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HomeMy WebLinkAbout2015 Comprehensive Annual Financial ReportTOWN OF COHASSET, MASSACHUSETTS Comprehensive Annual Financial Report                                                                                                       For the fiscal year ended June 30, 2015 Prepared By: The Fiscal Team TOWN OF COHASSET, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2015 Prepared by: The Fiscal Team Town of Cohasset, Massachusetts TOWN OF COHASSET, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2015 TABLE OF CONTENTS Introductory Section ...................................................................................................................................................... 1  Letter of Transmittal ..................................................................................................................................................... 2  GFOA Certificate of Achievement ................................................................................................................................ 7  Organizational Chart .................................................................................................................................................... 8  Principal Town Officials ................................................................................................................................................ 9  Financial Section ......................................................................................................................................................... 11  Independent Auditor’s Report .................................................................................................................................... 13  Management’s Discussion and Analysis ................................................................................................................... 15  Basic Financial Statements ........................................................................................................................................ 25  Statement of Net Position ....................................................................................................................................... 27  Statement of Activities ............................................................................................................................................ 28  Governmental Funds – Balance Sheet .................................................................................................................. 30  Reconciliation of the Governmental Funds Balance Sheet Total Fund Balances to the Statement of Net Position .............................................................................................................................................................. 31  Governmental Funds – Statement of Revenues, Expenditures and Changes in Fund Balances ......................... 32  Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................................................................................................. 33  Proprietary Funds – Statement of Net Position ...................................................................................................... 34  Proprietary Funds – Statement of Revenues, Expenses and Changes in Net Position ........................................ 35  Proprietary Funds – Statement of Cash Flows ...................................................................................................... 36  Fiduciary Funds – Statement of Fiduciary Net Position ......................................................................................... 37  Fiduciary Funds – Statement of Changes in Fiduciary Net Position ...................................................................... 38  Notes to Basic Financial Statements ..................................................................................................................... 39  Required Supplementary Information ........................................................................................................................ 71  General Fund Budgetary Comparison Schedule ................................................................................................... 73  General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ...... 74  Pension Plan Schedules - Town ............................................................................................................................ 78  Schedule of the Town’s proportionate share of the net pension liability ............................................................ 79  Schedule of the Town contributions ................................................................................................................... 80  Schedule of the special funding amounts of the net pension liability ................................................................. 81  Other Postemployment Benefits Plan Schedules .................................................................................................. 82  Other Postemployment Benefits Plan Schedule of Funding Progress and Employer Contributions ................. 83  Other Postemployment Benefits Plan Actuarial Methods and Assumptions ...................................................... 84  Notes to Required Supplementary Information ...................................................................................................... 85  Combining and Individual Fund Statements .............................................................................................................. 89  Nonmajor Governmental Funds ............................................................................................................................. 90  Nonmajor Governmental Funds – Combining Balance Sheet............................................................................ 92  Nonmajor Governmental Funds – Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ............................................................................................................................................................. 96  Agency Fund ........................................................................................................................................................ 100  Agency Fund – Statement of Changes in Assets and Liabilities ...................................................................... 101  Statistical Section ...................................................................................................................................................... 103  Net Position By Component ..................................................................................................................................... 104  Changes in Net Position .......................................................................................................................................... 105  Fund Balances, Governmental Funds ..................................................................................................................... 106  Changes in Fund Balances, Governmental Funds .................................................................................................. 107  Assessed Value and Actual Value of Taxable Property by Classification and Tax Rates ....................................... 108  Principal Taxpayers ................................................................................................................................................. 109  Property Tax Levies and Collections ....................................................................................................................... 110  Ratios of Outstanding Debt and General Bonded Debt ........................................................................................... 111  Direct and Overlapping Governmental Activities Debt............................................................................................. 112  Computation of Legal Debt Margin .......................................................................................................................... 113  Demographic and Economic Statistics .................................................................................................................... 114  Principal Employers ................................................................................................................................................. 115  Full-Time Equivalent Town Employees by Function ................................................................................................ 116  Operating Indicators by Function/Program .............................................................................................................. 117  Capital Asset Statistics by Function/Program .......................................................................................................... 118  Introductory Section Cohasset John Smith Day  Town of Cohasset, Massachusetts 1 Comprehensive Annual Financial Report Introductory Section Town of Cohasset, Massachusetts 2 Comprehensive Annual Financial Report Letter of Transmittal Letter of Transmittal December 23, 2015 To the Honorable Members of the Board of Selectmen and the Citizens of the Town of Cohasset: It is with pleasure that the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2015 for the Town of Cohasset, Massachusetts is hereby presented for review. This report is the primary means of reporting the Town’s financial activities, and the financial reports contained within have been prepared and presented in conformity with generally accepted accounting principles (GAAP). Management assumes full responsibility for the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, based upon an internal control framework that has been established for this purpose. Recognizing that the cost of a system of internal control should not exceed its anticipated benefits, this system has been designed to provide reasonable rather than absolute assurance that the financial statements are free of any material misstatements. To the best of management’s knowledge and belief, this report is complete and reliable in all material respects. The Town’s financial statements have been audited by Powers & Sullivan, LLC, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Town for the fiscal year ended June 30, 2015, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the Town of Cohasset’s financial statements for the fiscal year ended June 30, 2015 are fairly presented in conformity with GAAP. The independent auditors report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the Town of Cohasset was part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the Town of Cohasset’s separately issued Single Audit Report. This CAFR is presented in three sections: Introductory, Financial and Statistical. This Introductory Section contains this transmittal letter with a Town profile, local economic conditions and outlook, and highlights of financial and general management initiatives. The Financial Section contains a Management’s Discussion and Analysis (MD&A) section. GAAP standards require that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of an MD&A. This letter of transmittal is designed to complement the MD&A. The Town’s MD&A can be found immediately following the independent auditor’s report from Powers & Sullivan, LLC. The Statistical Section contains, in most cases, a ten-year history of trends of both financial and demographic data. CHRISTOPHER G. SENIOR TOWN MANAGER EMAIL: csenior@cohassetma.org OFFICE: 781-383-4105 FAX: 781-383-0228 OFFICE OF THE TOWN MANAGER COHASSET TOWN HALL 41 HIGHLAND AVENUE COHASSET, MA 02025 Town of Cohasset, Massachusetts 3 Comprehensive Annual Financial Report Profile of the Town The Town of Cohasset was incorporated in 1770, some 150 years after its first recorded mention in the logs of English explorer Captain John Smith, and its early development as part of the Town of Hingham. Located in Norfolk County (as a non-geographically contiguous member community, along with the Town of Brookline), Cohasset is a coastal community 20 miles south of Boston, and is bordered by Hull to the north, Hingham to the west, Scituate to the south, and Massachusetts Bay to the east. Cohasset’s 9.89 square miles were home to 7,542 residents according to the 2010 US Census, and 8,084 residents according to the 2015 census conducted by the Cohasset Town Clerk. While the Town remains home to an active fishing fleet, it is primarily a residential community. The main highways include State routes 3A and 228, with connecting access to Route 3, the primary north-south highway on the South Shore. The Massachusetts Bay Transportation Authority (MBTA) provides easy access to Boston through a commuter rail station in Cohasset, a subway station in Braintree, and commuter boat service in Hingham. Logan International Airport, which can be reached via all three MBTA mass transit options, is approximately 22 miles away by car. The Town operates under an Open Town Meeting form of government, which is vested with all legislative and budgetary approval authority. A five-member Board of Selectmen is responsible for general policy implementation, and appoints a Town Manager who directs all day-to-day governmental operations, other than schools, as Chief Administrative and Chief Financial Officer. A five-member School Committee oversees a K-12 school system, and appoints a full-time Superintendent. Elected Water and Sewer boards oversee the water and sewer enterprise funds, respectively. General governmental services provided within the Town’s boundaries include police and fire protection, collection and treatment of sewage, water distribution, public works (including roads, cemeteries, and tree and park maintenance), harbor management, recreation, health, veteran’s services, aging support services, and a public library. The water and sewer enterprise funds are self-supporting. The Town also maintains a solid waste recycling and transfer station. Local Economy Cohasset’s unemployment rate of 4.0% in June, 2015 was 23% lower than the statewide average (according to data from the Massachusetts Department of Labor and Workforce Development), a figure influenced by a highly- educated workforce (67.7% of residents have a Bachelor’s degree or higher according to Metropolitan Area Planning Council data), and proximity to high tech, higher education, health care and financial sector employers in metropolitan Boston. The Town’s per capita income of more than $83,236 is more than twice the statewide average, according to the Massachusetts Department of Revenue. While many of the Town’s residents work in other communities, Cohasset is home to diverse mix of local businesses, including the South Shore Music Circus, the South Shore Arts Center, the headquarters of Pilgrim Bank, an active fishing fleet, the Sunrise assisted living facility, and Wicked Good Cupcakes, which was featured on the show “Shark Tank.” The Cohasset Village district, which includes a mix of small businesses including restaurants, shops and realtors, has no retail vacancies. There are two new developments proposed for the Village district, both currently before the Planning Board for review. One is mixed use, the other residential. The community’s natural beauty and abundant opportunities for outdoor activities, including a fine harbor, two beaches, the Whitney Woods Reservation, and Wompatuck State Park, have not only attracted active residents drawn to hiking, running, biking, swimming and sailing, but have also begun influencing the local economy. Cohasset now plays host to more than a dozen charitable and for-profit road race events, among them the Town of Cohasset, Massachusetts 4 Comprehensive Annual Financial Report Cohasset Triathlon which attracts 1,000 racers and supporters to Town, the Road Race by the Sea, a pre-Boston Marathon 10K event run since 1975, which has grown to some 1,200 participants, and a Town-sponsored Thanksgiving Day 5K which draws some 750 annual racers. During the past year, the community has seen the addition of dedicated parking spaces at the Cohasset Commuter rail station for visitors looking to hike and bike the trails of Wompatuck Park, the doubling in size of a local business catering to the active lifestyle, and the expansion of a Town employee wellness program with an emphasis on healthy living. The commuter rail station is adjacent to the Town’s first transit-oriented development, Old Colony Square, which saw the doubling in size of a co-working location called Workspace which provides office and meeting space, as well as support services, to the burgeoning local population that work from home. The complex, which is fully leased, also includes the headquarters of Wicked Good Cupcakes, a newly opened juice bar, a gourmet wine store, a health club, and sixteen living units. Two luxury residential subdivisions are also underway in Town: a 41-unit complex of single-family homes being built by Toll brothers; and a 27-unit complex known as Cook Estates. The Town Assessor is projecting that these two complexes, coupled with a strong local market for existing home renovation and expansion, will provide steady increases to the Town’s tax base over the next several years. Financial Planning and Management Policy and Program Development The Town’s administrative team welcomed a new Director of Public Health and a new Chief Information Officer, joining an experienced team of managers already in place. Town Meeting also approved a reorganization of the Public Works division, centralizing oversite of highways, cemeteries, tree and park, engineering, and water and sewer operations for the first time. These steps are part of the Town Manager’s ongoing efforts to improve operations and enhance the delivery of services. A Human Resources Director has been included in the FY 16 budget for the first time, taking the Town’s commitment to modernizing its HR management to a new level. The ongoing focus on employees included improved relations with the Town’s unions, leading to the successful negotiation and ratification of new contracts for police and fire. New contracts with administrative and library staff were also approaching conclusion, with ratification expected before the end of summer. During FY15 the Finance Department continued to improve best practices, from improvements to payroll processing (a phased in move to direct deposit/electronic advice; streamlining payroll forms and data entry) to full implementation of new standardized cash handling procedures (speeding the deposit and data entry of cash collections). The Treasurer-Collector also initiated a new quarterly investment report to the Board of Selectmen, and completed the implementation of the updated investment plan adopted by the Selectmen in FY14. In addition, the Town implemented ‘Visual Budget,’ a software tool which allows residents to explore the Town’s budget in a user-friendly manner, including a feature which shows how much of a property tax bill goes to support any particular service. The year also saw the initial rollout of “Cohasset Connects,” a software program (and smart phone app) which allows residents to report issues such as potholes and non-working street lights to the Town, receive email updates, and allow departments to both schedule and track their response to the problem. Powered by the software “See, Click, Fix,” the program was initiated through a grant obtained from the Metropolitan Area Planning Council (MAPC), and implemented with assistance from the Collins Center at UMass Boston. This initiative is part of the Town Manager’s ongoing objective to integrate performance management into regular Town operations. Town of Cohasset, Massachusetts 5 Comprehensive Annual Financial Report OPEB/Employee Health Care Following up on a successful plan change for Town workforce retirees which resulted in both short and long term premium reductions, the Board of Selectmen approved the transfer of retired teachers from the state-run GIC to the health plans currently provided to Town workforce retirees. These changes were part of the Town’s ongoing efforts to address its long term OPEB liability. The Town is a member of the MIIA public sector health benefits trust, and representatives from MIIA were instrumental in implementing the retired teacher transfer. The Town’s OPEB trust fund has been placed in an actively managed investment program under the direction of the Treasurer-Collector. This strategy is expected to generate increased growth for the fund. In FY15 the Town contributed $300,000 to this fund. A wellness program for active employees was fully implemented during the year. This effort included programs on healthy eating, exercise, and how to be a better health care consumer. One program, a ‘biggest winner’ weight loss challenge between competing groups of employees, resulted in the loss of 140 lbs. – the weight of an entire person. The winning team received prizes from local businesses geared to a healthy lifestyle. Over time, wellness programs have been shown to both increase employee productivity and decrease long term costs for chronic medical conditions. Technology Planning and Implementation In addition to customer friendly improvements like ‘Visual Budget’ and ‘Cohasset Connects’ mentioned above, the Town continued to make significant investments in educational technology and supporting infrastructure. Town Meeting approved a digital learning initiative which will increase the technology capabilities of all the Town’s schools over the next several years, including new devices at the elementary level, and support for a one-to-one program for all students at the secondary level. During the year the Town moved to upgrade its overall support for technology improvements, and the Town’s new CIO has been provided a budget for FY16 which provides for more staff and contract support, improvements to switching gear and wireless access points, and an expansion of the Town’s GIS mapping and management capabilities. Infrastructure Planning As part of its long term capital planning program, the Town is exploring a partnership with the MAPC on two fronts – a municipal space needs analysis, and a master plan. Both initiatives are expected to kick-off early in FY16, and will help long term planning for both Town facilities and critical infrastructure such as water, sewer and roads. A water rate study was completed during FY15, which was presented to and accepted by Town Meeting. The program provides a five-year plan to both strengthen the Water Enterprise Fund’s operating budget, as well as support a series of important capital projects. The Water Enterprise Fund ended FY15 with retained earnings of $380,225. Successful negotiations with the Our World center will enable the Recreation Department to operate its highly successful summer program out of expanded space during the summer of 2015. The agreement provided a path for Recreation to permanently occupy the space, allowing the Department to meet increasing demands for both youth and adult programs. At the same time the Town is actively negotiating for acquisition of a new Senior Center building to meet increasing demands for services for the Town’s elderly population. Discussions on that project are expected to conclude in FY16. Town of Cohasset, Massachusetts 6 Comprehensive Annual Financial Report Awards and Acknowledgments The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Town of Cohasset for its CAFR for the fiscal year ended June 30, 2014. This was the third time that the Town submitted a CAFR to the GFOA. The Town was awarded this Certificate in each year. In order to receive this prestigious award, a government had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report on a timely basis could not be accomplished without efficient and dedicated staff. I would like to express my appreciation to all members of the Town’s staff who assisted and contributed to the preparation of this report. I would particularly like to thank Director of Finance Mary Gallagher, and the staff at Powers & Sullivan, LLC. I would also like to thank the Board of Selectmen and the Advisory Committee for their strong interest and support in planning and conducting the financial operations of the Town. Respectfully Submitted Christopher Senior Cohasset Town Manager Town of Cohasset, Massachusetts 7 Comprehensive Annual Financial Report GFOA Certificate of Achievement Town of Cohasset, Massachusetts 8 Comprehensive Annual Financial Report Organizational Chart Town of Cohasset, Massachusetts 9 Comprehensive Annual Financial Report Principal Town Officials Elected Officials Term Expires Board of Selectmen Diane M. Kennedy, Chairperson 2017 Steve R. Gaumer, Vice Chairperson 2016 Paul J. Schubert, Selectman 2018 Kevin McCarthy, Selectman 2017 Karen Quigley, Selectman 2016 Moderator Daniel Evans 2017 Town Clerk Carol L. St. Pierre 2017 Board of Assessors Mary E. Granville 2017 Debra J. Krupczak 2018 Elsa J. Miller 2016 School Committee Jeanne M. Astino 2016 Katherine C. Dugan 2018 Ellen M. Maher 2018 Mary McGoldrick 2016 Paul Ognibene 2017 Sewer Commission Bryan T. Baldwin 2018 William B. McGowan, Jr. 2016 Wayne Sawchuk 2017 Water Commission Rolf N. Gjesteby 2017 Leonora C. Jenkins 2018 John W. Steinmetz 2016 Appointed Officials Town Manager Christopher G. Senior 2017 Director of Finance/Town Accountant Mary J. Gallagher Treasurer/Collector Paula M. Linhares Director of Assessing Mary Quill Superintendent of Schools Barbara Cataldo School Business Manager David DeGennaro Police Chief William Quigley Fire Chief Robert Silvia Director of Public Works Brian Joyce Town of Cohasset, Massachusetts 10 Comprehensive Annual Financial Report This page intentionally left blank. Financial Section Farmers Market Pond                         Town of Cohasset, Massachusetts 11 Comprehensive Annual Financial Report Financial Section Financial Section Town of Cohasset, Massachusetts 12 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 13 Comprehensive Annual Financial Report Independent Auditor’s Report To the Honorable Board of Selectmen Town of Cohasset, Massachusetts Report on the Financial Statements 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 Cohasset, Massachusetts as of and for the year ended June 30, 2015, 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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 Cohasset, Massachusetts, as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Town of Cohasset, Massachusetts 14 Comprehensive Annual Financial Report Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town of Cohasset, Massachusetts’ basic financial statements. The introductory section, combining and individual fund statements, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 23, 2015, on our consideration of the Town of Cohasset, Massachusetts’ internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town of Cohasset, Massachusetts’ internal control over financial reporting and compliance. December 23, 2015 Town of Cohasset, Massachusetts 15 Comprehensive Annual Financial Report Management’s Discussion and Analysis Town of Cohasset, Massachusetts 16 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 17 Comprehensive Annual Financial Report Management’s Discussion and Analysis As management of the Town of Cohasset, Massachusetts, we offer readers of these financial statements this narrative overview and analysis of the financial activities of the Town of Cohasset for the year ended June 30, 2015. We encourage readers to consider the information presented in this report in conjunction with additional information that we have furnished in our letter of transmittal. The Governmental Accounting Standards Board (GASB) is the authoritative standard setting body that provides guidance on how to prepare financial statements in conformity with generally accepted accounting principles (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 (including citizens, the media, legislators and others) can assess the financial condition of one government compared to others. Governments must adhere to GASB pronouncements in order to issue their financial statements in conformity with GAAP. The users of financial statements also rely on the independent auditor’s opinion. If the Town’s financial statements have significant departures from GAAP the independent auditors may issue a qualified opinion or a disclaimer (where no opinion is given). These types of opinions may have an adverse effect on the Town’s bond rating and our ability to borrow money at favorable interest rates. The Town has enjoyed an unmodified opinion on its financial statements for many years. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Town of Cohasset’s basic financial statements. The Town’s basic financial statements comprise three components: 1) government-wide financial statements 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the Town’s finances, in a manner similar to private-sector businesses. The statement of net position presents information on all of the Town’s assets, deferred outflows, liabilities and deferred inflows, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating. The statement of activities presents information showing how the Town’s net position changed during the most recent year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing or the related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities include administration, public safety, education, public works, health and welfare, culture and recreation, community preservation, and interest. The business-type activities include the activities of the sewer and water enterprise funds. Town of Cohasset, Massachusetts 18 Comprehensive Annual Financial Report 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. The Town, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Town can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the 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 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 fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Town adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with this budget. Proprietary funds. The Town maintains one type of proprietary fund. Enterprise funds are used to report the same functions as business-type activities in the government-wide financial statements. The Town uses enterprise funds to account for its sewer and water activities. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for sewer and water activities, all of which are considered major funds 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 because 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. Notes to 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 Governmental Activities As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. For governmental activities, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $40.2 million at the close of year 2015. The overall financial condition of the Town’s governmental activities remained stable during year 2015. Town of Cohasset, Massachusetts 19 Comprehensive Annual Financial Report Governmental net position of $46.8 million (116%), reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire those assets that are still outstanding. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the investment in its 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, $7 million (17%), represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position has a year-end deficit balance of ($13.6 million). This deficit balance is primarily due to the recognition of the $17 million net pension liability in connection with the implementation of GASB Statement #68, Accounting and Financial Reporting for Pensions. In connection with the implementation of GASB Statement #68, the financial statements also recognized a revision of beginning net position to reflect the net pension liability at the beginning of the year. Previously reported governmental net position of $55,033,890 has been revised to $38,818,593. The governmental net position increased by $1.4 million during the current year due to several offsetting factors. Net position increased due to $496,000 of positive budgetary results in the general fund, $696,000 of capital grant revenue used to acquire long-term capital assets, as well as principal payments on long-term debt exceeding depreciation expense by $712,000. Net position decreased as a result of a $980,000 increase in the Town’s OPEB liability. The Town currently funds the other postemployment benefits on a pay-as-you-go basis which is lower than the annual required contribution. The governmental expenses totaled $46.1 million of which $11.5 million (25%) was directly supported by program revenues. General revenues and transfers totaled $36 million, primarily coming from property taxes, motor vehicle excise and non-restricted state aid. Condensed financial data for years 2015 and 2014 is presented below. 2014 2015 (As Revised) Assets: Current assets………………………………………………$ 20,233,321 $ 18,243,454 Noncurrent assets (excluding capital)…………………… 5,266,132 6,126,555 Capital assets, not being depreciated…………………… 7,513,471 7,313,854 Capital assets, net of accumulated depreciation……… 56,441,389 58,451,133 Total assets……………………………………………89,454,313 90,134,996 Deferred Outflows of Resources…………………………1,293,240 731,853 Liabilities: Current liabilities (excluding debt)……………………… 1,666,016 1,505,154 Noncurrent liabilities (excluding debt)…………………… 27,399,236 25,659,997 Current debt………………………………………………… 3,588,998 3,659,601 Noncurrent debt…………………………………………… 17,871,306 21,223,504 Total liabilities…………………………………………50,525,556 52,048,256 Net Position: Net investment in capital assets………………………… 46,801,586 45,942,136 Restricted…………………………………………………… 6,995,791 6,742,197 Unrestricted………………………………………………… (13,575,380) (13,865,740) Total net position……………………………………$40,221,997 $38,818,593 Town of Cohasset, Massachusetts 20 Comprehensive Annual Financial Report 2014 2015 (As Revised) Program revenues: Charges for services………………………………………$ 3,208,756 $ 3,081,673 Operating grants and contributions……………………… 7,583,649 8,814,016 Capital grants and contributions………………………… 695,888 470,004 General revenues: Real estate, personal property taxes, and tax liens…… 33,093,668 31,786,548 Motor vehicle and other excise taxes…………………… 1,539,272 1,396,984 Community preservation taxes…………………………… 436,967 416,990 Penalties and interest on taxes…………………………… 166,014 189,395 Nonrestricted grants and contributions………………… 457,801 445,448 Unrestricted investment income………………………… 147,933 426,962 Total revenues…………………………………………47,329,948 47,028,020 Expenses: Administration……………………………………………… 3,997,974 3,680,617 Public safety………………………………………………… 6,991,258 6,623,281 Education…………………………………………………… 27,464,152 28,305,008 Public works………………………………………………… 4,136,781 3,476,400 Health and welfare………………………………………… 735,795 743,217 Culture and recreation…………………………………… 1,673,178 1,582,372 Community preservation………………………………… 271,225 438,778 Interest……………………………………………………… 810,989 966,501 Total expenses………………………………………… 46,081,352 45,816,174 Excess (Deficiency) before transfers…………………… 1,248,596 1,211,846 Transfers………………………………………………………154,808 152,423 Change in net position……………………………………… 1,403,404 1,364,269 Net position, beginning of year (as revised)…………… 38,818,593 37,454,324 Net position, end of year……………………………………$40,221,997 $38,818,593 Business-type Activities The Town’s business-type activities include water and sewer services. They are self-supporting and each fund maintained their financial condition in year 2015. Business-type sewer net position of $17.9 million (61%) represents the net investment in capital assets, while $11.4 million (39%) is unrestricted. Net position decreased by $565,000 which is primarily due to the planned use of $231,000 of reserves, as well as depreciation expense exceeding principal payments on long term debt by $114,000. Business-type water net position of $7.9 million (82%) represents the net investment in capital assets, while $1.7 million (18%) is unrestricted. Net position increased by $1.6 million which was primarily due to debt principal payments on long-term debt exceeding depreciation expense by $1.2 million. The 2014 net position of business-type activities has been revised to reflect the implementation of GASB Statement #68 and the associated net pension liability totaling $112,169. As a result, previously reported net position of $37,944,806 has been revised to $37,832,637. At the end of the current year all business-type activities were able to report positive balances in all categories of net position. The same situation held true for the prior year. Town of Cohasset, Massachusetts 21 Comprehensive Annual Financial Report Condensed financial data for years 2015 and 2014 is presented below. 2014 2015 (As Revised) Assets: Current assets……………………………………………$ 5,850,233 $ 5,040,966 Noncurrent assets (excluding capital)………………… 8,266,715 8,967,269 Capital assets, not being depreciated………………… 1,308,558 1,308,558 Capital assets, net of accumulated depreciation…… 65,056,508 66,776,316 Total assets…………………………………………80,482,014 82,093,109 Deferred outflows of resources…………………………4,856 - Liabilities: Current liabilities (excluding debt)……………………… 686,986 453,892 Noncurrent liabilities (excluding debt)………………… 117,584 112,169 Current debt……………………………………………… 2,997,595 3,104,280 Noncurrent debt………………………………………… 37,782,537 40,590,131 Total liabilities………………………………………41,584,702 44,260,472 Net Position: Net investment in capital assets……………………… 25,773,697 24,552,663 Unrestricted……………………………………………… 13,128,471 13,279,974 Total net position……………………………………$38,902,168 $37,832,637 Program revenues: Charges for services - Sewer………………………… $ 1,807,723 $ 1,840,085 Charges for services - Water…………………………… 5,143,208 4,507,575 Capital grants and contributions - Sewer……………… - 4,152 General Revenues: Unrestricted investment income……………………… 36,228 39,862 Total revenues………………………………………6,987,159 6,391,674 Expenses: Sewer………………………………………………..…… 2,315,178 2,379,793 Water………………………………………………..…… 3,447,642 3,553,676 Total expenses……………………………………… 5,762,820 5,933,469 Excess (Deficiency) before transfers…………………… 1,224,339 458,205 Transfers……………………………………………………(154,808) (152,423) Change in net position…………………………………… 1,069,531 305,782 Net position, beginning of year (as revised)………… 37,832,637 37,526,855 Net position, end of year…………………………………$38,902,168 $37,832,637 Town of Cohasset, Massachusetts 22 Comprehensive Annual Financial Report 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 year. The General Fund is the chief operating fund. At the end of the current year, unassigned fund balance of the General Fund was $5.2 million, assigned fund balance was $351,000, committed fund balance was $472,000 and total fund balance was $6.0 million. Unassigned fund balance represents 13% of total general fund expenditures, while total fund balance represents 15% of that same amount. The General Fund’s fund balance increased by $736,000 which was primarily due to $1.5 million of transfers to stabilization funds funded through the tax levy. Massachusetts General Law Ch.40 §5B allows for the establishment of Stabilization funds for one or more different purposes. The creation of a fund requires a two-thirds vote of the legislative body and must clearly define the purpose of the fund. Any changes to the purpose of the fund along with any additions to or appropriations from the fund required a two-thirds vote of the legislative body. At year end the balance of the General Stabilization fund is $2,288,168, the Facilities Stabilization fund is $2,296, and the Capital Stabilization fund is $1,145,998. All stabilization balances have been reported as unassigned fund balance within the General Fund. General Fund Budgetary Highlights The Town has adopted a budget for the General Fund. Actual revenues exceeded budget amounts by $761,000. Unexpended appropriations totaled $1.3 million of which $823,000 was carried forward to year 2016. During 2015, $430,000 of supplemental appropriations were approved primarily for snow and ice costs. Capital Asset and Debt Administration In conjunction with the operating budget, the Town annually prepares a capital budget for the upcoming year. Governmental capital assets, net of accumulated depreciation, at year end amounted to $64.0 million which represented a net decrease of $1.8 million from the prior year. Major additions included the purchase of police vehicles, street paving, as well as building improvements. Enterprise capital assets, net of accumulated depreciation, were valued at $66.4 million at year end. Current year additions totaled $60,000, all of which were related to water building improvements. Depreciation of $1.8 million was recorded in 2015. Outstanding long-term debt of governmental activities, as of June 30, 2015, totaled $20.6 million, a decrease of $3.2 million from the prior year. This decrease was entirely due to principal payments on long term debt. The Water Enterprise fund had $28.4 million of long-term debt outstanding at year-end, a decrease of $2.3 million from the prior year. This decrease was entirely due to principal payments on long term debt. The Sewer Enterprise fund had $12.2 million of long-term debt outstanding at year-end, a decrease of $655,000 from the prior year. This decrease was entirely due to principal payments on long term debt. Town of Cohasset, Massachusetts 23 Comprehensive Annual Financial Report Please refer to footnotes 4, 6, and 7 for further discussion of the major capital asset and debt activity. Requests for Information This financial report is designed to provide a general overview of the Town of Cohasset’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Finance Director, Town Hall, 41 Highland Avenue, Cohasset, Massachusetts 02025. Town of Cohasset, Massachusetts 24 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 25 Comprehensive Annual Financial Report Basic Financial Statements Town of Cohasset, Massachusetts 26 Comprehensive Annual Financial Report This page intentionally left blank. STATEMENT OF NET POSITION JUNE 30, 2015 Primary Government Governmental Business-type Activities Activities Total ASSETS CURRENT: Cash and cash equivalents…………………………………………………$ 11,775,404 $ 2,072,626 $ 13,848,030 Investments…………………………………………………………………… 5,028,553 1,148,427 6,176,980 Receivables, net of allowance for uncollectibles: Real estate, personal property and tax deferrals……………………… 543,491 - 543,491 Tax liens……………………………………...…………………………… 994,096 - 994,096 Motor vehicle and other excise taxes…………………………………… 72,512 - 72,512 User charges……………………………………………………………… - 1,948,154 1,948,154 Departmental and other………………………………………………… 148,298 - 148,298 Special assessments…………………………………………………… 228,040 681,026 909,066 Intergovernmental………………………………………………………… 1,442,927 - 1,442,927 Total Current Assets……………………………………………………… 20,233,321 5,850,233 26,083,554 NONCURRENT: Receivables, net of allowance for uncollectibles: Special assessments…………………………………………………… 2,486,246 8,266,715 10,752,961 Intergovernmental………………………………………………………… 2,779,886 - 2,779,886 Capital assets, non depreciable…………………………….……………… 7,513,471 1,308,558 8,822,029 Capital assets, net of accumulated depreciation………………………… 56,441,389 65,056,508 121,497,897 Total Noncurrent Assets………………………………………………… 69,220,992 74,631,781 143,852,773 TOTAL ASSETS………………………………………………………………… 89,454,313 80,482,014 169,936,327 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on refunding……………………………………………… 591,308 - 591,308 Deferred outflows of resources related to pensions……………………… 701,932 4,856 706,788 TOTAL DEFERRED OUTFLOWS OF RESOURCES……………………… 1,293,240 4,856 1,298,096 LIABILITIES CURRENT: Warrants payable…………………………………………………………… 954,300 348,757 1,303,057 Accrued payroll……………………………………………………………… 458,854 2,696 461,550 Accrued interest……………………………………………………………… 207,197 335,533 542,730 Other liabilities………………………………………………………………… 25,665 - 25,665 Landfill closure……………………………………………………………… 20,000 - 20,000 Notes payable………………………………………………………………… 236,800 190,000 426,800 Bonds payable……………………………………………………………… 3,352,198 2,807,595 6,159,793 Total Current Liabilities…………………………………………………… 5,255,014 3,684,581 8,939,595 NONCURRENT: Landfill closure……………………………………………………………… 217,226 - 217,226 Other postemployment benefits…………………………………………… 10,184,000 - 10,184,000 Net pension liability…………………………………………………………… 16,998,010 117,584 17,115,594 Bonds payable……………………………………………………………… 17,871,306 37,782,537 55,653,843 Total Noncurrent Liabilities………………………………………………… 45,270,542 37,900,121 83,170,663 TOTAL LIABILITIES…………………………………………………………… 50,525,556 41,584,702 92,110,258 NET POSITION Net investment in capital assets……………………………………………… 46,801,586 25,773,697 72,575,283 Restricted for: Debt service……………………………………………………...…………… 548,047 - 548,047 Permanent funds: Nonexpendable…………………………………………………………… 424,735 - 424,735 Expendable……….……………………………………………………… 1,976,348 - 1,976,348 Grants and gifts……………………………………………………………… 2,088,984 - 2,088,984 Community preservation…………………………………………………… 1,957,677 - 1,957,677 Unrestricted……………………………………………………………………… (13,575,380) 13,128,471 (446,909) TOTAL NET POSITION…………………………………………………………$ 40,221,997 $ 38,902,168 $ 79,124,165 See notes to basic financial statements. Town of Cohasset, Massachusetts 27 Comprehensive Annual Financial Report STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015 Operating Capital Charges for Grants and Grants and Net (Expense) Functions/Programs Expenses Services Contributions Contributions Revenue Primary Government: Governmental Activities: Administration…………………………………$ 3,997,974 $ 685,031 $ 269,881 $ - $ (3,043,062) Public safety…………………………………… 6,991,258 1,058,895 73,431 - (5,858,932) Education……………………………………… 27,464,152 1,129,365 5,948,648 - (20,386,139) Public works…………………………………… 4,136,781 292,558 161,443 564,749 (3,118,031) Health and welfare…………………………… 735,795 32,907 204,437 - (498,451) Culture and recreation……………………… 1,673,178 10,000 641,623 - (1,021,555) Community preservation…………………… 271,225 - - 131,139 (140,086) Interest………………………………………… 810,989 - 284,186 - (526,803) Total Governmental Activities……………… 46,081,352 3,208,756 7,583,649 695,888 (34,593,059) Business-Type Activities: Sewer…………………………………………… 2,315,178 1,807,723 - - (507,455) Water…………………………………………… 3,447,642 5,143,208 - - 1,695,566 Total Business-Type Activities…………… 5,762,820 6,950,931 - - 1,188,111 Total Primary Government…………………$ 51,844,172 $ 10,159,687 $ 7,583,649 $ 695,888 $(33,404,948) See notes to basic financial statements.(Continued) Program Revenues Town of Cohasset, Massachusetts 28 Comprehensive Annual Financial Report STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015 Governmental Business-Type Activities Activities Total Changes in net position: Net (expense) revenue from previous page………………………$(34,593,059) $1,188,111 $(33,404,948) General revenues: Real estate and personal property taxes, net of tax refunds……………………………………………… 33,093,668 - 33,093,668 Motor vehicle and other excise taxes………………………… 1,539,272 - 1,539,272 Community preservation tax………...………………………… 436,967 - 436,967 Penalties and interest on taxes………………………………… 166,014 - 166,014 Grants and contributions not restricted to specific programs……………………………………………… 457,801 - 457,801 Unrestricted investment income………………………………… 147,933 36,228 184,161 Transfers, net ………………………………………………………… 154,808 (154,808) - Total general revenues and transfers……………………………… 35,996,463 (118,580) 35,877,883 Change in net position………………………………………… 1,403,404 1,069,531 2,472,935 Net Position: Beginning of year, as revised………………..…………………… 38,818,593 37,832,637 76,651,230 End of year…………………………………………………………$ 40,221,997 $ 38,902,168 $ 79,124,165 See notes to basic financial statements.(Concluded) Primary Government Town of Cohasset, Massachusetts 29 Comprehensive Annual Financial Report GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2015 Nonmajor Total Governmental Governmental General Funds Funds ASSETS Cash and cash equivalents……………………………………$ 4,683,253 $ 7,092,151 $ 11,775,404 Investments…………………………………………………… 2,255,133 2,773,420 5,028,553 Receivables, net of uncollectibles: Real estate, personal property and tax deferrals ……… 543,491 - 543,491 Tax liens…………………………………….……………… 988,674 5,422 994,096 Motor vehicle and other excise taxes…………………… 72,512 - 72,512 Departmental and other…………………………………… 141,930 6,368 148,298 Special assessments……………………………………… 1,831,093 883,193 2,714,286 Intergovernmental………………………………………… 3,366,782 856,031 4,222,813 Due from other funds………………………………………… 8,978 - 8,978 TOTAL ASSETS………………………………………………$ 13,891,846 $ 11,616,585 $ 25,508,431 LIABILITIES Warrants payable………………………………………… $ 623,599 $ 330,701 $ 954,300 Accrued payroll…………………………………………… 428,664 30,190 458,854 Other liabilities……………………………………………… 25,665 - 25,665 Due to other funds………………………………………… - 8,978 8,978 Notes payable……………………………………………… - 236,800 236,800 TOTAL LIABILITIES…………………………………………… 1,077,928 606,669 1,684,597 DEFERRED INFLOWS OF RESOURCES Unavailable revenues……………………………………… 6,795,168 1,451,830 8,246,998 FUND BALANCES Nonspendable……………………………………………… - 424,735 424,735 Restricted…………………………………………………… - 9,133,351 9,133,351 Committed………………………………………………… 471,938 - 471,938 Assigned…………………………………………………… 351,097 - 351,097 Unassigned………………………………………………… 5,195,715 - 5,195,715 TOTAL FUND BALANCES…………………………………… 6,018,750 9,558,086 15,576,836 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES……………$ 13,891,846 $ 11,616,585 $ 25,508,431 See notes to basic financial statements. Town of Cohasset, Massachusetts 30 Comprehensive Annual Financial Report RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION JUNE 30, 2015 Total governmental fund balances……………………………………………………………………… $ 15,576,836 Capital assets (net) used in governmental activities are not financial resources and, therefore, are not reported in the funds…………………………………………………… 63,954,860 Certain changes in the net pension liability are required to be included in pension expense over future periods. These changes are reported as deferred outflows of resources or (deferred inflows of resources) related to pensions…………………………… 701,932 Accounts receivable are not available to pay for current-period expenditures and, therefore, are unearned in the funds……………………………………… 8,246,998 In the statement of activities, interest is accrued on outstanding long-term debt, whereas in governmental funds interest is not reported until due…………………………… (207,197) Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds Bonds payable……………………………………..…………………………………………… (20,617,799) Unamortized premium on bonds payable……………………………………………………… (605,705) Unamortized deferred loss on refunding……………………………………………………… 591,308 Landfill closure…………………………………………………………………………………… (237,226) Other postemployment benefits………………………………………………………………… (10,184,000) Net pension liability……………………………………………………………………………… (16,998,010) Net effect of reporting long-term liabilities……………………………………………… (48,051,432) Net position of governmental activities………………………………………………………………… $ 40,221,997 See notes to basic financial statements. Town of Cohasset, Massachusetts 31 Comprehensive Annual Financial Report GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2015 Nonmajor Total Governmental Governmental General Funds Funds REVENUES: Real estate and personal property taxes, net of tax refunds………………………………………………$ 33,054,033 $ - $ 33,054,033 Motor vehicle and other excise taxes…………………………… 1,561,442 - 1,561,442 Fees and rentals………………………………………………… 976,186 - 976,186 Penalties and interest on taxes………………………………… 163,479 2,535 166,014 Fines and forfeitures……………………………………………… 36,523 - 36,523 Licenses and permits…………………………………………… 652,504 - 652,504 Charges for services……………………………………………… - 1,090,181 1,090,181 Intergovernmental………………………………………………… 5,762,140 1,882,761 7,644,901 Departmental and other………………………………………… 315,006 534,256 849,262 Community preservation taxes………………………………… - 430,473 430,473 Contributions……………………………………………………… - 811,760 811,760 Special assessments…………………………………………… 403,783 150,912 554,695 Investment income……………………………………………… 99,530 48,403 147,933 TOTAL REVENUES……………………………………… 43,024,626 4,951,281 47,975,907 EXPENDITURES: Current: Administration………………………………………………… 2,524,755 569,590 3,094,345 Public safety…………………………………………………… 4,791,406 116,880 4,908,286 Education……………………………………………………… 17,135,774 2,903,902 20,039,676 Public works…………………………………………………… 2,757,732 531,957 3,289,689 Health and welfare…………………………………………… 534,692 44,366 579,058 Culture and recreation………………………………………… 685,125 559,321 1,244,446 Pension benefits……………………………………………… 3,611,380 - 3,611,380 Employee benefits…………………………………………… 4,366,746 - 4,366,746 Community preservation……………………………………… - 271,225 271,225 State and county charges………………………………………… 1,015,079 - 1,015,079 Debt service: Principal………………………………………………………… 3,219,630 - 3,219,630 Interest………………………………………………………… 846,574 - 846,574 TOTAL EXPENDITURES………………………………… 41,488,893 4,997,241 46,486,134 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES…………………………… 1,535,733 (45,960) 1,489,773 OTHER FINANCING SOURCES (USES): Transfers in……………………………………………………… 357,484 1,126,048 1,483,532 Transfers out……………………………………………………… (1,157,486) (171,238) (1,328,724) TOTAL OTHER FINANCING SOURCES (USES)…… (800,002) 954,810 154,808 NET CHANGE IN FUND BALANCES……………………………… 735,731 908,850 1,644,581 FUND BALANCES AT BEGINNING OF YEAR…………………… 5,283,019 8,649,236 13,932,255 FUND BALANCES AT END OF YEAR……………………………$ 6,018,750 $ 9,558,086 $ 15,576,836 See notes to basic financial statements. Town of Cohasset, Massachusetts 32 Comprehensive Annual Financial Report RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2015 Net change in fund balances - total governmental funds…………………………………………………… $ 1,644,581 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………………………………………………………………………………………… 697,665 Depreciation expense………………………………………………………………………………… (2,507,792) Net effect of reporting capital assets………………………………………………………… (1,810,127) Revenues in the Statement of Activities that do not provide current financial resources are fully unearned 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 unearned revenue…………………………………………………………………… (645,960) The issuance of long-term debt (e.g., bonds and leases) 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 position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. Debt service principal payments…………………………………………………………………… 3,219,632 Amortization of bond premiums……………………………………………………………………… 143,969 Amortization of deferred charge on refunding……………………………………………………… (140,545) Net effect of reporting long-term debt……………………………………………………… 3,223,056 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 accrued interest on long-term debt………………………………………………… 32,161 Net change in landfill closure accrual……………………………………………………………… 20,474 Net change in other postemployment benefits accrual…………………………………………… (980,000) Net change in deferred outflow/(inflow) of resources related to pensions……………………… 701,932 Net change in net pension liability…………………………………………………………………… (782,713) Net effect of recording long-term liabilities………………………………………………… (1,008,146) Change in net position of governmental activities…………………………………………………………… $ 1,403,404 See notes to basic financial statements. Town of Cohasset, Massachusetts 33 Comprehensive Annual Financial Report PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2015 Business-type Activities - Enterprise Funds Sewer Water Total ASSETS CURRENT: Cash and cash equivalents…………………………………… $ 1,479,945 $ 592,681 $ 2,072,626 Investments……………………………………………………… 1,148,427 - 1,148,427 Receivables, net of allowance for uncollectibles: User charges………………………………………………… 522,815 1,425,339 1,948,154 Special assessments………………………………………… 681,026 - 681,026 Total current assets……………………………………… 3,832,213 2,018,020 5,850,233 NONCURRENT: Receivables, net of allowance for uncollectibles: Special assessments………………………………………… 8,266,715 - 8,266,715 Capital assets, nondepreciable………………………………… 1,009 1,307,549 1,308,558 Capital assets, net of accumulated depreciation…………… 30,123,833 34,932,675 65,056,508 Total noncurrent assets………………………………… 38,391,557 36,240,224 74,631,781 TOTAL ASSETS…………………………………………………… 42,223,770 38,258,244 80,482,014 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources related to pensions………… 4,856 - 4,856 LIABILITIES CURRENT: Warrants payable………………………………………………… 308,820 39,937 348,757 Accrued payroll…………………………………………………… 2,696 - 2,696 Accrued interest………………………………………………… 110,085 225,448 335,533 Notes payable…………………………………………………… 190,000 - 190,000 Bonds payable…………………………………………………… 666,137 2,141,458 2,807,595 Total current liabilities…………………………………… 1,277,738 2,406,843 3,684,581 NONCURRENT: Net pension liability……………………………………………… 117,584 - 117,584 Bonds payable…………………………………………………… 11,513,655 26,268,882 37,782,537 TOTAL LIABILITIES………………………………………………… 12,908,977 28,675,725 41,584,702 NET POSITION Net investment in capital assets…………………………………… 17,920,824 7,852,873 25,773,697 Unrestricted………………………………………………………… 11,398,825 1,729,646 13,128,471 TOTAL NET POSITION……………………………………………$ 29,319,649 $ 9,582,519 $ 38,902,168 See notes to basic financial statements. Town of Cohasset, Massachusetts 34 Comprehensive Annual Financial Report PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEAR ENDED JUNE 30, 2015 Business-type Activities - Enterprise Funds Sewer Water Total OPERATING REVENUES: Charges for services …………………………………………$ 1,578,867 $ 5,143,208 $ 6,722,075 OPERATING EXPENSES: Cost of service and administration…………………………… 1,258,554 1,513,974 2,772,528 Depreciation…………………………………………………… 768,937 1,010,940 1,779,877 TOTAL OPERATING EXPENSES ……………………… 2,027,491 2,524,914 4,552,405 OPERATING INCOME (LOSS)…………………………… (448,624) 2,618,294 2,169,670 NONOPERATING REVENUES (EXPENSES): Investment income…………………………………………… 35,550 678 36,228 Interest expense……………………………………………… (287,687) (922,728) (1,210,415) Penalties and interest…………………………………….…… 228,856 - 228,856 TOTAL NONOPERATING REVENUES (EXPENSES), NET………………………… (23,281) (922,050) (945,331) INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS………………………………………… (471,905) 1,696,244 1,224,339 TRANSFERS: Transfers in…………………………………………………… - 31,438 31,438 Transfers out…………………………………………………… (93,123) (93,123) (186,246) TOTAL TRANSFERS……………………………………… (93,123) (61,685) (154,808) CHANGE IN NET POSITION……………………………… (565,028) 1,634,559 1,069,531 NET POSITION AT BEGINNING OF YEAR, AS REVISED… 29,884,677 7,947,960 37,832,637 NET POSITION AT END OF YEAR…………………………… $ 29,319,649 $ 9,582,519 $ 38,902,168 See notes to basic financial statements. Town of Cohasset, Massachusetts 35 Comprehensive Annual Financial Report Sewer Water Fund Fund Total CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers and users……………………………………………$ 1,827,946 $ 5,064,342 $ 6,892,288 Payments to vendors…………………………………………………………… (938,331) (1,514,341) (2,452,672) Payments to employees………………………………………………………… (57,478) - (57,478) NET CASH FROM OPERATING ACTIVITIES…………………………………… 832,137 3,550,001 4,382,138 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in……………………………………………………………………… - 31,438 31,438 Transfers out……………………………………………………………………… (93,123) (93,123) (186,246) NET CASH FROM NONCAPITAL FINANCING ACTIVITIES…………………… (93,123) (61,685) (154,808) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from the issuance of bonds and notes……………………………… 190,000 - 190,000 Special assessments…………………………………………………………… 720,135 - 720,135 Acquisition and construction of capital assets………………………………… - (60,069) (60,069) Principal payments on bonds and notes……………………………………… (845,034) (2,259,246) (3,104,280) Interest expense………………………………………………………………… (293,390) (945,749) (1,239,139) NET CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES……… (228,289) (3,265,064) (3,493,353) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of investments………………………………………………………… (368,865) - (368,865) Investment income……………………………………………………………… 35,550 678 36,228 NET CASH FROM INVESTING ACTIVITIES…………………………………… (333,315) 678 (332,637) NET CHANGE IN CASH AND CASH EQUIVALENTS………………………… 177,410 223,930 401,340 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR…… 1,302,535 368,751 1,671,286 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR…………… $ 1,479,945 $ 592,681 $ 2,072,626 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FROM OPERATING ACTIVITIES: Operating income (loss)…………………………………………………………$ (448,624) $ 2,618,294 $ 2,169,670 Adjustments to reconcile operating income (loss) to net cash from operating activities: Depreciation…………………………………………………………………… 768,937 1,010,940 1,779,877 Deferred (outflows)/inflows related to pensions…………………………… (4,856) - (4,856) Penalties and interest receipts…………………………………….………… 228,856 - 228,856 Changes in assets and liabilities: User fees…………………………………………………………………… 20,223 (78,866) (58,643) Warrants payable………………………………………………………… 261,793 (367) 261,426 Accrued payroll…………………………………………………………… 393 - 393 Net pension liability……………………………………………………… 5,415 - 5,415 Total adjustments……………………………………………………… 1,280,761 931,707 2,212,468 NET CASH FROM OPERATING ACTIVITIES……………………………………$ 832,137 $ 3,550,001 $ 4,382,138 See notes to basic financial statements. PROPRIETARY FUNDS STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2015 Business-type Activities - Enterprise Funds Town of Cohasset, Massachusetts 36 Comprehensive Annual Financial Report Other Postemployment Private Benefit Purpose Agency Trust Fund Trust Funds Fund ASSETS Cash and cash equivalents……...…………………………………………$ 1,836 $ 17,604 $ 626,870 Investments: Mutual funds……………………………………………………………… 499,058 - - PRIT……………………………………………………………………… 399,827 - - Equity securities………………………………………………………… - 785,001 - Receivables, net of allowance for uncollectibles: Departmental and other receivables…………………………………… - - 200,626 TOTAL ASSETS………………………………………………………………… 900,721 802,605 827,496 LIABILITIES Accrued liabilities…………………………………………………………… - - 28,570 Payroll withholdings………………………………………………………… - - 531,737 Liabilities due depositors…………………………………………………… - - 267,189 TOTAL LIABILITIES…………………………………………………………… - - 827,496 NET POSITION Held in trust for OPEB benefits and other purposes……………………$ 900,721 $ 802,605 $ - See notes to basic financial statements. FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2015 Town of Cohasset, Massachusetts 37 Comprehensive Annual Financial Report Other Postemployment Private Benefit Purpose Trust Fund Trust Funds ADDITIONS: Contributions: Employer……………………………………………………………………………………$ 300,000 $ - Private donations………………………………………………………………………… - 300 Total contributions…………………………………………………………………… 300,000 300 Net investment income: Interest……………………………………………………………………………………… 17,580 27,412 TOTAL ADDITIONS…………………………………………………………………… 317,580 27,712 DEDUCTIONS: Educational scholarships………………………………………………………………… - 13,501 CHANGE IN NET POSITION………………………………………………………… 317,580 14,211 NET POSITION AT BEGINNING OF YEAR……………………………………………… 583,141 788,394 NET POSITION AT END OF YEAR…………………………………………………………$ 900,721 $ 802,605 See notes to basic financial statements. FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2015 Town of Cohasset, Massachusetts 38 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 39 Comprehensive Annual Financial Report NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Notes to Basic Financial Statements The accompanying basic financial statements of the Town of Cohasset, 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 significant accounting policies are described herein. A. Reporting Entity The Town of Cohasset, Massachusetts, was incorporated in 1770, and has an open Town Meeting form of government with administrative authority vested in a five member Board of Selectmen and an appointed Town Manager. The Town’s major operations include police and fire protection, parks, library, recreation, public works, education, and general administrative services. In addition, the Town owns and operates a water system and sewer system. For financial reporting purposes, the Town has included all funds, organizations, agencies, boards, commissions and institutions. The Town has also considered all potential component units 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. As required by GAAP, these basic financial statements present the Town (the primary government) and its component units. Pursuant to these criteria, the Town includes one entity, The Cohasset Library Trust, as a blended component unit within the basic financial statements. Blended Component Unit Chapter 368 of the Acts of 2006 of the Massachusetts General Court granted the Cohasset Board of Library Trustees the right to establish a nonprofit corporation to be called the Cohasset Library Trust, Inc. under chapter 180 of the General Laws. Chapter 368 requires the Town Treasurer to serve as ex officio Treasurer of the Trust. The criteria used to determine the Trust being reported as a blended component unit within the permanent funds include the following. The legislation granted the Trustees the power to appoint the board of directors and remove any director with or without cause. The Town is financially accountable for the Trust as it has access to the resources and a financial benefit exists. Upon establishment of the Trust, the legislation required the Town Treasurer to turn over the Town Library Endowment funds. The Board of Library Trustees solicits donations to increase the endowment and directs the donors to make the donations directly to the Trust. The Trust’s purpose is to invest endowment funds and ultimately provide resources to support the capital and operating needs of the Town Library as determined by the Trustees. This support can be in the form of a transfer to the Town or minor expenses made directly from the Trust. The Trust is blended primarily due to the fact the directors of the Trust provide services exclusively to the Town Treasurer to assist in management of the endowment fund of the Paul Pratt Memorial Library, the public library of the Town. The legislation states that the Trust shall have no role in the governance of the Library. The Trust does not issue publically available financial statements. Joint Venture The Town is a member of the South Shore Vocational Technical High School that provides educational services to eight area communities. This joint venture assesses each community its share of operating and debt service costs based on student population and other factors. In 2015, Cohasset’s share of the operating and debt expenses was $84,250. There is no equity interest reported in these financial statements. Complete audited financial statements can be obtained directly from the School’s administrative office located at 476 Webster Street, Hanover, MA 02339. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 40 Comprehensive Annual Financial Report 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 changes in net position) report information on all of the non-fiduciary activities of the primary government and its component units. 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. Non-major funds are aggregated and displayed in a single column. Major Fund Criteria Major funds must be reported if the following criteria are met: • If total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of an individual governmental or enterprise fund are at least 10 percent of the corresponding element (assets and deferred outflows of resources, liabilities and deferred inflows or resources, etc.) for all funds of that category or type (total governmental or total enterprise funds), and • If the total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding element for all governmental and enterprise funds combined. Additionally, any other governmental or enterprise fund that management believes is particularly significant to the basic financial statements may be reported as a major fund.  Fiduciary funds are reported by fund type. 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 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: Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 41 Comprehensive Annual Financial Report • Charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment. • Grants and contributions that are restricted to meeting the operational requirements of a particular function or segment. • 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 sewer and water 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 are reported using the flow of 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 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 a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, and claims and judgments are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources. Real estate and personal property tax revenues are considered available if they are collected within 60 days after year-end. Investment income is susceptible to accrual. Other receipts and tax revenues become measurable and available when the cash is received and are recognized as revenue at that time. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria is met. Expenditure driven grants recognize revenue when the qualifying expenditures are incurred and all other grant requirements are met. The following major governmental funds are reported: The General fund is the primary operating fund. It is used to account for all financial resources, except those that are required to be accounted for in another fund. The nonmajor governmental funds consist of special revenue 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 and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than permanent funds or capital projects. The capital projects fund is used to account for financial resources that are restricted, committed or assigned to expenditures for capital outlays. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 42 Comprehensive Annual Financial Report The permanent fund is used to account for and report 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 are reported using the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded when the liabilities are incurred. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the proprietary funds principal ongoing operations. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. The following major proprietary funds are reported: The Sewer enterprise fund is used to account for sewage treatment operations of the department of public works that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges. The Water enterprise fund is used to account for water distribution operations of the department of public works that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods and services to the general public on a continuing basis be financed or recovered primarily through user charges. 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 in a trustee capacity for others that cannot be used to support the governmental programs. The following fiduciary fund types are reported: The other postemployment benefit trust fund is used to accumulate resources to provide funding for future OPEB liabilities. The private purpose trust fund is used to account for trust arrangements that exclusively benefit individuals, private organizations, or other governments. Some of these trusts have donor restrictions and trustee policies that do not allow the endowment portion and any unrealized appreciation to be spent. The restrictions and trustee policies only allows the trustees to approve spending of the realized investment earnings. The Town’s mainly uses this fund to account for educational scholarships. The agency fund is used to account for assets held in a purely custodial capacity. The Town’s agency funds consist of off-duty work details, performance bonds, and fees collected on behalf of other governments. Agency funds apply the accrual basis of accounting but do not have a measurement focus. D. Cash and Investments Government-Wide and Fund Financial Statements Cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with an original maturity of three months or less from the date of acquisition. Investments are carried at fair value. The fair values were determined by the closing price for those securities traded on national stock exchanges and the average bid-and-ask quotation for those securities traded in the over- the-counter market. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 43 Comprehensive Annual Financial Report E. Accounts Receivable Government-Wide and Fund Financial Statements The recognition of revenue related to accounts receivable reported in the government-wide financial statements and the proprietary funds 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 levied and based on values assessed on January 1st of every year. Assessed values are established by the Board of Assessor’s for 100% of the estimated fair market value. Real estate and personal property taxes are billed on a quarterly basis. The first two quarters (August 1st and November 1st) are preliminary tax bills based upon the previous year’s total annual tax. The second two quarters (February 1st and May 1st) are actual tax, reflecting the current year assessment and the current tax rate. Taxes due and unpaid are subject to penalties and interest if they are not paid by the respective due date. The Town has an ultimate right to foreclose on property for which taxes have not been paid. Real estate and personal property taxes levied are recorded as receivables in the year of the levy and are recorded under the modified accrual basis of accounting. Real estate tax liens are processed after the tax bills are sent and are recorded as receivables in the year they are processed. Real estate receivables are secured via the tax lien process and are considered 100% collectible. Accordingly, an allowance for uncollectible accounts is not reported. Personal property taxes cannot be secured through the lien process. The allowance of uncollectible accounts is estimated based on historical trends and specific account analysis. Motor Vehicle and Other Excise Taxes Motor vehicle excise taxes are assessed annually for each vehicle registered and are recorded as receivables in the 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. Boat excise taxes are assessed annually for each boat registered and are recorded as receivables in the year of the levy. The Commonwealth is responsible for reporting the number of boats registered and the fair value of those boats. The tax calculation is the fair value of the boat multiplied by $10 per $1,000 of value. The allowance for uncollectible accounts is estimated based on historical trends and specific account analysis. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 44 Comprehensive Annual Financial Report User Charges User fees are levied quarterly based on individual meter readings and are subject to penalties and interest if they are not paid by the respective due date. Unbilled user fees are estimated at year-end and are recorded as revenue in the current period. Water and Sewer liens are processed in December of every year and included as a lien on the property owner’s tax bill. Water and Sewer charges and liens are recorded as receivables in the 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 uncollectible accounts. Departmental and Other Departmental and other receivables consist primarily of ambulance charges and veterans benefits and are recorded as receivables in the year accrued. The allowance of uncollectible accounts is estimated based on historical trends and specific account analysis. Special Assessments Special assessments consist of sewer construction and particular apportioned street and water line betterments. These receivables are considered to be 100% collectible and therefore do not report an allowance for uncollectible accounts. Intergovernmental Various federal and state grants for operating and capital purposes are applied for and received annually. For non-expenditure driven grants, receivables are recorded as soon as all eligibility requirements imposed by the provider have been met. For expenditure driven grants, receivables are recorded 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 uncollectible accounts. F. Inventories Government-Wide and Fund Financial Statements Inventories are recorded as expenditures at the time of purchase. Such inventories are not material in total to the government-wide and fund financial statements, and therefore are not reported. G. Capital Assets Government-Wide and Proprietary Fund Financial Statements Capital assets, which include land, land improvements, buildings, machinery and equipment, vehicles and infrastructure (e.g., roads, water mains, sewer mains, and similar items), are reported in the applicable governmental or business-type activity column of the government-wide financial statements, and the proprietary fund financial statements. Capital assets are recorded at historical cost, or at estimated historical cost, if actual historical cost is not available. Donated capital assets are recorded at the estimated fair market value at the date of donation. Except for the capital assets of the governmental activities column in the government-wide financial statements, construction period interest is capitalized on constructed capital assets. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 45 Comprehensive Annual Financial Report All purchases and construction costs in excess of $25,000 are capitalized at the date of acquisition or construction, respectively, with expected useful lives of greater than one year. Capital assets (excluding land and construction-in-progress) are depreciated on a straight-line basis over the estimated useful life of the assets. The estimated useful lives of capital assets are as follows: Estimated Useful Life Capital Asset Type (in years) Land improvements…………………………… 20 Buildings and improvements…………………… 40 Machinery and equipment……………………… 5 Vehicles………………………………………… 5 Infrastructure…………………………………… 40 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 acquiring fund in the year of the purchase. H. 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. As of June 30, 2015 the Town reported both deferred charges on refunding, as well as deferred outflows related to pensions within this category. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. As of June 30, 2015 the Town did not report deferred inflow of resources. Governmental Fund Financial Statements Unavailable revenue at the governmental fund financial statement level represents outstanding receivables that do not meet the available criterion for revenue recognition in accordance with the current financial resources measurement focus and the modified accrual basis of accounting. Unavailable revenues are reported as deferred inflows of resources. Unavailable revenues are recognized as revenue during the conversion to the government- wide (full accrual) financial statements. 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. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 46 Comprehensive Annual Financial Report 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 transfers in and transfers out. Government-Wide Financial Statements Transfers between and within governmental funds and internal service 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 Transfers between and within funds are not eliminated from the individual fund statements and are reported as transfers in and transfers out. K. Net Position and Fund Equity Government-Wide Financial Statements (Net Position) Net position reported as “net investment in capital assets” includes capital assets, net of accumulated depreciation, less the principal balance of outstanding debt used to acquire capital assets. Unspent proceeds of capital related debt are not considered to be capital assets. Outstanding receivables related to future subsidies from the Massachusetts Water Pollution Abatement Trust are not considered to be capital related debt. Net position is reported as restricted when amounts are not available for appropriation or are legally restricted by outside parties for a specific future use. Net position has been “restricted for” the following: “Debt service” represents a capital grant to fund debt service on the school debt that will be amortized over the remaining life of the debt in accordance with state governmental regulations “Permanent funds – expendable” represents the amount of realized and unrealized investments earnings of donor restricted trusts. The restrictions and trustee policies only allows the trustees to approve spending of the realized investment earnings. “Permanent funds – nonexpendable” represent the endowment portion of donor restricted trusts. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 47 Comprehensive Annual Financial Report “Grants and Gifts” represents restrictions placed on assets from outside parties. “Community preservation” represents amounts held for uses restricted by law for community preservation purposes. Sometimes the Town will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the Town’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. Fund Financial Statements (Fund Balances) Governmental fund balances are classified as nonspendable, restricted, committed, assigned, or unassigned based on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The governmental fund balance classifications are as follows: “Nonspendable” fund balance includes amounts that cannot be spent because they are either not in spendable form or they are legally or contractually required to be maintained intact. “Restricted” fund balance includes amounts subject to constraints placed on the use of resources that is either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or that are imposed by law through constitutional provisions or enabling legislation. “Committed” fund balance includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority. Town Meeting is the highest level of decision-making authority for the government that can, by adoption of a Town Meeting article (resolution) prior to the end of the year, commit fund balance. Once adopted, the limitation imposed by the article remains in place until a similar action is taken to remove or revise the limitation. “Assigned” fund balance includes amounts that are constrained by the Town’s intent to be used for specific purposes, but are neither restricted nor committed. The Board of Selectmen has by resolution authorized the Finance Director to assign fund balance. The Board may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. “Unassigned” fund balance includes the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund. The Town’s spending policy is to spend restricted fund balance first, followed by committed, assigned and unassigned fund balance. Most governmental funds are designated for one purpose at the time of their creation. Therefore, any expenditure from the fund will be allocated to the applicable fund balance classifications in the order of the aforementioned spending policy. The general fund and certain other funds may have more than one purpose. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 48 Comprehensive Annual Financial Report L. Unavailable Revenue Unavailable revenue at the governmental fund financial statement level represents billed receivables that do not meet the availability criterion in accordance with the current financial resources measurement focus and the modified accrual basis of accounting. Unavailable revenue is recognized as revenue in the conversion to the entity-wide (full accrual) financial statements. M. Pensions 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 Norfolk County Contributory Retirement System and the Massachusetts Teachers Retirement System and additions to/deductions from the System’s fiduciary net position have been determined on the same basis as they are reported by the Systems. 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. N. 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 administration expenditures. O. 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 Law (MGL). Investment income from Enterprise Funds is retained in their respective funds. P. Compensated Absences Employees are granted vacation and sick leave in varying amounts based on collective bargaining agreements, state laws and executive policies. Government-Wide and Proprietary Fund Financial Statements Vested or accumulated vacation and sick leave are reported as liabilities and expensed as incurred. Governmental Fund Financial Statements Vested or accumulated vacation and sick leave, which will be liquidated with expendable available financial resources, are reported as expenditures and fund liabilities upon maturity of the liability, i.e. unused reimbursable leave still outstanding following an employee’s resignation or retirement. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 49 Comprehensive Annual Financial Report Q. Use of Estimates Government-Wide and Fund Financial Statements The preparation of basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure for contingent assets and liabilities at the date of the basic financial statements and the reported amounts of the revenues and expenditures/expenses during the year. Actual results could vary from estimates that were used. R. 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 the equivalent of consolidated financial information. NOTE 2 – CASH AND INVESTMENTS A cash and investment pool is maintained that is available for use by all funds. Each fund type's portion of this pool is displayed on the balance sheet as "Cash and Cash Equivalents". The deposits and investments of the trust funds are held separately from those of other funds. Statutes authorize the investment in obligations of the U.S. Treasury, agencies, and instrumentalities, certificates of deposit, repurchase agreements, money market accounts, bank deposits and the State Treasurer's Investment Pool (the Pool). The Treasurer may also invest trust funds in securities, other than mortgages or collateral loans, which are legal for the investment of funds of savings banks under the laws of the Commonwealth. The Pool meets the criteria of an external investment pool. The Pool is administered by the Massachusetts Municipal Depository Trust (MMDT), which was established by the Treasurer of the Commonwealth who serves as Trustee. The fair value of the position in the Pool is the same as the value of the Pool shares. Custodial Credit Risk – Deposits In the case of deposits, this is the risk that in the event of a bank failure, the Town of Cohasset’s deposits may not be returned to it. The Town does not have a deposit policy for custodial credit risk. At year-end, the carrying amount of deposits totaled $14,004,791 and the bank balance totaled $13,917,875. Of the bank balance, $1,289,122 was covered by Federal Depository Insurance, $2,259,591 was covered by DIF Insurance, $4,145,741 was covered by SIF Insurance, and $6,223,421 was exposed to custodial credit risk because it was uninsured and uncollateralized. At year-end the carrying amount of deposits for the Pratt Memorial Library Trust totaled $67,044. The bank balance totaled $67,044, all of which was covered by Federal Depository Insurance. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 50 Comprehensive Annual Financial Report Investments As of June 30, 2015, the Town had the following investments: Under Fair Value 1 Year 1 - 5 Years 6-10 Years Rating Investment Type Debt Securities Government Sponsored Enterprises……… $ 1,973,474 $ 171,405 $ 1,429,053 $ 373,016 AAA U.S. Treasury Notes………………………… 933,417 121,481 499,445 312,491 AAA Corporate Bonds……………………………… 375,068 50,836 324,232 - AA-BAA Total Debt Securities............................... 3,281,959 $ 343,722 $ 2,252,730 $ 685,507 Other Investments Equity Securities................................... 2,128,473 Mutual Funds........................................ 626,268 PRIT……………………………………… 399,827 Money Market Mutual Funds…………… 422,505 Total Investments.............................. $ 6,859,032 Maturity The Other Postemployment Benefit Trust Fund participates in PRIT. The effective weighted duration rate for PRIT investments ranged from 1.33 to 21.81 years. As of June 30, 2015, the Pratt Memorial Library Trust had the following investments: Other Investments Mutual Funds………………………………$ 1,424,339 Custodial Credit Risk – Investments For an investment, this is the risk that, in the event of a failure by the counterparty, the Town will not be able to recover the value of its investments or collateral security that are in the possession of an outside party. Of the Town’s investments, $3,281,959 of debt securities, and $2,128,473 of equity securities are exposed to custodial credit risk because the related securities are uninsured, unregistered and held by the counterparty. The Town has formally adopted an investment policy for custodial credit risk. Interest Rate Risk Interest rate risk exists when there is a possibility that changes in interest rates could adversely affect the fair value of the Town’s investments. The Town has formally adopted an investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 51 Comprehensive Annual Financial Report Credit Risk The Town has adopted a formal policy related to Credit Risk. Moody’s Investors Service rated the Town’s debt securities; their ratings ranged from BAA to AAA. Concentration of Credit Risk The Town will minimize the concentration of credit risk by diversifying the investment portfolio, so that the impact of potential losses from any one type of security or issuer will be minimized. No more than 5% of the Town’s investments are invested in any one issuer. NOTE 3 – RECEIVABLES At June 30, 2015, receivables for the individual major and non-major governmental funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: Gross Allowance for Net Amount Uncollectibles Amount Receivables: Real estate, personal property and tax deferrals ………$ 551,290 $ (7,799) $ 543,491 Tax liens…………………………………………………… 994,096 - 994,096 Motor vehicle and other excise taxes…………………… 116,196 (43,684) 72,512 Departmental and other………………………………… 542,418 (394,120) 148,298 Special assessments……………………………………… 2,714,286 - 2,714,286 Intergovernmental…………………….…………………… 4,222,813 - 4,222,813 Total………………………………………………………$ 9,141,099 $ (445,603) $ 8,695,496 At June 30, 2015, receivables for the sewer and water enterprise funds consist of the following: Gross Allowance for Net Amount Uncollectibles Amount Receivables: Sewer user charges……………………………………… $ 522,815 $ - $ 522,815 Water user charges………………………………………… 1,425,339 - 1,425,339 Special assessments……………………………………… 8,947,741 - 8,947,741 Total………………………………………………………$ 10,895,895 $- $ 10,895,895 Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 52 Comprehensive Annual Financial Report Governmental funds report unavailable revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At the end of the current year, the various components of unavailable revenue reported in the governmental funds were as follows: Nonmajor General Governmental Fund Funds Total Receivable and other asset type: Real estate and personal property taxes…………………$ 394,177 $ 998 $ 395,175 Tax liens…………………………………………………… 988,675 5,421 994,096 Motor vehicle and other excise…………………………… 72,512 - 72,512 Departmental and other…………………………………… 141,930 6,368 148,298 Special assessments……………………………………… 1,831,092 883,194 2,714,286 Intergovernmental………………………………………… 3,366,782 555,849 3,922,631 Total……………………………………………………… $ 6,795,168 $ 1,451,830 $ 8,246,998 NOTE 4 – CAPITAL ASSETS Capital asset activity for the year ended June 30, 2015, was as follows: Governmental Activities:Beginning Ending Balance Increases Decreases Balance Capital assets not being depreciated: Land……………………………………………………………$ 6,947,032 $ - $ - $ 6,947,032 Construction in progress…………………………………… 366,822 210,029 (10,412) 566,439 Total capital assets not being depreciated………………… 7,313,854 210,029 (10,412) 7,513,471 Capital assets being depreciated: Land improvements………………………………………… 964,468 57,694 - 1,022,162 Buildings and improvements………………………………… 66,624,201 188,079 - 66,812,280 Machinery and equipment…………………………………… 2,218,293 40,275 - 2,258,568 Vehicles……………………………………………………… 3,735,283 62,000 (482,653) 3,314,630 Infrastructure………………………………………………… 27,370,215 150,000 - 27,520,215 Total capital assets being depreciated…………………… 100,912,460 498,048 (482,653) 100,927,855 Less accumulated depreciation for: Land improvements………………………………………… (155,045) (33,620) - (188,665) Buildings and improvements………………………………… (23,339,316) (1,549,677) - (24,888,993) Machinery and equipment…………………………………… (1,580,401) (128,223) - (1,708,624) Vehicles……………………………………………………… (3,057,924) (119,020) 482,653 (2,694,291) Infrastructure………………………………………………… (14,328,641) (677,252) - (15,005,893) Total accumulated depreciation…………………………… (42,461,327) (2,507,792) 482,653 (44,486,466) Total capital assets being depreciated, net…………………… 58,451,133 (2,009,744) - 56,441,389 Total governmental activities capital assets, net………………$ 65,764,987 $ (1,799,715) $ (10,412) $ 63,954,860 Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 53 Comprehensive Annual Financial Report Business-Type Activities Sewer Enterprise Fund:Beginning Ending Balance Increases Decreases Balance Capital assets not being depreciated: Land……………………………………………………………$1,009 $ - $ - $ 1,009 Capital assets being depreciated: Buildings and improvements………………………………… 1,121,784 - - 1,121,784 Machinery and equipment…………………………………… 4,827,061 - - 4,827,061 Infrastructure………………………………………………… 33,351,017 - - 33,351,017 Total capital assets being depreciated…………………… 39,299,862 - - 39,299,862 Less accumulated depreciation for: Buildings and improvements………………………………… (293,905) (18,696) - (312,601) Machinery and equipment……………………………………(2,020,366) (135,175) - (2,155,541) Infrastructure………………………………………………… (6,092,821) (615,066) - (6,707,887) Total accumulated depreciation…………………………… (8,407,092) (768,937) - (9,176,029) Total capital assets being depreciated, net…………………… 30,892,770 (768,937) - 30,123,833 Total sewer activities capital assets, net………………………$ 30,893,779 $ (768,937) $- $ 30,124,842 Water Enterprise Fund:Beginning Ending Balance Increases Decreases Balance Capital assets not being depreciated: Land……………………………………………………………$ 1,307,549 $ - $ - $ 1,307,549 Capital assets being depreciated: Buildings and improvements………………………………… - 60,069 - 60,069 Machinery, equipment and vehicles……………………… 132,912 - - 132,912 Vehicles……………………………………………………… - - - - Infrastructure………………………………………………… 48,916,983 - - 48,916,983 Total capital assets being depreciated…………………… 49,049,895 60,069 - 49,109,964 Less accumulated depreciation for: Buildings and improvements………………………………… - (2,503) - (2,503) Machinery, equipment and vehicles……………………… (41,256) (10,675) - (51,931) Infrastructure………………………………………………… (13,125,093) (997,762) - (14,122,855) Total accumulated depreciation…………………………… (13,166,349) (1,010,940) - (14,177,289) Total capital assets being depreciated, net…………………… 35,883,546 (950,871) - 34,932,675 Total water activities capital assets, net……………………… $ 37,191,095 $ (950,871) $- $ 36,240,224 Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 54 Comprehensive Annual Financial Report Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: Administration……………………………………………………………………… $ 92,727 Public safety………………………………………………………………………… 188,367 Education…………………………………………………………………………… 1,375,951 Public works………………………………………………………………………… 698,170 Culture and recreation……………………………………………………………… 152,577 Total depreciation expense - governmental activities……………………………… $ 2,507,792 Business-Type Activities: Sewer…………………………………………………………………………………$ 768,937 Water………………………………………………………………………………… 1,010,940 Total depreciation expense - business-type activities……………………………… $ 1,779,877 NOTE 5 – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS Interfund receivables and payables for the year ended June 30, 2015 are summarized as follows: Receivable Fund Payable Fund Amount General Fund………… Chapter 90…………… $ 8,978 (1) (1) Represents an advance to the Chapter 90 fund to meet temporary cash flow needs. Interfund transfers for the year ended June 30, 2015, are summarized as follows: Nonmajor Water General Governmental Enterprise Transfers Out: Fund Funds Fund Total General Fund………………………………………$- $ 1,126,048 $ 31,438 $ 1,157,486 (1) Nonmajor Governmental Funds………………… 171,238 - - 171,238 (2) Sewer Enterprise Fund…………………………… 93,123 - - 93,123 (3) Water Enterprise Fund…………………………… 93,123 - - 93,123 (3) Total……………………………………………… $ 357,484 $ 1,126,048 $ 31,438 $ 1,514,970 Transfers In: (1) Budgeted transfers from the general fund and the capital stabilization fund to various capital project funds. (2) Budgeted transfers from school construction surplus, wetlands, open space, and Title V betterments to the general fund. (3) Budgeted transfers from the sewer and water enterprise funds for indirect costs. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 55 Comprehensive Annual Financial Report NOTE 6 – SHORT-TERM FINANCING Short-term debt may be authorized and issued to fund the following: • Current operating costs prior to the collection of revenues through issuance of revenue or tax anticipation notes (RANS or TANS). • Capital project costs and other approved expenditures incurred prior to obtaining permanent financing through issuance of bond anticipation notes (BANS) or grant anticipation notes (GANS). Short-term loans are general obligation of the Town and carry maturity dates that are limited by statute. Interest expenditures for short-term borrowings are accounted for in the General Fund and the Enterprise funds, where applicable. Details related to the Town’s short-term debt activity for the year ended June 30, 2015, is as follows: Balance at Balance at Rate June 30, Renewed/ Retired/ June 30, Type Purpose (%) Due Date 2014 Issued Redeemed 2015 Governmental funds BAN Bond Anticipation Note…………… 0.50% 5/29/2015 $ 296,000 $ - $ 296,000 $ - BAN Bond Anticipation Note…………… 0.55% 5/27/2016 - 236,800 - 236,800 Total governmental funds………………………………… 296,000 236,800 296,000 236,800 Business-type funds Sewer enterprise funds: BAN Bond Anticipation Note…………… 0.50% 5/29/2015 190,000 - 190,000 - BAN Bond Anticipation Note…………… 0.55% 5/27/2016 - 190,000 - 190,000 Total sewer enterprise funds……………………………… 190,000 190,000 190,000 190,000 Total notes payable…………………………………………$ 486,000 $ 426,800 $ 486,000 $ 426,800 NOTE 7 – LONG-TERM DEBT Under the provisions of Chapter 44, Section 10, Municipal Law authorizes indebtedness up to a limit of 5% of the equalized valuation. Debt issued in accordance with this section of the law is designated as being "inside the debt limit". In addition, however, debt may be authorized in excess of that limit for specific purposes. Such debt, when issued, is designated as being "outside the debt limit". In prior years, certain general obligation bonds were defeased by placing the proceeds of bonds in an irrevocable trust to provide for all future debt service payments on the refunded bonds. Accordingly, the trust account’s assets and liabilities for the defeased bonds are not included in the basic financial statements. At June 30, 2015, $3,535,000 of bonds outstanding from the advance refunding transactions is considered defeased. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 56 Comprehensive Annual Financial Report Details related to the Town’s outstanding general obligation indebtedness at June 30, 2015, and the debt service requirements are as follow: Bonds and Notes Payable Schedule – Governmental Funds Original Interest Outstanding Outstanding Maturities Loan Rate at June 30, at June 30, Project Through Amount (%) 2014 Issued Redeemed 2015 MCWT………………………………………………… 2033 $ 20,206,877 0.00 - 5.30 $ 10,610,445 $- $ 1,324,453 $ 9,285,992 General Obligation Bonds of 2005……………….. 2022 1,540,000 3.00 - 4.00 100,000 - 100,000 - General Obligation Refunding Bonds of 2005…… 2017 1,397,120 2.50 - 3.50 241,536 - 76,679 164,857 General Obligation Bonds of 2006………………… 2025 596,400 4.00 60,000 - 30,000 30,000 General Obligation Refunding Bonds of 2008…… 2018 3,041,600 3.00 1,320,000 - 315,000 1,005,000 General Obligation Bonds of 2009………………… 2027 669,000 1.50 - 4.00 365,000 - 45,000 320,000 General Obligation Bonds of 2010………………… 2030 1,726,000 1.00 - 3.50 780,000 - 164,000 616,000 General Obligation Refunding Bonds of 2010…… 2021 987,000 1.50 - 2.50 600,000 - 115,000 485,000 General Obligation Refunding Bonds of 2012…… 2024 9,039,000 1.80 8,914,000 - 994,500 7,919,500 General Obligation Refunding Bonds of 2013…… 2026 696,450 2.00-3.00 696,450 - - 696,450 General Obligation Bonds of 2013………………… 2033 215,000 2.00-3.00 150,000 - 55,000 95,000 Total governmental bonds payable………………………………………………………………………… 23,837,431 - 3,219,632 20,617,799 Add: unamortized premium………………………………………………………………………………… 749,674 - 143,969 605,705 Total governmental bonds payable, net……………………………………………………………………$ 24,587,105 $- $ 3,363,601 $ 21,223,504 Debt service requirements for principal and interest for governmental bonds payable in future years are as follows: Year Principal Interest Total 2016……………$ 3,223,085 $ 705,426 $ 3,928,511 2017…………… 3,200,622 581,453 3,782,075 2018…………… 2,953,980 450,711 3,404,691 2019…………… 2,605,622 343,804 2,949,426 2020…………… 2,298,381 243,134 2,541,515 2021…………… 2,060,657 151,268 2,211,925 2022…………… 1,064,351 88,422 1,152,773 2023…………… 1,048,264 54,770 1,103,034 2024…………… 1,026,194 26,066 1,052,260 2025…………… 172,944 10,437 183,381 2026…………… 147,912 7,975 155,887 2027…………… 143,900 5,932 149,832 2028…………… 129,908 4,089 133,997 2029…………… 130,937 2,900 133,837 2030…………… 131,986 1,691 133,677 2031…………… 129,056 - 129,056 2032…………… 75,000 - 75,000 2033…………… 75,000 - 75,000 Total……………$ 20,617,799 $ 2,678,078 $ 23,295,877 The Town receives subsidy assistance from the Massachusetts Clean Water Trust (MCWT). Future subsidies of capital expenses are structured as principal subsidies of principal payments. Interest on the outstanding bonds for MCWT is subsidized over the life of the bonds to assist the Town in repayment of this future debt. Future principal subsidies of $3,366,782 have been recorded as an intergovernmental receivable in the general fund. Future interest subsidies total $834,162 and will be recognized as revenue when received. During 2015, the Town’s principal and interest subsidy amounted to approximately $866,000. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 57 Comprehensive Annual Financial Report Bonds and Notes Payable Schedule – Sewer Enterprise Fund Original Interest Outstanding Outstanding Maturities Loan Rate at June 30, at June 30, Project Through Amount (%) 2014 Issued Redeemed 2015 MCWT………………………………………………… 2031 $ 12,600,000 2.00 $ 11,015,826 $- $ 549,534 $ 10,466,292 General Obligation Bonds of 2004………...……… 2015 98,288 4.40 - - - - General Obligation Bonds of 2009………………… 2029 350,000 4.00 275,000 - 15,000 260,000 General Obligation Bonds of 2010………………… 2030 1,071,000 3.30 - 3.40 858,000 - 55,000 803,000 General Obligation Refunding Bonds of 2012…… 2023 46,000 1.80 46,000 - 5,500 40,500 General Obligation Bonds of 2013………………… 2033 669,348 2.00-3.00 640,000 - 30,000 610,000 Total sewer bonds payable…………………………………………………………………………………$ 12,834,826 $ - $ 655,034 $ 12,179,792 Debt service requirements for principal and interest for Sewer Enterprise Fund bonds payable in future years are as follows: Year Principal Interest Total 2016……………$ 666,137 $ 261,702 $ 927,839 2017…………… 681,963 246,650 928,613 2018…………… 693,518 230,845 924,363 2019…………… 705,306 215,132 920,438 2020…………… 717,333 199,105 916,438 2021…………… 729,603 183,027 912,630 2022…………… 743,121 158,775 901,896 2023…………… 750,890 151,120 902,010 2024…………… 758,918 134,688 893,606 2025…………… 770,209 118,078 888,287 2026…………… 788,769 101,168 889,937 2027…………… 800,603 83,882 884,485 2028…………… 828,716 66,150 894,866 2029…………… 839,114 47,528 886,642 2030…………… 828,803 28,634 857,437 2031…………… 796,789 3,000 799,789 2032…………… 40,000 1,800 41,800 2033…………… 40,000 600 40,600 Total……………$ 12,179,792 $ 2,231,884 $ 14,411,676 Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 58 Comprehensive Annual Financial Report Bonds and Notes Payable Schedule – Water Enterprise Fund Original Interest Outstanding Outstanding Maturities Loan Rate at June 30, at June 30, Project Through Amount (%) 2014 Issued Redeemed 2015 MCWT………………………………………………… 2027 $ 8,318,031 2.00 $ 7,010,571 $ - $ 369,924 $ 6,640,647 General Obligation Bonds of 2005………………… 2025 2,617,000 3.00 - 4.00 115,000 - 115,000 - General Obligation Refunding Bonds of 2005…… 2017 1,311,060 3.30 343,464 - 123,321 220,143 General Obligation Bonds of 2006………………… 2026 5,245,000 3.40 - 4.10 690,000 - 345,000 345,000 General Obligation Refunding Bonds of 2008…… 2018 474,700 3.00 180,000 - 45,000 135,000 General Obligation Bonds of 2009………………… 2029 1,051,000 4.00 860,000 - 40,000 820,000 General Obligation Bonds of 2010………………… 2030 16,379,000 3.50 14,112,000 - 866,000 13,246,000 General Obligation Refunding Bonds of 2010…… 2021 1,705,000 1.50 - 2.50 935,000 - 215,000 720,000 General Obligation Refunding Bonds of 2012…… 2017 50,000 1.80 30,000 - 10,000 20,000 General Obligation Refunding Bonds of 2013…… 2026 4,533,550 2.00-3.00 4,533,550 - - 4,533,550 General Obligation Bonds of 2013………………… 2033 2,004,652 2.00-3.00 1,860,000 - 130,000 1,730,000 Total water bonds payable………………………………………………………...…………………………$ 30,669,585 $ - $ 2,259,245 $ 28,410,340 Debt service requirements for principal and interest for Water Enterprise Fund bonds payable in future years are as follows: Year Principal Interest Total 2016……………$ 2,141,458 $ 860,173 $ 3,001,631 2017…………… 2,095,752 790,546 2,886,298 2018…………… 1,989,100 723,868 2,712,968 2019…………… 1,824,335 662,327 2,486,662 2020…………… 1,863,829 603,773 2,467,602 2021…………… 1,915,689 546,830 2,462,519 2022…………… 1,815,316 492,064 2,307,380 2023…………… 1,840,912 436,892 2,277,804 2024…………… 1,887,682 381,813 2,269,495 2025…………… 1,947,829 326,440 2,274,269 2026…………… 1,892,956 269,799 2,162,755 2027…………… 1,654,269 213,872 1,868,141 2028…………… 1,631,655 158,053 1,789,708 2029…………… 1,618,568 101,800 1,720,368 2030…………… 1,591,085 44,524 1,635,609 2031…………… 494,905 7,650 502,555 2032…………… 100,000 4,650 104,650 2033…………… 105,000 1,575 106,575 Total……………$ 28,410,340 $ 6,626,649 $ 35,036,989 Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 59 Comprehensive Annual Financial Report The Town is subject to various debt limits by statute and may issue additional general obligation debt under the normal debt limit. At June 30, 2015, the Town had the following authorized and unissued debt: Purpose Amount Septic System………………………………………………$ 1,500,000 Sewer………………………………………………………… 570,000 Water System Improvements……………………………… 53,632 Fire/Ambulance……………………………………………… 184,000 Dump Truck for Department of Public Works…………… 61,800 Bound Brook Dam………………………………………… 1,191,400 Senior Center……………………………………………… 1,030,000 Total…………………………………………………………$ 4,590,832 Changes in Long-term Liabilities During the year ended June 30, 2015, the following changes occurred in long-term liabilities: Balance Balance Due June 30, June 30, Within 2014 Additions Reductions 2015 One Year Governmental Activities: Long-term bonds payable………………………… $ 23,837,431 $ - $ (3,219,632) $ 20,617,799 $ 3,223,085 Unamortized premium on bonds payable……… 749,674 - (143,969) 605,705 129,113 Total bonds payable………………………………… 24,587,105 - (3,363,601) 21,223,504 3,352,198 Landfill closure……………………………………… 257,700 - (20,474) 237,226 20,000 Other postemployment benefits…………………… 9,204,000 2,492,000 (1,512,000) 10,184,000 - Net pension liability………………………………… 16,215,297 782,713 - 16,998,010 - . Total Governmental Activities………………………$ 50,264,102 $ 3,274,713 $ (4,896,075) $ 48,642,740 $ 3,372,198 Business-Type Activities: Long-term bonds payable………………………… $ 43,504,411 $ - $ (2,914,279) $ 40,590,132 $ 2,807,595 Net pension liability………………………………… 112,169 5,415 - 117,584 - Total Business Type Activities….…………………$ 43,616,580 $ 5,415 $ (2,914,279) $ 40,707,716 $ 2,807,595 The governmental activities liabilities will be liquidated by the general fund. The business-type liabilities will be liquidated by the enterprise fund reporting the liability. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 60 Comprehensive Annual Financial Report NOTE 8 – GOVERNMENTAL FUND BALANCE CLASSIFICATIONS The Town has adopted GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Types Definitions. The intention of the GASB is to provide a more structured classification of fund balance and to improve the usefulness of fund balance reporting to the users of the Town’s financial statements. The reporting standard establishes a hierarchy for fund balance classifications and the constraints imposed on the uses of those resources. Massachusetts General Law Ch.40 §5B allows for the establishment of Stabilization funds for one or more different purposes. The creation of a fund requires a two-thirds vote of the legislative body and must clearly define the purpose of the fund. Any changes to the purpose of the fund along with any additions to or appropriations from the fund required a two-thirds vote of the legislative body. At year end the balance of the General Stabilization fund is $2,288,168, the Facilities Stabilization fund is $2,296, and the Capital Stabilization fund is $1,145,998. All stabilization balances have been reported as unassigned fund balance within the General Fund. GASB 54 provides for two major types of fund balance, which are nonspendable and spendable and are more fully discussed in Note 1. Nonspendable fund balances are balances that cannot be spent because they are not expected to be converted to cash or they are legally or contractually required to remain intact. Examples of this classification are prepaid items, inventories, and principal (corpus) of an endowment fund. The Town has reported principal portions of endowment funds as nonspendable. The general fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds it is not appropriate to report a positive unassigned fund balance amount. However, in the governmental funds other than the general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to other purposes, it may be necessary to report a negative unassigned fund balance in that fund. In addition to the nonspendable fund balances, GASB 54 has provided a hierarchy of spendable fund balances, based on a hierarchy of spending constraints. • Restricted: fund balances that are constrained by external parties, constitutional provisions, or enabling legislation. • Committed: fund balances that contain self-imposed constraints of the government from its highest level of decision making authority. • Assigned: fund balances that contain self-imposed constraints of the government to be used for a particular purpose. • Unassigned: fund balance of the general fund that is not constrained for any particular purpose. The Town’s spending policy is to spend restricted fund balance first, followed by committed, assigned and unassigned fund balance. Most governmental funds are designated for one purpose at the time of their creation. Therefore, any expenditure from the fund will be allocated to the applicable fund balance classifications in the order of the aforementioned spending policy. The general fund and certain other funds may have more than one purpose. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 61 Comprehensive Annual Financial Report As of June 30, 2015, the governmental fund balance consisted of the following: Nonmajor Total Governmental Governmental General Funds Funds Fund Balances Nonspendable: Permanent fund principal………………………$- $ 424,735 $ 424,735 Restricted for: Town grants…………………………………… - 208,597 208,597 School grants…………………………………… - 439,703 439,703 Receipts reserved for appropriation………… - 469,306 469,306 School construction…………………………… - 653,373 653,373 MCWT septic loan program…………………… - 196,595 196,595 Town revolving funds…………………………… - 249,638 249,638 School revolving funds………………………… - 610,247 610,247 School lunch…………………………………… - 195,670 195,670 Community preservation……………………… - 1,957,677 1,957,677 Gifts and donations…………………………… - 833,926 833,926 Gifts and donations recreation………………… - 410,163 410,163 Other Town special revenue………………… - 5,393 5,393 Capital projects bonded……………………… - 112,140 112,140 Capital projects non-bonded………………… - 814,575 814,575 Library expendable trust funds……………… - 1,267,969 1,267,969 Other expendable trust funds………………… - 708,379 708,379 Committed to: Administration……………………………………169,951 - 169,951 Public safety…………………………………… 12,638 - 12,638 Education…………………………………………151,019 - 151,019 Public works…………………………………… 137,230 - 137,230 Culture and recreation………………………… 1,100 - 1,100 Assigned to: Encumbrances: Administration…………………………………… 107,048 - 107,048 Public safety…………………………………… 8,062 - 8,062 Education………………………………………… 87,936 - 87,936 Public works…………………………………… 146,782 - 146,782 Health & welfare………………………………… 669 - 669 Culture and recreation………………………… 600 - 600 Unassigned…………………………………………… 5,195,715 - 5,195,715 Total Fund Balances………………………………………$ 6,018,750 $ 9,558,086 $ 15,576,836 Governmental Funds Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 62 Comprehensive Annual Financial Report NOTE 9 – RISK FINANCING The Town is exposed to various risks of loss related to torts: theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the Town carries commercial insurance. The amount of claim settlements has not exceeded insurance coverage in any of the previous three years. The Town is part of a premium-based self-insurance group which insures for health insurance, as well as general and personal liability, through the Massachusetts Inter-Local Insurance Association (MIIA). The Town essentially transfers risk through payment of its annual assessment which is adjusted according to the Town’s experience history. The Town is self-insured for worker’s compensation and unemployment benefits which are funded on a pay-as- you-go basis from annual appropriations. The estimated future workers’ compensation liability is based on history and injury type. At June 30, 2015, the amount of the liability for workers’ compensation claims and unemployment benefits were immaterial and are therefore not reported. NOTE 10 – PENSION PLAN The Town is a member of the Norfolk County Contributory Retirement System (System), a cost-sharing multiple- employer defined benefit pension plan covering eligible employees of the 43 member units. The system is administered by five board members (Board) on behalf of all current employees and retirees except for current teachers and retired teachers. Chapter 32 of the MGL assigns authority to establish and amend benefit provisions of the plan. The System issues a publicly available unaudited financial report in accordance with guidelines established by the Commonwealth’s Public Employee Retirement Administration Commission. That report may be obtained by contacting the System located at 480 Neponset Street, Building 15, Canton, MA 02021; or by visiting http:// http://www.norfolkcountyretirement.org/. 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/. Special Funding Situation The Commonwealth is a nonemployer contributor and is required by statute 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, 2014. The Town’s portion of the collective pension expense, contributed by the Commonwealth, of $2,053,387 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 $29,555,851 as of the measurement date. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 63 Comprehensive Annual Financial Report Benefits Provided Both Systems provide retirement, disability, survivor and death benefits to plan members and beneficiaries. Massachusetts Contributory Retirement System benefits are, with certain minor exceptions, uniform from system to system. The System provides for retirement allowance benefits up to a maximum of 80% of a member's highest three-year average annual rate of regular compensation. For persons who became members 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 a member's age, length of creditable service, level of compensation, and group classification. Members become vested after ten years of creditable service. There were no changes in benefit terms that affected the measurement of the total pension liability at December 31, 2014. Employees who resign from service and who are not eligible to receive a retirement allowance or are under the age of 55 are entitled to request a refund of their accumulated total deductions. Survivor benefits are extended to eligible beneficiaries of members 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’s state law during those years are borne by the Commonwealth and are deposited into the pension fund. Cost-of-living adjustments granted after 1997 must be approved by the Board and are borne by the System. Contributions Chapter 32 of the MGL governs the contributions of plan members and member units. Active plan members are required to contribute to the System at rates ranging from 5% to 9% of gross regular compensation with an additional 2% contribution required for compensation exceeding $30,000. The percentage rate is keyed to the date upon which an employee's membership commences. The member units are required to pay into the ERRS a legislatively mandated actuarial determined contribution that is apportioned among the employers based on active current payroll. The Town’s proportionate share of the required contribution equaled its actual contribution for the year ended December 31, 2014 was $1,596,748, (19.75%) 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. Pension Liabilities At June 30, 2015, the Town reported a liability of $17,115,594 for its proportionate share of the net pension liability. The net pension liability was measured as of December 31, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of January 1, 2014. Accordingly, update procedures were used to roll forward the total pension liability to the measurement date. The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term share of contributions to the pension plan relative to the projected contributions of all participating members. At December 31, 2014, the Town’s proportion was 3.3%, which did not change from its proportion measured at December 31, 2013. Pension Expense For the year ended June 30, 2015, the Town recognized pension expense of $1,678,088. At June 30, 2015, the Town reported deferred outflows of resources related to pensions of $706,788 from the net difference between projected and actual investment earnings on pension plan investments. Since the System performs an actuarial valuation bi-annually, there are no reported differences between expected and actual experience or a change of assumptions as of December 31, 2014. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 64 Comprehensive Annual Financial Report The Town’s deferred outflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2016………………………………………………$ 176,697 2017……………………………………………… 176,697 2018……………………………………………… 176,697 2019……………………………………………… 176,697 Total………………………………………………$ 706,788 Actuarial Assumptions The total pension liability in the January 1, 2014 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement that was updated to December 31, 2014: Valuation date…………………………… January 1, 2014 Actuarial cost method…………………… Entry Age Normal Cost Method. Asset valuation method………………… Market value Investment rate of return………………… 8.25% Projected salary increases……………… 4.00% Inflation rate……………………………… 4.50% Cost of living adjustments……………… 3.0% of the first $15,000 of retirement income. Mortality…………………………………… The RP-2000 Mortality Table adjusted with Scale AA. Investment policy The pension plan’s policy in regard to the allocation of invested assets is established and may be amended by the Board. Plan 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 pension plan. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 65 Comprehensive Annual Financial Report The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of January 1, 2014 are summarized in the following table: Target Long-Term Expected Asset Class Allocation Real Rate of Return Domestic equity……………… 32.00% 7.70% International equities………… 17.50% 6.40% Fixed income…………………… 19.00% 1.90% Real estate……………………… 9.00% 5.20% Private equity…………………… 8.50% 11.90% Hedge funds…………………… 9.00% 5.50% Real assets…………………… 5.00% 5.50% 100.00% Rate of return For the year ended December 31, 2014, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 5.07%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Discount rate The discount rate used to measure the total pension liability was 8.25%. 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 rated. 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. Sensitivity of the net position liability to changes in the discount rate The following presents the net position liability, calculated using the discount rate of 8.25%, as well as what the net position liability would be if it were calculated using a discount rate that is 1-percentage-point lower (7.25%) or 1-percentage-point higher (8.25%) than the current rate: Current 1% Decrease Discount 1% Increase (7.25%) (8.25%) (9.25%) The Town's proportionate share of the net pension liability………$ 21,479,318 $ 17,115,595 $ 13,365,228 Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 66 Comprehensive Annual Financial Report NOTE 11 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS Plan Description – The Town of Cohasset administers a single-employer defined benefit healthcare plan (“the Retiree Health Plan”). The plan provides lifetime healthcare insurance for eligible retirees and their spouses through the Town’s group health insurance plan, which covers both active and retired members. 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. At year end the membership of the plan is as follows: Current retirees, beneficiaries, and dependents…… 192 Current active members………………………………… 319 Total………………………………………………………511 Funding Policy – Contribution requirements are also negotiated between the Town and union representatives. The required contribution is based on a pay-as-you-go financing requirement. The Town contributes between 50 - 90 percent of the cost of current-year premiums for eligible retired plan members and their spouses. Plan members receiving benefits contribute the remaining percent of their premium costs. For 2015, the Town contributed $1.5 million to the plan. Administrative costs of the Plan are included in both the rates and Town appropriations. The Town accepted legislation that established a Postemployment Benefit Trust and enables the Town to contribute funds to begin pre-funding the OPEB liability. In 2015 the Town contributed $300,000 to the Trust. Annual OPEB Cost and Net OPEB Obligation – The Town’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The components of the Town’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Town’s net OPEB obligation are summarized in the following table: Annual required contribution………………………………………$ 2,454,000 Interest on net OPEB obligation………………………………… 368,000 Adjustments to annual required contribution…………………… (330,000) Annual OPEB cost/expense…………………..………………… 2,492,000 Contributions made………………………………………………… (1,512,000) Increase/(Decrease) in net OPEB obligation…………………… 980,000 Net OPEB obligation - beginning of year………………………… 9,204,000 Net OPEB obligation - end of year……………………………… $ 10,184,000 Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 67 Comprehensive Annual Financial Report The Town’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for year 2015 and preceding two years are as follows: Percentage of Year Annual Annual OPEB Net OPEB Ended OPEB Cost Cost Contributed Obligation 6/30/2015 $ 2,492,000 61% $ 10,184,000 6/30/2014 3,239,000 50% 9,204,000 6/30/2013 3,099,000 46% 7,569,000 Funded Status and Funding Progress – The funded status of the Plan as of the most recent actuarial valuation date is as follows: Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Projected Unit Credit (UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 7/1/2014 $ 583,141 $ 32,942,616 $ 32,359,475 1.77% $ 20,324,842 159.21% Schedule of Funding Progress Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions – Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2014 actuarial valuation, actuarial liabilities were determined using the projected unit credit cost method. The actuarial assumptions included a 4.75% investment return assumption, 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 inflation rate of 3.0%, and an annual medical/drug cost trend rate of 8% initially, graded to 5% over 4 years. 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 remaining amortization period at July 1, 2014 is 30 years. Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 68 Comprehensive Annual Financial Report NOTE 12 – LANDFILL CLOSURE State and federal laws and regulations require the Town to construct a final capping system on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site after closure. The Town closed and capped its landfill in 1997. The Town has reflected a $237,000 post-closure care liability at June 30, 2015 as an obligation of governmental funds. This amount is based upon estimates of what it would cost to perform all post-closure care. Actual costs may be higher due to inflation, changes in technology, or changes in regulations. Its cost was estimated based on annual sampling for the current monitoring network at the site and estimated costs to maintain the integrity of the landfill cap during the post-closure period. NOTE 13 – CONTINGENCIES The Town participates in a number of federal award programs. Although the grant programs have been audited in accordance with the provisions of the Single Audit Act Amendments of 1996 through June 30, 2015, these programs are still subject to financial and compliance audits. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although it is expected such amounts, if any, to be immaterial. Various legal actions and claims are pending. Litigation is subject to many uncertainties, and the outcome of individual litigated matters is not always predictable. Although the amount of liability, if any, at June 30, 2015, cannot be ascertained, management believes any resulting liability should not materially affect the financial position at June 30, 2015. NOTE 14 – SUBSEQUENT EVENTS Management has evaluated subsequent events through December 23, 2015, which is the date the financial statements were available to be issued. NOTE 15 – REVISION OF NET POSITION PREVIOUSLY REPORTED Beginning net position of governmental activities, business-type activities and each applicable enterprise fund has been revised to reflect the implementation of GASB Statement #68. The revised balances are summarized in the following table: 6/30/2014 Previously 6/30/2014 Reported Implementation Revised Balances of GASB #68 Balances Government-Wide Financial Statements Governmental activities………………………………………………$ 55,033,890 $ (16,215,297) $ 38,818,593 Business-type activities……………………………………………… 37,944,806 (112,169) 37,832,637 Total……………………………………………………………………$ 92,978,696 $ (16,327,466) $ 76,651,230 Proprietary Fund Financial Statements Sewer enterprise………………………………………………………$ 29,996,846 $ (112,169) $ 29,884,677 Water enterprise……………………………………………………… 7,947,960 - 7,947,960 Total……………………………………………………………………$ 37,944,806 $ (112,169) $ 37,832,637 Notes to Basic Financial Statements Year Ended June 30, 2015 Town of Cohasset, Massachusetts 69 Comprehensive Annual Financial Report NOTE 16 – IMPLEMENTATION OF NEW GASB PRONOUNCEMENTS During 2015, the following GASB pronouncements were implemented: • GASB Statement #67, Financial Reporting for Pension Plans; GASB Statement #68, Accounting and Financial Reporting for Pensions; and GASB Statement #71 Pension Transition for Contributions Made Subsequent to the Measurement Date. Financial statement changes include the recognition of a net pension liability, pension expense and deferred outflows/inflows of resources depending on the nature of the change each year. The financial statements also recognized a restatement of the beginning net position to reflect the net pension liability at the beginning of the year. The notes to the basic financial statements and the required supplementary information were expanded to include additional required schedules and disclosures. • GASB Statement #69, Governmental Combinations and Disposals of Government Operations. This pronouncement did not impact the basic financial statements. The following GASB pronouncements will be implemented in the future: • The GASB issued Statement #72, Fair Value Measurement and Application, which is required to be implemented in 2016. • The GASB issued Statement #73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 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 Statement 68, which is required to be implemented in 2017. • The GASB issued Statement #74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, which is required to be implemented in 2017. • The GASB issued Statement #75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, which is required to be implemented in 2018. • The GASB issued Statement #76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, which is required to be implemented in 2016. • The GASB issued Statement #77, Tax Abatement Disclosures, which is required to be implemented in 2017. Management is currently assessing the impact the implementation of these pronouncements will have on the basic financial statements. Town of Cohasset, Massachusetts 70 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 71 Comprehensive Annual Financial Report Required Supplementary Information Town of Cohasset, Massachusetts 72 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 73 Comprehensive Annual Financial Report General Fund Budgetary Comparison Schedule The General Fund is the general operating fund of the Town. It is used to account for the entire Town’s financial resources, except those required to be accounted for in another fund. General Fund Budgetary Comparison Schedule Actual Amounts Original Final Budgetary Carried Forward Variance to Budget Budget Amounts To Next Year Final Budget REVENUES: Real estate and personal property taxes, net of tax refunds……………………………………………$ 32,942,548 $ 32,942,548 $ 33,054,835 $ - $ 112,287 Motor vehicle and other excise taxes………………………… 1,208,300 1,208,300 1,561,442 - 353,142 Penalties and interest on taxes……………………………… 147,061 147,061 163,479 - 16,418 Fees and rentals………………………………………………… 958,727 958,727 976,186 - 17,459 Licenses and permits…………………………………………… 541,129 541,129 652,504 - 111,375 Fines and forfeitures…………………………………………… 52,336 52,336 36,523 - (15,813) Intergovernmental……………………………………………… 2,816,160 2,816,160 2,842,492 - 26,332 Departmental and other………………………………………… 190,345 190,345 315,006 - 124,661 Special assessments…………………………………………… 400,000 400,000 403,783 - 3,783 Investment income……………………………………………… 19,361 19,361 30,908 - 11,547 TOTAL REVENUES…………………………………… 39,275,967 39,275,967 40,037,158 - 761,191 EXPENDITURES: ADMINISTRATION Moderator: Personal Services……………………………………… 500 500 - - 500 Selectmen: Personal Services……………………………………… 8,100 8,100 7,957 - 143 General Expenses……………………………………… 262,217 259,232 204,795 39,816 14,621 TOTAL…………………………………………………… 270,317 267,332 212,752 39,816 14,764 Town Manager Personal Services……………………………………… 390,465 390,465 380,718 - 9,747 General Expenses……………………………………… 98,227 340,227 102,281 225,583 12,363 TOTAL…………………………………………………… 488,692 730,692 482,999 225,583 22,110 Human Resource Management: Salaries and Expenses………………………………… 50,000 50,000 43,500 - 6,500 Advisory Committee: General Expenses……………………………………… 360 360 211 - 149 Reserve Fund…………………………………………… 200,000 - - - - TOTAL…………………………………………………… 200,360 360 211 - 149 Director of Finance: Personal Services……………………………………… 164,011 158,833 158,832 - 1 General Expenses……………………………………… 106,624 114,709 106,708 8,000 1 TOTAL…………………………………………………… 270,635 273,542 265,540 8,000 2 Board of Assessors: Personal Services……………………………………… 201,265 174,197 172,725 - 1,472 General Expenses……………………………………… 21,000 21,568 14,950 - 6,618 TOTAL…………………………………………………… 222,265 195,765 187,675 - 8,090 Treasurer/Collector: Personal Services……………………………………… 243,757 244,508 244,506 - 2 General Expenses……………………………………… 49,990 50,290 45,110 800 4,380 TOTAL…………………………………………………… 293,747 294,798 289,616 800 4,382 Legal: Town Counsel Services………………………………… 175,000 207,946 207,945 - 1 Chief Technology Office: Personal Services……………………………………… 174,874 93,414 86,764 - 6,650 General Expenses……………………………………… 25,876 43,876 43,181 644 51 TOTAL…………………………………………………… 200,750 137,290 129,945 644 6,701 Town Clerk: Personal Services……………………………………… 139,865 139,865 137,333 - 2,532 General Expenses……………………………………… 10,000 10,000 7,299 2,156 545 TOTAL…………………………………………………… 149,865 149,865 144,632 2,156 3,077 (Continued) Budgeted Amounts GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2015 Town of Cohasset, Massachusetts 74 Comprehensive Annual Financial Report Actual Amounts Original Final Budgetary Carried Forward Variance to Budget Budget Amounts To Next Year Final Budget Budgeted Amounts GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2015 Planning Board: General Expenses……………………………………… 560 560 - - 560 Permits & Inspections: Personnel Services……………………………………… 143,783 123,784 122,249 - 1,535 General Expenses……………………………………… 27,040 28,315 27,428 - 887 TOTAL…………………………………………………… 170,823 152,099 149,677 - 2,422 Other General Government: General Expenses……………………………………… 420,506 413,407 410,263 - 3,144 Total Administration…………………………………………… 2,914,020 2,874,156 2,524,755 276,999 72,402 PUBLIC SAFETY Police: Personal Services……………………………………… 1,804,301 1,885,101 1,877,484 - 7,617 General Expenses……………………………………… 472,297 455,887 449,478 6,370 39 TOTAL…………………………………………………… 2,276,598 2,340,988 2,326,962 6,370 7,656 Fire: Personal Services……………………………………… 2,023,497 2,023,497 2,017,945 - 5,552 General Expenses……………………………………… 189,666 189,666 181,829 7,473 364 Hydrant Services………………………………………… 53,000 - - - - TOTAL…………………………………………………… 2,266,163 2,213,163 2,199,774 7,473 5,916 Inspections: Personal Services……………………………………… 86,893 86,893 85,843 - 1,050 General Expenses……………………………………… 50,500 50,500 40,646 114 9,740 TOTAL…………………………………………………… 137,393 137,393 126,489 114 10,790 Emergency Management: Personal Services……………………………………… 3,000 3,000 3,000 - - General Expenses……………………………………… 23,000 28,795 28,554 - 241 TOTAL…………………………………………………… 26,000 31,795 31,554 - 241 Harbor Master: Personal Services……………………………………… 88,132 88,132 88,132 - - General Expenses……………………………………… 29,902 29,902 18,495 6,268 5,139 TOTAL…………………………………………………… 118,034 118,034 106,627 6,268 5,139 Shellfish: Personal Services……………………………………… 475 475 - 475 - Total Public Safety……………………………………………… 4,824,663 4,841,848 4,791,406 20,700 29,742 EDUCATION Cohasset Schools: Salaries and Expenditures……………………………… 17,291,769 17,291,769 17,051,524 238,955 1,290 South Shore VocTech: Vocational Assessment………………………………… 84,721 84,721 84,250 - 471 Total Education………………………………………………… 17,376,490 17,376,490 17,135,774 238,955 1,761 (Continued) Town of Cohasset, Massachusetts 75 Comprehensive Annual Financial Report Actual Amounts Original Final Budgetary Carried Forward Variance to Budget Budget Amounts To Next Year Final Budget Budgeted Amounts GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2015 PUBLIC WORKS/FACILITIES Department of Public Works: Personal Services……………………………………… 738,312 709,312 703,162 - 6,150 General Expenses……………………………………… 385,968 385,968 203,559 146,782 35,627 Other Appropriations…………………………………… 250,000 - - - - TOTAL…………………………………………………… 1,374,280 1,095,280 906,721 146,782 41,777 Snow and Ice Control: General Expenses……………………………………… 125,000 580,404 580,404 - - Street Lighting: General Expenses……………………………………… 75,000 94,525 94,525 - - Transfer Station: Personal Services……………………………………… 181,382 167,482 144,334 - 23,148 General Expenses……………………………………… 285,672 287,502 287,502 - - TOTAL…………………………………………………… 467,054 454,984 431,836 - 23,148 Facilities Management: Personal Services……………………………………… 286,727 319,629 319,629 - - General Expenses……………………………………… 678,838 607,738 424,617 137,230 45,891 TOTAL…………………………………………………… 965,565 927,367 744,246 137,230 45,891 Total Public Works/Facilities…………………………………… 3,006,899 3,152,560 2,757,732 284,012 110,816 HEALTH & WELFARE Board of Health: Personal Services……………………………………… 128,980 128,980 114,192 - 14,788 General Expenses……………………………………… 19,300 19,300 12,216 669 6,415 TOTAL…………………………………………………… 148,280 148,280 126,408 669 21,203 Elder Affairs: Personal Services……………………………………… 231,700 231,700 227,008 - 4,692 General Expenses……………………………………… 43,592 43,592 41,184 - 2,408 TOTAL…………………………………………………… 275,292 275,292 268,192 - 7,100 Veterans Services: Personal Services……………………………………… 16,400 16,460 16,460 - - General Expenses……………………………………… 117,850 132,985 123,632 - 9,353 TOTAL…………………………………………………… 134,250 149,445 140,092 - 9,353 Total Health & Welfare………………………………………… 557,822 573,017 534,692 669 37,656 CULTURE AND RECREATION Library Services: Personal Services……………………………………… 463,601 465,265 465,264 - 1 General Expenses……………………………………… 102,772 102,772 101,596 1,100 76 TOTAL…………………………………………………… 566,373 568,037 566,860 1,100 77 Recreation: Personal Services……………………………………… 113,902 118,266 118,265 - 1 Common Historical Commission: General Expenses……………………………………… 50 50 - - 50 Historical Preservation: Personal Services……………………………………… 600 600 - 600 - Total Culture and Recreation………………………………… 680,925 686,953 685,125 1,700 128 DEBT SERVICE Debt Service Principal……………………………………… 2,639,354 2,639,354 2,637,555 - 1,799 Debt Service Interest……………………………………… 623,164 563,964 562,388 - 1,576 Total Debt Service……………………………………………… 3,262,518 3,203,318 3,199,943 - 3,375 (Continued) Town of Cohasset, Massachusetts 76 Comprehensive Annual Financial Report Actual Amounts Original Final Budgetary Carried Forward Variance to Budget Budget Amounts To Next Year Final Budget Budgeted Amounts GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2015 BENEFITS & INSURANCE Pension Assessment: County Assessment…………………………………… 1,591,141 1,571,043 1,557,993 - 13,050 Workers Compensation: General Expenses……………………………………… 122,508 122,508 122,508 - - Unemployment: General Expenses……………………………………… 7,500 7,500 2,115 - 5,385 Health Insurance: General Expenses……………………………………… 3,870,467 3,870,467 3,641,602 - 228,865 Life Insurance: General Expenses……………………………………… 9,360 9,360 5,223 - 4,137 Medicare: General Expenses……………………………………… 284,920 309,646 309,645 - 1 Property & Liability Insurance: General Expenses……………………………………… 295,301 295,301 285,653 - 9,648 Total Benefits & Insurance…………………………………… 6,181,197 6,185,825 5,924,739 - 261,086 State and County Assessment………………………………… 1,004,674 1,004,674 1,015,079 - (10,405) TOTAL EXPENDITURES……………………………… 39,809,208 39,898,841 38,569,245 823,035 506,561 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES…………………………………… (533,241) (622,874) 1,467,913 (823,035) 1,267,752 OTHER FINANCING SOURCES (USES): Transfers in……………………………………………………… 565,263 868,701 868,701 - - Transfers out…………………………………………….……… (1,500,000) (1,840,638) (1,840,638) - - TOTAL OTHER FINANCING SOURCES (USES)…… (934,737) (971,937) (971,937) - - NET CHANGE IN FUND BALANCE……………………………… (1,467,978) (1,594,811) 495,976 (823,035) 1,267,752 BUDGETARY FUND BALANCE, Beginning of year…………… 1,868,394 1,868,394 1,868,394 - - BUDGETARY FUND BALANCE, End of year……………………$ 400,416 $ 273,583 $ 2,364,370 $ (823,035) $ 1,267,752 See notes to required supplementary information.(Concluded) Town of Cohasset, Massachusetts 77 Comprehensive Annual Financial Report Town of Cohasset, Massachusetts 78 Comprehensive Annual Financial Report Pension Plan Schedules - Town The Schedule of the Town’s Proportionate Share of the Net Pension Liability presents multi-year trend information on the Town’s net pension liability and related ratios. The Schedule of Town Contributions presents multi-year trend information on the Town’s required and actual contributions to the pension plan and related ratios. The Schedule of the Special Funding Amounts of the Net Pension Liability for the Massachusetts Teachers Contributory Retirement System presents multi-year trend information on the liability and expense assumed by the Commonwealth of Massachusetts on behalf of the Town along with related ratios. These schedules are intended to present information for ten years. Until a ten year trend is compiled, information is presented for those years for which information is available. Pension Plan Schedules - Town December 31, 2014 Town's proportion of the net pension liability (asset)…………………… 3.30% Town's proportionate share of the net pension liability (asset)………$ 17,115,594 Town's covered employee payroll (*)……………………………………$ 8,086,454 Net pension liability as a percentage of covered-employee payroll……………………………………………………………………… 211.66% Plan fiduciary net position as a percentage of the total pension liability……………………………………………………… 60.10% 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. *Covered employee payroll as reported in the January 1, 2014 funding valuation report. See notes to required supplementary information. SCHEDULE OF THE TOWN'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY NORFOLK COUNTY CONTRIBUTORY RETIREMENT SYSTEM Town of Cohasset, Massachusetts 79 Comprehensive Annual Financial Report 2014 Actuarially determined contribution (a)…………………$ 1,596,748 Contributions in relation to the actuarially determined contribution……………………………… 1,596,748 Contribution deficiency (excess)……………………$- Covered-employee payroll (*)……………………………$ 8,086,454 Contributions as a percentage of covered- employee payroll……………………………………… 19.75% 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. (a) Based on the results of the January 1, 2014 actuarial valuation (including assumptions and methods) which determined budgeted appropriations for fiscal 2015. *Covered employee payroll as reported in the January 1, 2014 funding valuation report. See notes to required supplementary information. SCHEDULE OF TOWN CONTRIBUTIONS NORFOLK COUNTY CONTRIBUTORY RETIREMENT SYSTEM Town of Cohasset, Massachusetts 80 Comprehensive Annual Financial Report Fiscal Year Commonwealth's 100% Share of the Net Pension Liability Associated with the Town Town's Expense and Revenue Recognized for the Commonwealth's Support Plan Fiduciary Net Position as a Percentage of the Total Liability 2015 $ 29,555,851 $ 2,053,387 61.64% 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. SCHEDULE OF THE SPECIAL FUNDING AMOUNTS OF THE NET PENSION LIABILITY MASSACHUSETTS TEACHERS' RETIREMENT SYSTEM 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 liability. Town of Cohasset, Massachusetts 81 Comprehensive Annual Financial Report Town of Cohasset, Massachusetts 82 Comprehensive Annual Financial Report Other Postemployment Benefits Plan Schedules The Schedule of Funding Progress compares, over time, the actuarial accrued liability for benefits with the actuarial value of accumulated plan assets. The Schedule of Employer Contributions compares, over time, the annual required contributions to the actual contribution made. The Schedule of Actuarial Methods and Assumptions presents factors that significantly affect the identification of trends in the amounts reported. Other Postemployment Benefits Plan Schedules Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Projected Unit Credit (UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 7/1/2014 $ 583,141 $ 32,942,616 $ 32,359,475 1.77% $ 20,324,842 159.2% 7/1/2012 147,649 36,227,021 36,079,372 0.41% 16,716,994 215.8% 7/1/2010 - 32,380,795 32,380,795 0.00% 16,972,461 190.8% 7/1/2008 - 27,570,365 27,570,365 0.00% 15,431,785 178.7% Annual Actual Percentage of Year Required Contributions the ARC Ended Contribution (ARC) Made Contributed 2015 $ 2,454,000 $ 1,512,000 61.6% 2014 3,208,000 1,604,000 50.0% 2013 3,075,000 1,435,000 46.7% 2012 3,311,000 1,274,000 38.5% 2011 2,542,000 1,112,000 43.7% 2010 2,180,000 1,360,000 62.4% See notes to required supplementary information. Schedule of Employer Contributions OTHER POSTEMPLOYMENT BENEFITS PLAN SCHEDULE OF FUNDING PROGRESS AND EMPLOYER CONTRIBUTIONS Schedule of Funding Progress Town of Cohasset, Massachusetts 83 Comprehensive Annual Financial Report Actuarial Methods: Valuation date…………………………………………… July 1, 2014 Actuarial cost method…………………………………… Projected Unit Credit Amortization method…………………………………… Increasing at 3.50% over thirty years on an open amortization period. Remaining amortization period………………………… 30 years at July 1, 2014. Asset valuation method………………………………… Market value Actuarial Assumptions: Investment rate of return……………………………… 4.75% per annum. Inflation rate……………………………………………… 3.0% per annum. Medical/drug cost trend rate…………………………… 8% initially, graded to 5% over 4 years. Plan Membership: Current retirees, beneficiaries, and dependents…… 271 Current active members………………………………… 319 Total………………………………………………………590 See notes to required supplementary information. OTHER POSTEMPLOYMENT BENEFITS PLAN ACTUARIAL METHODS AND ASSUMPTIONS Town of Cohasset, Massachusetts 84 Comprehensive Annual Financial Report Notes to Required Supplementary Information Year Ended June 30, 2015 Town of Cohasset, Massachusetts 85 Comprehensive Annual Financial Report NOTE A – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Notes to Required Supplementary Information A. Budgetary Information Municipal Law requires the adoption of a balanced budget that is approved by the Advisory Committee (Committee). The Committee presents an annual budget to the Open Town Meeting, which includes estimates of revenues and other financing sources and recommendations of expenditures and other financing uses. The Town, which has full authority to amend and/or reject the budget or any line item, adopts the expenditure budget by majority vote. Increases or transfers between and within departments subsequent to the approval of the annual budget, requires majority vote at a Special Town Meeting. The majority of appropriations are non-continuing which lapse at the end of each year. Others are continuing appropriations for which the governing body has authorized that an unspent balance from a prior year be carried forward and made available for spending in the current year. These carry forwards are included as part of the subsequent year’s original budget. Generally, expenditures may not exceed the legal level of spending (salaries and expenses) authorized for an appropriation account. However, the payment of debt service is statutorily required, regardless of whether such amounts are appropriated. Additionally, expenditures for disasters, natural or otherwise, and final claims and judgments may exceed the level of spending authorized by majority vote at a Special Town Meeting. An annual budget is adopted for the general fund in conformity with the guidelines described above. The original 2015 approved budget authorized $41.3 million in appropriations and other amounts to be raised. During 2015, $430,000 of supplemental appropriations were approved primarily for snow and ice costs. The Finance Director/Town Accountant’s office has the responsibility to ensure that budgetary control is maintained. Budgetary control is exercised through the accounting system. B. Budgetary - GAAP Reconciliation For budgetary financial reporting purposes, the Uniform Municipal Accounting System basis of accounting (established by the Commonwealth) is followed, which differs from the GAAP basis of accounting. A reconciliation of budgetary-basis to GAAP-basis results for the general fund for the year ended June 30, 2015, is presented below: Net change in fund balance, budgetary basis…………………$ 495,976 Perspective difference: Activity of the stabilization fund recorded in the general fund for GAAP………………………………………… 240,557 Basis of accounting differences: Net change in recording revenue accruals…………………… (802) Recognition of revenue for on-behalf payments…………… 2,053,387 Recognition of expenditures for on-behalf payments……… (2,053,387) Net change in fund balance - GAAP basis…………………… $ 735,731 Notes to Required Supplementary Information Year Ended June 30, 2015 Town of Cohasset, Massachusetts 86 Comprehensive Annual Financial Report NOTE B – PENSION PLAN Pension Plan Schedules A. Schedule of the Town’s Proportionate Share of the Net Pension Liability The Schedule of the Town’s Proportionate Share of the Net Pension Liability details the allocated percentage of the net pension liability (asset), 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 Contributions Governmental employers 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 Special Funding Amounts of the Net Pension Liabilities 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 liability. D. Changes in Assumptions: There were no changes in the assumptions as part of the updated actuarial valuation through the measurement date of December 31, 2014. E. Changes in Plan Provisions: There were no changes in plan provisions as part of the updated actuarial valuation through the measurement date of December 31, 2014. Notes to Required Supplementary Information Year Ended June 30, 2015 Town of Cohasset, Massachusetts 87 Comprehensive Annual Financial Report NOTE C – OTHER POSTEMPLOYMENT BENEFITS The Town administers a single-employer defined benefit healthcare plan (“the Retiree Health Plan”). The plan provides lifetime healthcare for eligible retirees and their spouses through the Town’s health insurance plan, which covers both active and retired members, including teachers. The Town currently finances its other postemployment benefits (OPEB) on a pay-as-you-go basis plus an additional contribution to the Trust. As a result, the funded ratio (actual value of assets expressed as a percentage of the actuarial accrued liability) is low. In accordance with Governmental Accounting Standards, the Town has recorded its OPEB cost equal to the actuarial determined annual required contribution (ARC) which includes the normal cost of providing benefits for the year and a component for the amortization of the total unfunded actuarial accrued liability of the plan. The Schedule of Funding Progress presents multiyear trend information which compares, over time, the actuarial accrued liability for benefits with the actuarial value of accumulated plan assets. The Schedule of Employer Contributions presents multi-year trend information for required and actual contributions relating to the plan. Projections of benefits for financial reporting purposes are based on the substantive plan and included the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit cost 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. The Schedule of Actuarial Methods and Assumptions presents factors that significantly affect the identification of trends in the amounts reported. Town of Cohasset, Massachusetts 88 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 89 Comprehensive Annual Financial Report Combining and Individual Fund Statements Combining and Individual Fund Statements Town of Cohasset, Massachusetts 90 Comprehensive Annual Financial Report Nonmajor Governmental Funds Nonmajor Governmental Funds Special Revenue Funds Special revenue funds are used to account for the proceeds of specific revenue sources (other than permanent funds or capital project funds) that are restricted by law or administrative action to expenditures for specified purposes. The Town’s special revenue funds are grouped into the following categories: Town Grants – This fund accounts for all federal and state grants used for Town related projects and activities. School Grants – This fund is used to account for all federal and state grants used for school related projects and activities. Receipts Reserved for Appropriation – This fund is used to account for receipts from a specific revenue source that by law is accounted for separately from the general fund and must be spent by appropriation. MCWT Septic Loan Program – This fund is used to account for the activities related to septic loans issued to citizens, funded through the MCWT. Town Revolving Funds – This fund accounts for various Town operations such as insurance recoveries, and the law enforcement trust. School Revolving Fund – This fund accounts for school activity, such as transportation receipts, athletic receipts and tuition costs. School Lunch – This fund is used to account for all cafeteria activities and is funded by user charges, federal and state grants, and commodities received. Community Preservation – This fund is used to account for the 1.5% local real estate tax surcharge on nonexempt property (and matching state trust fund distribution) that can be used for open space, historic resource and affordable housing purposes. Property exempt from the surcharge consists of the first $100,000 of all residential property and also property owned by low income seniors with a low or moderate income as defined by Massachusetts Department of Revenue (DOR) guidelines. Disbursements from this fund must originate from the Community Preservation Committee and be approved by Town Meeting. Gifts and Donations – This fund is used to account for the activities of donated funds. Other Town Special Revenue Funds – This fund accounts for activities related to various Treasury bond premiums. Town of Cohasset, Massachusetts 91 Comprehensive Annual Financial Report Capital Project Funds Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. Chapter 90 – This fund accounts for roadway improvements for which expenditures are reimbursed 100% by the Commonwealth. Capital Projects Bonded – This fund is used to account for major Town and school capital acquisition and construction projects. These projects will be funded through the issuance of long-term bonds and notes. Capital Projects Non-Bonded – This fund is used to account for major Town and school capital acquisition and construction projects. These projects will be funded through available funds. Permanent Funds Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support governmental programs. Library Trust Fund – This fund accounts for all endowment funds managed by the Treasurer and the Cohasset Library Trust, Inc., a blended component unit. The expendable portion of the endowment can only be spent to support the Paul Pratt Memorial Library. Other Trust Funds – These funds account for all contributions and bequests for which only earnings may be expended to benefit the government. Receipts MCWT Town Town School Reserved For Septic Loan Revolving Grants Grants Appropriation Program Funds ASSETS Cash and cash equivalents…………………………………………$ 134,247 $ 489,651 $ 1,122,680 $ 196,595 $ 257,704 Investments…………………………………………………………… - - - - - Receivables, net of uncollectibles: Tax liens…………………………………………………………… - - - - - Departmental and other………………………………………… -- --- Special assessments…………………………………………… - - 883,193 - - Intergovernmental………………………………………………… 110,858 24,112 - - - TOTAL ASSETS…………………………………………………… $ 245,105 $ 513,763 $ 2,005,873 $ 196,595 $ 257,704 LIABILITIES Warrants payable…………………………………………………$ 36,508 $ 74,060 $ - $ - $ 7,960 Accrued payroll…………………………………………………… - - - - 106 Due to other funds……………………………………………… - - - - - Notes payable…………………………………………………… - - - - - TOTAL LIABILITIES………………………………………………… 36,508 74,060 - - 8,066 DEFERRED INFLOWS OF RESOURCES Unavailable revenues…………………………………………… - - 883,194 - - FUND BALANCES Nonspendable…………………………………………………… - - - - - Restricted………………………………………………………… 208,597 439,703 1,122,679 196,595 249,638 TOTAL FUND BALANCES………………………………………… 208,597 439,703 1,122,679 196,595 249,638 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES…………………$ 245,105 $ 513,763 $ 2,005,873 $ 196,595 $ 257,704 Special Revenue Funds NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2015 Town of Cohasset, Massachusetts 92 Comprehensive Annual Financial Report School Other Revolving School Community Gifts and Town Special Funds Lunch Preservation Donations Revenue Funds Sub-total $ 630,105 $ 211,437 $ 1,958,772 $ 770,356 $ 5,693 $ 5,777,240 - - - 519,818 - 519,818 - - 5,422 - - 5,422 - - 6,368 - - 6,368 -----883,193 - - - - - 134,970 $ 630,105 $ 211,437 $ 1,970,562 $ 1,290,174 $ 5,693 $ 7,327,011 $ 17,122 $ 1,683 $ 98 $ 32,821 $ 300 $ 170,552 2,736 14,084 - 13,264 - 30,190 - - - - - - - - - - - - 19,858 15,767 98 46,085 300 200,742 - - 12,787 - - 895,981 - - - - - - 610,247 195,670 1,957,677 1,244,089 5,393 6,230,288 610,247 195,670 1,957,677 1,244,089 5,393 6,230,288 $ 630,105 $ 211,437 $ 1,970,562 $ 1,290,174 $ 5,693 $ 7,327,011 (Continued) Special Revenue Funds Town of Cohasset, Massachusetts 93 Comprehensive Annual Financial Report Capital Projects Capital Projects Chapter 90 Bonded Non-Bonded Sub-total ASSETS Cash and cash equivalents……………………………………………$- $ 348,940 $ 818,490 $ 1,167,430 Investments…………………………………………………………… - - - - Receivables, net of uncollectibles: Tax liens…………………………………………………………… - - - - Departmental and other…………………………………………… - - - - Special assessments……………………………………………… - - - - Intergovernmental………………………………………………… 721,061 - - 721,061 TOTAL ASSETS………………………………………………………$ 721,061 $ 348,940 $ 818,490 $ 1,888,491 LIABILITIES Warrants payable………………………………………………… $ 156,234 $ - $ 3,915 $ 160,149 Accrued payroll…………………………………………………… - - - - Due to other funds………………………………………………… 8,978 - - 8,978 Notes payable……………………………………………………… - 236,800 - 236,800 TOTAL LIABILITIES…………………………………………………… 165,212 236,800 3,915 405,927 DEFERRED INFLOWS OF RESOURCES Unavailable revenues……………………………………………… 555,849 - - 555,849 FUND BALANCES Nonspendable……………………………………………………… - - - - Restricted…………………………………………………………… - 112,140 814,575 926,715 TOTAL FUND BALANCES…………………………………………… - 112,140 814,575 926,715 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES……………………$ 721,061 $ 348,940 $ 818,490 $ 1,888,491 Capital Project Funds NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2015 Town of Cohasset, Massachusetts 94 Comprehensive Annual Financial Report Total Nonmajor Library Other Governmental Trust Fund Trust Funds Sub-total Funds $ 67,044 $ 80,437 $ 147,481 $ 7,092,151 1,424,339 829,263 2,253,602 2,773,420 - - - 5,422 - - - 6,368 - - - 883,193 - - - 856,031 $ 1,491,383 $ 909,700 $ 2,401,083 $ 11,616,585 $- $ - $ - $ 330,701 - - - 30,190 - - - 8,978 - - - 236,800 - - - 606,669 - - - 1,451,830 223,414 201,321 424,735 424,735 1,267,969 708,379 1,976,348 9,133,351 1,491,383 909,700 2,401,083 9,558,086 $ 1,491,383 $ 909,700 $ 2,401,083 $ 11,616,585 (Concluded) Permanent Funds Town of Cohasset, Massachusetts 95 Comprehensive Annual Financial Report Receipts MCWT Town Town School Reserved For Septic Loan Revolving Grants Grants Appropriation Program Funds REVENUES: Charges for services………………………………………………………$- $ - $ 1,136 $ - $ - Penalties and interest on taxes………………………………………… - - 992 - - Intergovernmental………………………………………………………… 208,049 1,315,254 - - - Departmental and other…………………………………………………… - - 41,236 600 409,167 Community preservation tax……………………………………………… - - - - - Contributions……………………………………………………………… - - - - - Special assessments……………………………………………………… - - 150,912 - - Investment income………………………………………………………… - - - - - TOTAL REVENUES……………………………………………… 208,049 1,315,254 194,276 600 409,167 EXPENDITURES: Current: Administration………………………………………………………… 20,124 - 4,976 - 207,975 Public safety…………………………………………………………… 26,253 - - - 1,295 Education……………………………………………………………… - 1,385,933 - - - Public works…………………………………………………………… 143,281 - - - 8,941 Health and welfare…………………………………………………… 19,880 - - 1,000 - Culture and recreation………………………………………………… 18,779 - - - 133,483 Community preservation……………………………………………… - - - - - TOTAL EXPENDITURES………………………………………… 228,317 1,385,933 4,976 1,000 351,694 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES……………………………………… (20,268) (70,679) 189,300 (400) 57,473 OTHER FINANCING SOURCES (USES): Transfers in………………………………………………………………… - - - - - Transfers out……………………………………………………………… - - (145,338) - - TOTAL OTHER FINANCING SOURCES (USES)……………… - - (145,338) - - NET CHANGE IN FUND BALANCES……………………………………… (20,268) (70,679) 43,962 (400) 57,473 FUND BALANCES AT BEGINNING OF YEAR…………………………… 228,865 510,382 1,078,717 196,995 192,165 FUND BALANCES AT END OF YEAR…………………………………… $ 208,597 $ 439,703 $ 1,122,679 $ 196,595 $ 249,638 NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2015 Special Revenue Funds Town of Cohasset, Massachusetts 96 Comprehensive Annual Financial Report School Other Revolving School Community Gifts and Town Special Funds Lunch Preservation Donations Revenue Funds Sub-total $ 746,455 $ 342,590 $ - $ - $ - $ 1,090,181 - - 1,543 - - 2,535 - 63,107 131,139 - - 1,717,549 74,503 - - - 8,750 534,256 - - 430,473 - - 430,473 165,416 - - 628,894 - 794,310 - - - - - 150,912 - - 6,552 14,304 - 20,856 986,374 405,697 569,707 643,198 8,750 4,741,072 - - - 125,653 - 358,728 - - - 7,005 - 34,553 1,030,219 368,779 - - - 2,784,931 - - - - - 152,222 - - - 16,136 7,350 44,366 - - - 385,997 - 538,259 - - 271,225 - - 271,225 1,030,219 368,779 271,225 534,791 7,350 4,184,284 (43,845) 36,918 298,482 108,407 1,400 556,788 - - - 32,190 - 32,190 - - (25,900) (190) - (171,428) - - (25,900) 32,000 - (139,238) (43,845) 36,918 272,582 140,407 1,400 417,550 654,092 158,752 1,685,095 1,103,682 3,993 5,812,738 $ 610,247 $ 195,670 $ 1,957,677 $ 1,244,089 $ 5,393 $ 6,230,288 (Continued) Special Revenue Funds Town of Cohasset, Massachusetts 97 Comprehensive Annual Financial Report Capital Projects Capital Projects Chapter 90 Bonded Non-Bonded Sub-total REVENUES: Charges for services……………………………………………$- $ - $ - $ - Penalties and interest on taxes………………………………… - - - - Intergovernmental……………………………………………… 165,212 - - 165,212 Departmental and other………………………………………… - - - - Community preservation tax…………………………………… - - - - Contributions…………………………………………………… - - - - Special assessments…………………………………………… - - - - Investment income……………………………………………… - - - - TOTAL REVENUES……………………………………… 165,212 - - 165,212 EXPENDITURES: Current: Administration………………………………………………… - 18,101 192,761 210,862 Public safety………………………………………………… - 975 81,352 82,327 Education…………………………………………………… - - 118,721 118,721 Public works………………………………………………… 315,212 - 60,625 375,837 Health and human services………………………………… - - - - Culture and recreation……………………………………… - 5,058 - 5,058 Community preservation…………………………………… - - - - TOTAL EXPENDITURES……………………………… 315,212 24,134 453,459 792,805 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES…………………………… (150,000) (24,134) (453,459) (627,593) OTHER FINANCING SOURCES (USES): Transfers in……………………………………………………… 150,000 20,540 923,318 1,093,858 Transfers out…………………………………………………… - 32,190 - 32,190 TOTAL OTHER FINANCING SOURCES (USES)…… 150,000 52,730 923,318 1,126,048 NET CHANGE IN FUND BALANCES…………………………… - 28,596 469,859 498,455 FUND BALANCES AT BEGINNING OF YEAR………………… - 83,544 344,716 428,260 FUND BALANCES AT END OF YEAR……………………………$- $ 112,140 $ 814,575 $ 926,715 YEAR ENDED JUNE 30, 2015 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Capital Project Funds Town of Cohasset, Massachusetts 98 Comprehensive Annual Financial Report Total Library Nonmajor Expendable Other Governmental Trust Fund Trust Funds Sub-total Funds $- $ - $ - $ 1,090,181 - - - 2,535 - - - 1,882,761 - - - 534,256 - - - 430,473 12,450 5,000 17,450 811,760 - - - 150,912 - 27,547 27,547 48,403 12,450 32,547 44,997 4,951,281 - - - 569,590 - - - 116,880 - 250 250 2,903,902 - 3,898 3,898 531,957 - - - 44,366 16,004 - 16,004 559,321 - - - 271,225 16,004 4,148 20,152 4,997,241 (3,554) 28,399 24,845 (45,960) - - - 1,126,048 (30,000) (2,000) (32,000) (171,238) (30,000) (2,000) (32,000) 954,810 (33,554) 26,399 (7,155) 908,850 1,524,937 883,301 2,408,238 8,649,236 $ 1,491,383 $ 909,700 $ 2,401,083 $ 9,558,086 (Concluded) Permanent Funds Town of Cohasset, Massachusetts 99 Comprehensive Annual Financial Report Town of Cohasset, Massachusetts 100 Comprehensive Annual Financial Report Agency Fund Agency Fund The Agency Fund is used to account for assets held in a purely custodial capacity. The Town’s agency funds consist of off-duty work details, payroll withholdings, performance bonds, and fees collected on behalf of other governments. AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES YEAR ENDED JUNE 30, 2015 Beginning End of Year Additions Deletions of Year Cash and cash equivalents……………$ 632,778 $ 441,887 $ (447,795) $ 626,870 Special details receivables…………… 91,014 747,508 (637,896) 200,626 TOTAL ASSETS……………………………$ 723,792 $ 1,189,395 $ (1,085,691) $ 827,496 Accrued liabilities………………………$ 18,634 $ 28,570 $ (18,634) $ 28,570 Payroll withholdings…………………… 473,935 416,136 (358,334) 531,737 Liabilities due depositors……………… 231,223 744,689 (708,723) 267,189 TOTAL LIABILITIES………………………$ 723,792 $ 1,189,395 $ (1,085,691) $ 827,496 ASSETS LIABILITIES Town of Cohasset, Massachusetts 101 Comprehensive Annual Financial Report Town of Cohasset, Massachusetts 102 Comprehensive Annual Financial Report This page intentionally left blank. Statistical Section Cohasset Foam Day                      Town of Cohasset, Massachusetts 103 Comprehensive Annual Financial Report Statistical Section This part of the Town of Cohasset’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the Town’s overall financial health. Financial Trends • These schedules contain trend information to help the reader understand how the Town’s financial performance and well-being have changed over time. Revenue Capacity • These schedules contain information to help the reader assess the Town’s most significant local revenue source, the property tax. Debt Capacity • These schedules present information to help the reader assess the affordability of the Town’s current levels of outstanding debt and the Town’s ability to issue additional debt in the future. Demographic and Economic Information • These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town’s financial activities take place. Operating Information • These schedules contain service and infrastructure data to help the reader understand how the information in the Town’s financial report relates to the services the Town provides and the activities it performs. SOURCES: Unless otherwise noted, the information in these schedules is derived from the Town’s financial reports for the relevant year. Statistical Section 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Governmental activitiesNet investment in capital assets…………………………$ 39,898,511 $ 48,068,232 $ 50,643,262 $ 51,522,827 $ 51,634,686 $ 52,393,141 $ 45,256,816 $ 45,149,347 $ 45,942,136 $ 46,801,586 Restricted………………………………………………… 3,730,297 5,834,583 3,913,860 4,516,539 5,582,944 6,107,623 4,904,201 5,941,619 6,742,197 6,995,791 Unrestricted……………………………………………… 4,304,057 5,216,169 5,134,722 2,953,254 1,356,625 (867,326) 2,963,690 2,578,655 (13,865,740) (13,575,380) Total governmental activities net position…………………$ 47,932,865 $ 59,118,984 $ 59,691,844 $ 58,992,620 $ 58,574,255 $ 57,633,438 $ 53,124,707 $ 53,669,621 $ 38,818,593 $ 40,221,997 Business-type activitiesNet investment in capital assets…………………………$ 22,264,775 $ 19,555,307 $ 15,134,636 $ 14,652,348 $ 18,013,611 $ 30,478,145 $ 23,986,222 $ 23,598,624 $ 24,552,663 $ 25,773,697 Restricted………………………………………………… 711,110 - - 4,824,658 - - - - - - Unrestricted……………………………………………… (735,417) 326,249 4,809,853 498,502 2,446,486 1,593,511 13,812,098 14,040,400 13,279,974 13,128,471 Total business-type activities net position…………………$ 22,240,468 $ 19,881,556 $ 19,944,489 $ 19,975,508 $ 20,460,097 $ 32,071,656 $ 37,798,320 $ 37,639,024 $ 37,832,637 $ 38,902,168 Primary governmentNet investment in capital assets…………………………$ 62,163,286 $ 67,623,539 $ 65,777,898 $ 66,175,175 $ 69,648,297 $ 82,871,286 $ 69,243,038 $ 68,747,971 $ 70,494,799 $ 72,575,283 Restricted………………………………………………… 4,441,407 5,834,583 3,913,860 9,341,197 5,582,944 6,107,623 4,904,201 5,941,619 6,742,197 6,995,791 Unrestricted……………………………………………… 3,568,640 5,542,418 9,944,575 3,451,756 3,803,111 726,185 16,775,788 16,619,055 (585,766) (446,909) Total primary government net position……………………$ 70,173,333 $ 79,000,540 $ 79,636,333 $ 78,968,128 $ 79,034,352 $ 89,705,094 $ 90,923,027 $ 91,308,645 $ 76,651,230 $ 79,124,165 Last Ten YearsNet Position By ComponentTown of Cohasset, Massachusetts104Comprehensive Annual Financial Report 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Expenses Governmental activities: Administration…………………………………………………$ 2,270,168 $ 2,411,532 $ 2,247,822 $ 2,077,306 $ 2,996,631 $ 3,194,742 $ 3,664,574 $ 3,447,387 $ 3,680,617 $ 3,997,974 Public safety………………………………………………… 5,083,546 5,064,012 5,241,554 5,603,698 6,078,695 6,622,695 6,643,418 6,455,507 6,623,281 6,991,258 Education……………………………………………………… 20,135,117 21,182,820 22,824,221 24,592,648 24,660,716 25,743,937 26,247,926 27,666,185 28,305,008 27,464,152 Public works………………………………………………… 2,308,523 2,985,226 3,000,931 3,303,838 3,319,593 3,740,913 3,014,490 3,378,422 3,476,400 4,136,781 Health and human services………………………………… - - - - 534,902 537,404 582,648 1,924,232 743,217 735,795 Culture and recreation……………………………………… 1,276,040 1,018,967 1,463,622 2,149,442 1,573,707 1,125,988 1,542,483 1,543,186 1,582,372 1,673,178 Community preservation…………………………………… 134,102 698,478 979,560 389,070 - - 46,183 161,798 438,778 271,225 Interest………………………………………………………… 2,012,455 1,240,749 1,728,188 1,138,051 902,237 921,343 1,244,644 1,146,440 966,501 810,989 Total governmental activities expenses……………………… 33,219,951 34,601,784 37,485,898 39,254,053 40,066,481 41,887,022 42,986,366 45,723,157 45,816,174 46,081,352 Business-type activities: Water and Sewer…………………………………………… 4,594,389 4,931,421 4,872,635 - - - - - - - Sewer………………………………………………………… - - - 2,574,878 3,247,261 4,165,164 2,810,623 2,741,823 2,379,793 2,315,178 Water………………………………………………………… - - - 3,107,783 4,058,435 4,339,973 3,937,565 3,796,075 3,553,676 3,447,642 Total business-type activity expenses………………………… 4,594,389 4,931,421 4,872,635 5,682,661 7,305,696 8,505,137 6,748,188 6,537,898 5,933,469 5,762,820 Total primary government expenses…………………………$ 37,814,340 $ 39,533,205 $ 42,358,533 $ 44,936,714 $ 47,372,177 $ 50,392,159 $ 49,734,554 $ 52,261,055 $ 51,749,643 $ 51,844,172 Program Revenues Governmental activities: Charges for services: Administration………………………………………………$ 557,733 $ 590,840 $ 608,963 $ 568,125 $ 326,584 $ 360,593 $ 495,669 $ 570,288 $ 594,218 $ 685,031 Public safety charges for services……………………… 780,673 619,502 542,269 728,561 1,123,285 1,147,747 878,441 954,524 1,034,736 1,058,895 Education charges for services………………………… 813,769 1,134,297 1,046,450 1,111,911 1,111,911 1,145,164 975,482 1,064,381 1,090,505 1,129,365 Public works charges for services……………………… 826,425 345,301 348,594 332,941 338,641 178,356 238,427 314,016 303,932 292,558 Health and human Services……………………………… - - - - 16,103 21,499 46,623 44,208 37,433 32,907 Culture and recreation…………………………………… 171,910 192,252 220,554 329,764 306,237 332,205 77,414 15,219 20,849 10,000 Operating grants and contributions………………………… 5,270,910 6,150,388 5,937,188 6,549,047 7,839,025 6,417,307 7,713,034 9,315,471 8,814,016 7,583,649 Capital grants and contributions…………………………… 1,762,729 252,305 621,442 1,118,972 470,782 662,105 928,013 517,534 470,004 695,888 Total government activities program revenues...…………… 10,184,149 9,284,885 9,325,460 10,739,321 11,532,568 10,264,976 11,353,103 12,795,641 12,365,693 11,488,293 Business-type activities: Charges for services: Water and Sewer………………………………………… 2,917,392 3,231,311 4,317,447 - - - - - - - Sewer……………………………………………………… - - - 1,132,954 3,994,707 1,684,014 2,175,548 1,936,177 1,840,085 1,807,723 Water……………………………………………………… - - - 3,103,861 938,375 4,732,701 5,102,955 4,562,181 4,507,575 5,143,208 Capital grants and contributions…………………………… 2,474,295 711,849 729,889 521,528 772,599 13,875,299 222,911 37,676 4,152 - Total business-type activities program revenues...………… 5,391,687 3,943,160 5,047,336 4,758,343 5,705,681 20,292,014 7,501,414 6,536,034 6,351,812 6,950,931 Total primary government program revenues………………$ 15,575,836 $ 13,228,045 $ 14,372,796 $ 15,497,664 $ 17,238,249 $ 30,556,990 $ 18,854,517 $ 19,331,675 $ 18,717,505 $ 18,439,224 Net (Expense)/Revenue Governmental activities…………………………………………$ (23,035,802) $ (25,316,899) $ (28,160,438) $ (28,514,732) $ (28,533,913) $ (31,622,046) $ (31,633,263) $ (32,927,516) $ (33,450,481) $ (34,593,059) Business-type activities………………………………………… 797,298 (988,261) 174,701 (924,318) (1,600,015) 11,786,877 753,226 (1,864) 418,343 1,188,111 Total primary government net expense………………………$ (22,238,504) $ (26,305,160) $ (27,985,737) $ (29,439,050) $ (30,133,928) $ (19,835,169) $ (30,880,037) $ (32,929,380) $ (33,032,138) $ (33,404,948) General Revenues and other Changes in Net Position Governmental activities: Real estate, personal property taxes and tax liens, net of tax refunds payable………………………………$ 23,424,245 $ 24,008,846 $ 25,363,080 $ 26,301,119 $ 27,205,991 $ 28,117,764 $ 29,542,428 $ 30,668,230 $ 31,786,548 $ 33,093,668 Motor vehicle and other excise taxes…………………… 1,224,023 1,255,031 1,301,850 1,125,863 1,083,885 1,115,676 1,162,053 1,299,064 1,396,984 1,539,272 Community preservation tax…………….…………..…… 304,681 323,669 329,500 347,755 289,045 364,940 388,279 402,419 416,990 436,967 Penalties and interest on taxes…………………….…… - - - 157,070 199,216 118,155 206,230 243,820 189,395 166,014 Grants and contributions not restricted to specific programs………………………………………… 577,815 1,097,648 1,281,172 577,913 478,507 531,931 507,739 441,823 445,448 457,801 Unrestricted investment income………………………… 677,962 652,672 345,926 261,154 289,538 353,846 109,608 239,803 426,962 147,933 Transfers…………………………………………………… (1,016,395) (474,475) 111,770 (440,022) (1,430,634) (729,614) (172,726) 177,271 152,423 154,808 Total governmental activities………………………………… 25,192,331 26,863,391 28,733,298 28,330,852 28,115,548 29,872,698 31,743,611 33,472,430 34,814,750 35,996,463 Business-type activities: Unrestricted investment income (loss)………………… - - - - - - 6,862 19,839 39,862 36,228 Transfers…………………………………………………… 1,016,395 474,475 (111,770) 440,022 1,430,634 729,614 172,726 (177,271) (152,423) (154,808) Total business-type activities………………………………… 1,016,395 474,475 (111,770) 440,022 1,430,634 729,614 179,588 (157,432) (112,561) (118,580) Total primary government………………………………………$ 26,208,726 $ 27,337,866 $ 28,621,528 $ 28,770,874 $ 29,546,182 $ 30,602,312 $ 31,923,199 $ 33,314,998 $ 34,702,189 $ 35,877,883 Changes in Net Position Governmental activities…………………………………………$ 2,156,529 $ 1,546,492 $ 572,860 $ (183,880) $ (418,365) $ (1,749,348) $ 110,348 $ 544,914 $ 1,364,269 $ 1,403,404 Business-type activities………………………………………… 1,813,693 (513,786) 62,931 (484,296) (169,381) 12,516,491 932,814 (159,296) 305,782 1,069,531 Total primary government…………………………………...…$ 3,970,222 $ 1,032,706 $ 635,791 $ (668,176) $ (587,746) $ 10,767,143 $ 1,043,162 $ 385,618 $ 1,670,051 $ 2,472,935 Notes: Health and human services were combined with Culture and recreation prior to FY2009. Water and Sewer activities were combined prior to FY2009. Changes in Net Position Last Ten Years Town of Cohasset, Massachusetts 105 Comprehensive Annual Financial Report 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015General FundReserved………………………………$ 1,398,543 $ 1,064,656 $ 946,813 $ 650,882 $ 635,676 $ - $ - $ - $ - $ - Unreserved…………………………… 1,076,403 1,311,271 598,305 366,706 328,674 - - - - - Committed……………………………… - - - - - - 563,210 481,523 481,240 471,938 Assigned……………………………… - - - - - 261,659 100,724 177,296 161,245 351,097 Unassigned…………………………… - - - - - 1,654,551 2,194,199 3,080,514 4,640,534 5,195,715 Total general fund……………………… $ 2,474,946 $ 2,375,927 $ 1,545,118 $ 1,017,588 $ 964,350 $ 1,916,210 $ 2,858,133 $ 3,739,333 $ 5,283,019 $ 6,018,750 All Other Governmental FundsUnreserved, reported in:Special revenue funds………………$ 3,202,480 $ 4,292,742 $ 4,171,263 $ 4,686,206 $ 4,447,470 $ - $ - $ - $ - $ - Capital projects funds……………… 980,428 378,213 347,869 1,564,003 1,547,657 - - - - - Permanent funds…………………… 1,360,685 1,078,638 929,869 470,507 602,861 - - - - - Nonspendable………………………… - - - - - 223,414 223,414 223,414 424,735 424,735 Restricted……………………………… - - - - - 7,091,227 6,121,494 7,777,139 8,224,501 9,133,351 Unassigned…………………………… - - - - - (216,907) - - - - Total all other governmental funds…. $ 5,543,593 $ 5,749,593 $ 5,449,001 $ 6,720,716 $ 6,597,988 $ 7,097,734 $ 6,344,908 $ 8,000,553 $ 8,649,236 $ 9,558,086 The Town implemented GASB 54 in year 2011, fund balances prior to year 2011 have been reported in the pre-GASB 54 format.Last Ten YearsFund Balances, Governmental FundsTown of Cohasset, Massachusetts106Comprehensive Annual Financial Report 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Revenues:Real estate, personal property taxes and tax liens, net of tax refunds……………………………………………$ 23,546,983 $ 24,024,445 $ 25,068,139 $ 26,358,347 $ 26,911,817 $ 28,288,869 $ 29,566,547 $ 30,728,408 $ 31,740,271 $ 33,054,033 Motor vehicle and other excise taxes……………………… 1,226,999 1,255,148 1,284,858 1,151,630 1,013,543 1,141,926 1,145,219 1,323,667 1,423,062 1,561,442 Licenses, permits, and fees…………………………………… 351,226 353,125 353,673 354,247 478,108 543,407 1,286,403 1,572,712 1,588,933 1,628,690 Penalties and interest on taxes……………………………… 171,559 113,820 165,983 157,070 199,216 118,155 206,230 243,820 189,395 166,014 Fines and Fees………………………………………………… 38,061 62,852 38,255 31,905 66,214 41,603 26,240 36,648 52,336 36,523 Charges for services…………………………………………… - - - - - - 975,618 1,065,228 1,091,101 1,090,181 Intergovernmental……………………………………………… 7,776,899 7,291,370 11,852,317 7,902,111 6,815,415 7,283,379 8,276,896 7,869,826 9,043,567 7,644,901 Departmental and other……………………………………… 2,704,598 2,420,899 2,353,281 2,611,334 3,401,009 2,541,449 1,097,591 624,797 685,874 849,262 Community preservation taxes……………………………… 304,681 323,669 329,500 347,755 289,045 364,940 386,736 406,634 416,852 430,473 Contributions…………………………………………………… 180,668 434,322 359,123 343,821 1,231,690 327,964 685,050 1,199,670 712,636 811,760 Special assessments………………………………………… - - - - - - 543,308 528,928 588,606 554,695 Investment income…………………………………………… 506,749 652,672 345,926 261,154 289,538 353,846 101,859 239,803 426,962 147,933 Total revenue…………………………………………………… 36,808,423 36,932,322 42,151,055 39,519,374 40,695,595 41,005,538 44,297,697 45,840,141 47,959,595 47,975,907 Expenditures: Administration………………………………………………… 1,664,174 1,730,736 1,948,258 2,021,005 2,371,786 2,233,776 2,928,984 2,752,661 2,872,276 3,094,345 Public safety…………………………………………………… 3,964,118 3,944,044 4,015,495 4,252,024 4,674,695 4,584,957 4,423,141 4,676,241 4,980,413 4,908,286 Education……………………………………………………… 14,192,150 14,900,817 16,140,775 16,866,182 17,614,538 17,678,808 17,790,989 18,395,033 18,736,662 20,039,676 Public works…………………………………………………… 3,021,611 3,390,864 4,318,823 3,566,755 2,432,446 3,144,958 2,274,672 2,239,202 2,737,423 3,289,689 Health and welfare…………………………………………… - - - - 361,930 384,277 477,299 1,788,316 602,257 579,058 Culture and recreation………………………………………… 1,101,642 1,165,866 1,321,206 1,317,249 2,121,394 903,198 1,130,054 1,159,141 1,189,344 1,244,446 Pension benefits……………………………………………… 3,240,289 3,576,981 3,689,572 3,913,458 4,154,230 4,577,048 4,432,165 4,819,457 4,943,764 3,611,380 Employee benefits…………………………………………… 2,391,472 2,613,612 2,901,546 2,754,754 2,891,482 2,777,999 3,570,122 4,022,985 4,191,000 4,366,746 Community preservation……………………………………… 134,102 698,476 979,560 389,070 278,054 295,713 207,144 161,798 438,778 271,225 State and county charges…………………………………… 890,940 1,075,608 1,079,456 1,069,319 1,036,228 988,613 973,754 922,630 937,872 1,015,079 Debt service Principal……………………………………………………… 1,838,463 2,028,833 2,278,880 1,954,979 1,838,109 2,034,985 3,264,323 2,925,391 3,303,933 3,219,630 Interest……………………………………………………… 2,420,768 1,451,637 1,841,793 1,075,004 1,015,231 921,343 1,152,362 1,332,712 985,927 846,574 Total expenditures…………………………………………… 34,859,729 36,577,474 40,515,364 39,179,799 40,790,123 40,525,675 42,625,009 45,195,567 45,919,649 46,486,134 Excess (deficiency) of revenues over (under) expenditures……………………………………… 1,948,694 354,848 1,635,691 339,575 (94,528) 479,863 1,672,688 644,574 2,039,946 1,489,773 Other financing sources (uses): Premium from issuance of bonds…………………………… - - - - - - 7,749 - - - Proceeds from issuance of long-term debt………………… - - 1,089,751 1,360,000 1,349,196 - - 1,715,000 - - Issuance of refunding bonds………………………………… - - - - - - 9,039,000 696,450 - - Premium from issuance of refunding bonds………………… - - - - - - 1,063,518 41,802 - - Payment to refunded bond escrow agent…………………… - - - - - - (9,973,238) (738,252) - - Payments of current refunded debt………………………… - - (3,974,951) - - - (200,000) - - - Transfers in…………………………………………………… 2,513 556,532 414,857 348,660 487,366 632,099 1,726,682 809,333 890,222 1,483,532 Transfers out…………………………………………………… (1,018,908) (1,031,007) (303,087) (788,682) (1,918,000) (1,361,713) (1,899,408) (632,062) (737,799) (1,328,724) Total other financing sources (uses)…………………………… (1,016,395) (474,475) (2,773,430) 919,978 (81,438) (729,614) (235,697) 1,892,271 152,423 154,808 Net change in fund balance…………………………………… $ 932,299 $ (119,627) $ (1,137,739) $ 1,259,553 $ (175,966) $ (249,751) $ 1,436,991 $ 2,536,845 $ 2,192,369 $ 1,644,581 Debt service as a percentage of noncapital expenditures…… 12.68% 10.67% 11.32% 8.09% 7.41% 7.48% 11.04% 9.55% 9.53% 8.88%Note: Charges for services were reported as departmental revenue prior to FY2012.Last Ten YearsChanges in Fund Balances, Governmental FundsTown of Cohasset, Massachusetts107Comprehensive Annual Financial Report Assessed and Actual Values and Tax Rates Total Commercial Total Residential Residential Commercial Industrial Personal Commercial Commercial % of Town Year Value Tax Rate Value Value Property Value Tax Rate Total Value Value 2006 $2,026,040,247 $10.84 $126,445,894 $8,501,300 $12,159,982 $147,107,176 $10.84 6.8% $2,173,147,423 2007 $2,167,447,677 $10.50 $136,912,204 $7,685,900 $11,984,202 $156,582,306 $10.50 6.7% $2,324,029,983 2008 (1) $2,238,249,282 $10.60 $139,764,272 $9,809,100 $15,297,550 $164,870,922 $10.60 6.9% $2,403,120,204 2009 $2,285,017,876 $10.78 $142,386,023 $9,809,100 $17,961,230 $170,156,353 $10.78 6.9% $2,455,174,229 2010 $2,265,856,922 $11.22 $144,324,020 $9,809,100 $18,749,710 $172,882,830 $11.22 7.1% $2,438,739,752 2011 (1) $2,260,416,269 $11.59 $147,290,135 $10,439,000 $22,156,220 $179,885,355 $11.59 7.4% $2,440,301,624 2012 $2,289,907,980 $11.98 $152,768,381 $468,500 $22,610,360 $175,847,241 $11.98 7.1% $2,465,755,221 2013 $2,344,387,276 $12.20 $153,133,804 $526,500 $23,478,670 $177,138,974 $12.20 7.0% $2,521,526,250 2014 (1) $2,364,598,033 $12.54 $153,369,768 $526,500 $23,783,160 $177,679,428 $12.54 7.0% $2,542,277,461 2015 $2,423,560,624 $12.71 $165,225,922 $1,070,900 $23,639,620 $189,936,442 $12.71 7.3% $2,613,497,066 (1) Revaluation year. Source: Assessor's Department, Town of Cohasset and Official Statements. All property in the Commonwealth of Massachusetts is assessed at 100% of fair cash value. Note: Chapter 59, Section 21C of the Massachusetts General Laws, known as "Proposition 2 1/2", imposes 2 separate limits on the annual tax levy of the Town. The primary limitation is that the tax levy cannot exceed 2 1/2 percent of the full and fair cash value. The secondary limitation is that the tax levy cannot exceed the maximum levy limit for the preceding year as determined by the State Commissioner of Revenue by more than 2 1/2 percent, subject to an exception for property added to the tax rolls and for certain substantial valuation increases other than as part of a general revaluation. The secondary limit may be exceeded in any year by a majority vote of the voters, however it cannot exceed the primary limitation. Assessed Value and Actual Value of Taxable Property by Classification and Tax Rates Last Ten Years 93% 6%0%1% Total Assessed Value by Classification Year Ended June 30, 2015 Residential Commercial Industrial Personal Property 93% 6%0%1% Total Assessed Value by Classification Year Ended June 30, 2014 Residential Commercial Industrial Personal Property 6.4% 6.5% 6.6% 6.7% 6.8% 6.9% 7.0% 7.1% 7.2% 7.3% 7.4% 7.5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Commercial Value as % of Total Value Town of Cohasset, Massachusetts 108 Comprehensive Annual Financial Report Principal Taxpayers Current Year and Nine Years AgoPercentage of Percentage ofTotal Taxable Total TaxableNature of Assessed Assessed Assessed AssessedName BusinessValuation RankValueValuation RankValueAvalon Cohasset Inc. Residential 50,000,400$ 1 1.91% -$ -Minot International Residential 17,535,800 2 0.67% - -AG-WP Cohasset LLC Residential 14,374,700 3 0.55% - -Roy, Peter A Retail 11,951,200 4 0.46% 8,021,100 4 0.37%Staszko, Donald E & Opray, Barbara Residential 10,126,500.00 5 0.39% 9,410,000 2 0.43%Connell Cohasset LLC Retail 9,750,800 6 0.37% - -Hingham Lumber Company Inc. Residential 9,568,600 7 0.37% 8,275,900 3 0.38%Toll MA Land Ltd. Partnership Residential/Retail 8,703,100 8 0.33% - -Chute, Ruth Residential 8,678,700 9 0.33% - -Roy, Mary L. Retail 7,701,500 10 0.29% 5,509,800 8 0.25%CSDV Limited Partnership Retail - - 9,471,500 1 0.44%Metropolitan/Cohasset Senior Housing Assisted Living - - 8,021,100 5 0.37%Cohasset Golf Club Country Club - - 5,764,823 6 0.27%Tedeschi Realty Corp Retail - - 5,697,400 7 0.26%Sarro Realty Trust/Ordelheide Residential - - 5,010,100 9 0.23%Cohasset Development Trust Inn - - 4,918,900 10 0.23%Totals148,391,300$ 5.68% 70,100,623$ 3.23%Source: Official Statements, Town of Cohasset2015 2006Town of Cohasset, Massachusetts109Comprehensive Annual Financial Report Percent ofLess First Year Percent of Delinquent Total Total TaxTotal Abatements & Net Net as % Current Net Levy Tax Tax Collections toYear Tax Levy Exemptions Tax Levy of Total Tax Collections Collected Collections Collections Net Tax Levy2006 $23,556,918 $209,277 $23,347,641 99.11% $23,161,301 99.20% $184,999 $23,346,300 99.99%2007 $24,402,315 $300,000 $24,102,315 98.77% $23,722,764 98.43% $350,285 $24,073,049 99.88%2008 (1) $25,473,074 $200,161 $25,272,913 99.21% $24,778,582 98.04% $461,236 $25,239,818 99.87%2009 $26,466,778 $226,467 $26,240,311 99.14% $25,909,543 98.74% $330,665 $26,240,208 100.00%2010 $27,362,660 $193,471 $27,169,189 99.29% $26,682,972 98.21% $471,009 $27,153,981 99.94%2011 (1) $28,284,096 $137,105 $28,146,991 99.52% $27,767,687 98.65% $379,126 $28,146,813 100.00%2012 $29,539,748 $158,733 $29,381,015 99.46% $28,827,046 98.11% $304,413 $29,131,459 99.15%2013 $30,762,620 $145,021 $30,617,599 99.53% $30,225,220 98.72% $151,290 $30,376,510 99.21%2014 (1) $31,880,160 $192,772 $31,687,388 99.40% $31,155,908 98.32% $461,911 $31,617,819 99.78%2015 $33,217,548 $141,026 $33,076,522 99.58% $32,545,881 98.40% $0 $32,545,881 98.40% (1) Revaluation year.Source: Assessor's Department and Official Statements, Town of CohassetProperty Tax Levies and CollectionsLast Ten Years$0$5,000,000$10,000,000$15,000,000$20,000,000$25,000,000$30,000,000$35,000,0002006 2007 2008 2009 2010 2011 2012 2013 2014 2015Real Estate Tax Levies vs. First Year CollectionsLast Ten YearsReal Estate Tax LevyFirst Year Current Tax CollectionsTown of Cohasset, Massachusetts110Comprehensive Annual Financial Report General Less Net General Percentage Percentage Percentage PercentageU. S. Census Personal Assessed Obligation Amounts Obligation Per of Personal of Assessed Per of Personal of AssessedYear Population Income Value Bonds Available (2) Bonds Capita Income Value Capita Income Value2006 7,640 629,451,000$ 2,173,147,423$ $29,311,242 ($1,096,092) $28,215,150 $3,837 4.66% 1.35% 3,693$ 4.48% 1.30%2007 7,525 716,627,000$ 2,324,029,983$ $27,316,455 ($1,035,198) $26,281,257 $3,630 3.81% 1.18% 3,493$ 3.67% 1.13%2008 7,617 627,893,000$ 2,403,120,204$ $22,177,463 ($974,304) $21,203,159 $2,912 3.53% 0.92% 2,784$ 3.38% 0.88%2009 7,777 539,625,000$ 2,455,174,229$ $21,622,991 ($913,410) $20,709,581 $2,780 4.01% 0.88% 2,663$ 3.84% 0.84%2010 7,874 455,330,000$ 2,438,739,752$ $21,134,078 ($852,516) $20,281,562 $2,684 4.64% 0.87% 2,576$ 4.45% 0.83%2011 7,846 528,494,000$ 2,440,301,624$ $18,784,897 ($791,622) $17,993,275 $2,394 3.55% 0.77% 2,293$ 3.40% 0.74%2012 7,490 539,280,000$ 2,465,755,221$ $28,375,584 ($730,728) $27,644,856 $3,788 5.26% 1.15% 3,691$ 5.13% 1.12%2013 7,895 629,121,000$ 2,521,526,250$ $28,043,018 ($669,834) $27,373,184 $3,552 4.46% 1.11% 3,467$ 4.35% 1.09%2014 7,870 655,067,320$ 2,542,277,461$ $24,587,105 ($608,940) $23,978,165 $3,124 3.75% 0.97% 3,047$ 3.66% 0.94%2015 8,195 672,879,824$ 2,613,497,066$ $21,223,504 (548,047) $20,675,457 $2,590 3.15% 0.81% 2,523$ 3.07% 0.79%Business-TypeActivities (1)General Total Net Percentage Percentage Percentage PercentageObligation Debt Debt Per of Personal of Assessed Per of Personal of AssessedYear Bonds Outstanding Outstanding Capita Income Value Capita Income Value2006 32,075,348$ $61,386,590 $60,290,498 $8,035 9.75% 2.82% $7,891 9.58% 2.77%2007 31,560,891$ $58,877,346 $57,842,148 $7,824 8.22% 2.53% $7,687 8.07% 2.49%2008 49,629,563$ $71,807,026 $70,832,722 $9,427 11.44% 2.99% $9,299 11.28% 2.95%2009 66,414,491$ $88,037,482 $87,124,072 $11,320 16.31% 3.59% $11,203 16.15% 3.55%2010 63,506,979$ $84,641,057 $83,788,541 $10,749 18.59% 3.47% $10,641 18.40% 3.44%2011 60,953,569$ $79,738,466 $78,946,844 $10,163 15.09% 3.27% $10,062 14.94% 3.24%2012 45,681,585$ $74,057,169 $73,326,441 $9,887 13.73% 3.00% $9,790 13.60% 2.97%2013 46,185,305$ $74,228,323 $73,558,489 $9,402 11.80% 2.94% $9,317 11.69% 2.92%2014 43,504,411$ $68,091,516 $67,482,576 $8,652 10.39% 2.68% $8,575 10.30% 2.65%2015 40,590,132$ $61,813,636 $61,265,589 $7,543 9.19% 2.37% $7,476 9.10% 2.34%(1) Water and Sewer Funds(2) Amounts available are restricted resources from the Massachusetts School Building Administration.Source: Audited Financial Statements, U. S. Census, Division of Local ServicesTotal Debt Outstanding Net Debt OutstandingTotal Primary GovernmentRatios of Outstanding Debt and General Bonded DebtLast Ten YearsGovernmental ActivitiesGeneral Obligation Bonds Net General Obligation BondsTown of Cohasset, Massachusetts111Comprehensive Annual Financial Report Share of Debt Percentage Overlapping Town of Cohasset, Massachusetts Outstanding Applicable Debt Overlapping debt repaid with property taxes Norfolk County………………………………………………… $12,235,000 (a) 2.17% $ 129,245 Massachusetts Bay Transportation Authority……………… 5,499,988,000 (b) 0.11% 174,399 South Shore Regional Vocational School District…………… 805,000 (a) 1.16% 73,471 Subtotal, overlapping debt…………………………………………… 377,115 Total Town direct debt………………………………………………… 21,223,504 Total direct and overlapping debt…………………………………… $ 21,600,619 (a) Outstanding debt as of June 30, 2015 (b) MBTA debt outstanding is as of 5/30/14 (the 6/30/15 figure has not yet been made available). Source: Official Statement Town of Cohasset, Massachusetts Note: Overlapping governments are those that coincide, at least in part, with geographic boundaries of the Town. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the taxpayers of the Town. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the property taxpayers should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. The overlap of Norfolk county is set by the Commonwealth based on property valuations and for the School District the overlap represents the Town's students proportionate share compared to all students. As of June 30, 2015 Direct and Overlapping Governmental Activities Debt Town of Cohasset, Massachusetts 112 Comprehensive Annual Financial Report 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Equalized Valuation……………………………$ 2,173,147,423 $ 2,324,029,983 $ 2,403,120,204 $ 2,455,174,229 $ 2,438,739,752 $ 2,440,301,624 $ 2,465,755,221 $ 2,521,526,250 $ 2,542,277,461 $ 2,613,497,066 Debt Limit -5% of Equalized Valuation………$ 108,657,371 $ 116,201,499 $ 120,156,010 $ 122,758,711 $ 121,936,988 $ 122,015,081 $ 123,287,761 $ 126,076,313 $ 127,113,873 $ 130,674,853 Less: Outstanding debt applicable to limit………… 37,028,938 35,607,984 46,684,604 64,610,320 62,821,695 59,198,694 55,258,487 57,125,731 52,685,014 48,103,224 Legal debt margin…………………………$ 71,628,433 $ 80,593,515 $ 73,471,406 $ 58,148,391 $ 59,115,293 $ 62,816,387 $ 68,029,274 $ 68,950,582 $ 74,428,859 $ 82,571,629 Total debt applicable to the limit as a percentage of the limit………………… 34.08% 30.64% 38.85% 52.63% 51.52% 48.52% 44.82% 45.31% 41.45% 36.81%Source: Treasurer's Department, Town of CohassetLast Ten YearsComputation of Legal Debt MarginTown of Cohasset, Massachusetts113Comprehensive Annual Financial Report PerCapitaPopulation Personal Personal Median School UnemploymentYear Estimates Income Income Age Enrollment Rate2006 7,640 629,451,000$ 87,643$ 44 1,515 3.40%2007 7,525 716,627,000$ 99,962$ 44 1,489 3.30%2008 7,617 627,893,000$ 84,727$ 44 1,421 3.90%2009 7,777 539,625,000$ 71,549$ 44 1,466 6.60%2010 7,874 455,330,000$ 57,827$ 44 1,496 5.90%2011 7,846 528,494,000$ 67,358$ 44 1,535 5.00%2012 7,490 539,280,000$ 72,000$ 44 1,530 5.00%2013 7,895 629,121,000$ 83,416$ 44 1,594 4.50%2014 7,870 655,067,320$ 83,236$ 44 1,632 4.50%2015 8,084 672,879,824$ 83,236$ 44 1,614 4.00%Source: U. S. Census, Division of Local ServicesMedian age is based on most recent census dataDemographic and Economic StatisticsLast Ten YearsTown of Cohasset, Massachusetts114Comprehensive Annual Financial Report Nature Percentage of Percentage ofof Total Town Total TownEmployer Business Employees Rank Employment Employees Rank EmploymentSuper Stop & Shop Grocery Store 160 1 3.94% 160 1 4.54%Cohasset Harbor Resort Motel/Restaurant 157 2 3.87% - -Shaw's Grocery Store 120 3 2.96% 110 2 3.12%South Shore Music Circus Seasonal Entertainment 88 4 2.17% 80 3 2.27%Hingham Lumber Building Supplies 82 5 2.02% - -Golden Living Center Cohasset Rehabilitation Hospital 79 6 1.95% - -Sunrise Assisted Living Facility 64 7 1.58% 35 8 0.99%Red Lion Inn Inn/Restaurant 40 8 0.99% 50 6 1.42%Cohasset Knoll Skilled Nursing Rehabilitation Hospital - - 70 4 1.98%Kimball's By The Sea Motel/Restaurant - - 50 7 1.42%A.B.B. Optical Optical Lenses - - 60 5 1.70%790 19.47% 615 17.43%The Town only has information on eight of the largest employers.Source: Massachusetts Workplace Development Agency & the Town's personnel and department records.2015 2006Principal EmployersCurrent Year and Nine Years AgoTown of Cohasset, Massachusetts115Comprehensive Annual Financial Report 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Function Administration…………… 17 18 15 15 20 21 21 24 22 22 Police…………………… 109 116 128 185 109 112 87 89 102 96 Fire……………………… 27 22 30 25 27 27 35 36 35 33 Education……………… 344 358 344 349 336 332 334 337 345 313 Sewer…………………… 1 1 1 1 1 1 1 1 1 1 Public works…………… 27 27 27 25 26 27 25 25 25 27 Human services………… 12 12 11 12 11 10 13 14 12 12 Culture and recreation… 47 45 52 44 43 53 68 69 74 75 Total …………………… 584 599 608 656 573 583 584 595 616 579 Source: Town personnel records and various Town departments. Last Ten Years Full-time Equivalent Town Employees by Function Town of Cohasset, Massachusetts 116 Comprehensive Annual Financial Report Function/Program2006 2007 2008 2009 2010 2011 2012 2013 2014 2015AdministrationPopulation……………………………………………… 7,647 7,525 7,617 7,777 7,874 7,846 7,490 7,895 7,870 8,064 Registered voters, annual town election…………… 2,455 1,240 873 272 5,239 5,398 5,424 5,814 5,679 5,675 Town Clerk Births………………………………………………… 75 70 75 66 70 58 65 49 61 73 Marriages…………………………………………… 27 28 32 33 27 29 35 27 23 35 Deaths……………………………………………… 78 79 73 83 60 77 67 87 73 88 Police Accidents covered by an officer……………………. 163 147 161 133 155 133 140 160 158 165 Citations issued……………………………………… 846 1,246 904 768 1,825 2,401 1,739 928 1,571 1,133 Arrests………………………………………………… 80 102 105 144 104 113 115 151 167 141 Larcenies………………………………….…………… 100 111 96 75 73 89 80 56 76 87 Fire Total Reponses……………………………………… 2,242 2,283 2,289 2,515 2,108 2,086 2,218 2,154 1,418 2,357 Fire related calls……………………………………… 75 90 101 78 45 71 70 48 59 77 EMS/Rescue related calls………………………….. 991 935 890 967 937 930 953 1,001 715 1,019 Building Department Building permits issued……………………………… 420 419 426 335 301 407 304 388 398 421 Education Public school enrollment……………………………… 1,515 1,489 1,421 1,466 1,496 1,535 1,530 1,594 1,632 1,614 Public Works Cemetery Interments…………………………………………… 47 42 32 31 28 42 33 28 38 37 Water Service connections………………………...……… 2,414 2,430 2,449 2,433 2,467 2,492 2,512 2,567 2,571 2,580 Consumption in billions of gallons……………… 0.264 0.275 0.344 0.306 0.281 0.305 0.269 0.272 0.268 0.275Daily consumption in millions of gallons………… 0.722 0.753 0.941 0.838 0.771 0.836 0.736 0.745 0.734 0.754Sewer Service connections………………………...……… 861 867 874 1,031 1,134 1,274 1,385 1,538 1,559 1,562 Daily average collection (MGD)………………… 0.240 0.272 0.279 0.226 0.223 0.2393 0.224 0.277 .274 .279HighwayMiles of public road………………………………… 33.50 33.50 33.50 33.50 33.50 33.50 33.50 33.50 33.50 33.50 Human ServicesBoard of Health Permits/Septic……………………………………… 27 41 26 21 31 26 21 17 29 32 Council on AgingHome delivered meals…………………………… n/a n/a n/a 5,000 2,302 3,470 3,630 2,936 3,607 3,613 Transportation……………………………………… 3,170 2,621 3,116 3,820 4,209 4,510 5,031 4,369 3,024 3,699 Volunteer service hours…………………………… 5,960 6,960 7,304 7,831 8,304 9,235 7,752 7,755 10,697 8,558 Fitness/exercise program participants…………… 206 172 204 190 212 172 301 319 219 255 Recreation/social event participants……………… n/a 1,537 1,605 1,106 1,013 1,137 1,057 1,148 265 360 Libraries Volumes in collection………………………………… 65,724 65,223 66,319 62,306 64,924 70,364 68,404 67,396 222,020 220,014 Circulation…………………………………..………… 136,974 139,551 149,974 149,299 139,221 149,224 152,773 157,437 155,411 155,974 Program attendance………………………………… 4,371 4,913 5,441 5,962 6,314 7,067 8,454 9,683 10,636 10,675 Source: Various Town Departmentsn/a: Information not availableLast Ten YearsOperating Indicators by Function/ProgramTown of Cohasset, Massachusetts117Comprehensive Annual Financial Report Function/Program2006 2007 2008 2009 2010 2011 2012 2013 2014 2015AdministrationNumber of buildings…………….……… 1 1 1 1 1 1 1 1 1 1 PoliceNumber of stations……………………… 1 1 1 1 1 1 1 1 1 1 FireNumber of stations……………………… 1 1 1 1 1 1 1 1 1 1 Number of vehicles……………………… 8 8 8 10 10 10 10 10 10 10 EducationNumber of elementary schools………… 2 2 2 2 2 2 2 2 2 2 Number of middle schools……………… 1 1 1 1 1 1 1 1 1 1 Number of high schools………………… 1 1 1 1 1 1 1 1 1 1 Public WorksWater mains (miles)……………………… 31 31 31 46 46 46 46 46 46 46 Fire hydrants……………………………… 496 496 496 496 496 496 496 496 496 496 Sanitary sewers (miles)………………… 22 22 22 33 33 33 33 33 33 33 Number of wells………………………… 1 1 1 1 1 1 1 1 1 1 Number of water storage tanks………… 2 2 2 2 2 2 2 2 2 2 Number of pump stations……………… 9 9 9 9 9 9 9 9 9 9 Human ServicesSenior center…………………………… 1 1 1 1 1 1 1 1 1 1 Culture and RecreationRecreation building……………………… 1 1 1 1 1 1 1 1 1 1 Library…………………………………… 1 1 1 1 1 1 1 1 1 1 Source: Various Town Departments Last Ten YearsCapital Asset Statistics by Function/ProgramTown of Cohasset, Massachusetts118Comprehensive Annual Financial Report