide financial statements, as the resources of
those funds are not available to support the Town’s own programs. The accounting used for fiduciary funds is
much like that used for proprietary funds.
Private-purpose trust funds, 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 $68,941,602 at the close of fiscal year 2017. 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 $78,153,616, or
113% 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 $10,120,106 (14.7% of total) represents resources that are
subject to external restrictions on how they may be used. The remaining balance of unrestricted net position is
($19,332,120).
The Town increased its total liabilities by $8,088,718 over fiscal 2016, and total net position decreased by -$233
thousand or -.034%. Net position of governmental activities decreased by -$1,411,852, a -2.55% decrease from
fiscal 2016. Net position of business-type activities increased by $1,179,052 or 8.51% from 2016. There was an
increase of $1,073,075 in net position reported in connection with the water business-type activity, and an
increase of $105,977 in net position in connection with the golf department business-type activity, respectively.
- 6 -
Increase Increase Increase
FY 2017 FY 2016 (Decrease)FY 2017 FY 2016 (Decrease)FY 2017 FY 2016 (Decrease)
Assets:
Current assets 23,846,298$ 20,453,770$ 3,392,528$ 5,518,926$ 5,073,086$ 445,840$ 29,365,224$ 25,526,856$ 3,838,368$
Noncurrent assets (excluding capital)510,338 477,809 32,529 18,203 26,665 (8,462) 528,541 504,474 24,067
Capital assets 77,359,113 73,066,835 4,292,278 22,311,841 22,727,907 (416,066) 99,670,954 95,794,742 3,876,212
Total assets 101,715,749 93,998,414 7,717,335 27,848,970 27,827,658 21,312 129,564,719 121,826,072 7,738,647
Deferred Outflow of Resources:2,391,864 1,549,576 842,288 462,389 262,158 200,231 2,854,253 1,811,734 1,042,519
Liabilities:
Current liabilities (excluding debt)2,935,024 2,465,198 469,826 112,650 249,852 (137,202) 3,047,674 2,715,050 332,624
Noncurrent liabilities (excluding debt)27,720,730 25,239,036 2,481,694 5,116,496 4,726,756 389,740 32,837,226 29,965,792 2,871,434
Current debt 1,774,077 3,980,794 (2,206,717) 1,411,718 1,481,475 (69,757) 3,185,795 5,462,269 (2,276,474)
Noncurrent debt 16,926,625 8,473,773 8,452,852 6,465,904 7,757,622 (1,291,718) 23,392,529 16,231,395 7,161,134
Total liabilities 49,356,456 40,158,801 9,197,655 13,106,768 14,215,705 (1,108,937) 62,463,224 54,374,506 8,088,718
Deferred Inflows of Resources:849,854 76,034 773,820 164,292 12,864 151,428 1,014,146 88,898.00 925,248
Net Position:
Net investment in capital assets 63,537,675 63,830,648 (292,973) 14,615,941 13,519,826 1,096,115 78,153,616 77,350,474 803,142
Restricted 10,120,106 8,896,901 1,223,205 - - - 10,120,106 8,896,901 1,223,205
Unrestricted (19,756,478) (17,414,394) (2,342,084) 424,358 341,421 82,937 (19,332,120) (17,072,973) (2,259,147)
Total net position 53,901,303$ 55,313,155$ (1,411,852)$ 15,040,299$ 13,861,247$ 1,179,052$ 68,941,602$ 69,174,402$ (232,800)$
Revenues
Program Revenues:
Charges for services 2,002,157$ 2,185,933$ (183,776)$ 6,859,542$ 6,729,653$ 129,889$ 8,861,699$ 8,915,586$ (53,887)$
Operating grants and contributions 4,896,281 3,751,480 1,144,801 65,465 86,795 (21,330) 4,961,746 3,838,275 1,123,471
Capital grants and contributions 524,497 953,490 (428,993) - - - 524,497 953,490 (428,993)
General Revenues:
Real Estate and personal property taxes 30,094,300 29,016,875 1,077,425 - - - 30,094,300 29,016,875 1,077,425
Tax Liens 144,539 82,570 61,969 - - - 144,539 82,570 61,969
Motor vehicle and other excise taxes 1,531,194 1,431,019 100,175 - - - 1,531,194 1,431,019 100,175
Hotel/Motel Tax and Meals Tax 1,327,383 1,306,320 21,063 - - - 1,327,383 1,306,320 21,063
Penalties and interest on taxes 134,213 177,214 (43,001) - - - 134,213 177,214 (43,001)
Payments in Lieu of Taxes 6,877 6,878 (1) - - - 6,877 6,878 (1)
Nonrestricted grants and contributions 1,894,233 1,977,699 (83,466) - - - 1,894,233 1,977,699 (83,466)
Unrestricted investment income 63,356 39,070 24,286 - - - 63,356 39,070 24,286
Bond Premium - 372,027 (372,027) - - - - 372,027 (372,027)
Other revenues 95,353 33,330 62,023 - - - 95,353 33,330 62,023
Total Revenues 42,714,383 41,333,905 1,380,478 6,925,007 6,816,448 108,559 49,639,390 48,150,353 1,489,037
Expenses:
General Government 3,877,906 3,399,120 478,786 - - - 3,877,906 3,399,120 478,786
Public Safety 6,758,973 6,027,652 731,321 - - - 6,758,973 6,027,652 731,321
Education 19,000,757 18,582,078 418,679 - - - 19,000,757 18,582,078 418,679
Public Works 2,551,324 2,448,758 102,566 - - - 2,551,324 2,448,758 102,566
Human Services 922,712 900,986 21,726 - - - 922,712 900,986 21,726
Culture and Recreation 1,058,718 975,094 83,624 - - - 1,058,718 975,094 83,624
Employee Benefits 9,497,540 7,623,466 1,874,074 - - - 9,497,540 7,623,466 1,874,074
State and County Assessments 611,991 636,425 (24,434) - - - 611,991 636,425 (24,434)
Interest 378,478 261,563 116,915 - - - 378,478 261,563 116,915
Golf - - - 3,188,468 3,226,663 (38,195) 3,188,468 3,226,663 (38,195)
Water - - - 2,002,830 2,083,461 (80,631) 2,002,830 2,083,461 (80,631)
Total Expenses 44,658,399 40,855,142 3,803,257 5,191,298 5,310,124 (118,826) 49,849,697 46,165,266 3,684,431
Increase/(Decrease) in Net Position before contributions
to permanent endowments and transfers (1,944,016) 478,763 (2,422,779) 1,733,709 1,506,324 227,385 (210,307) 1,985,087 (2,195,394)
Contributions to permanent endowments - 7,475 (7,475) - - - - 7,475 (7,475)
Transfers 532,164 1,125,102 (592,938) (554,657) (1,125,102) 570,445 (22,493) - (22,493)
Change in Net Position (1,411,852) 1,611,340 (3,023,192) 1,179,052 381,222 797,830 (232,800) 1,992,562 (2,225,362)
Net Position - beginning 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
Net Position - ending 53,901,303$ 55,313,155$ (1,411,852)$ 15,040,299$ 13,861,247$ 1,179,052$ 68,941,602$ 69,174,402$ (232,800)$
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
$19,592,997 a $5,480,603 increase from the prior year’s ending fund balance.
The general fund is the primary operating fund. At the end of the current fiscal year, unassigned fund balance of
the general fund was $6,225,685, while total fund balance stood at $8,474,413. 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 15.6% of total general fund expenditures, while total fund
balance represents 21.3% of that same amount.
The stabilization fund has accumulated a fund balance of $2,080,514 which represents 5.2% 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 $1,229,724 (at two Special Town Meetings) to fund
safety and protection equipment and expenses, human services expense, culture and recreation expenses, general
government equipment and expenses, and public works equipment and expenses. The Town budgeted $35.6
million in revenues and $40.5 million in expenditures, drawing on transfers and prior year’s surplus to finance the
difference. At year end, $660,454 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, 2017, amounts to $99,670,954 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 $4,292,278 during
the current fiscal year while the business-type activities capital assets (net of accumulated depreciation) decreased
by -$416,066. Total depreciation was $2.9 million, resulting in a total government-wide increase to capital assets
(net of accumulated depreciation) of $3,876,212.
Increase Increase
FY 2017 FY 2016 (Decrease)FY 2017 FY 2016 (Decrease)FY 2017 FY 2016
Land 39,654,942$ 39,529,192$ 125,750$ 2,874,212$ 2,874,212$ -$ 42,529,154$ 42,403,404$
Construction in Progress 7,100,831 2,981,200 4,119,631 389,206 389,206 - 7,490,037 3,370,406
46,755,773 42,510,392 4,245,381 3,263,418 3,263,418 - 50,019,191 45,773,810
Buildings and improvements 15,635,470 16,290,165 (654,695) 4,242,285 4,311,579 (69,294) 19,877,755 20,601,744
Improvements (other than buildings)4,101,163 3,525,871 575,292 - - - 4,101,163 3,525,871
Machinery, Equipment, and Vehicles 3,557,943 3,337,978 219,965 966,334 910,567 55,767 4,524,277 4,248,545
Infrastructure 7,308,764 7,402,429 (93,665) 13,839,804 14,242,343 (402,539) 21,148,568 21,644,772
30,603,340 30,556,443 46,897 19,048,423 19,464,489 (416,066) 49,651,763 50,020,932
Total Capital Assets 77,359,113$ 73,066,835$ 4,292,278$ 22,311,841$ 22,727,907$ (416,066)$ 99,670,954$ 95,794,742$
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, 2017 totaled $25,070,400. Within this total, business-type activities have debt of
$7,640,000 that is fully supported by their respective program revenues, and governmental activities debt is
$17,430,400. Total debt consists of the following:
Outstanding Outstanding
Governmental Activities June 30, 2017 June 30, 2016
Land Purchase - Copelas 555,000$ 590,000$
Road Betterments - Prell Circle 35,000 45,000
Road Betterments - Allen Drive 50,000 60,000
Ebeneezer Lane Road Bett 90,000 104,720
S. Pond DR/Captain Fitz Rd 110,000 122,354
School Renovations 2,755,000 2,908,104
Road Repairs 1,865,000 2,000,000
MWPAT Title V 70,000 80,000
Punkhorn Land Acquisition - 6/30/11 465,000 500,000
Heights Road Betterments - 6/30/11 85,000 110,000
Lane Road Betterments - 6/30/11 25,000 35,000
Police Station 500,000 670,000
MWPAT #97-1156 Title V 41,400 51,800
Land Purchase 240,000 300,000
Land Purchase 1,175,000 1,305,000
Road Betterments - Fiddler's Lane - 15,000
Road Betterments - Herringbrook Lane - 10,000
Road Betterments - 2008 20,000 40,000
Fire Station - 5/3/17 6,500,000 -
Road Repairs - 5/3/17 2,250,000 -
Library Parking Lot - 5/3/17 295,582 -
Tower Hill Circle - RD Bett - 5/3/17 226,769 -
Moss/Commons - RD Bett - 5/3/17 76,649 -
Total Governmental Activities 17,430,400$ 8,946,978$
Outstanding Outstanding
Business-type Activities June 30, 2017 June 30, 2016
Golf Course 2,205,000$ 2,865,000$
Well Access Road 240,000 274,945.00
Water 795,000 840,168.00
WELL #6 & WATER MAIN - 2,270,000 2,405,000
Water offices/garage 1,350,000 1,475,000
Water Mains 440,000 590,000
Slough Road 315,000 350,000
Water Betterments - Fiddler's Lane 25,000 30,000
Total Business-type Activities 7,640,000$ 8,830,113$
Grand Total - All long-term debt 25,070,400$ 17,777,091$
Outstanding Debt at Year End
- 10 -
Please refer to Notes 5 and 9 for further discussion of the major capital asset and debt activity.
Economic Factors and Next Year’s Budgets & Rate
The Town’s leadership (elected and appointed officials) considered many factors when setting the fiscal 2018
budget and tax rates including the following:
• The Fiscal 2018 tax rate was set at $8.26, a $.13 cent decrease over Fiscal 2017. The excess levy capacity
was $714,798.08.
• The Selectboard voted during their classification hearing to maintain the same tax rate for all classes of
property.
• Fiscal 2017 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 2016 contribution was $50,000, $75,000 in Fiscal 2017 and $55,000 in Fiscal
2018. The June 30, 2017 Balance in this fund is $1,548,165.
• The Federal Emergency Management Agency (FEMA) awarded Brewster a $352,446 Grant to update the Fire
Department Radios.
• Approximately $149,087 of Chapter 90 Highway Funds was expended on local roadway repairs and
construction for Snow Road and Underpass Road. Approximately $500,000 Chapter 90 Highway Funds will
be expended in Fiscal 2018.
• The Town secured $13,500,000 via two Proposition 2 ½ Override approvals –Design and Construction of a
new Fire Station in FY2016 ($500,000); and Construction began in FY2017 (13,000,000) and is expected to
be completed by the spring of 2018.
• Fiscal 2017 Community Preservation Projects include funding for the Gulls Way Land Acquisition, Historical
Cape Reparatory Theatre and Grant/Loan Programs for Habitat for Humanity Affordable Housing.
Request for Information
This financial report is designed to provide a general overview of the Town of Brewster’s finances for all those
with an interest in the government’s finances. Questions concerning any of the information provided in this
report or request for additional financial information should be addressed to the Finance Director, 2198 Main
Street, Brewster, MA 02631.
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
CURRENT:
CASH AND SHORT-TERM INVESTMENTS 22,344,267$ 4,398,914$ 26,743,181$
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
REAL ESTATE AND PERSONAL PROPERTY TAXES 340,826 - 340,826
TAX LIENS 545,973 - 545,973
MOTOR VEHICLE EXCISE TAXES 142,984 - 142,984
USER FEES - 1,113,226 1,113,226
DEPARTMENTAL AND OTHER 271,380 - 271,380
INTERGOVERNMENTAL 108,995 - 108,995
SPECIAL ASSESSMENTS 91,873 6,786 98,659
NONCURRENT:
RESTRICTED ASSETS:
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
SPECIAL ASSESSMENTS 510,338 18,203 528,541
CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 77,359,113 22,311,841 99,670,954
TOTAL ASSETS 101,715,749 27,848,970 129,564,719
DEFERRED OUTFLOWS OF RESOURCES
RELATED TO PENSIONS 2,391,864 462,389 2,854,253
LIABILITIES
CURRENT:
ACCOUNTS PAYABLE 2,842,025 53,322 2,895,347
ACCRUED INTEREST 63,499 59,328 122,827
LANDFILL POSTCLOSURE CARE COSTS 29,500 - 29,500
CAPITAL LEASES 172,403 66,718 239,121
BONDS AND NOTES PAYABLE 1,601,674 1,345,000 2,946,674
NONCURRENT:
LANDFILL POSTCLOSURE CARE COSTS 324,000 - 324,000
POSTEMPLOYMENT BENEFITS 6,964,662 1,166,621 8,131,283
NET PENSION LIABILITY 20,432,068 3,949,875 24,381,943
CAPITAL LEASES 339,429 50,904 390,333
BONDS AND NOTES PAYABLE 16,587,196 6,415,000 23,002,196
TOTAL LIABILITIES 49,356,456 13,106,768 62,463,224
DEFERRED INFLOWS OF RESOURCES
RELATED TO PENSIONS 849,854 164,292 1,014,146
NET POSITION
NET INVESTMENT IN CAPITAL ASSETS 63,537,675 14,615,941 78,153,616
RESTRICTED FOR:
CAPITAL PROJECTS (50,712) - (50,712)
PERMANENT FUNDS:
EXPENDABLE 124,021 - 124,021
NONEXPENDABLE 150,388 - 150,388
OTHER PURPOSES 9,896,409 - 9,896,409
UNRESTRICTED (19,756,478) 424,358 (19,332,120)
TOTAL NET POSITION 53,901,303$ 15,040,299$ 68,941,602$
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2017
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 3,877,906$ 446,219$ 387,809$ -$ (3,043,878)$
PUBLIC SAFETY 6,758,973 488,749 1,436,214 - (4,834,010)
EDUCATION 19,000,757 125,497 1,216,553 - (17,658,707)
PUBLIC WORKS 2,551,324 549,575 189,484 518,166 (1,294,099)
HUMAN SERVICES 922,712 74,427 106,537 6,331 (735,417)
CULTURE & RECREATION 1,058,718 317,690 172,037 - (568,991)
EMPLOYEE BENEFITS 9,497,540 - 1,387,647 - (8,109,893)
STATE & COUNTY ASSESSMENTS 611,991 - - - (611,991)
INTEREST 378,478 - - - (378,478)
TOTAL GOVERNMENTAL ACTIVITIES 44,658,399 2,002,157 4,896,281 524,497 (37,235,464)
BUSINESS-TYPE ACTIVITIES:
GOLF 3,188,468 3,724,718 2,516 - 538,766
WATER 2,002,830 3,134,824 62,949 - 1,194,943
TOTAL BUSINESS-TYPE ACTIVITIES 5,191,298 6,859,542 65,465 - 1,733,709
TOTAL PRIMARY GOVERNMENT 49,849,697$ 8,861,699$ 4,961,746$ 524,497$ (35,501,755)$
(continued)
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2017
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 (37,235,464)$ 1,733,709$ (35,501,755)$
GENERAL REVENUES:
REAL ESTATE AND PERSONAL PROPERTY TAXES,
NET OF TAX REFUNDS PAYABLE 30,094,300 - 30,094,300
TAX LIENS 144,539 - 144,539
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,531,194 - 1,531,194
HOTEL/MOTEL & MEALS TAX 1,327,383 - 1,327,383
PENALTIES AND INTEREST ON TAXES 134,213 - 134,213
PAYMENTS IN LIEU OF TAXES 6,877 - 6,877
GRANTS AND CONTRIBUTIONS NOT RESTRICTED
TO SPECIFIC PROGRAMS 1,894,233 - 1,894,233
UNRESTRICTED INVESTMENT INCOME 63,356 - 63,356
MISCELLANEOUS 95,353 - 95,353
TRANSFERS, NET 532,164 (554,657) (22,493)
TOTAL GENERAL REVENUES AND TRANSFERS 35,823,612 (554,657) 35,268,955
CHANGE IN NET POSITION (1,411,852) 1,179,052 (232,800)
NET POSITION:
BEGINNING OF YEAR 55,313,155 13,861,247 69,174,402
END OF YEAR 53,901,303$ 15,040,299$ 68,941,602$
(concluded)
TOWN OF BREWSTER, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2017
PRIMARY GOVERNMENT
See accompanying notes to the basic financial statements
- 13 -
TOWN OF BREWSTER, MASSACHUSETTS
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30, 2017
NONMAJOR TOTAL
COMMUNITY ROAD FIRE GOVERNMENTAL GOVERNMENTAL
ASSETS GENERAL PRESERVATION IMPROVEMENTS STATION FUNDS FUNDS
CASH AND SHORT-TERM INVESTMENTS 10,345,173$ 3,624,941$ 1,087,362$ 3,604,447$ 3,682,344$ 22,344,267$
RECEIVABLES, NET OF ALLOWANCE FOR UNCOLLECTIBLES:
REAL ESTATE AND PERSONAL PROPERTY TAXES 340,826 - - - - 340,826
TAX LIENS 545,973 - - - - 545,973
MOTOR VEHICLE EXCISE TAXES 142,984 - - - - 142,984
DEPARTMENTAL AND OTHER - 19,575 - - 251,805 271,380
INTERGOVERNMENTAL - - - - 108,995 108,995
SPECIAL ASSESSMENTS - - - - 602,211 602,211
TOTAL ASSETS 11,374,956$ 3,644,516$ 1,087,362$ 3,604,447$ 4,645,355$ 24,356,636$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCES
LIABILITIES:
ACCOUNTS PAYABLE 2,024,528$ 51,852$ -$ 705,448$ 60,197$ 2,842,025$
NOTES PAYABLE - - - - 169,814 169,814
TOTAL LIABILITIES 2,024,528 51,852 - 705,448 230,011 3,011,839
DEFFERRED INFLOWS OF RESOURCES:
UNAVAILABLE REVENUE 876,015 19,575 - - 856,210 1,751,800
FUND BALANCES:
NONSPENDABLE - - - - 150,388 150,388
RESTRICTED 324,213 3,573,089 1,087,362 2,898,999 3,461,653 11,345,316
COMMITTED 1,425,480 - - - - 1,425,480
ASSIGNED 499,035 - - - - 499,035
UNASSIGNED 6,225,685 - - - (52,907) 6,172,778
TOTAL FUND BALANCES 8,474,413 3,573,089 1,087,362 2,898,999 3,559,134 19,592,997
TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES
AND FUND BALANCES 11,374,956$ 3,644,516$ 1,087,362$ 3,604,447$ 4,645,355$ 24,356,636$
See accompanying notes to the basic financial statements
- 14 -
NONMAJOR TOTAL
COMMUNITY ROAD FIRE GOVERNMENTAL GOVERNMENTAL
GENERAL PRESERVATION IMPROVEMENTS STATION FUNDS FUNDS
REVENUES:
REAL ESTATE AND PERSONAL PROPERTY TAXES,
NET OF TAX REFUNDS 30,117,694$ -$ -$ -$ -$ 30,117,694$
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,493,765 - - - - 1,493,765
INTERGOVERNMENTAL 3,235,200 212,708 - - 870,830 4,318,738
PAYMENTS IN LIEU OF TAXES 6,877 - - - - 6,877
PENALTIES & INTEREST ON TAXES 104,132 - - - - 104,132
FINES & FORFEITS 37,017 - - - - 37,017
CHARGES FOR SERVICES 549,812 - - - 1,643,168 2,192,980
HOTEL/MOTEL & MEALS TAX 1,327,383 - - - - 1,327,383
INVESTMENT INCOME 63,239 14,962 - - 2,834 81,035
CONTRIBUTIONS AND DONATIONS - - - - 113,559 113,559
DEPARTMENTAL AND OTHER 1,341,544 895,301 - - 462,224 2,699,069
TOTAL REVENUES 38,276,663 1,122,971 - - 3,092,615 42,492,249
EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT 3,009,858 648,506 - - 312,264 3,970,628
PUBLIC SAFETY 6,223,620 - - 3,703,250 547,469 10,474,339
EDUCATION 18,245,794 - - - 296,852 18,542,646
PUBLIC WORKS 2,275,181 25,647 652,591 - 680,651 3,634,070
HUMAN SERVICES 837,474 - - - 45,109 882,583
CULTURE & RECREATION 834,881 32,923 - - 315,293 1,183,097
EMPLOYEE BENEFITS 7,012,971 - - - 54,343 7,067,314
STATE & COUNTY ASSESSMENTS 611,991 - - - - 611,991
DEBT SERVICE
PRINCIPAL 513,504 225,000 - - 127,074 865,578
INTEREST 287,999 88,452 - 3,463 22,062 401,976
TOTAL EXPENDITURES 39,853,273 1,020,528 652,591 3,706,713 2,401,117 47,634,222
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (1,576,610) 102,443 (652,591) (3,706,713) 691,498 (5,141,973)
OTHER FINANCING SOURCES (USES)
PROCEEDS FROM BONDS AND NOTES - - 2,250,000 6,500,000 599,000 9,349,000
PROCEEDS FROM CAPITAL LEASES 152,756 - - - - 152,756
PROCEEDS FROM BONDS PREMIUM 69,255 - 158,282 361,119 - 588,656
OPERATING TRANSFERS IN 1,826,266 - - - 726,048 2,552,314
OPERATING TRANSFERS OUT (832,950) - - - (1,187,200) (2,020,150)
TOTAL OTHER FINANCING SOURCES (USES)1,215,327 - 2,408,282 6,861,119 137,848 10,622,576
NET CHANGE IN FUND BALANCES (361,283) 102,443 1,755,691 3,154,406 829,346 5,480,603
FUND BALANCES AT BEGINNING OF YEAR 8,835,696 3,470,646 (668,329) (255,407) 2,729,788 14,112,394
FUND BALANCES AT END OF YEAR 8,474,413$ 3,573,089$ 1,087,362$ 2,898,999$ 3,559,134$ 19,592,997$
TOWN OF BREWSTER, MASSACHUSETTS
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FISCAL YEAR ENDED JUNE 30, 2017
See accompanying notes to the basic financial statements
- 15 -
TOTAL GOVERNMENTAL FUND BALANCES 19,592,997$
CAPITAL ASSETS (NET) USED IN GOVERNMENTAL ACTIVITIES ARE NOT FINANCIAL RESOURCES
AND, THEREFORE, ARE NOT REPORTED IN THE FUNDS 77,359,113
ACCOUNTS RECEIVABLE ARE NOT AVAILABLE TO PAY FOR CURRENT-PERIOD
EXPENDITURES AND, THEREFORE, ARE DEFERRED IN THE FUNDS 1,751,800
IN THE STATEMENT OF ACTIVITIES, INTEREST IS ACCRUED ON OUTSTANDING LONG-TERM DEBT,
WHEREAS IN GOVERNMENTAL FUNDS INTEREST IS NOT REPORTED UNTIL DUE (63,499)
LONG-TERM LIABILITIES ARE NOT DUE AND PAYABLE IN THE CURRENT PERIOD AND, THEREFORE,
ARE NOT REPORTED IN THE GOVERNMENTAL FUNDS
BONDS AND NOTES PAYABLE (17,430,400)
CAPITAL LEASES (511,832)
NET PENSION LIABILITY (20,432,068)
DEFERRED OUTFLOWS OF RESOURCES 2,391,864
DEFERRED INFLOWS OF RESOURCES (849,854)
POSTEMPLOYMENT BENEFITS (6,964,662)
UNAMORTIZED BOND PREMIUM (588,656)
LANDFILL POSTCLOSURE CARE COSTS (353,500)
NET EFFECT OF REPORTING LONG-TERM LIABILITIES (44,739,108)
NET POSITION OF GOVERNMENTAL ACTIVITIES 53,901,303$
TOWN OF BREWSTER, MASSACHUSETTS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION
JUNE 30, 2017
See accompanying notes to the basic financial statements
- 16 -
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 5,480,603$
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 6,372,510
DEPRECIATION EXPENSE (2,080,232)
NET EFFECT OF REPORTING CAPITAL ASSETS 4,292,278
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 222,134
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 (9,349,000)
PROCEEDS FROM CAPITAL LEASES (152,756)
DEBT SERVICE PRINCIPAL PAYMENTS 865,578
CAPITAL LEASE - PRINCIPAL PAYMENTS 217,695
NET EFFECT OF REPORTING LONG-TEM DEBT (8,418,483)
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 (1,066,562)
NET CHANGE IN LANDFILL POSTCLOSURE CARE ACCRUAL 7,000
NET CHANGE IN DEFERRED OUTFLOWS OF RESOURCES 842,288
NET CHANGE IN DEFERRED INFLOWS OF RESOURCES (773,820)
NET CHANGE IN UNAMORTIZED BOND PREMIUM (588,656)
NET CHANGE IN ACCRUED INTEREST ON LONG-TERM DEBT 23,498
NET CHANGE IN NET PENSION LIABILITY (1,432,132)
NET EFFECT OF RECORDING LONG-TERM LIABILITIES (2,988,384)
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES (1,411,852)$
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, 2017
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 29,928,660$ 29,928,660$ 30,117,694$ 189,034$
MOTOR VEHICLE AND OTHER EXCISE TAXES 1,193,700 1,193,700 1,493,765 300,065
INTERGOVERNMENTAL 1,788,487 1,788,487 1,870,110 81,623
PAYMENTS IN LIEU OF TAXES 6,800 6,800 6,877 77
PENALTIES & INTEREST ON TAXES 87,000 87,000 104,132 17,132
FINES & FORFEITS 23,000 23,000 37,017 14,017
HOTEL/MOTEL & MEALS TAX 1,175,000 1,175,000 1,327,383 152,383
INVESTMENT INCOME 20,000 20,000 46,808 26,808
DEPARTMENTAL AND OTHER 1,394,777 1,394,777 1,891,356 496,579
TOTAL REVENUES 35,617,424 35,617,424 36,895,142 1,277,718
EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT 3,463,804 3,594,223 3,423,655 170,568
PUBLIC SAFETY 5,954,676 6,664,626 6,527,139 137,487
EDUCATION 18,356,275 18,356,275 18,354,783 1,492
PUBLIC WORKS 2,303,844 2,639,336 2,570,416 68,920
HUMAN SERVICES 959,570 993,146 980,810 12,336
CULTURE & RECREATION 821,478 901,478 897,636 3,842
EMPLOYEE BENEFITS 5,783,762 5,795,762 5,659,479 136,283
STATE & COUNTY ASSESSMENTS 656,880 656,880 611,991 44,889
DEBT SERVICE
PRINCIPAL 740,536 663,155 513,504 149,651
INTEREST 210,985 216,653 281,667 (65,014)
TOTAL EXPENDITURES 39,251,810 40,481,534 39,821,080 660,454
EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (3,634,386) (4,864,110) (2,925,938) 1,938,172
OTHER FINANCING SOURCES (USES):
PROCEEDS FROM BOND PREMIUM - - 69,255 69,255
OPERATING TRANSFERS IN 1,196,850 1,604,993 1,826,266 221,273
OPERATING TRANSFERS OUT (50,000) (804,103) (832,950) (28,847)
TOTAL OTHER FINANCING SOURCES (USES)1,146,850 800,890 1,062,571 261,681
NET CHANGE IN FUND BALANCE (2,487,536) (4,063,220) (1,863,367) 2,199,853
BUDGETARY FUND BALANCE, BEGINNING OF YEAR 6,162,155 6,162,155 6,162,155 -
BUDGETARY FUND BALANCE, END OF YEAR 3,674,619$ 2,098,935$ 4,298,788$ 2,199,853$
TOWN OF BREWSTER, MASSACHUSETTS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FISCAL YEAR ENDED JUNE 30, 2017
BUDGETED AMOUNTS
See accompanying notes to the basic financial statements
- 18 -
ASSETS GOLF WATER TOTAL
CURRENT:
CASH AND SHORT-TERM INVESTMENTS 646,631$ 3,752,283$ 4,398,914$
USER FEES - 1,113,226 1,113,226
SPECIAL ASSESSMENTS - 6,786 6,786
TOTAL CURRENT ASSETS 646,631 4,872,295 5,518,926
NONCURRENT:
SPECIAL ASSESSMENTS - 18,203 18,203
CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 8,954,292 13,357,549 22,311,841
TOTAL NONCURRENT ASSETS 8,954,292 13,375,752 22,330,044
TOTAL ASSETS 9,600,923 18,248,047 27,848,970
DEFERRED OUTFLOWS OF RESOURCES
RELATED TO PENSIONS 270,298 192,091 462,389
LIABILITIES
CURRENT:
ACCOUNTS PAYABLE - 53,322 53,322
ACCRUED INTEREST 32,396 26,932 59,328
CAPITAL LEASES PAYABLE 66,718 - 66,718
BONDS AND NOTES PAYABLE 820,000 525,000 1,345,000
TOTAL CURRENT LIABILITIES 919,114 605,254 1,524,368
NONCURRENT:
POSTEMPLOYMENT BENEFITS 775,578 391,043 1,166,621
NET PENSION LIABILITY 2,308,970 1,640,905 3,949,875
CAPITAL LEASES PAYABLE 50,904 - 50,904
BONDS AND NOTES PAYABLE 1,505,000 4,910,000 6,415,000
TOTAL NONCURRENT LIABILITIES 4,640,452 6,941,948 11,582,400
TOTAL LIABILITIES 5,559,566 7,547,202 13,106,768
DEFERRED INFLOWS OF RESOURCES
RELATED TO PENSIONS 96,040 68,252 164,292
NET POSITION
NET INVESTMENT IN CAPITAL ASSETS 6,511,670 8,104,271 14,615,941
UNRESTRICTED (2,296,055) 2,720,413 424,358
TOTAL NET POSITION 4,215,615$ 10,824,684$ 15,040,299$
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
JUNE 30, 2017
BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS
See accompanying notes to the basic financial statements
- 19 -
GOLF WATER TOTAL
OPERATING REVENUES:
CHARGES FOR SERVICES 3,724,718$ 3,134,824$ 6,859,542$
DEPARTMENTAL AND OTHER 2,516 62,949 65,465
TOTAL OPERATING REVENUES 3,727,234 3,197,773 6,925,007
OPERATING EXPENSES:
GENERAL SERVICES 2,615,083 1,428,163 4,043,246
DEPRECIATION 456,464 364,831 821,295
TOTAL OPERATING EXPENSES 3,071,547 1,792,994 4,864,541
OPERATING INCOME (LOSS)655,687 1,404,779 2,060,466
NON-OPERATING REVENUES (EXPENSES):
INTEREST EXPENSE (116,921) (209,836) (326,757)
INCOME (LOSS) BEFORE OPERATING TRANSFERS 538,766 1,194,943 1,733,709
OPERATING TRANSFERS:
OPERATING TRANSFERS IN 106,903 - 106,903
OPERATING TRANSFERS OUT (539,692) (121,868) (661,560)
TOTAL OPERATING TRANSFERS (432,789) (121,868) (554,657)
CHANGE IN NET POSITION 105,977 1,073,075 1,179,052
NET POSITION AT BEGINNING OF YEAR 4,109,638 9,751,609 13,861,247
NET POSITION AT END OF YEAR 4,215,615$ 10,824,684$ 15,040,299$
TOWN OF BREWSTER, MASSACHUSETTS
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
FISCAL YEAR ENDED JUNE 30, 2017
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, 2017
GOLF WATER TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES:
RECEIPTS FROM CUSTOMERS AND USERS 3,727,234$ 3,091,794$ 6,819,028$
PAYMENTS TO SUPPLIERS (1,103,145) (658,975) (1,762,120)
PAYMENTS TO EMPLOYEES (1,298,140) (763,528) (2,061,668)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,325,949 1,669,291 2,995,240
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
OPERATING TRANSFERS IN 106,903 - 106,903
OPERATING TRANSFERS OUT (539,692) (121,868) (661,560)
NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES (432,789) (121,868) (554,657)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
NET PROCEEDS FROM THE ISSUANCE/RETIREMENT OF BONDS AND NOTES (106,903) - (106,903)
PRINCIPAL PAYMENTS ON BONDS AND NOTES (660,000) (530,113) (1,190,113)
PRINCIPAL PAYMENTS ON CAPITAL LEASES (64,459) - (64,459)
ACQUISITION AND CONSTRUCTION OF CAPITAL ASSETS (207,970) (197,259) (405,229)
INTEREST EXPENSE (128,200) (214,281) (342,481)
NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES (1,167,532) (941,653) (2,109,185)
NET INCREASE (DECREASE) IN CASH AND SHORT TERM INVESTMENTS (274,372) 605,770 331,398
CASH AND SHORT TERM INVESTMENTS - BEGINNING OF YEAR 921,003 3,146,513 4,067,516
CASH AND SHORT TERM INVESTMENTS- END OF YEAR 646,631$ 3,752,283$ 4,398,914$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
OPERATING INCOME (LOSS)655,687$ 1,404,779$ 2,060,466$
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
DEPRECIATION 456,464 364,831 821,295
(INCREASE) DECREASE IN ACCOUNTS RECEIVABLE - (105,979) (105,979)
(INCREASE) DECREASE IN DEFERRED OUTFLOWS OF RESOURCES (98,727) (101,504) (200,231)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE - (121,478) (121,478)
INCREASE (DECREASE) IN DEFERRED INFLOWS OF RESOURCES 87,621 63,807 151,428
INCREASE (DECREASE) IN NET PENSION LIABILITY 161,841 115,015 276,856
INCREASE (DECREASE) IN POSTEMPLOYMENT BENEFITS 63,063 49,820 112,883
TOTAL ADJUSTMENTS 670,262 264,512 934,774
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,325,949$ 1,669,291$ 2,995,240$
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, 2017
POSTEMPLOYMENT PRIVATE
BENEFITS PURPOSE AGENCY
TRUST TRUST FUNDS FUNDS
ASSETS
CASH AND SHORT-TERM INVESTMENTS -$ 83,034$ 10,843$
INVESTMENTS 1,548,165 - -
DEPARTMENTAL - - 29,068
TOTAL ASSETS 1,548,165 83,034 39,911
LIABILITIES
ACCOUNTS PAYABLE - - 5,914
OTHER LIABILITIES - - 33,997
TOTAL LIABILITIES - - 39,911
NET POSITION
NET POSITION - HELD IN TRUST FOR OPEB AND OTHER PURPOSES 1,548,165$ 83,034$ -$
See accompanying notes to the basic financial statements
- 22 -
POSTEMPLOYMENT PRIVATE
BENEFITS PURPOSE
TRUST TRUST FUNDS
ADDITIONS:
CONTRIBUTIONS:
CONTRIBUTIONS -$ 6,775$
EMPLOYER CONTRIBUTIONS 75,000 -
EMPLOYER CONTRIBUTIONS TO PAY FOR OPEB BENEFITS 402,208 -
NET INVESTMENT INCOME (LOSS):
INVESTMENT INCOME 173,833 510
TOTAL ADDITIONS 651,041 7,285
DEDUCTIONS:
BENEFIT PAYMENTS 402,208 -
EDUCATION - 6,214
TOTAL DEDUCTIONS 402,208 6,214
CHANGE IN NET POSITION BEFORE OPERATING TRANSFERS 248,833 1,071
OPERATING TRANSFERS:
OPERATING TRANSFERS IN - 22,493
CHANGE IN NET POSITION 248,833 23,564
NET POSITION AT BEGINNING OF YEAR 1,299,332 59,470
NET POSITION AT END OF YEAR 1,548,165$ 83,034$
TOWN OF BREWSTER, MASSACHUSETTS
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FISCAL YEAR ENDED JUNE 30, 2017
See accompanying notes to the basic financial statements
- 23 -
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 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 46.01% in the joint
venture.
Name Purpose Address
Annual
Assessment
Nauset Regional To provide education services 78 Eldredge Parkway $ 9,684,955
School District Orleans, MA 02653
Cape Cod Regional
Technical High
School
To provide vocational education 351 Pleasant Lake Ave
Harwich, MA 02645
$ 828,976
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 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 and deferred outflows of resources, liabilities and deferred inflows of
resources, revenues, or expenditures of an individual governmental fund are at least 10
percent of the corresponding element (assets and deferred outflows of resources, liabilities
and deferred inflows of resources, etc.) for all funds of that category or type (total
governmental funds), and;
b. If the total assets and deferred outflows of resources, liabilities and deferred inflows of
resources, revenues, or expenditures of an individual governmental fund are at least 5 percent
of the corresponding element for all governmental 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, 2017
- 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, 2017
- 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 Fire Station fund is a capital projects fund used to account for the construction costs of the
new fire station.
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, 2017
- 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.
D. Cash and Investments
Government-Wide and Fund Financial Statements
Cash and short term investments are considered to be cash on hand, demand deposits and short-term
investments with original maturities of three months or less from the date of acquisition. Investments are
reported at fair value.
E. Fair Value Measurements
The Town reports required types of financial instruments in accordance with the fair value standards.
These standards require an entity to maximize the use of observable inputs (such as quoted prices in
active markets) and minimize the use of unobservable inputs (such as appraisals or valuation techniques)
to determine fair value. Fair value standards also require the government to classify these financial
instruments into a three-level hierarchy, based on the priority of inputs to the valuation technique or in
accordance with net asset value practical expedient rules, which allow for either Level 2 or Level 3
depending on lock up and notice periods associated with the underlying funds. Instruments measured and
reported at fair value are classified and disclosed in one of the following categories:
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 29 -
Level 1 – Quoted prices are available in active markets for identical instruments as of the reporting date.
Instruments, which are generally included in this category, include actively traded equity and debt
securities, U.S. government obligations, and mutual funds with quoted market prices in active markets.
Level 2 – Pricing inputs are other than quoted in active markets, which are either directly or indirectly
observable as of the reporting date, and fair value is determined through the use of models or other
valuation methodologies. Certain fixed income securities, primarily corporate bonds, are classified as
Level 2 because fair values are estimated using pricing models, matrix pricing, or discounted cash flows.
Level 3 – Pricing inputs are unobservable for the instrument and include situations where there is little, if
any, market activity for the instrument. The inputs into the determination of fair value require significant
management judgment or estimation. In some instances the inputs used to measure fair value may fall into
different levels of the fair value hierarchy and is based on the lowest level of input that is significant to
the fair value measurement. Market price is affected by a number of factors, including the type of
instrument and the characteristics specific to the instrument. Instruments with readily available active
quoted prices generally will have a higher degree of market price observability and a lesser degree of
judgment used in measuring fair value. It is reasonably possible that change in values of these instruments
will occur in the near term and that such changes could materially affect amounts reported in these
financial statements. For more information on the fair value of the Town’s financial instruments, see Note
3 – Fair Value Measurements.
F. Accounts Receivable
Government-Wide and Fund Financial Statements
The recognition of revenue related to accounts receivable reported in the government-wide financial
statements and proprietary and fiduciary funds financial statements are reported under the accrual basis of
accounting. The recognition of revenue related to accounts receivable reported in the governmental funds
financial statements are reported under the modified accrual basis of accounting.
Real Estate, Personal Property Taxes and Tax Liens
Real estate and personal property taxes are based on values assessed as of each January 1 and are
normally due on the subsequent November 1 and May 1. Property taxes that remain unpaid after the
respective due dates are subject to penalties and interest charges. By law, all taxable property in the
Commonwealth must be assessed at 100% of fair market value. Once levied, which is required to be at
least 30 days prior to the due date, these taxes are recorded as receivables in the fiscal year of levy.
Based on the Town’s experience, most property taxes are collected during the year in which they are
assessed. Liening of properties on which taxes remain unpaid occurs annually. The Town ultimately has
the right to foreclose on all properties where the taxes remain unpaid.
A statewide property tax limitation statute known as “Proposition 2 ½” limits the amount of increase in
property tax levy in any fiscal year. Generally, Proposition 2 ½ limits the total levy to an amount not
greater than 2 ½ % of the total assessed value of all taxable property within the Town. Secondly, the tax
levy cannot increase by more than 2 ½ % of the prior year’s levy plus the taxes on property newly added
to the tax rolls. Certain provisions of Proposition 2 ½ can be overridden by a Town-wide referendum.
Real estate receivables are secured via the tax lien process and are considered 100% collectible.
Accordingly, an allowance for uncollectibles is not reported.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 30 -
Personal property taxes cannot be secured through the lien process. The allowance of uncollectibles is
estimated based on historical trends and specific account analysis.
Motor Vehicle Excise
Motor vehicle excise taxes are assessed annually for each vehicle registered in the Town and are recorded
as receivables in the fiscal year of the levy. The Commonwealth is responsible for reporting the number
of vehicles registered and the fair values of those vehicles. The tax calculation is the fair value of the
vehicle multiplied by $25 per $1,000 of value.
The allowance for uncollectibles is estimated based on historical trends and specific account analysis.
Water
User fees are levied semi-annually based on meter readings and are subject to penalties if they are not
paid by the respective due date. Water liens are processed in December of every year and included as a
lien on the property owner's tax bill. Water charges and related liens are recorded as receivables in the
fiscal year of the levy.
Since the receivables are secured via the lien process, these accounts are considered 100% collectible and
therefore do not report an allowance for uncollectibles.
Special Assessments
Governmental activities special assessments consist primarily of Road Betterments, and Title V
receivables which are recorded as receivables in the fiscal year accrued. Since the receivables are secured
via the lien process, these assets are considered 100% collectable and therefore do not report an allowance
for uncollectibles.
Departmental and Other
Departmental and other receivables consist primarily of ambulance receivables and are recorded as
receivables in the fiscal year accrued. The allowance for uncollectibles for the ambulance receivables is
estimated based on historical trends and specific account analysis.
Intergovernmental
Various federal and state grants for operating and capital purposes are applied for and received annually.
For non-expenditure driven grants, receivables are recognized as soon as all eligibility requirements
imposed by the provider have been met. For expenditure driven grants, receivables are recognized when
the qualifying expenditures are incurred and all other grant requirements are met.
These receivables are considered 100% collectible and therefore do not report an allowance for
uncollectibles.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 31 -
G. Inventories
Government-Wide and Fund Financial Statements
Inventories of the governmental funds and the water and golf enterprise funds are recorded as
expenditures at the time of purchase. Such inventories are not material in total to the basic financial
statements, and therefore are not reported.
H. Capital Assets
Government-Wide and Proprietary Fund Financial Statements
Capital assets, which include land, vehicles, buildings and improvements, capital improvements,
machinery and equipment, 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.
Capital assets (excluding land and construction in progress) are depreciated on a straight-line basis. The
estimated useful lives of capital assets are as follows:
The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend
asset lives are not capitalized and are treated as expenses when incurred. Improvements are capitalized.
Governmental Fund Financial Statements
Capital asset costs are recorded as expenditures in the fiscal year of purchase for the various funds.
Asset Class
Estimated
Useful Life
(in years)
Buildings and Improvements 20-40
Capital Improvements (other than buildings) 20
Machinery, Equipment and Vehicles 5-15
Infrastructure 40
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 32 -
I. Interfund Receivables and Payables
During the course of its operations, transactions occur between and within individual funds that may
result in amounts owed between funds.
Government-Wide Financial Statements
Transactions of a buyer/seller nature between and within governmental funds are eliminated from the
governmental activities in the statement of net position. Any residual balances outstanding between the
governmental activities and business-type activities are reported in the statement of net position as
"internal balances".
Fund Financial Statements
Transactions of a buyer/seller nature between and within funds are not eliminated from the individual
fund statements. Receivables and payables resulting from these transactions are classified as "Due from
other funds" or "Due to other funds" on the balance sheet.
J. Interfund Transfers
During the course of its operations, resources are permanently reallocated between and within funds.
These transactions are reported as operating transfers in and operating transfers out.
Government-Wide Financial Statements
Operating transfers between and within governmental funds are eliminated from the governmental
activities in the statement of net position. Any residual balances outstanding between the governmental
activities and business-type activities are reported in the statement of activities as "Transfers, net".
Fund Financial Statements
Operating transfers between and within funds are not eliminated from the individual fund statements and
are reported as operating transfers in and operating transfers out.
K. Deferred Outflows/Inflows of Resources
Government-Wide Financial Statements (Net Position)
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to a future period(s) and so will not be recognized as
an outflow of resources (expense/ expenditure) until then. The Town reported deferred outflows of
resources related to pensions in this category.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 33 -
In addition to liabilities, the statement of financial position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of resources,
represents an acquisition of net position that applies to a future period(s) and so will not be recognized as
an inflow of resources (revenue) until that time. The Town reported deferred inflows of resources related
to pensions in this category.
Governmental Fund Financial Statements
In addition to liabilities, the governmental funds balance sheet will sometimes report a separate section
for deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents assets that have been recorded in the governmental fund financial statements but the
revenue is not available and so will not be recognized as an inflow of resources (revenue) until it becomes
available. The Town has recorded unavailable revenue as deferred inflows of resources in the
governmental funds balance sheet. Unavailable revenue is recognized as revenue in the conversion to the
government-wide (full accrual) financial statements.
L. Net Position and Fund Equity
Government-Wide Financial Statements (Net Position)
Net position are classified into three components:
a. Net investment in capital assets – consists of capital assets including restricted capital assets, net
of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages,
notes, or other borrowings that are attributable to the acquisition, construction, or improvement of
those assets.
b. Restricted net position – Consists of net position with constraints placed on the use either by (1)
external groups such as creditors, grantors, contributors, or laws or regulations of other
governments; or (2) law through constitutional provisions or enabling legislation.
Net position have been “restricted” for the following:
• Capital Projects represent various ongoing capital projects at June 30, 2017.
• Permanent funds -expendable represents amounts held in trust for which the expenditures are
restricted by various trust agreements.
• Permanent funds -nonexpendable represents amounts held in trust for which only investment
earnings may be expended.
• Other specific purpose represents restrictions placed on assets from outside parties.
c. Unrestricted net position – All other net position that do not meet the definition of “restricted” or
“net investment in capital assets.”
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 34 -
Fund Financial Statements (Fund Balances)
The Town uses the following criteria for fund balance classification:
• For nonspendable fund balance: includes amounts that cannot be spent because they are either
(1) not in spendable form or (2) legally or contractually required to be maintained intact.
• For restricted fund balance: when constraints placed on the use of the resources are either (1)
externally imposed by creditors, grantors, contributors, or laws or regulations of other
governments; or (2) imposed by law trough constitutional provisions or enabling legislation.
• For committed fund balance: (1) the government’s highest level of decision-making authority and
(2) the formal action that is required to be taken to establish (and modify or rescind) a fund
balance commitment.
• For assigned fund balance: (1) the body or official authorized to assign amounts to a specific
purpose and (2) the policy established by the governing body pursuant to which the authorization
is given.
• For unassigned fund balance: is the residual classification for the general fund. In other
governmental funds, if expenditures incurred for specific purposes exceeded the amounts
restricted, committed, or assigned to those purposes, it may be necessary to report a negative
unassigned fund balance.
The Town uses the following criteria for fund balance policies and procedures:
• When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balance is available, the unrestricted amount will be considered to have been spent.
• When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund
balance is available, and the least restricted amount will be considered to have been spent.
M. Long-term debt
Government-Wide and Proprietary Fund Financial Statements
Long-term debt is reported as liabilities in the government-wide and proprietary fund statement of net
position. Material bond premiums and discounts are deferred and amortized over the life of the bonds
using the effective interest method. Bonds payable are reported net of the applicable bond premium or
discount.
Governmental Fund Financial Statements
The face amount of governmental funds long-term debt is reported as other financing sources. Bond
premiums and discounts, as well as issuance costs, are recognized in the current period. Bond premiums
are reported as other financing sources and bond discounts are reported as other financing uses. Issuance
costs, whether or not withheld from the actual bond proceeds received, are reported as general
government expenditures.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 35 -
N. Investment Income
Excluding the permanent funds, investment income derived from major and nonmajor governmental
funds is legally assigned to the general fund unless otherwise directed by Massachusetts General Laws
(MGL).
O. Compensated Absences
Employees are granted sick and vacation leave in varying amounts. Upon retirement, termination or
death, certain employees are compensated for unused sick and vacation leave (subject to certain
limitations) at their then current rates of pay. The total amount of sick and vacation costs to be paid in
future years is not material to the basic financial statements and has not been recorded on the basic
financial statements.
P. Pension
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows
of resources related to pensions, and pension expense, information about the fiduciary net position of the
Barnstable County Retirement Association (Association) and the Massachusetts Teachers Retirement
System (MTRS). Additions to/deductions from the Association’s fiduciary net position have been
determined on the same basis as they are reported by the Association. For this purpose, benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance with
the benefit terms. Investments are reported at fair value.
Q. Post Retirement Benefits
Government-Wide and Fund Financial Statements
In addition to providing pension benefits, health and life insurance coverage is provided for retired
employees and their survivors in accordance with Chapter 32B, of Massachusetts General Laws, under
various contributory plans. The cost of providing health and life insurance is recognized by recording the
employer's 50% share of insurance premiums in the general fund in the fiscal year paid. All benefits are
provided through third-party insurance carriers and health maintenance organizations that administer,
assume, and pay all claims.
R. Use of Estimates
Government-Wide and Fund Financial Statements
The preparation of the accompanying financial statements in conformity with accounting principles
generally accepted in the United States of America, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and
expenditures/expenses during the reporting period. Actual results could vary from estimates that were
used.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 36 -
S. Total Column
Government-Wide Financial Statements
The total column presented on the government-wide financial statements represents consolidated financial
information.
Fund Financial Statements
The total column on the fund financial statements is presented only to facilitate financial analysis. Data in
this column is not comparable to the consolidated financial information.
NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Basis of Accounting
Pursuant to Chapter 44, Section 32 of the Massachusetts General Laws, the Town adopts an annual
budget for the general fund as well as for those special revenue funds for which the provisions of Chapter
44,Section 53fl1/2 have been adopted. The budgets for all departments and operations of the Town,
except that of the public schools, are prepared under the direction of the Town Administrator. The School
Department budget is prepared under the direction of the School Committee. The level of expenditures
may not legally exceed appropriations for each department or undertaking in the following categories: (1)
salaries and wages; (2) ordinary maintenance; and (3) capital outlays.
The majority of appropriations are non-continuing which lapse at the end of each fiscal year. Others are
continuing appropriations for which the governing body has authorized that an unspent balance from a
prior fiscal year be carried forward and made available for spending in the current fiscal year. Carryover
articles, not encumbrances, are included as part of the subsequent fiscal year's original budget.
Original and supplemental appropriations are enacted upon by a Town Meeting vote. Management may
not amend the budget without seeking the approval of the governing body. The Town’s Finance
Committee can legally transfer funds from its reserve fund to other appropriations within the budget
without seeking Town Meeting approvals. The original fiscal year 2017 approved budget authorized
$37,591,607 in current year appropriations and other amounts to be raised and $1,660,203 in carryover
articles carried over from previous fiscal years. Supplemental appropriations of $1,229,724 were
approved at two Special Town Meetings for fiscal year 2017.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 37 -
The Finance Director has the responsibility to ensure that budgetary controls are maintained and
monitored through the accounting system.
B. Budgetary – GAAP Reconciliation
For budgetary financial reporting purposes, the Uniform Municipal Accounting System basis of
accounting (established by the Commonwealth) is followed, which differs from the GAAP basis of
accounting. A reconciliation of budgetary-basis to GAAP-basis results for the general fund for the fiscal
year ended June 30, 2017 is presented below:
C. Deficit Fund Balances
Individual fund deficits exist within the special revenue, capital project funds, and golf capital project
fund. These individual deficits will be eliminated through subsequent fiscal year budget transfers, grants,
and/or proceeds from long-term debt during fiscal year 2018.
NOTE 3 – DEPOSITS AND INVESTMENTS
State and local statutes place certain limitations on the nature of deposits and investments available to the
Town. Deposits (including demand deposits, term deposits and certificates of deposit) in any one financial
institution may not exceed certain levels unless collateralized by the financial institutions involved.
Deposits
Custodial Credit Risk - Deposits
Custodial credit risk is the risk that in the event of bank failure, the Town’s deposits may not be
returned. Massachusetts General Law Chapter 44, Section 55, limits the deposits “in a bank or
trust company, or banking company to an amount not exceeding sixty percent (60%) of the
capital and surplus of such bank or trust company or banking company, unless satisfactory
security is given to it by such bank or trust company or banking company for such excess.”
The Town does not have a formal deposit policy for custodial credit risk.
Net change in fund balance - budgetary basis (1,863,367)$
Basis of accounting differences:
Increase in revenue for on-behalf payments - MTRS 1,358,758
Increase in expenditures for on-behalf payments - MTRS (1,358,758)
Increase in revenue for the MWPAT subsidy 6,332
Increase in expenditures for the MWPAT subsidy (6,332)
Net Stabilization fund activity 16,430
Adjustment for current year articles 1,425,480
Adjustment for current year encumbrances 199,035
Adjustment for expenditures from prior year encumbrances (138,861)
Net change in fund balance - GAAP basis (361,283)$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 38 -
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 collateralized with securities held by the pledging financial Institution’s
trust department or agent but not in the Town’s name.
The following table illustrates how much of the Town’s bank deposits are insured and how much
of the Town’s bank deposits are collateralized and held by the pledging bank’s trust department
but not in the Town’s name as of June 30, 2017:
Total Bank Balances 24,203,820$
Bank Balances Covered by Deposit Insurance
Federal Deposit Insurance Corporation (FDIC)1,325,200
Share Insurance Fund (SIF)1,642,819
Depositor's Insurance Fund (DIF)16,570,678
Total Bank Balances Covered by Deposit Insurance 19,538,697
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 4,665,123
Total Bank Balances Subject to Custodial Credit Risk 4,665,123
Total Bank Balances 24,203,820$
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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 39 -
• Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. For short-term investments that were purchased using surplus revenues,
Massachusetts General Law Chapter 44, Section 55, limits the Town’s investments to the top
rating issued by at least one nationally recognized statistical rating organization (NRSROs).
Presented below are the rating as of year-end for each investment type of the Town.
Investment type Fair value
Minimum
Legal
Rating Unrated
State Retirees Benefits Trust Fund (SRBT) -
HCST OPEB Master Trust 1,548,165$ N/A 1,548,165$
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 Town
does not have an investment policy for custodial credit risk.
• Interest Rate Risk
Interest rate risk is the risk of changes in market interest rates which will adversely affect the fair
value of an investment. Generally, the longer the maturity of an investment, the greater the risk of
its fair value to change with the market interest rate. The Town does not have a formal investment
policy that limits investment maturities as a means of managing its exposure to fair value losses
arising from increasing interest rates.
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 1,548,165$ 1,548,165$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 40 -
• Concentration of Credit Risk
The Town places no limit on the amount the government may invest in any one issuer. More than
5% of the Town’s investments are in the following securities:
Issuer
Percentage of
Total
Investments
State Retirees Benefits Trust Fund (SRBT) -
HCST OPEB Master Trust 100.00%
Fair Market Value of Investments
The Town holds investments that are measured at fair value on a recurring basis. Because investing is not
a core part of the Town’s mission, the Town determines that the disclosures related to these investments
only need to be disaggregated by the major type. The Town chooses a tabular format for disclosing the
levels within the fair value hierarchy.
The Town categorizes its fair value measurement within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the assets. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs
are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
The Town has the following recurring fair value measurement as of June 30, 2017:
Investment Type June 30, 2017
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 -$ -$ -$ -$
Investments measured at the net asset value (NAV)
State Retirees Benefits Trust - (SRBT)1,548,165
Investments measured at amortized cost
Massachusetts Municipal Depository Trust - (MMDT)2,758,140
Total Investments 4,306,305$
Fair Value Measurements Using
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 41 -
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, 2017 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, 2017, for the water enterprise fund consists of the following:
Allowance
Gross for Net
Receivables:Amount Uncollectibles Amount
Real estate and personal property taxes 342,026$ (1,200)$ 340,826$
Tax liens 545,973 - 545,973
Motor vehicle and other excise taxes 207,070 (64,086) 142,984
Departmental and other 377,356 (105,976) 271,380
Intergovernmental 108,995 - 108,995
Special assessments 602,211 - 602,211
Total 2,183,631$ (171,262)$ 2,012,369$
Allowance
Gross for Net
Receivables:Amount Uncollectibles Amount
Water
User fees 1,113,226$ -$ 1,113,226$
Special Assessments 24,989 - 24,989
Total 1,138,215$ -$ 1,138,215$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 42 -
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 187,058$ 19,575$ 549,411$ 756,044$
Intergovernmental - - 2,195 2,195
Deferred Other Revenue 688,957 - 304,604 993,561
Total 876,015$ 19,575$ 856,210$ 1,751,800$
Deferred Inflows of Resources Analysis
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 43 -
NOTE 5 – CAPITAL ASSETS
Capital asset activity for the fiscal year ended June 30, 2017, was as follows:
Beginning Decrease/Ending
Governmental Activities:Balance Increases Adjustments Balance
Capital assets not being depreciated:
Land 39,529,192$ 125,750$ -$ 39,654,942$
Construction in progress 2,981,200 4,355,215 (235,584) 7,100,831
Total capital assets not being depreciated 42,510,392 4,480,965 (235,584) 46,755,773
Capital assets being depreciated:
Building and improvements 28,737,460 - - 28,737,460
Capital improvement (other than buildings)4,709,032 689,112 235,584 5,633,728
Machinery, equipment, and vehicles 11,353,034 1,009,133 (857,752) 11,504,415
Infrastructure 12,459,351 193,300 - 12,652,651
Total capital assets being depreciated 57,258,877 1,891,545 (622,168) 58,528,254
Less accumulated depreciation for:
Building and improvements (12,447,295) (654,695) - (13,101,990)
Capital improvement (other than buildings)(1,183,161) (349,404) - (1,532,565)
Machinery, equipment, and vehicles (8,015,056) (789,168) 857,752 (7,946,472)
Infrastructure (5,056,922) (286,965) - (5,343,887)
Total accumulated depreciation (26,702,434) (2,080,232) 857,752 (27,924,914)
Total capital assets being depreciated, net 30,556,443 (188,687) 235,584 30,603,340
Total governmental activities capital assets, net 73,066,835$ 4,292,278$ -$ 77,359,113$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 44 -
Depreciation expense was charged to functions/programs of the primary government as follows:
General government 187,554$
Public safety 705,893
Education 507,707
Public works 420,342
Human services 40,129
Culture and recreation 218,607
Total depreciation expense - governmental activities 2,080,232$
Water 364,831$
Golf 456,464
Total depreciation expense - business-type activities 821,295$
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 5,707,642 351 - 5,707,993
Machinery, equipment, and vehicles 3,118,051 232,625 - 3,350,676
Infrastructure 24,963,757 87,400 84,853 25,136,010
Total capital assets being depreciated 33,789,450 320,376 84,853 34,194,679
Less accumulated depreciation for:
Buildings and improvements (1,396,063) (69,645) - (1,465,708)
Machinery, equipment, and vehicles (2,207,484) (176,858) - (2,384,342)
Infrastructure (10,721,414) (574,792) - (11,296,206)
Total accumulated depreciation (14,324,961) (821,295) - (15,146,256)
Total capital assets being depreciated, net 19,464,489 (500,919) 84,853 19,048,423
Total business-type activites capital assets, net 22,727,907$ (500,919)$ 84,853$ 22,311,841$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 45 -
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, golf course pro core processor, seven mowers and Volvo wheel loader.
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 1,360,187$
Machinery & Equipment 486,658
Less: Accumulated depreciation (973,992)
872,853$
The future minimum lease obligations and the net present value of the minimum lease payments as of
June 30, 2017, are as follows:
Governmental
Year Ending June 30 Activities
2018 307,204$
2019 242,393
2020 82,816
2021 32,596
Total minimum lease payments 665,009
Less: amounts representing interest (35,555)
Present value of minimum lease payments 629,454$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 46 -
NOTE 7 – INTERFUND TRANSFERS
Interfund transfers for the fiscal year ended June 30, 2017, 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 Private
General Golf Governmental Prurpose Trust
Operating Transfers Out:Fund Fund Funds Fund Total
Nonmajor Governmental Funds 1,156,820$ -$ -$ -$ 1,156,820$ (1)
Nonmajor Governmental Funds 10,001 - - 20,378 30,379 (3)
Golf Enterprise Fund 101,305 - - - 101,305 (1)
Golf Enterprise Fund 436,272 - - 2,115 438,387 (3)
Water Enterprise Fund 121,868 - - - 121,868 (1)
General Fund - 106,903 697,200 - 804,103 (2)
General Fund - - 28,848 - 28,848 (3)
Total 1,826,266$ 106,903$ 726,048$ 22,493$ 2,681,710$
Operating Transfers In:
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 47 -
The following is a summary of changes in short-term debt for the year ended June 30, 2017:
Type Purpose
Rate
(%)
Due
Date
Balance at
June 30, 2016
Renewed/
Issued
Retired/
Redeemed
Balance at
June 30, 2017
Governmental Funds
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) -
BAN Various Projects 1.60 6/18/2018 - 169,814 - 169,814
Total Governmental Funds 2,930,818 169,814 (2,930,818) 169,814
Business - Type Activities
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) -
BAN Golf Course Improvements 0.90 11/17/2017 - 120,000 - 120,000
Total Business Type Activities 226,903 120,000 (226,903) 120,000
Total:3,157,721$ 289,814$ (3,157,721)$ 289,814$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 48 -
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, 2017:
Bonds and Notes Payable Schedule -Governmental Funds
Project
Interest
Rate (%)
Outstanding at
June 30, 2016 Issued
Redeemed/
Refunded
Outstanding at
June 30, 2017
MWPAT Title V Septic Var 51,800 - 10,400 41,400
Police Station 3.89 670,000 - 170,000 500,000
MWPAT Title V Septic 3.59 80,000 - 10,000 70,000
Land Acquisition 3.64 300,000 - 60,000 240,000
Land Acquisition 4.49 425,000 - 50,000 375,000
Land Acquisition 4.49 880,000 - 80,000 800,000
Road Betterments 4.49 15,000 - 15,000 -
Road Betterments 4.49 10,000 - 10,000 -
Road Betterments 3.96 40,000 - 20,000 20,000
Land Acquisition 3.84 500,000 - 35,000 465,000
Road Betterments 3.84 110,000 - 25,000 85,000
Road Betterments 3.84 35,000 - 10,000 25,000
Road Betterments 3.00 45,000 - 10,000 35,000
Road Betterments 3.00 60,000 - 10,000 50,000
Land Acquisition 3 - 3.50 590,000 - 35,000 555,000
Road Betterments 2.5 - 4.0 104,720 - 14,720 90,000
Road Betterments 2.5 - 4.0 122,354 - 12,354 110,000
School Renovations 2.5 - 4.0 2,908,104 - 153,104 2,755,000
Road Betterments 2.5 - 4.0 2,000,000 - 135,000 1,865,000
Fire Station 2.25 -5.00 - 6,500,000 - 6,500,000
Road Repairs 2.25 -5.00 - 2,250,000 - 2,250,000
Library Parking Lot 2.25 -5.00 - 295,582 - 295,582
Road Betterments 2.25 -5.00 - 226,769 - 226,769
Road Betterments 2.25 -5.00 - 76,649 - 76,649
Total Bonds and Notes Payable 8,946,978 9,349,000 865,578 17,430,400
Add: Unamortized Bond Premium - 588,656 - 588,656
Total 8,946,978$ 9,937,656$ 865,578$ 35,449,456$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 49 -
The annual debt service requirements for principal and interest for Governmental bonds and notes
outstanding at June 30, 2017 are as follows:
Bonds and Notes Payable Schedule -Water and Golf Enterprise Funds
Fiscal Year Principal Interest Total
2018 1,364,400$ 590,666$ 1,955,066$
2019 1,320,400 542,224 1,862,624
2020 1,320,400 495,284 1,815,684
2021 1,135,200 442,672 1,577,872
2022 1,040,000 393,355 1,433,355
2023-2027 4,985,000 1,287,498 6,272,498
2028-2032 4,000,000 587,901 4,587,901
2033-2037 2,265,000 182,382 2,447,382
Total 17,430,400$ 4,521,982$ 21,952,382$
Project
Interest
Rate (%)
Outstanding at
June 30, 2016 Issued
Redeemed/
Refunded
Outstanding at
June 30, 2017
Golf Course 3.92 2,865,000$ -$ 660,000$ 2,205,000$
Water Mains 3.89 590,000 - 150,000 440,000
Water Betterments - Slough Rd 3.64 350,000 - 35,000 315,000
Water Betterments - Fiddler's Ln 4.49 30,000 - 5,000 25,000
Water Offices/Garage 3.96 1,475,000 - 125,000 1,350,000
Well #6 3 - 3.50 2,405,000 - 135,000 2,270,000
Well Access Road 2.5 - 4.0 274,945 - 34,945 240,000
Water 2.5 - 4.0 840,168 - 45,168 795,000
Total 8,830,113$ -$ 1,190,113$ 7,640,000$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 50 -
The annual debt service requirements for principal and interest for water and golf enterprise funds bonds
and notes outstanding at June 30, 2017 are as follows:
Loans Authorized and Unissued
As of June 30, 2017, the Town has loans authorized and unissued as follows:
Fiscal Year Principal Interest Total
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 370,000 130,402 500,402
2022 370,000 116,943 486,943
2023-2027 1,730,000 387,333 2,117,333
2028-2032 980,000 145,472 1,125,472
2033-2036 420,000 23,600 443,600
Total 7,640,000$ 1,500,891$ 9,140,891$
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, 2017
- 51 -
Changes in Long-term Liabilities
The following is a summary of changes in long-term liabilities for the year ended June 30, 2017:
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, 2017:
Term Debt Estimated Indirect
Agency Outstanding Share Debt
Nauset Regional School District 3,325,000$ 46.01% 1,529,833$
Barnstable County 22,114,734$ 4.56% 1,008,432$
25,439,734$ 2,538,264$
Beginning Ending Current
Governmental Activities:Balance Additions Reductions Balance Portion
Bonds and notes payable 8,946,978$ 9,349,000$ (1,090,273)$ 17,205,705$ 1,364,400$
Add: Unamortized Premiums - 588,656 - 588,656 -
Total Bond Payable 8,946,978 9,937,656 (1,090,273) 17,794,361 1,364,400
Landfill postclosure care costs 360,500 - (7,000) 353,500 29,500
Capital Leases 576,771 152,756 (217,695) 511,832 172,403
Postemployment benefits 5,898,100 1,066,562 - 6,964,662 -
Net pension liability 18,999,936 1,432,132 - 20,432,068 -
Total governmental activities
long-term liabilities 34,782,285$ 12,589,106$ (1,314,968)$ 46,056,423$ 1,566,303$
Beginning Ending Current
Business-Type Activities:Balance Additions Reductions Balance Portion
Postemployment benefits 1,053,737$ 112,884$ -$ 1,166,621$ -$
Net Pension Liability 3,673,019 276,856 - 3,949,875 -
Capital Lease 182,081 - (64,459) 117,622 66,718
Bonds and notes payable 8,830,113 - (1,190,113) 7,640,000 1,225,000
Total business-type activities
long-term liabilities 13,738,950$ 389,740$ (1,254,572)$ 12,874,118$ 1,291,718$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 52 -
NOTE 10 – GOVERNMENTAL FUND BALANCE CLASSIFICATIONS
The Town has classified its governmental fund balances with the following hierarchy.
Nonmajor
General Community Road Fire Governmental
Fund Preservation Improvements Station Funds Total
Fund Balances
Nonspendable:
Permanent Fund Principal -$ -$ -$ -$ 150,388$ 150,388$
Restricted For:
General Government - - - - 577,322 577,322
Public Safety - - - 2,898,999 1,479,721 4,378,720
Education - - - - 77,244 77,244
Public Works - - 1,087,362 - 721,432 1,808,794
Human Services - - - - 254,292 254,292
Culture & Recreration - - - - 146,380 146,380
Employee Benefits - - - - 81,241 81,241
Bond Premium 324,213 - - - - 324,213
Community Preservation - 3,573,089 - - - 3,573,089
Expendable Trust Funds - - - - 124,021 124,021
324,213 3,573,089 1,087,362 2,898,999 3,461,653 11,345,316
Committed To:
Continuing Appropriations
General Government 262,499 - - - - 262,499
Public Safety 365,582 - - - - 365,582
Education 182,680 - - - - 182,680
Public Works 421,438 - - - - 421,438
Human Services 130,526 - - - - 130,526
Culture & Recreation 62,755 - - - - 62,755
1,425,480 - - - - 1,425,480
Assigned To:
Encumbered For:
General Government 86,737 - - - - 86,737
Public Safety 3,721 - - - - 3,721
Education 60,041 - - - - 60,041
Public Works 29,775 - - - - 29,775
Human Services 13,161 - - - - 13,161
Employee Benefits 5,600 - - - - 5,600
Subsequent Years Expenditures 300,000 - - - - 300,000
499,035 - - - - 499,035
Unassigned
General Fund 4,145,171 - - - - 4,145,171
General Stabilization Fund 2,080,514 - - - - 2,080,514
Nonmajor Governmental Funds - - - - (2,195) (2,195)
Nonmajor Capital Projects
General Government - - - - (43,719) (43,719)
Public Works - - - - (6,993) (6,993)
6,225,685 - - - (52,907) 6,172,778
Total Governmental Fund Balances 8,474,413$ 3,573,089$ 1,087,362$ 2,898,999$ 3,559,134$ 19,592,997$
`
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 53 -
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 $2,080,514 as of June 30,
2017. 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 $49,724,257.
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 2017.
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, 2017
- 54 -
The Group has adopted a contributory dental insurance plan (self-funded) and a voluntary dental plan,
which was premium based through June 30, 2007 and changed to a self funded basis effective July 1,
2007. These plans are administered by Delta Dental Plan of Massachusetts for a monthly administrative
fee, based on the number of subscribers. Dental plans are optional for employees. Effective July 1, 2009
the group adopted a voluntary fully 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 (Medical Portion) are on a claims-paid basis, and are administered by Harvard Pilgrim
Health Care for a monthly administration fee based on the number of individual and family plan
subscribers for that particular month. Medicare Enhance is combined with a fully insured PDP from
Aetna Medicare RX Plan.
On July 1, 2014 the Group joined with two other Massachusetts municipal joint purchase groups to create
the first Massachusetts Municipal Reinsurance Arrangement (MMRA). The policy year is July 1 through
June 30. All participants share the same rates for coverage of claims exceeding $300,000 up to $800,000.
There is no Aggregating Specific Deductible. If claims experience is below projections, participants are
dividend eligible on a collective and proportional basis. Participating governmental entities have agreed to
participate for a minimum of three years. In addition, the group has a specific excess medical and
prescription drug claims reinsurance contract with an insurance carrier covering claims paid in excess of
$800,000 per individual. The policy period covers claims incurred within 12 months and paid within 24
months.
The Group does not reinsure its Medex and HPHC Medicare Enhance Medical plans.
The Group’s Board may deal with certified surpluses and deficits through the rate setting process and this
is the preferred method. Alternatively, the Group may deal with certified surpluses and deficits by making
direct distributions to members in the case of a certified surplus or may require direct payments from
members in the case of a certified deficit.
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 229 Town of Brewster employees and 131
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, 2017 the Cape Cod Municipal Health Group had total assets of $31,123,512, total
liabilities of $14,780,514 (including $14,264,665 in estimated benefits obligations), and a total surplus of
$16,342,998.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 55 -
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 Town of Brewster administers a single-employer defined benefit healthcare plan
(Plan). The Plan provides medical, dental and life insurance benefits to eligible retirees and their spouses
through a single-employer defined Other Postemployment Benefit (OPEB) plan. Chapter 32B of the
MGL assigns authority to establish and amend benefit provisions of the plan. Benefit provisions are
negotiated between the Town and the unions representing Town Employees and are renegotiated each
bargaining period. The Retiree Health Plan does not issue a publicly available financial report.
Additionally, retired teachers and their spouses receive health insurance through the Group Insurance
Commission of the Commonwealth of Massachusetts (GIC). Each Participating Municipality is assessed
for the governmental share of health and life insurance premiums paid on-behalf of its teacher retirees by
the State. The State pays 85-90% of the total premium; the retiree’s co-payment is 10-15% of the total
premium as well as full payment for catastrophic illness coverage.
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 pay-as-you-go financing requirements.
The Town contributes 50% of the cost of current-year premiums for eligible retired plan members and
their spouses. For Fiscal Year 2017, the estimated total Town premiums plus implicit costs for the retiree
medical program are $605,788.
The Commonwealth of Massachusetts passed special legislation that has allowed the Town to establish a
postemployment benefit trust fund and to enable the Town to begin pre-funding its other postemployment
benefits (OPEB) liabilities.
Plan Membership – The following table represents the Plan’s membership as June 30, 2016:
Active Members 188
Inactive members currently receiving benefits 133
Total 321
Components of OPEB Liability – The following table represents the components of the Plan’s OPEB
liability as of June 30, 2017:
Total OPEB Liability 21,915,046$
Less: OPEB plan's fiduciary net position (1,574,088)
Net OPEB Liability 20,340,958$
The OPEB plan's fiduciary net position as a
percentage of the total OPEB liability 7.18%
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 56 -
Significant Actuarial Methods and Assumptions – The total OPEB liability in the June 30, 2016 actuarial
valuation was determined by using the following actuarial assumptions, applied to all periods included in
the measurement that was updated to June 30 2017 to be in accordance with GASB #74:
Valuation Date:Actuarially Dtermined Contribution for fiscal year
ending June 30, 2017 was determined with the
June 30, 2016 actuarial valuation.
Actuarial Cost Method:Entry Age Normal - Level Percentage
of Payroll
Asset-Valuation Method:Market value of assets as of the reporting
date June 30, 2017
Investment Rate of Return 7.25%, for assets invested in the State Retiree
Benefits Trust Fund 7.0% for all others
Inflation:3.50%
Discount rate 3.78% as of June 30,2017 and 2.85%as of
June 30,02016
Salary Increases:Service-related increases for group 1 and group 2
employees: 6.00% decreasing over 9 years to an
ultimate 4.25%. Service-related increases for group
4 members: 7.00% decreasing over 5 years to an
ultimate level of 4.75%.
Healthcare trend rates:
Cape Cod Municipal Health Group
Under 65 10.5% for 1 year, then 7.0% decreasing by 0.5% each
year to an ultimate level of 4.5% per year
Over 65 1.9% for 1 year, then 7.0% decreasing by 0.5% each
year to an ultimate level of 4.5% per year
Dental 2.1% for 1 year, then 4.5% per year
Group Insurance Commision
Under 65 6.8% for 1 year, then 8.5% decreases by 0.5% each
year to an ultimate level of 5.0% per year
Over 65 1.6% for 1 year, then 8.5% decreasing by 0.5% each
year to an ultimate level of 5.0% per year
Part B contributions 4.5% Retiree contributions are expected to increase
with the respective trend shown above
Pre-Retirement Mortality:
Healthy non-teachers RP-2000 Employees Mortality Table projected
generationally with scale BB2D from 2009
Healthy non-teachers (Falmouth)RP-2000 Employees Mortality Table projected
generationally with scale BB from 2009
Post-Retirement Mortality:
Healthy non-teachers RP-2000 Healthy Annuitant Mortality Table projected
generationally with scale BB2D from 2009
Healthy non-teachers (Falmouth)RP-2000 Healthy Annuitant Mortality Table projected
generationally with scale BB from2009
Disabled non-teachers RP-2000 Healthy Annuitant MortalityTable projected
generationally with scale BB2D from 2015
Disabled non-teachers (Falmouth)RP-2000 Healthy Annuitant MortalityTable projected
generationally with scale BB from 2012
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 57 -
Investment Policy
The OPEB plan’s assets are managed on a total return basis with a long-term objective of achieving and
maintaining a fully funded status for the benefits provided through the OPEB plan.
The long-term expected rate of return on OPEB plan investments was determined using a building block
method in which the best estimate ranges of expected future rates of return (expected returns, net of
investment expense and inflation) are developed for each major asset class. Theses 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 and subtracting expected
investment expenses and a risk margin. The arithmetic real rates of return for each major asset class, after
deducting inflation, but before investment expenses, used in the derivation of the long-term expected
investment rate of return assumption are summarized in the following table.
Long-Term
Expected Real
Rate of Return
Domestic equity 6.44%
International developed markets equity 7.40%
International emerging markets equity 9.42%
Core fixed income 2.02%
High- yield fixed income 4.43%
Real Estate 5.00%
Commodities 4.43%
Hedge fund, GTAA, Risk parity 3.75%
Private equity 10.47%
Total 100.00%
Asset Class
Sensitivity of the net OPEB liability to changes in the discount rate – The following table presents the
Plan’s net OPEB liability, calculated using the discount rate of 3.78% as well as what the net OPEB
liability would be if it were calculated using a discount rate that is 1 percentage- point lower (2.78%) or
1 percentage-point higher (4.78%) than the current rate.
Current
1% Decrease Discount Rate 1% Increase
(2.78%)(3.78%)(4.78%)
Net OPEB liability 23,985,630$ 20,340,958$ 17,417,158$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 58 -
Sensitivity of the net OPEB liability to changes in the healthcare trend – The following table presents the
net other postemployment benefit liability, calculated using the healthcare trend rate if it was 1
percentage-point lower or 1 percentage-point higher than the current rate.
1% Decrease in Current 1% Increase in
Trend Rates Trend Rates Trend Rates
Net OPEB liability 16,856,765$ 20,340,958$ 24,849,655$
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 the 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 1,767,886$
Interest on net OPEB obligation 262,779
Adjustment to annual required contribution (ARC) (245,431)
Annual OPEB cost (expense)1,785,234
Contributions made (605,788)
Increase in net OPEB obligation 1,179,446
Net OPEB obligation - beginning of year 6,951,837
Net OPEB obligation - end of year 8,131,283$
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 59 -
The Town’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for 2017 and the eight preceding years were as follows:
Funded Status and Funding Progress. As of June 30, 2016, the most recent actuarial valuation date, the
plan was 6.3% funded. The actuarial accrued liability for benefits was $20,681,081 million, and the
actuarial value of assets was $1.299 million, resulting in an unfunded actuarial accrued liability (UAAL)
of $19.382 million. The covered payroll (annual payroll of active employees covered by the plan) was
$15.757 million, and the ratio of the UAAL to the covered payroll was 123.0%.
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
6/30/2017 $ 1,785,234 33.93% $ 1,179,446 $ 8,131,283
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 60 -
In the June 30, 2016, actuarial valuation, actuarial liabilities were determined using the entry age normal
cost method. The actuarial assumptions included a 7.25% investment return assumption and a 3.78%
discount rate, which is based on the expected yield on the assets of the Town, calculated based on the
funded level of the plan at the valuation date, an annual medical/prescription drug cost trend of: 10.5%
initially, then 7% decreasing 0.5% for six years to an ultimate level of 4.5% per year for members under
age 65 and 1.9% initially, then 7.0% decreasing by 0.5% for six years to an ultimate level of 4.5% per
year for members over age 65, a GIC medical/prescription drug cost trend rate of 6.8% then 8.5%
decreasing by 0.5% for eight years to an ultimate level of 5.0% per year for members under the age of 65
and 1.6% then 8.5% for eight years to an ultimate rate of 5.0% per year for members over the age of 65,
and included a 3.5% inflation assumption. The actuarial value of assets was determined using techniques
that spread the effects of short-term volatility in the market value of investments over a five-year period.
The UAAL is being amortized over a 30 year open period using a level percentage of projected payroll
with amortization payments increasing at 3.5% per year. The asset valuation method being used is market
value. The remaining amortization period at July 1, 2017, was 21 years.
NOTE 14 – PENSION PLANS
A. Plan Descriptions
The Town contributes to the Barnstable County Retirement Association (The Association), a multiple-
employer, cost sharing contributory defined benefit pension plan, under Massachusetts General Law
(MGL), Chapter 32, and is regulated by the Massachusetts Public Employee Retirement Administration
Commission (PERAC). Substantially all employees are members of the Association except for public
school teachers and certain school administrators.
The Association issues a publically available audited financial report that may be obtained by
contacting the association at 3195 Main Street Barnstable, MA 02630.
The Town is a member of the Massachusetts Teachers’ Retirement System (MTRS), a cost-sharing multi-
employer defined benefit plan. MTRS is managed by the Commonwealth of Massachusetts
(Commonwealth) on behalf of municipal teachers and municipal teacher retirees. The Commonwealth is a
nonemployer contributor and is responsible for 100% of the contributions and future benefit requirements
of the MTRS. The MTRS covers certified teachers in cities (except Boston), towns, regional school
districts, charter schools, educational collaboratives, and Quincy College. The MTRS is part of the
Commonwealth’s reporting entity and the audited financial report may be obtained by visiting
http://www.mass.gov/osc/publications-and-reports/financial-reports/. The MTRS report may also be
obtained by contacting MTRS at One Charles Park, Cambridge, Massachusetts 02142-1206.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 61 -
Special Funding Situation
The Commonwealth is a nonemployer contributor and is required by statue to make 100% of all
actuarially determined employer contributions on behalf of the Town to the MTRS. Therefore, the Town
is considered to be in a special funding situation as defined by GASB Statement No.68, Accounting and
Financial Reporting for Pensions and the Commonwealth is a nonemployer contributor in MTRS. Since
the Town does not contribute directly to MTRS, there is no net pension liability to recognize. The total of
the Commonwealth provided contributions have been allocated based on each employer’s covered payroll
to the total covered payroll of employers in MTRS as of the measurement date of June 30, 2016. The
Town’s portion of the collective pension expense, contributed by the Commonwealth, of $1,358,758 is
reported in the general fund as intergovernmental revenue and pension expense in the current fiscal year.
The portion of the Commonwealth’s collective net pension liability associated with the Town is
$13,320,299 as of the measurement date.
The “Association” and the MTRS are contributory defined benefit plans and membership in both the
“Association” and the MTRS is mandatory upon commencement of employment for all permanent, full-
time employees.
B. Benefits
The Association and MTRS provide retirement, disability and death benefits to plan members and
beneficiaries. Massachusetts Contributory Retirement System benefits are with certain exceptions,
uniform from system to system. The Association provides for retirement allowance benefits up to a
maximum of 80% of an employees highest three year average annual rate of regular compensation for
those hired prior to April 2, 2012. For persons who became employees on or after April 2, 2012, average
salary is the average annual rate of regular compensation received during the five consecutive years that
produce the highest average, or, if greater, during the last five years (whether or not consecutive)
preceding retirement. Benefit payments are based upon an employee’s age, length of creditable service,
level of compensation, and group classification.
Employees who become permanently and totally disabled for further duty may be eligible to receive
a disability retirement allowance. The amount of benefits to be received in such cases is dependent
on several factors, including whether or not the disability is work related, the employee’s age, years
of creditable service, level of compensation, veterans’ status and group classification.
Employees who resign from service are entitled to request a refund of their accumulated total
deductions. Survivor benefits are extended to eligible beneficiaries of employees whose death occurs
prior to or following retirement.
Cost-of living adjustments granted between 1981 and 1997, and any increase in other benefits
imposed by the Commonwealth of Massachusetts’ state law during those years are borne by the
Commonwealth and are deposited in to the pension fund. Cost-of-living adjustments granted after
1997 must be approved by the Association and all costs are borne by the Association.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 62 -
C. Contributions
Barnstable County Retirement Association
Chapter 32 of MGL governs the contributions of plan members and member employees. Active plan
employees are required to contribute to the Association at rates ranging from 5 to 9% and of their gross
regular compensation. The percentage rate is keyed to the date upon which an employee’s membership
commences. Employees hired on or after January 1, 1979, contribute an additional 2.0% of annual regular
compensation in excess of $30,000. The member units are required to pay into the Association, a
legislatively mandated actuarial determined contribution that is apportioned among the employers based
on the actuarial valuation results. The Town’s proportionate share of the required contribution for the year
ended June 30, 2017 which was $1,967,090 and 20.21% 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.
D. Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of
Resources Related to Pensions
Pension Liabilities
At June 30, 2017 the Town reported a liability of $24,381,943 for its proportionate share of the net
pension liability. The net pension liability was measured as of December 31, 2016 and the total pension
liability used to calculate the net pension liability was determined by an actuarial valuation as of January
1, 2016. Accordingly, updated procedures were used to roll forward the total pension liability to the
measurement date. The Town’s proportion of the net pension liability was based on a projection of the
Town’s long-term share of contributions to the pension plan relative to the projected contributions of all
participating members actuarially determined. At December 31, 2016, the Town’s proportion was 3.47%
which was a slight decrease from the last measurement.
Pension Expense and Deferred Outflows/Inflows of Resources
For the year ended June 30, 2017 the Town recognized pension expense of $3,558,807. At June 30, 2017
the Town reported deferred outflows and inflows of resources related to pensions of $2,854,253 and
$1,014,146 respectively.
The balances of deferred outflows and inflows as June 30, 2017 consist of the following:
Deferred Deferred
Outflows Inflows
of Resources of Resources Total
Differences between expected and actual experience -$ (312,406)$ (312,406)$
Changes of Assumptions 1,446,352 - 1,446,352
Differences between projected and actual investment earnings 1,385,944 - 1,385,944
Contributions and proportionate share of contributions 21,957 (701,740) (679,783)
Total Deferred Outflows (Inflows) of Resources 2,854,253$ (1,014,146)$ 1,840,107$
Deferred Category
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 63 -
The Town’s net deferred outflows/inflows of resources related to pensions will be recognized in future
pension expense are as follows:
Year ended June 30 Amount
2018 545,259$
2019 545,259
2020 536,871
2021 109,662
2022 103,056
Total Balance of Deferred Outflows/Inflows 1,840,107$
E. Actuarial assumptions
The total pension liability was determined by an actuarial valuation as of January 1, 2016, using the
following actuarial assumptions, applied to all periods included in the measurement date of December 31,
2016:
Valuation date……………………………… January 1, 2016
Actuarial cost method……………………… Entry Age Normal Cost Method.
Amortization method……………………… Appropriations increase at 5.28% per year
Remaining amortization period…………… 20 years from July1, 2016 for 2002 and 2003 Early
Retirement Incentives, retiree sheriffs liability and
remaining unfunded liability, and 6 years from July 1,
2016 for 2010 Early Retirement Incentive.
Asset valuation method…………………… A preliminary actuarial value is first determined by taking the
actuarial value of assets at the beginning of the year and
adding assumed investment earnings (at the assumed
actuarial rate of return) and the net new money during the
year (contributions less benefit payments and administrative
expenses). Twenty percent of the difference between the
market value of assets as reported in the Associations
Annual Statement and the preliminary actuarial value of
assets is added to the preliminary actuarial value. In order
for the actuarial value to not differ too significantly from
the market value of assets, the final actuarial value of assets
must be within 20% of the market value of assets.
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.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
- 64 -
Cost of living adjustments………………… 3.0% of the first $16,000 of retirement income as of July 1,
2015, $17,000 as of July 1, 2016, and $18,000 as of July 1,
2017.
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 Scale BB2D from 2009
Healthy Retiree…………...The RP-2000 Healthy Annuitant Mortality Table projected
generationally with Scale BB2D from 2009
Disabled Retiree………….The RP-2000 Healthy Annuitant Mortality Table projected
generationally with Scale BB2D from 2015
Investment rate of return/Discount rate…… 7.625% net of pension plan investment expense, including
inflation.
Investment policy
The Pension Plan’s policy in regard to the allocation of invested assets is established by the PRIT. Plan
assets are managed on a total return basis with a long-term objective of achieving a fully funded status for
the benefits provided through the pension plan.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
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F. Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which 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, 2016 are summarized in the following table:
Asset Class
Long-Term
Expected Nominal
Rate of Return
Long-Term Expected
Asset Allocation
Developed equity 18.00%6.44%
International developed markets equity 16.00%7.40%
International emerging markets equity 6.00%9.42%
Core fixed income 13.00%2.02%
High-yield fixed income 10.00%4.43%
Real estate 10.00%5.00%
Commodities 4.00%4.43%
Hedge fund, GTAA, Risk parity 13.00%3.75%
Private equity 10.00%10.47%
100.00%
For the year ended December 31, 2016 the Association’s annual money-weighted rate of return on
pension plan investments net of pension plan investment expense was 7.40%. The money-weighted rate
of return expresses investment performance, net of pension plan investment expense, adjusted for the
changing amounts actually invested.
G. Discount Rate
The discount rate used to measure the total pension liability was 7.625%. 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 plan members. Therefore, the long-
term expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
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H. Sensitivity of the net pension liability to changes on the discount rate
The following presents the net pension liability, calculated using the discount rate of 7.625%, as well as
what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point
lower (6.625%) or 1 percentage point higher (8.625%) than the current rate:
1% Decrease
(6.625%)
Current
Discount Rate
(7.625%)
1% Increase
(8.625%)
Lakeville share of the net
pension liability 31,026,287$ 24,381,943$ 18,777,769$
Detailed information about the pension plan’s fiduciary net pension is available in a separately issued
Plymouth County Retirement Association 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, 2017. 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 (14 years remaining), and
the estimated liability has been recorded in the Statement of Net Position, Governmental Activities. The
$353,500 reported as landfill post-closure liability at June 30, 2017 is based on what it would cost to
perform all post-closure care at June 30, 2017. 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, 2017, cannot be ascertained, management believes any resulting liability should not materially affect
the financial position at June 30, 2017.
TOWN OF BREWSTER, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2017
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NOTE 16 – IMPLEMENTATION OF NEW GASB PRONOUNCEMENTS
During fiscal year 2017, the following GASB pronouncements were implemented:
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 #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 Requirements 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.
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.
Future GASB Pronouncements:
The GASB issued Statement #75, Accounting and Financial Reporting for Postemployment Benefits
Other Than Pensions, this 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 #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 #83, Certain Asset Retirement Obligations, which is required to be
implemented in 2019. Management’s current assessment is that this pronouncement will not have a
significant impact on the Basic Financial Statements.
The GASB issued Statement #84, Fiduciary Activities, which is required to be implemented in 2020.
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, 2017
- 68 -
The GASB issued Statement #85, Omnibus 2017, 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 #86, Certain Debt Extinguishment Issues, 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 #87, Leases, which is required to be implemented in 2021. Management’s
current assessment is that this pronouncement will not have a significant impact on the Basic Financial
Statements.
TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
BARNSTABLE COUNTY RETIREMENT ASSOCIATION
JUNE 30, 2017
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, 2016 December 31, 2015 December 31, 2014
Town's proportion of the net pension liability 3.47%3.60%3.62%
Town's proportionate share of the net pension liability 24,381,943$ 22,672,955$ 20,436,149$
Town's covered-employee payroll 9,735,188$ 9,902,884$ 9,494,687$
Town's proportionate share of the net pension liability as a
percentage of it's covered-employee payroll 250.45%228.95%215.24%
Plan fiduciary net position as a percentage of the total
pension liability 57.28%58.10%60.43%
Note: This schedule is intended to present information for 10 years. Until a 10 year trend is compiled,
information is presented for those years for which the information is available.
See notes to Required Supplementary Information
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
BARNSTABLE COUNTY RETIREMENT ASSOCIATION
JUNE 30, 2017
December 31 ,2016 December 31 ,2015 December 31 ,2014
Actuarily determined contribution 1,967,090$ 1,946,029$ 1,885,218$
Contribution in relation to the actuarilly
determined contribution (1,967,090) (1,946,029) (1,885,218)
Contribution deficency (excess)-$ -$ -$
Town's covered-employee payroll 9,735,188$ 9,902,884$ 9,494,687$
Contribution as a percentage of covered -
employee payroll 20.21%19.65%19.86%
SCHEDULE OF TOWNS CONTRIBUTION
Note: This Town schedule is intended to present information for 10 years. Until a 10 year trend is
compiled, information is presented for those years for which the information is available.
See notes to Required Supplementary Information
- 70 -
TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
MASSACHUSETTS TEACHERS RETIREMENT SYSTEM
JUNE 30, 2017
The following schedule is presented in accordance with GASB Statement No. 74
Schedule of the Commonwealth’s Collective amounts of the Net Pension Liability
The Commonwealth of Massachusetts is a nonemployer contributor and is required by statue to make all
actuarially determined employer contributions on behalf of the member employers which creates a special
funding situation. Since the Town does not contribute directly to MTRS, there is no net pension liability
to recognize. This schedule discloses the Commonwealth’s 100% share of the collective net pension
liability that is associated with the Town; the portion of the collective pension expense as both revenue
and pension expense recognized by the Town; and the Plan’s fiduciary net position as a percentage of
total liability.
Commonwealth's Town's Expense
100% Share of the and Revenue Plan Fiduciary Net
Net Pension Recognized for the Position as a
Liability Associated Commonwealth's Percentage of the
with the Town Support Total Pension Liability
2017 13,320,299$ 1,358,758$ 52.73%
2016 12,323,157 999,518 55.38%
2015 9,511,918 660,839 61.64%
Fiscal Year
Note: This schedule is intended to present information for 10 years. Until a 10-year trend is compiled,
information is presented for those years for which information is available.
See notes to required supplementary information.
- 71 -
TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS
JUNE 30, 2017
The following schedules are presented in accordance with GASB Statement No. 74
Schedule of the Town’s Proportionate Share of the Net Other Postemployment Benefit Liability
June 30, 2017
Total OPEB Liability
Service Cost 1,200,462$
Interest 686,109
Changes of benefit terms -
Differences between expected and actual experience -
Changes of assumptions (2,577,803)
Benefit Payments (530,788)
Net Change in total OPEB liability (1,222,020)
Total OPEB liability-beginning 23,137,066
Total OPEB liability-ending (a)21,915,046
Plan fiduciary net position
Contributions-employer 605,788
Net investment income 199,756
Benefit payments (530,788)
Administrative expenses -
Net change in plan fiduciary net position 274,756
Plan fiduciary net position - beginning 1,299,332
Plan fiduciary net position - ending (b)1,574,088
Town's net OPEB liability-ending (a)-(b)20,340,958$
Plan fiduciary net position as a percentage of
total OPEB liability 7.18%
Covered-employee payroll 15,756,605
Plan's net OPEB liability as a percentage of
covered-employee payroll 129.09%
Note: This schedule is intended to present information for 10 years. Until a 10-year trend is
compiled, information is presented for those years for which information is available
See notes to required supplementary information.
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS
JUNE 30, 2017
June 30, 2017
Acuarially determined contribution 1,767,886$
Contributions in relation to the actuarially
determined contribution (605,788)
Contribution deficiency (excess)1,162,098$
Covered-employee payroll 15,756,605$
Contributions as a percentage of covered-
employee payroll 3.84%
Schedule of the Town's Contribution
Note: This schedule is intended to present information for 10 years. Until a 10-year trend is
compiled, information is presented for those years for which information is available.
See notes to required supplementary information.
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS
JUNE 30, 2017
June 30, 2017
Annual money-weighted rate of return,
net of investment expense 5.44%
Schedule of Investment Return
Note: This schedule is intended to present information for 10 years. Until a 10-year trend is
compiled, information is presented for those years for which information is available.
See notes to required supplementary information.
- 74 -
TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS
JUNE 30, 2017
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%
6/30/2016 1,299,332$ 20,681,081$ 19,381,749$ 6.3% 15,756,605$ 123.0%
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$
2017 $ 1,785,234 33.93% 1,179,446$ 8,131,283$
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TOWN OF BREWSTER, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POSTEMPLOYMENT BENEFITS
JUNE 30, 2017
Significant Actuarial Methods and Assumptions – The total OPEB liability in the June 30, 2016 actuarial
valuation was determined by using the following actuarial assumptions, applied to all periods included in
the measurement that was updated to June 30 2017 to be in accordance with GASB #74:
Valuation Date:Actuarially Dtermined Contribution for fiscal year
ending June 30, 2017 was determined with the
June 30, 2016 actuarial valuation.
Actuarial Cost Method:Entry Age Normal - Level Percentage
of Payroll
Asset-Valuation Method:Market value of assets as of the reporting
date June 30, 2017
Investment Rate of Return 7.25%, for assets invested in the State Retiree
Benefits Trust Fund 7.0% for all others
Inflation:3.50%
Discount rate 3.78% as of June 30,2017 and 2.85%as of
June 30,02016
Salary Increases:Service-related increases for group 1 and group 2
employees: 6.00% decreasing over 9 years to an
ultimate 4.25%. Service-related increases for group
4 members: 7.00% decreasing over 5 years to an
ultimate level of 4.75%.
Healthcare trend rates:
Cape Cod Municipal Health Group
Under 65 10.5% for 1 year, then 7.0% decreasing by 0.5% each
year to an ultimate level of 4.5% per year
Over 65 1.9% for 1 year, then 7.0% decreasing by 0.5% each
year to an ultimate level of 4.5% per year
Dental 2.1% for 1 year, then 4.5% per year
Group Insurance Commision
Under 65 6.8% for 1 year, then 8.5% decreases by 0.5% each
year to an ultimate level of 5.0% per year
Over 65 1.6% for 1 year, then 8.5% decreasing by 0.5% each
year to an ultimate level of 5.0% per year
Part B contributions 4.5% Retiree contributions are expected to increase
with the respective trend shown above
Pre-Retirement Mortality:
Healthy non-teachers RP-2000 Employees Mortality Table projected
generationally with scale BB2D from 2009
Healthy non-teachers (Falmouth) RP-2000 Employees Mortality Table projected
generationally with scale BB from 2009
Post-Retirement Mortality:
Healthy non-teachers RP-2000 Healthy Annuitant Mortality Table projected
generationally with scale BB2D from 2009
Healthy non-teachers (Falmouth) RP-2000 Healthy Annuitant Mortality Table projected
generationally with scale BB from2009
Disabled non-teachers RP-2000 Healthy Annuitant MortalityTable projected
generationally with scale BB2D from 2015
Disabled non-teachers (Falmouth) RP-2000 Healthy Annuitant MortalityTable projected
generationally with scale BB from 2012
- 76 -
TOWN OF BREWSTER
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2017
Pension Plan Schedules
A. Schedule of the Town’s Proportionate Share of the Net Pension Liability
The Schedule of Town’s Proportionate Share of the Net Pension Liability details the allocated percentage
of the net pension liability; the proportionate share of the net pension liability, and the covered employee
payroll. It also demonstrates the net position as a percentage of the pension liability and the net pension
liability as a percentage of covered payroll.
B. Schedule of Town’s Contribution
Governmental employees are required to pay an annual appropriation as established by PERAC. The
appropriation includes the amounts to pay the pension portion of each member’s retirement allowance, an
amount to amortize the actuarially determined unfunded liability to zero in accordance with the System’s
funding schedule, and additional appropriations in accordance with adopted early retirement incentive
programs. The appropriations are payable on July 1, and January 1. The Town may choose to pay the
entire appropriation in July at a discounted rate. Accordingly, actual contributions may be less than the
“total appropriation”. The pension fund appropriation is allocated to the Town based on covered payroll.
C. Schedule of the Commonwealth’s Collective amounts of the Net Pension Liability
The Commonwealth of Massachusetts is a nonemployer contributor and is required by statute to make all
actuarially determined employer contributions on behalf of the member employers which creates a special
funding situation. Since the Town does not contribute directly to MTRS, there is no net pension liability
to recognize. This schedule discloses the Commonwealth’s 100% share of the collective net pension
liability that is associated with the Town; the portion of the collective pension expense as both a revenue
and pension expense recognized by the Town; and the Plan’s fiduciary net position as a percentage of the
total pension liability.
Other Postemployment Benefits Schedules
A. Schedule of the Town’s Proportionate Share of the Net Other Postemployment Benefit Liability
The Schedule of the Town’s Proportionate Share of the Net Other Postemployement Benefit Liability
details the Plan’s net other postemployment benefit liability and the covered employee payroll. It also
demonstrates the Plan’s net position as a percentage of the total liability and the Plan’s net other
postemployment benefit liability as a percentage of covered payroll.
B. Schedule of the Town’s Contribution
The Schedule of the Town’s contributions includes the Town’s annual required contribution to the plan,
along with the contribution made in relation to the actuarially determined contribution and the covered
employee payroll. The Town is not required to fully fund this contribution. It also demonstrates the
contributions as a percentage of covered payroll.
- 77 -
TOWN OF BREWSTER
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2017
C. Schedule of Investment Return
The Schedule of Investment Return includes the money-weighted investment return on the Plan’s other
postemployment assets, net of investment expense.
D. Schedules of Funding Progress and Employer Contributions
The Schedule of Funding Progress presents multi-year trend information which compares, over time, the
actuarial accrued liability for benefits with the actuarial value of accumulated assets and the Schedule of
Employer Contributions presents multi-year trend information for the Town’s required and actual
contributions relating to the plan.
E. Actuarial Methods and Assumptions
The actuarial methods and assumptions presents factors that significantly affect the identification of
trends in the amount reported.
- 78 -