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Home My WebLink About2017 Comprehensive Annual Financial ReportTOWN OF COHASSET, MASSACHUSETTS Comprehensive Annual Financial Report For the Year Ended June 30, 2017 Prepared By: The Fiscal Team TOWN OF COHASSET, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2017 Prepared by: The Fiscal Team Town of Cohasset, Massachusetts TOWN OF COHASSET, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2017 TABLE OF CONTENTS Introductory Section ...................................................................................................................................................... 1 Letter of Transmittal ..................................................................................................................................................... 3 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 ........................................................................................................................ 75 General Fund Budgetary Comparison Schedule ................................................................................................... 77 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual ...... 78 Pension Plan Schedules - Town ............................................................................................................................ 80 Schedule of the Town’s proportionate share of the net pension liability ............................................................ 81 Schedule of the Town contributions ................................................................................................................... 82 Schedule of the special funding amounts of the net pension liability ................................................................. 83 Other Postemployment Benefits Plan Schedules .................................................................................................. 84 Schedule of Town’s net OPEB Liability and Related Ratios .............................................................................. 85 Schedule of Town Contributions ......................................................................................................................... 86 Schedule of Investment Returns ........................................................................................................................ 87 Schedule of Funding Progress and Employer Contributions.............................................................................. 88 Actuarial Methods and Assumptions .................................................................................................................. 89 Notes to Required Supplementary Information ...................................................................................................... 90 Combining and Individual Fund Statements .............................................................................................................. 95 Nonmajor Governmental Funds ............................................................................................................................. 96 Nonmajor Governmental Funds – Combining Balance Sheet............................................................................ 98 Nonmajor Governmental Funds – Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................................................................................................................................... 102 Agency Fund ........................................................................................................................................................ 106 Agency Fund – Statement of Changes in Assets and Liabilities ...................................................................... 107 Statistical Section ...................................................................................................................................................... 109 Net Position By Component ..................................................................................................................................... 110 Changes in Net Position .......................................................................................................................................... 111 Fund Balances, Governmental Funds ..................................................................................................................... 112 Changes in Fund Balances, Governmental Funds .................................................................................................. 113 Assessed Value and Actual Value of Taxable Property by Classification and Tax Rates ....................................... 114 Principal Taxpayers ................................................................................................................................................. 115 Property Tax Levies and Collections ....................................................................................................................... 116 Ratios of Outstanding Debt and General Bonded Debt ........................................................................................... 117 Direct and Overlapping Governmental Activities Debt............................................................................................. 118 Computation of Legal Debt Margin .......................................................................................................................... 119 Demographic and Economic Statistics .................................................................................................................... 120 Principal Employers ................................................................................................................................................. 121 Full-Time Equivalent Town Employees by Function ................................................................................................ 122 Operating Indicators by Function/Program .............................................................................................................. 123 Capital Asset Statistics by Function/Program .......................................................................................................... 124 Introductory Section Cohasset Police Officer Jay St. Ives with his new friend, John, Photo: William Quigley recruiting for the police academy class of 2035. Town of Cohasset, Massachusetts 1 Comprehensive Annual Financial Report Introductory Section Town of Cohasset, Massachusetts 2 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 3 Comprehensive Annual Financial Report Letter of Transmittal Letter of Transmittal December 21, 2017 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, 2017 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, 2017, 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, 2017 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. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement that analysis and should be read in conjunction with it. The Town of Cohasset’s MD&A can be found immediately following the report of the independent auditors. 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. CHRISTOPHER G. SENIOR TOWN MANAGER EMAIL: csenior@cohassetma.org OFFICE: 781-383-4100 x5109 FAX: 781-383-0228 OFFICE OF THE TOWN MANAGER COHASSET TOWN HALL 41 HIGHLAND AVENUE COHASSET, MA 02025 Town of Cohasset, Massachusetts 4 Comprehensive Annual Financial Report 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 8,225 residents according to the 2016 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 3.5% in June, 2017 was 19% lower than the statewide average (according to data from the Mass. 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 MAPC 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 $108,063 is nearly three times the statewide average, according to the Mass. 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, and the Sunrise assisted living facility. The Cohasset Village district, which includes a mix of small businesses including restaurants, shops and realtors, continues to thrive, with two new restaurants opening during the past year. There are two new developments nearing completion in the district, one mixed use, the other residential, which will add 13 housing units and 3 business condominiums between them. 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 also influence the local economy. Cohasset now plays host to more than a dozen charitable and for-profit road race events, among them the Cohasset Triathlon which attracts 1,200 racers and supporters to Town, the Road Race by the Sea, a pre-Boston Marathon 10K event run since 1975, and a Town-sponsored Thanksgiving Day 5K which draws some 750 annual racers. In addition, the annual South Shore Arts Festival (sponsored by the South Shore Arts Center) brings thousands to the Town Common over a long weekend every June. Town of Cohasset, Massachusetts 5 Comprehensive Annual Financial Report Anchored by 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 Town’s transit-oriented development complex adjacent to the Cohasset Commuter Rail Station continues to thrive. Also including a juice bar, a gourmet wine store, a restaurant, a clothing store, a health club, a tutoring center, and sixteen living units, the facility is fully leased and a hub of commercial and residential activity. Two luxury residential subdivisions are also nearing completion in Town: a 41-unit complex of single-family homes being built by Toll brothers; and a 27-unit complex known as Cook Estates. In addition an upscale self- storage building is being developed on Route 3A near the Avalon Apartment complex. Financial Planning and Management Policy and Program Development The Town retained its AAA rating from the Standard & Poor’s rating agency during the fiscal year, as the Town’s financial management team, with strong support from volunteer boards and commissions, continued to update and adopt a series of financial policies, improving day-to-day management practices, and increasing transparency. Three electric vehicles joined the Town’s fleet as part of its Green Communities program. The acquisition of the three vehicles were primarily funded by a grant, which also paid for the installation of an electric vehicle charging station in the Town Hall parking lot. The Town received an additional $177,000 in Green Communities grant dollars for energy efficiency upgrades to municipal buildings during the year. In addition, work is nearing completion on a solar array on the Town’s capped landfill. When completed, the array will provide as much as 20% of the Town’s municipal energy usage. Efforts to reduce injury and property damage claims through improved training and adoption of best practices led to the Town’s receipt of an award for risk management from the Massachusetts Interlocal Insurance Association. In addition, Cohasset entered the Massachusetts Community Compact program, receiving $55,000 in grants to support IT security and to upgrade its GIS mapping system. Technology Planning and Implementation The Town completed work on its carrier-class fiber network, which has become the foundation for the installation of the Town’s first government-wide phone system. The VoIP phone network has dramatically improved both internal and external communication. The next major project for IT is the acquisition of a new e-permitting system for the Department of Permits and Inspections, with an installation target of mid FY 18. The full roll-out of digital learning to the Cohasset Middle/High School will take place at the start of the new school year, the culmination of a multi-year roll-out of 21st century classroom equipment across the Town’s school department. In addition, data security and reliability have been improved with the creation of twin data centers which provide real-time back-up for each other, as well as limiting external access to the network. Infrastructure Planning The Town completed work on a long-standing project to raise a regularly flooded stretch of Jerusalem Road out of the floodplain, and neared completion of a repair project on long-needed repairs to a culvert and water control structure under Beechwood Street, which also regulates the Town’s reservoir system. Partnership with MassDOT will bring the full replacement of the nearly 60-year-old Cunningham Bridge, with the State picking up nearly the entire cost for the $6.2 million project. Town of Cohasset, Massachusetts 6 Comprehensive Annual Financial Report A feasibility study on improvements to the historic Cohasset Town Hall has also begun. The building, originally constructed in 1857, with renovations in the 1920’s and the 1980’s, is part of the Cohasset Common Historic District, which is included in the National Register of Historic Places. The Town also acquired space for the Town’s Recreation Department, which has rapidly expanded programing over the past several years. This new space will allow for both indoor and outdoor recreational programs for children and adults. The vacated space at Town Hall has been merged into the Department of Permits and Inspections, bringing Conservation and Health into the combined office for the first time. 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, 2016. This was the fourth 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, Treasurer-Collector Paula Linhares, 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 Paul Schubert, Chairman 2018 Jack Keniley, Vice Chairman 2019 Diane Kennedy, Clerk 2020 Steve Gaumer, Selectman 2019 Kevin McCarthy, Selectman 2020 Moderator Daniel Evans 2020 Town Clerk Carol L. St. Pierre 2020 Board of Assessors Alyson A. Silvia 2020 Debra J. Krupczak 2019 Melissa Browne 2018 School Committee Jeanne M. Astino 2019 Katherine C. Dugan 2018 Ellen M. Maher 2018 Jennifer Madden 2020 Barbara Stefan 2019 Sewer Commission William B. McGowan, Jr. 2019 Wayne Sawchuk 2020 John Beck 2018 Water Commission Rolf N. Gjesteby 2020 Leonora C. Jenkins 2018 John W. Steinmetz 2019 Appointed Officials Town Manager Christopher G. Senior 2020 Director of Finance/Town Accountant Mary J. Gallagher Treasurer/Collector Paula M. Linhares Director of Assessing Mary Quill Superintendent of Schools Louise L. Demas Interim School Business Manager John Tuffy 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 Cunningham Bridge replacement project, funded Photo: William Quigley through a $6.2 million allocation from MassDOT . 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. 13 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, 2017, and the related notes to the financial statements, which collectively comprise the Town’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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, 2017, 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. 14 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 21, 2017, 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 21, 2017 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, 2017. 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 administrative services, 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. GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pensions Plans, was implemented this year. This standard added Note disclosures and Required Supplemental Information for the Town’s OPEB Trust fund. Its sister standard, GASB Statement No. 75, Accounting and Financial Reporting for Postemployment benefits Other Than Pensions, is required to be implemented in FY2018. This standard will affect the financial statements themselves by requiring the Town to record its OPEB assets, liabilities, and deferred financial statement elements for the first time. 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. Town of Cohasset, Massachusetts 19 Comprehensive Annual Financial Report 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 $43.0 million at the close of year 2017. The overall financial condition of the Town’s governmental activities remained stable during year 2017. Governmental net position of $50.1 million (117%), 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, $7.8 million (18%), 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 $15.0 million. This deficit balance is primarily due to the recognition of the $19.0 million net pension liability, as well as the $11.7 million other postemployment benefits liability. The governmental net position increased by $1.8 million during the current year primarily due to $1.1 million of positive budgetary results in the general fund, as well as the receipt of $689,000 of capital grant revenue. The governmental expenses totaled $51.8 million of which $14.0 million (27%) was directly supported by program revenues. General revenues and transfers totaled $39.6 million, primarily coming from property taxes, motor vehicle excise and non-restricted state aid. Condensed financial data for years 2017 and 2016 is presented below. 2017 2016 Assets: Current assets………………………………………………$ 23,372,071 $ 21,029,355 Noncurrent assets (excluding capital)…………………… 3,113,933 4,050,631 Capital assets, not being depreciated…………………… 8,235,076 7,627,196 Capital assets, net of accumulated depreciation……… 56,129,242 56,587,242 Total assets……………………………………………90,850,322 89,294,424 Deferred Outflows of Resources…………………………3,341,775 4,759,475 Liabilities: Current liabilities (excluding debt)……………………… 1,163,596 1,021,305 Noncurrent liabilities (excluding debt)…………………… 31,002,771 31,092,377 Current debt……………………………………………… 4,043,476 3,470,639 Noncurrent debt…………………………………………… 13,561,665 15,617,168 Total liabilities…………………………………………49,771,508 51,201,489 Deferred Inflows of Resources……………………………1,447,506 1,665,476 Net Position: Net investment in capital assets………………………… 50,120,485 48,845,082 Restricted…………………………………………………… 7,805,611 7,488,345 Unrestricted………………………………………………… (14,953,013) (15,146,493) Total net position……………………………………$42,973,083 $41,186,934 Town of Cohasset, Massachusetts 20 Comprehensive Annual Financial Report 2017 2016 Program revenues: Charges for services………………………………………$ 2,980,292 $ 3,331,816 Operating grants and contributions……………………… 10,318,668 8,817,175 Capital grants and contributions………………………… 689,367 328,686 General revenues: Real estate, personal property taxes, and tax liens…… 35,883,703 34,635,305 Motor vehicle and other excise taxes…………………… 1,832,408 1,556,866 Community preservation taxes…………………………… 480,755 454,855 Penalties and interest on taxes………………………… 135,455 280,132 Nonrestricted grants and contributions………………… 578,281 490,188 Unrestricted investment income………………………… 464,935 392,935 Total revenues…………………………………………53,363,864 50,287,958 Expenses: Administrative services…………………………………… 4,413,663 4,487,473 Public safety……………………………………………… 7,609,256 7,738,244 Education…………………………………………………… 31,221,840 29,217,508 Public works……………………………………………… 4,788,976 4,251,519 Health and welfare………………………………………… 847,136 863,580 Culture and recreation…………………………………… 2,260,471 2,062,098 Community preservation………………………………… 41,527 259,568 Interest……………………………………………………… 594,413 643,741 Total expenses……………………………………… 51,777,282 49,523,731 Excess (Deficiency) before transfers…………………… 1,586,582 764,227 Transfers………………………………………………………199,567 200,710 Change in net position……………………………………… 1,786,149 964,937 Net position, beginning of year…………………………… 41,186,934 40,221,997 Net position, end of year……………………………………$42,973,083 $41,186,934 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 2017. Business-type sewer net position of $17.6 million (63%) represents the net investment in capital assets, while $10.5 million (37%) is unrestricted. Net position decreased by $551,000 which is primarily due to the planned use of reserves. Business-type water net position of $10.1 million (79%) represents the net investment in capital assets, while $2.7 million (21%) is unrestricted. Net position increased by $1.4 million which was primarily due to debt principal payments on long-term debt exceeding depreciation expense. At the end of the current year all business-type activities were able to report positive balances in all categories of net position. The same situation held true for the prior year. Town of Cohasset, Massachusetts 21 Comprehensive Annual Financial Report Condensed financial data for years 2017 and 2016 is presented below. 2017 2016 Assets: Current assets……………………………………………$ 7,206,879 $ 6,669,537 Noncurrent assets (excluding capital)………………… 6,912,573 7,628,985 Capital assets, not being depreciated………………… 1,308,558 1,308,558 Capital assets, net of accumulated depreciation…… 61,884,389 63,274,184 Total assets…………………………………………77,312,399 78,881,264 Deferred outflows of resources…………………………585,530 29,705 Liabilities: Current liabilities (excluding debt)……………………… 492,022 397,495 Noncurrent liabilities (excluding debt)………………… 131,369 136,703 Current debt……………………………………………… 2,942,230 2,832,217 Noncurrent debt………………………………………… 33,378,947 35,553,820 Total liabilities………………………………………36,944,568 38,920,235 Deferred inflows of resources……………………………10,013 11,521 Net Position: Net investment in capital assets……………………… 27,744,000 26,675,077 Unrestricted……………………………………………… 13,199,348 13,304,136 Total net position…………………………………$40,943,348 $39,979,213 Program revenues: Charges for services - Sewer………………………… $ 1,728,175 $ 1,819,131 Charges for services - Water………………………… 5,089,666 5,385,579 Capital grants and contributions - Sewer……………… 12,300 - General Revenues: Unrestricted investment income……………………… 25,083 123,786 Total revenues………………………………………6,855,224 7,328,496 Expenses: Sewer………………………………………………..…… 2,218,405 2,466,017 Water………………………………………………..…… 3,473,117 3,584,724 Total expenses……………………………………… 5,691,522 6,050,741 Excess (Deficiency) before transfers………………… 1,163,702 1,277,755 Transfers……………………………………………………(199,567) (200,710) Change in net position…………………………………… 964,135 1,077,045 Net position, beginning of year………………………… 39,979,213 38,902,168 Net position, end of year…………………………………$40,943,348 $39,979,213 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 $6.7 million, assigned fund balance was $411,000, committed fund balance was $417,000 and total fund balance was $7.5 million. Unassigned fund balance represents 14% of total general fund expenditures, while total fund balance represents 16% of that same amount. The General Fund’s fund balance increased by $824,000 primarily due to positive operating results. 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 $3.5 million, the Facilities Stabilization fund is $2,511, the Capital Stabilization fund is $1.3 million, and the Special Education Stabilization fund is $264,000. 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 $533,000. Unexpended appropriations totaled $1.3 million of which $828,000 was carried forward to year 2018. During 2017, $180,000 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 $64.4 million which represented a net increase of $150,000 from the prior year. Major additions include Town-wide IT infrastructure upgrades, roadway improvements, as well as the ongoing Bound Brook culvert replacement. Enterprise capital assets, net of accumulated depreciation, were valued at $63.2 million at year end. Major additions during the year included various water system upgrades, as well as the repair of Bear Hill Water tank. Depreciation of $1.8 million was recorded in 2017. In order to take advantage of favorable interest rates the Town issued $9.5 million of General Obligation Refunding Bonds during 2017. $10.1 million of general obligation bonds were defeased as an advance refunding by placing the proceeds of the refunding 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. The Town has decreased its aggregate debt service payments by $912,540 and will experience an economic gain of $793,816. At June 30, 2017, $10.1 million of general obligation bonds outstanding are considered defeased. Town of Cohasset, Massachusetts 23 Comprehensive Annual Financial Report Outstanding long-term debt of governmental activities, as of June 30, 2017 totaled $17 million. In addition to the issuance of refunding bonds, $1.4 million of general obligation bonds were issued to finance the purchase of various equipment and infrastructure upgrades. The Water Enterprise fund had $25.1 million of long-term debt outstanding at year-end, a decrease of $1.2 million from the prior year. This decrease was due to the issuance of $9.1 million of refunding and general obligation bonds and a related premium of $1.3 million, offset by principal payments on long term debt of $11.5 million. The Sewer Enterprise fund had $11.3 million of long-term debt outstanding at year-end. In addition to the issuance of refunding bonds, offset by principal payments on long-term debt. Please refer to footnotes 4, 6, and 7 for further discussion of the major capital asset and debt activity. Requests for Information This financial report is designed to provide a general overview of the Town of Cohasset’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Finance Director, Town Hall, 41 Highland Avenue, Cohasset, Massachusetts 02025. Town of Cohasset, Massachusetts 24 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 25 Comprehensive Annual Financial Report Basic Financial Statements Town of Cohasset, Massachusetts 26 Comprehensive Annual Financial Report This page intentionally left blank. STATEMENT OF NET POSITION JUNE 30, 2017 Primary Government Governmental Business-type Activities Activities Total ASSETS CURRENT: Cash and cash equivalents…………………………………………………$ 12,984,803 $ 3,098,903 $ 16,083,706 Investments…………………………………………………………………… 7,171,781 1,562,587 8,734,368 Receivables, net of allowance for uncollectibles: Real estate, personal property and tax deferrals……………………… 405,282 - 405,282 Tax liens……………………………………...…………………………… 1,049,232 - 1,049,232 Motor vehicle and other excise taxes………………………………… 80,603 - 80,603 User charges……………………………………………………………… - 1,909,762 1,909,762 Departmental and other………………………………………………… 166,720 - 166,720 Special assessments…………………………………………………… 379,308 635,627 1,014,935 Intergovernmental………………………………………………………… 1,134,342 - 1,134,342 Total Current Assets……………………………………………………… 23,372,071 7,206,879 30,578,950 NONCURRENT: Receivables, net of allowance for uncollectibles: Special assessments…………………………………………………… 1,536,800 6,912,573 8,449,373 Intergovernmental………………………………………………………… 1,577,133 - 1,577,133 Capital assets, non depreciable…………………………….……………… 8,235,076 1,308,558 9,543,634 Capital assets, net of accumulated depreciation………………………… 56,129,242 61,884,389 118,013,631 Total Noncurrent Assets………………………………………………… 67,478,251 70,105,520 137,583,771 TOTAL ASSETS………………………………………………………………… 90,850,322 77,312,399 168,162,721 DEFERRED OUTFLOWS OF RESOURCES Deferred loss on refunding………………………………………………… 353,470 564,858 918,328 Deferred outflows of resources related to pensions……………………… 2,988,305 20,672 3,008,977 TOTAL DEFERRED OUTFLOWS OF RESOURCES……………………… 3,341,775 585,530 3,927,305 LIABILITIES CURRENT: Warrants payable…………………………………………………………… 747,567 218,431 965,998 Accrued payroll……………………………………………………………… 209,336 439 209,775 Accrued interest……………………………………………………………… 145,267 273,152 418,419 Landfill closure……………………………………………………………… 26,500 - 26,500 Capital lease obligations…………………………………………………… 34,926 - 34,926 Notes payable………………………………………………………………… 597,399 - 597,399 Bonds payable………………………………………………………………… 3,446,077 2,942,230 6,388,307 Total Current Liabilities…………………………………………………… 5,207,072 3,434,252 8,641,324 NONCURRENT: Landfill closure……………………………………………………………… 159,726 - 159,726 Capital lease obligations…………………………………………………… 113,278 - 113,278 Other postemployment benefits…………………………………………… 11,738,925 - 11,738,925 Net pension liability…………………………………………………………… 18,990,842 131,369 19,122,211 Bonds payable………………………………………………………………… 13,561,665 33,378,947 46,940,612 Total Noncurrent Liabilities………………………………………………… 44,564,436 33,510,316 78,074,752 TOTAL LIABILITIES……………………………………………………………… 49,771,508 36,944,568 86,716,076 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources related to pensions……………………… 1,447,506 10,013 1,457,519 NET POSITION Net investment in capital assets……………………………………………… 50,120,485 27,744,000 77,864,485 Restricted for: Debt service……………………………………………………...…………… 426,258 - 426,258 Permanent funds: Nonexpendable…………………………………………………………… 442,525 - 442,525 Expendable……….……………………………………………………… 2,116,414 - 2,116,414 Grants and gifts……………………………………………………………… 2,041,895 - 2,041,895 Community preservation…………………………………………………… 2,778,519 - 2,778,519 Unrestricted……………………………………………………………………… (14,953,013) 13,199,348 (1,753,665) TOTAL NET POSITION…………………………………………………………$ 42,973,083 $ 40,943,348 $ 83,916,431 See notes to basic financial statements. Town of Cohasset, Massachusetts 27 Comprehensive Annual Financial Report STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 Operating Capital Charges for Grants and Grants and Net (Expense) Functions/Programs Expenses Services Contributions Contributions Revenue Primary Government: Governmental Activities: Administrative services………………………$ 4,413,663 $ 552,000 $ 323,469 $ 230,857 $ (3,307,337) Public safety…………………………………… 7,609,256 1,071,160 128,228 - (6,409,868) Education……………………………………… 31,221,840 1,072,356 8,219,927 - (21,929,557) Public works…………………………………… 4,788,976 249,587 153,360 365,218 (4,020,811) Health and welfare…………………………… 847,136 21,025 276,195 - (549,916) Culture and recreation……………………… 2,260,471 14,164 1,006,585 - (1,239,722) Community preservation…………………… 41,527 - - 93,292 51,765 Interest………………………………………… 594,413 - 210,904 - (383,509) Total Governmental Activities……………… 51,777,282 2,980,292 10,318,668 689,367 (37,788,955) Business-Type Activities: Sewer…………………………………………… 2,218,405 1,728,175 - 12,300 (477,930) Water…………………………………………… 3,473,117 5,089,666 - - 1,616,549 Total Business-Type Activities…………… 5,691,522 6,817,841 - 12,300 1,138,619 Total Primary Government…………………$ 57,468,804 $ 9,798,133 $ 10,318,668 $ 701,667 $(36,650,336) See notes to basic financial statements.(Continued) Program Revenues Town of Cohasset, Massachusetts 28 Comprehensive Annual Financial Report STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2017 Governmental Business-Type Activities Activities Total Changes in net position: Net (expense) revenue from previous page………………………$(37,788,955) $1,138,619 $(36,650,336) General revenues: Real estate and personal property taxes, net of tax refunds……………………………………………… 35,883,703 - 35,883,703 Motor vehicle and other excise taxes………………………… 1,832,408 - 1,832,408 Community preservation tax………...………………………… 480,755 - 480,755 Penalties and interest on taxes………………………………… 135,455 - 135,455 specific programs……………………………………………… 578,281 - 578,281 Unrestricted investment income………………………………… 464,935 25,083 490,018 Transfers, net ………………………………………………………… 199,567 (199,567) - Total general revenues and transfers……………………………… 39,575,104 (174,484) 39,400,620 Change in net position………………………………………… 1,786,149 964,135 2,750,284 Net Position: Beginning of year……………...………………..………………… 41,186,934 39,979,213 81,166,147 End of year…………………………………………………………$ 42,973,083 $ 40,943,348 $ 83,916,431 See notes to basic financial statements.(Concluded) Primary Government Town of Cohasset, Massachusetts 29 Comprehensive Annual Financial Report GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2017 Nonmajor Total Governmental Governmental General Funds Funds ASSETS Cash and cash equivalents………………………………… $ 4,110,567 $ 8,874,236 $ 12,984,803 Investments…………………………………………………… 4,246,514 2,925,267 7,171,781 Receivables, net of uncollectibles: Real estate, personal property and tax deferrals ……… 405,282 - 405,282 Tax liens…………………………………….……………… 1,038,503 10,729 1,049,232 Motor vehicle and other excise taxes…………………… 80,603 - 80,603 Departmental and other…………………………………… 162,122 4,598 166,720 Special assessments……………………………………… 1,087,990 828,118 1,916,108 Intergovernmental………………………………………… 2,186,996 524,479 2,711,475 TOTAL ASSETS………………………………………………$ 13,318,577 $ 13,167,427 $ 26,486,004 LIABILITIES Warrants payable………………………………………… $ 624,410 $ 123,157 $ 747,567 Accrued payroll…………………………………………… 167,475 41,861 209,336 Notes payable……………………………………………… - 597,399 597,399 TOTAL LIABILITIES………………………………………… 791,885 762,417 1,554,302 DEFERRED INFLOWS OF RESOURCES Unavailable revenues……………………………………… 5,010,993 1,272,182 6,283,175 FUND BALANCES Nonspendable……………………………………………… - 442,525 442,525 Restricted…………………………………………………… - 10,690,303 10,690,303 Committed………………………………………………… 417,445 - 417,445 Assigned…………………………………………………… 410,837 - 410,837 Unassigned………………………………………………… 6,687,417 - 6,687,417 TOTAL FUND BALANCES…………………………………… 7,515,699 11,132,828 18,648,527 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES……………$ 13,318,577 $ 13,167,427 $ 26,486,004 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, 2017 Total governmental fund balances……………………………………………………………………… $ 18,648,527 Capital assets (net) used in governmental activities are not financial resources and, therefore, are not reported in the funds…………………………………………………… 64,364,318 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…………………………… 1,540,799 Accounts receivable are not available to pay for current-period expenditures and, therefore, are unearned in the funds……………………………………… 6,283,175 In the statement of activities, interest is accrued on outstanding long-term debt, whereas in governmental funds interest is not reported until due…………………………… (145,267) Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds Bonds payable……………………………………..…………………………………………… (16,645,666) Unamortized premium on bonds payable……………………………………………………… (362,076) Unamortized deferred loss on refunding……………………………………………………… 353,470 Capital lease financing…………………………………………………………………………… (148,204) Landfill closure…………………………………………………………………………………… (186,226) Other postemployment benefits………………………………………………………………… (11,738,925) Net pension liability……………………………………………………………………………… (18,990,842) Net effect of reporting long-term liabilities……………………………………………… (47,718,469) Net position of governmental activities………………………………………………………………… $ 42,973,083 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, 2017 Nonmajor Total Governmental Governmental General Funds Funds REVENUES: Real estate and personal property taxes, net of tax refunds………………………………………………$ 35,703,170 $ - $ 35,703,170 Motor vehicle and other excise taxes…………………………… 1,835,268 - 1,835,268 Fees and rentals…………………………………………………… 872,814 - 872,814 Penalties and interest on taxes…………………………………… 133,798 1,657 135,455 Fines and forfeitures……………………………………………… 25,226 - 25,226 Licenses and permits……………………………………………… 637,919 - 637,919 Charges for services……………………………………………… - 1,067,252 1,067,252 Intergovernmental………………………………………………… 8,224,836 2,048,749 10,273,585 Departmental and other…………………………………………… 305,927 491,169 797,096 Community preservation taxes…………………………………… - 473,928 473,928 Contributions……………………………………………………… - 1,142,682 1,142,682 Special assessments……………………………………………… 372,938 85,783 458,721 Investment income………………………………………………… 184,217 280,718 464,935 TOTAL REVENUES………………………………………… 48,296,113 5,591,938 53,888,051 EXPENDITURES: Current: Administrative services………………………………………… 3,023,538 1,869,112 4,892,650 Public safety…………………………………………………… 5,013,933 167,946 5,181,879 Education……………………………………………………… 18,200,850 2,910,729 21,111,579 Public works…………………………………………………… 2,887,771 1,251,926 4,139,697 Health and welfare……………………………………………… 507,370 136,986 644,356 Culture and recreation………………………………………… 730,277 993,346 1,723,623 Pension benefits………………………………………………… 6,159,043 - 6,159,043 Employee benefits……………………………………………… 6,035,065 - 6,035,065 Community preservation……………………………………… - 41,527 41,527 State and county charges………………………………………… 401,673 - 401,673 Debt service: Principal………………………………………………………… 3,373,347 - 3,373,347 Interest…………………………………………………………… 622,298 - 622,298 TOTAL EXPENDITURES………………………………… 46,955,165 7,371,572 54,326,737 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES……………………………… 1,340,948 (1,779,634) (438,686) OTHER FINANCING SOURCES (USES): Issuance of long-term debt……………………………………… - 1,417,000 1,417,000 Issuance of refunding bonds……………………………………… 166,800 - 166,800 Payments to refunded bond escrow agent……………………… (188,659) - (188,659) Transfers in………………………………………………………… 370,282 923,645 1,293,927 Transfers out……………………………………………………… (865,500) (228,860) (1,094,360) TOTAL OTHER FINANCING SOURCES (USES)……… (517,077) 2,111,785 1,594,708 NET CHANGE IN FUND BALANCES……………………………… 823,871 332,151 1,156,022 FUND BALANCES AT BEGINNING OF YEAR…………………… 6,691,828 10,800,677 17,492,505 FUND BALANCES AT END OF YEAR………………………………$ 7,515,699 $ 11,132,828 $ 18,648,527 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, 2017 Net change in fund balances - total governmental funds…………………………………………………… $ 1,156,022 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay………………………………………………………………………………………… 2,999,532 Depreciation expense………………………………………………………………………………… (2,849,652) Net effect of reporting capital assets………………………………………………………… 149,880 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…………………………………………………………………… (524,187) 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. Capital lease principal payments…………………………………………………………………… 33,599 Issuance of long-term debt…………………………………………………………………………… (1,417,000) Issuance of refunding bonds………………………………………………………………………… (166,800) Debt service principal payments…………………………………………………………………… 3,373,347 Payments to refunded bond escrow agent………………………………………………………… 188,659 Amortization of bond premiums……………………………………………………………………… 114,517 Amortization of deferred charge on refunding……………………………………………………… (133,653) Net effect of reporting long-term debt……………………………………………………… 1,992,669 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………………………………………………… 47,021 Net change in landfill closure accrual……………………………………………………………… 26,500 Net change in other postemployment benefits accrual…………………………………………… (744,925) Net change in deferred outflow/(inflow) of resources related to pensions……………………… (1,087,936) Net change in net pension liability…………………………………………………………………… 771,105 Net effect of recording long-term liabilities………………………………………………… (988,235) Change in net position of governmental activities…………………………………………………………… $ 1,786,149 See notes to basic financial statements. Town of Cohasset, Massachusetts 33 Comprehensive Annual Financial Report PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2017 Business-type Activities - Enterprise Funds Sewer Water Total ASSETS CURRENT: Cash and cash equivalents……………………………………$ 1,632,251 $ 1,466,652 $ 3,098,903 Investments……………………………………………………… 1,558,525 4,062 1,562,587 Receivables, net of allowance for uncollectibles: User charges………………………………………………… 559,714 1,350,048 1,909,762 Special assessments……………………………………… 635,627 - 635,627 Total current assets……………………………………… 4,386,117 2,820,762 7,206,879 NONCURRENT: Receivables, net of allowance for uncollectibles: Special assessments……………………………………… 6,912,573 - 6,912,573 Capital assets, nondepreciable………………………………… 1,009 1,307,549 1,308,558 Capital assets, net of accumulated depreciation…………… 28,575,615 33,308,774 61,884,389 Total noncurrent assets………………………………… 35,489,197 34,616,323 70,105,520 TOTAL ASSETS…………………………………………………… 39,875,314 37,437,085 77,312,399 DEFERRED OUTFLOWS OF RESOURCES Deferred loss on refunding…………………………………… - 564,858 564,858 Deferred outflows of resources related to pensions………… 20,672 - 20,672 TOTAL DEFERRED OUTFLOWS OF RESOURCES………… 20,672 564,858 585,530 LIABILITIES CURRENT: Warrants payable……………………………………………… 187,477 30,954 218,431 Accrued payroll………………………………………………… 439 - 439 Accrued interest………………………………………………… 100,292 172,860 273,152 Bonds payable…………………………………………………… 744,518 2,197,712 2,942,230 Total current liabilities…………………………………… 1,032,726 2,401,526 3,434,252 NONCURRENT: Net pension liability……………………………………………… 131,369 - 131,369 Bonds payable…………………………………………………… 10,580,672 22,798,275 33,378,947 Total noncurrent liabilities……………………………… 10,712,041 22,798,275 33,510,316 TOTAL LIABILITIES……………………………………………… 11,744,767 25,199,801 36,944,568 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources related to pensions………… 10,013 - 10,013 NET POSITION Net investment in capital assets………………………………… 17,627,244 10,116,756 27,744,000 Unrestricted………………………………………………………… 10,513,962 2,685,386 13,199,348 TOTAL NET POSITION……………………………………………$ 28,141,206 $ 12,802,142 $ 40,943,348 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, 2017 Business-type Activities - Enterprise Funds Sewer Water Total OPERATING REVENUES: Charges for services ………………………………………… $ 1,540,617 $ 5,089,666 $ 6,630,283 OPERATING EXPENSES: Cost of service and administration…………………………… 1,208,892 1,671,057 2,879,949 Depreciation…………………………………………………… 777,334 1,041,384 1,818,718 TOTAL OPERATING EXPENSES ……………………… 1,986,226 2,712,441 4,698,667 OPERATING INCOME (LOSS)…………………………… (445,609) 2,377,225 1,931,616 NONOPERATING REVENUES (EXPENSES): Investment income…………………………………………… 22,095 2,988 25,083 Interest expense……………………………………………… (232,179) (760,676) (992,855) Penalties and interest…………………………………….…… 199,858 - 199,858 TOTAL NONOPERATING REVENUES (EXPENSES), NET………………………… (10,226) (757,688) (767,914) INCOME (LOSS) BEFORE TRANSFERS……………… (455,835) 1,619,537 1,163,702 TRANSFERS: Transfers out…………………………………………………… (95,079) (104,488) (199,567) CHANGE IN NET POSITION……………………………… (550,914) 1,515,049 964,135 NET POSITION AT BEGINNING OF YEAR…………………… 28,692,120 11,287,093 39,979,213 NET POSITION AT END OF YEAR…………………………… $ 28,141,206 $ 12,802,142 $ 40,943,348 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……………………………………………$ 1,750,697 $ 5,227,991 $ 6,978,688 Payments to vendors…………………………………………………………… (1,007,152) (1,697,346) (2,704,498) Payments to employees………………………………………………………… (43,512) - (43,512) NET CASH FROM OPERATING ACTIVITIES…………………………………… 700,033 3,530,645 4,230,678 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out……………………………………………………………………… (95,079) (104,488) (199,567) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from the issuance of bonds and notes……………………………… - 235,000 235,000 Special assessments…………………………………………………………… 720,098 - 720,098 Acquisition and construction of capital assets………………………………… - (428,923) (428,923) Principal payments on bonds and notes……………………………………… (734,464) (2,097,754) (2,832,218) Interest expense………………………………………………………………… (271,156) (789,420) (1,060,576) NET CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES……… (285,522) (3,081,097) (3,366,619) CASH FLOWS FROM INVESTING ACTIVITIES: Sale (Purchase) of investments………………………………………………… (261,976) 788 (261,188) Investment income……………………………………………………………… 22,095 2,988 25,083 NET CASH FROM INVESTING ACTIVITIES…………………………………… (239,881) 3,776 (236,105) NET CHANGE IN CASH AND CASH EQUIVALENTS………………………… 79,551 348,836 428,387 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR…… 1,552,700 1,117,816 2,670,516 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR…………… $ 1,632,251 $ 1,466,652 $ 3,098,903 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FROM OPERATING ACTIVITIES: Operating income (loss)…………………………………………………………$ (445,609) $ 2,377,225 $ 1,931,616 Adjustments to reconcile operating income (loss) to net cash from operating activities: Depreciation…………………………………………………………………… 777,334 1,041,384 1,818,718 Deferred (outflows)/inflows related to pensions…………………………… 7,525 - 7,525 Penalties and interest receipts…………………………………….………… 199,858 - 199,858 Changes in assets and liabilities: User fees…………………………………………………………………… 10,222 138,325 148,547 Warrants payable………………………………………………………… 155,598 (26,289) 129,309 Accrued payroll…………………………………………………………… 439 - 439 Net pension liability……………………………………………………… (5,334) - (5,334) Total adjustments……………………………………………………… 1,145,642 1,153,420 2,299,062 NET CASH FROM OPERATING ACTIVITIES……………………………………$ 700,033 $ 3,530,645 $ 4,230,678 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES: Debt and related premium issuance for an advanced refunding ……………$ 560,434 $ 9,995,858 $ 10,556,292 Payment to the escrow agent and issuance expenses……………………… (560,434) (9,995,858) (10,556,292) See notes to basic financial statements. PROPRIETARY FUNDS STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2017 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……...…………………………………………$ 2,890 $ 39,201 $ 1,063,980 Investments: Mutual funds……………………………………………………………… 1,163,293 - - PRIT……………………………………………………………………… 992,529 - - Equity securities………………………………………………………… - 860,623 - Receivables, net of allowance for uncollectibles: Departmental and other receivables…………………………………… - - 214,649 TOTAL ASSETS………………………………………………………………… 2,158,712 899,824 1,278,629 LIABILITIES Payroll withholdings………………………………………………………… - - 638,818 Liabilities due depositors…………………………………………………… - - 639,811 TOTAL LIABILITIES…………………………………………………………… - - 1,278,629 NET POSITION Restricted for OPEB benefits and other purposes………………………2,158,712 - - Held in trust for other purposes…………………………………………… - 899,824 TOTAL NET POSITION…………………………………………………………$ 2,158,712 $ 899,824 $ - See notes to basic financial statements. FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2017 Town of Cohasset, Massachusetts 37 Comprehensive Annual Financial Report Other Postemployment Private Benefit Purpose Trust Fund Trust Funds ADDITIONS: Contributions: Employer contributions to the trust………………………………………………………$ 475,000 $ - Employer contributions to pay benefit payments……………………………………… 1,539,864 - Private donations………………………………………………………………………… - 300 Total contributions…………………………………………………………………… 2,014,864 300 Net investment income: Interest……………………………………………………………………………………… 191,236 46,980 TOTAL ADDITIONS…………………………………………………………………… 2,206,100 47,280 DEDUCTIONS: Benefit payments………………………………………………………….……………… 1,539,864 - Educational scholarships………………………………………………………………… - 18,399 TOTAL DEDUCTIONS……………………………………………………………… 1,539,864 18,399 CHANGE IN NET POSITION………………………………………………………… 666,236 28,881 NET POSITION AT BEGINNING OF YEAR……………………………………………… 1,492,476 870,943 NET POSITION AT END OF YEAR…………………………………………………………$ 2,158,712 $ 899,824 See notes to basic financial statements. FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2017 Town of Cohasset, Massachusetts 38 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2017 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 2017, Cohasset’s share of the operating and debt expenses was $84,057. 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, 2017 Town of Cohasset, Massachusetts 40 Comprehensive Annual Financial Report The Town has also entered into a joint venture for the South Shore Regional Emergency Communications Center (SSRECC) along with the Town of Hingham, Hull, and Norwell to pool resources and share costs, risks, and rewards of operating a regional 911 call center. The Center became operational as of January 1, 2012, and the Town’s 2017 assessment totaled $287,543. Since the assets of the SSRECC were acquired with State grants, there is currently no significant equity interest accruing to the member communities. The annual assessments are based on and equal to the operating costs of the Center. The SSRECC issues a publically available financial report that includes its financial statements. Copies of these financial statements may be obtained by writing to the SSRECC’s Executive Director, 210 Central Street, Hingham, MA 02043. 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 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 41 Comprehensive Annual Financial Report 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: • 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: Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 42 Comprehensive Annual Financial Report 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. 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 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 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 accounts consist of off-duty work details, performance bonds, and fees collected on behalf of other governments. The Agency fund applies the accrual basis of accounting but does not have a measurement focus. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 43 Comprehensive Annual Financial Report 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. E. Fair Value Measurements The Town reports required types of financial instruments in accordance with the fair value standards. These standards require an entity to maximize the use of observable inputs (such as quoted prices in active markets) and minimize the use of unobservable inputs (such as appraisals or valuation techniques) to determine fair value. Fair value standards also require the government to classify these financial instruments into a three-level hierarchy, based on the priority of inputs to the valuation technique or in accordance with net asset value practical expedient rules, which allow for either Level 2 or Level 3 depending on lock up and notice periods associated with the underlying funds. Instruments measured and reported at fair value are classified and disclosed in one of the following categories: Level 1 – Quoted prices are available in active markets for identical instruments as of the reporting date. Instruments, which are generally included in this category, include actively traded equity and debt securities, U.S. government obligations, and mutual funds with quoted market prices in active markets. Level 2 – Pricing inputs are other than quoted in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Certain fixed income securities, primarily corporate bonds, are classified as Level 2 because fair values are estimated using pricing models, matrix pricing, or discounted cash flows. Level 3 – Pricing inputs are unobservable for the instrument and include situations where there is little, if any, market activity for the instrument. The inputs into the determination of fair value require significant management judgment or estimation. In some instances the inputs used to measure fair value may fall into different levels of the fair value hierarchy and is based on the lowest level of input that is significant to the fair value measurement. Market price is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Instruments with readily available active quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. It is reasonably possible that change in values of these instruments will occur in the near term and that such changes could materially affect amounts reported in these financial statements. For more information on the fair value of the Town’s financial instruments, see Note 2 – Cash and Investments. F. Accounts Receivable Government-Wide and Fund Financial Statements The recognition of revenue related to accounts receivable reported in the government-wide financial statements and the proprietary funds and fiduciary funds financial statements are reported under the accrual basis of Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 44 Comprehensive Annual Financial Report 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. 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. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 45 Comprehensive Annual Financial Report 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. G. 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. H. 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; donated works of art, historical treasures and similar assets, and capital assets received in service concession arrangements are recorded at the acquisition value. 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. 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 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 46 Comprehensive Annual Financial Report 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. I. 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, 2017, the Town reported both deferred loss 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, 2017, the Town reported deferred inflows of resources related to pensions within this category. 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. J. Interfund Receivables and Payables During the course of its operations, transactions occur between and within individual funds that may result in amounts owed between funds. Government-Wide Financial Statements Transactions of a buyer/seller nature between and within governmental funds are eliminated from the governmental activities in the statement of net position. Any residual balances outstanding between the governmental activities and business-type activities are reported in the statement of net position as “internal balances”. Fund Financial Statements Transactions of a buyer/seller nature between and within funds are not eliminated from the individual fund statements. Receivables and payables resulting from these transactions are classified as “Due from other funds” or “Due to other funds” on the balance sheet. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 47 Comprehensive Annual Financial Report K. 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. L. 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. “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. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 48 Comprehensive Annual Financial Report 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. M. 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. N. 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 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 49 Comprehensive Annual Financial Report 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. O. 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 administrative services expenditures. P. 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. Q. 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. R. 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. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 50 Comprehensive Annual Financial Report S. Total Column Government-Wide Financial Statements The total column presented on the government-wide financial statements represents consolidated financial information. Fund Financial Statements The total column on the fund financial statements is presented only to facilitate financial analysis. Data in this column is not 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 $15,155,537 and the bank balance totaled $15,490,851. Of the bank balance, $1,250,000 was covered by Federal Depository Insurance, $5,137,270 was covered by DIF Insurance, $2,449,046 was covered by SIF Insurance, and $6,645,535 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 $38,549. The bank balance totaled $38,549, all of which was covered by Federal Depository Insurance. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 51 Comprehensive Annual Financial Report Investments As of June 30, 2017, the Town had the following investments: Under Fair Value 1 Year 1 - 5 Years 6-10 Years Rating Investment Type Debt Securities Government Sponsored Enterprises………$ 1,754,954 $ 80,708 $ 1,410,316 $ 263,930 AAA U.S. Treasury Notes………………………… 2,073,108 147,654 1,220,864 704,590 AAA Corporate Bonds……………………………… 937,046 376,164 462,670 98,212 AAA-BAA Total Debt Securities.............................. 4,765,108 $ 604,526 $ 3,093,850 $ 1,066,732 Other Investments Equity Securities.................................. 3,173,267 Mutual Funds....................................... 1,309,841 PRIT……………………………………… 992,529 MMDT…………………………………… 879,505 Money Market Mutual Funds…………… 1,116,186 Total Investments..............................$ 12,236,436 Maturity The Other Postemployment Benefit Trust Fund participates in PRIT. The effective weighted duration rate for PRIT investments ranged from 0.45 to 22.60 years. As of June 30, 2017, the Pratt Memorial Library Trust had the following investments: Other Investments Mutual Funds………………………………$ 1,510,068 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, $4,765,108 of debt securities, and $3,173,267 of equity securities are exposed to custodial credit risk because the related securities are uninsured, unregistered and held by the counterparty. The Town’s investment policy requires all securities not held directly by the Town to be held in the Town’s name and tax identification number by a third party custodian approved by the Treasurer. 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’s investment policy 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, 2017 Town of Cohasset, Massachusetts 52 Comprehensive Annual Financial Report Credit Risk The Town’s investment policy limits investments in debt securities to United States Treasuries and United States Government Agency obligations, which carry a AA rating, and other investments that must be in high grade securities, a high concentration of which must be rated A and above. Additionally the Treasurer may invest in the Massachusetts Municipal Depository Trust (MMDT) with no limit to the amount of funds placed in this fund. 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. Fair Market Value of Investments The Town holds investments that are measured at fair value on a recurring basis. Because investing is not a core part of the Town’s mission, the Town determines that the disclosures related to these investments only need to be disaggregated by major type. The Town chooses a tabular format for disclosing the levels within the fair value hierarchy. The Town categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Town has the following fair value measurements as of June 30, 2017: Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable June 30, Assets Inputs Inputs Investment Type 2017 (Level 1) (Level 2) (Level 3) Investments by fair value level: Debt Securities: Government Sponsored Enterprises…………………………………$ 1,754,954 $ 1,754,954 $ - $ - U.S. Treasury Notes…………………………………………………… 2,073,108 2,073,108 - - Corporate Bonds………………………………………………………… 937,046 - 937,046 - Total debt securities………………………………………………… 4,765,108 3,828,062 937,046 - Other investments: Equity Securities....................................……………………… 3,173,267 3,173,267 - - Mutual Funds.........................................……………………… 1,309,841 1,309,841 - - Money Market Mutual Funds…………………………………… 1,116,186 1,116,186 - - Total other investments………………………..………………… 5,599,294 5,599,294 - - Total investments measured at fair value……………………… 10,364,402 $ 9,427,356 $ 937,046 $ - Investments measured at the net asset value (NAV): PRIT………………………………………………………………… 992,529 Investments measured at amortized cost: MMDT……………………………………………………………… 879,505 Total investments……………………………………………………$ 12,236,436 Fair Value Measurements Using Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 53 Comprehensive Annual Financial Report Government sponsored enterprises, U.S. Treasury notes, equity securities, mutual funds, money market mutual funds classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Corporate bonds classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. PRIT Investments are valued using the net asset value method. This investment pool was established by the Treasurer of the Commonwealth of Massachusetts, who serves as Trustee. PRIT is administered by the Pension Reserves Investment Management Board (PRIM). The fair values of the positions in each investment Pool are the same as the value of each Pool’s shares. The Town does not have the ability to control any of the investment decisions relative to its funds in PRIT. MMDT investments are valued at amortized cost. Under the amortized cost method, an investment is valued initially at its cost and adjusted for the amount of interest income accrued each day over the term of the investment to account for any difference between the initial cost and the amount payable at its maturity. If amortized cost is determined not to approximate fair value, the value of the portfolio securities will be determined under procedures established by the Advisor. The Pratt Memorial Library Trust investments at June 30, 2017 of $1,510,068 are measured at fair value using quoted prices in active markets for identical assets (Level 1). NOTE 3 – RECEIVABLES At June 30, 2017, 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 …… $ 413,282 $ (8,000) $ 405,282 Tax liens…………………………………………………… 1,049,232 - 1,049,232 Motor vehicle and other excise taxes…………………… 116,603 (36,000) 80,603 Departmental and other………………………………… 534,812 (368,092) 166,720 Special assessments…………………………………… 1,916,108 - 1,916,108 Intergovernmental…………………….………………… 2,711,475 - 2,711,475 Total………………………………………………………$6,741,512 $ (412,092) $ 6,329,420 At June 30, 2016, receivables for the sewer and water enterprise funds consist of the following: Gross Allowance for Net Amount Uncollectibles Amount Receivables: Sewer user charges………………………………………$ 559,714 $ - $ 559,714 Water user charges……………………………………… 1,350,048 - 1,350,048 Special assessments……………………………………… 7,548,200 - 7,548,200 Total………………………………………………………$ 9,457,962 $ - $ 9,457,962 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 54 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……………… $ 454,775 $ 1,809 $ 456,584 Tax liens…………………………………………………… 1,039,604 9,628 1,049,232 Motor vehicle and other excise…………………………… 80,603 - 80,603 Departmental and other…………………………………… 161,024 5,696 166,720 Special assessments……………………………………… 1,087,991 828,118 1,916,109 Intergovernmental………………………………………… 2,186,996 426,931 2,613,927 Total……………………………………………………… $ 5,010,993 $ 1,272,182 $ 6,283,175 NOTE 4 – CAPITAL ASSETS Capital asset activity for the year ended June 30, 2017, 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…………………………………… 680,164 1,100,389 (492,509) 1,288,044 Total capital assets not being depreciated………………… 7,627,196 1,100,389 (492,509) 8,235,076 Capital assets being depreciated: Land improvements………………………………………… 1,022,162 - - 1,022,162 Buildings and improvements……………………………… 67,807,785 157,905 - 67,965,690 Machinery and equipment…………………………………… 2,351,587 991,802 - 3,343,389 Vehicles……………………………………………………… 4,089,176 381,183 - 4,470,359 Infrastructure………………………………………………… 28,332,886 860,762 - 29,193,648 Total capital assets being depreciated…………………… 103,603,596 2,391,652 - 105,995,248 Less accumulated depreciation for: Land improvements………………………………………… (223,007) (34,341) - (257,348) Buildings and improvements……………………………… (26,446,844) (1,578,391) - (28,025,235) Machinery and equipment…………………………………… (1,620,377) (265,406) - (1,885,783) Vehicles……………………………………………………… (3,065,983) (273,268) - (3,339,251) Infrastructure………………………………………………… (15,660,143) (698,246) - (16,358,389) Total accumulated depreciation…………………………… (47,016,354) (2,849,652) - (49,866,006) Total capital assets being depreciated, net…………………… 56,587,242 (458,000) - 56,129,242 Total governmental activities capital assets, net………………$ 64,214,438 $ 642,389 $ (492,509) $ 64,364,318 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 55 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……………………………… (331,297) (18,696) - (349,993) Machinery and equipment……………………………………(2,290,716) (135,175) - (2,425,891) Infrastructure………………………………………………… (7,324,900) (623,463) - (7,948,363) Total accumulated depreciation…………………………… (9,946,913) (777,334) - (10,724,247) Total capital assets being depreciated, net…………………… 29,352,949 (777,334) - 28,575,615 Total sewer activities capital assets, net………………………$ 29,353,958 $ (777,334) $- $ 28,576,624 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……………………………… 65,069 - - 65,069 Machinery, equipment and vehicles……………………… 106,749 157,000 - 263,749 Vehicles……………………………………………………… 26,163 48,858 - 75,021 Infrastructure………………………………………………… 48,916,983 223,065 - 49,140,048 Total capital assets being depreciated…………………… 49,114,964 428,923 - 49,543,887 Less accumulated depreciation for: Buildings and improvements……………………………… (10,506) (3,003) - (13,509) Machinery, equipment and vehicles……………………… (36,443) (19,158) - (55,601) Vehicles………………………………………………………(26,163) (8,143) (34,306) Infrastructure………………………………………………… (15,120,617) (1,011,080) - (16,131,697) Total accumulated depreciation…………………………… (15,193,729) (1,041,384) - (16,235,113) Total capital assets being depreciated, net…………………… 33,921,235 (612,461) - 33,308,774 Total water activities capital assets, net………………………$ 35,228,784 $ (612,461) $- $ 34,616,323 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 56 Comprehensive Annual Financial Report Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: Administrative services…………………………………………………………… $ 196,854 Public safety………………………………………………………………………… 270,998 Education…………………………………………………………………………… 1,400,460 Public works………………………………………………………………………… 792,495 Culture and recreation……………………………………………………………… 188,845 Total depreciation expense - governmental activities……………………………… $ 2,849,652 Business-Type Activities: Sewer…………………………………………………………………………………$ 777,334 Water………………………………………………………………………………… 1,041,384 Total depreciation expense - business-type activities………………………………$ 1,818,718 NOTE 5 – CAPITAL LEASES The Town has entered into non-cancelable long-term lease agreements for the purchase of certain equipment. The lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The following identifies the assets acquired through capital lease agreements: Governmental Activities Asset: Machinery and equipment…………………………………$ 181,803 Less: accumulated depreciation………………………… (34,845) Total………………………………………………………$ 146,958 The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2017 were as follows: Years Governmental Ending June 30, Activities 2018……………………………………………………… 40,780 2019……………………………………………………… 40,780 2020……………………………………………………… 40,780 2021……………………………………………………… 40,783 Total minimum lease payments……………………… 163,123 Less: amounts representing interest………………… (14,919) Present value of minimum lease payments…………$ 148,204 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 57 Comprehensive Annual Financial Report NOTE 6 – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS Interfund transfers for the year ended June 30, 2017, are summarized as follows: Nonmajor General Governmental Transfers Out: Fund Funds Total General Fund…………………………………… $ - $ 865,500 $ 865,500 (1) Nonmajor Governmental Funds………………… 170,715 58,145 228,860 (2) Sewer Enterprise Fund………………………… 95,079 - 95,079 (3) Water Enterprise Fund………………………… 104,488 - 104,488 (3) Total………………………………………………$ 370,282 $ 923,645 $ 1,293,927 Transfers In: (1) Budgeted transfers from the general fund and the capital stabilization fund to various capital project funds. Also, transfer to Town Capital Projects to fund construction costs. (2) Budgeted transfers from school construction surplus, wetlands, open space, and Title V betterments to the general fund. Also, transfers to and from various nonmajor governmental funds. (3) Budgeted transfers from the sewer and water enterprise funds for indirect costs. NOTE 7 – 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, 2017, is as follows: Balance at Balance at Rate June 30, Renewed/ Retired/ June 30, Type Purpose (%) Due Date 2016 Issued Redeemed 2017 Governmental funds BAN Bond Anticipation Note…………… 1.50% 6/22/2018 $ - $ 597,400 $ - $ 597,400 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 58 Comprehensive Annual Financial Report NOTE 8 – 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 order to take advantage of favorable interest rates the Town issued $9.5 million of General Obligation Refunding Bonds during 2017. The proceeds of these bonds along with the premiums received were deposited into an irrevocable trust to provide for all future debt service payments on $9,431,000 of water enterprise bonds; $528,000 of sewer enterprise bonds; and $176,000 of governmental bonds. Accordingly, the trust account’s assets and liabilities for the defeased bonds are not included in the basic financial statements. The Town has decreased its aggregate debt service payments by $912,540 and will experience an economic gain of $793,816. At June 30, 2017 $176,000 of governmental and $9,959,000 of business-type general obligation bonds outstanding that mature in fiscal year 2020, are considered defeased. Details related to the Town’s outstanding general obligation indebtedness at June 30, 2017, 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 (%) 2016 Issued Redeemed 2017 MCWT………………………………………………… 2033 $ 27,680,877 0.00 - 5.30 $ 7,913,346 $ - $ 1,396,355 $ 6,516,991 General Obligation Refunding Bonds of 2005…… 2017 863,940 2.50 - 3.50 90,869 - 90,869 - General Obligation Refunding Bonds of 2008…… 2018 3,041,600 3.00 675,000 - 345,000 330,000 General Obligation Bonds of 2009………………… 2027 265,000 1.50 - 4.00 95,000 - 35,000 60,000 General Obligation Bonds of 2010………………… 2030 1,726,000 1.00 - 3.50 461,000 - 328,000 133,000 General Obligation Refunding Bonds of 2010…… 2021 835,000 1.50 - 2.50 400,000 - 85,000 315,000 General Obligation Refunding Bonds of 2012…… 2024 9,039,000 1.80 6,940,000 - 960,000 5,980,000 General Obligation Refunding Bonds of 2013…… 2026 696,450 2.00-3.00 594,500 - 131,400 463,100 General Obligation Bonds of 2013………………… 2024 215,000 2.00-3.00 40,000 - 5,000 35,000 General Obligation Bonds of 2016………………… 2026 1,208,000 2.00-3.00 1,208,000 - 153,000 1,055,000 General Obligation Refunding Bonds of 2016…… 2027 193,500 2.00-3.00 193,500 - 2,500 191,000 General Obligation Bonds of 2017………………… 2037 1,417,000 3.00-4.00 - 1,417,000 17,224 1,399,776 General Obligation Refunding Bonds of 2017…… 2030 166,800 3.00-4.00 - 166,800 - 166,800 Total governmental bonds payable………………………………………………………………………… 18,611,215 1,583,800 3,549,348 16,645,667 Add: unamortized premium………………………………………………………………………………… 476,592 - 114,517 362,075 Total governmental bonds payable, net……………………………………………………………………$ 19,087,807 $ 1,583,800 $ 3,663,865 $ 17,007,742 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 59 Comprehensive Annual Financial Report Debt service requirements for principal and interest for governmental bonds payable in future years are as follows: Year Principal Interest Total 2018……………$ 3,345,445 $ 501,580 $ 3,847,025 2019…………… 2,991,291 387,334 3,378,625 2020…………… 2,617,266 277,222 2,894,488 2021…………… 2,198,774 180,437 2,379,211 2022…………… 1,207,014 115,264 1,322,278 2023…………… 1,190,888 79,144 1,270,032 2024…………… 1,172,594 46,758 1,219,352 2025…………… 321,136 29,748 350,884 2026…………… 303,912 21,083 324,995 2027…………… 185,724 15,061 200,785 2028…………… 172,573 12,601 185,174 2029…………… 173,459 9,975 183,434 2030…………… 175,383 8,547 183,930 2031…………… 174,345 6,539 180,884 2032…………… 121,200 5,088 126,288 2033…………… 122,128 4,159 126,287 2034…………… 48,075 3,211 51,286 2035…………… 49,042 2,246 51,288 2036…………… 50,028 1,259 51,287 2037…………… 25,390 254 25,644 Total……………$ 16,645,667 $ 1,707,510 $ 18,353,177 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 $2,186,996 have been recorded as an intergovernmental receivable in the general fund. Future interest subsidies total $375,688 and will be recognized as revenue when received. During 2017, the Town’s principal and interest subsidy amounted to approximately $803,794. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 60 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 (%) 2016 Issued Redeemed 2017 MCWT………………………………………………… 2031 $ 12,600,000 2.00 $ 9,905,654 $ - $ 571,964 $ 9,333,690 General Obligation Bonds of 2009………………… 2029 350,000 4.00 60,000 - 20,000 40,000 General Obligation Bonds of 2010………………… 2030 1,071,000 3.30 - 3.40 748,000 - 583,000 165,000 General Obligation Refunding Bonds of 2012…… 2023 46,000 1.80 35,000 - 5,000 30,000 General Obligation Bonds of 2013………………… 2033 669,348 2.00-3.00 580,000 - 30,000 550,000 General Obligation Bonds of 2016………………… 2026 570,000 2.00-3.00 570,000 - 50,000 520,000 General Obligation Refunding Bonds of 2016…… 2026 193,500 2.00-3.00 193,500 - 2,500 191,000 General Obligation Refunding Bonds of 2017…… 2030 495,500 3.00-4.00 - 495,500 - 495,500 Total sewer bonds payable…………………………………………………………………………………$ 12,092,154 $ 495,500 $ 1,262,464 $ 11,325,190 Debt service requirements for principal and interest for Sewer Enterprise Fund bonds payable in future years are as follows: Year Principal Interest Total 2018……………$ 744,518 $ 238,198 $ 982,716 2019…………… 760,306 223,405 983,711 2020…………… 774,833 206,279 981,112 2021…………… 782,003 189,512 971,515 2022…………… 792,920 172,580 965,500 2023…………… 810,689 155,103 965,792 2024…………… 818,919 136,764 955,683 2025…………… 829,209 118,543 947,752 2026…………… 850,769 99,953 950,722 2027…………… 799,603 80,927 880,530 2028…………… 822,716 63,581 886,297 2029…………… 836,113 45,593 881,706 2030…………… 825,803 28,074 853,877 2031…………… 796,789 3,000 799,789 2032…………… 40,000 1,800 41,800 2033…………… 40,000 600 40,600 Total……………$ 11,325,190 $ 1,763,912 $ 13,089,102 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 61 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 (%) 2016 Issued Redeemed 2017 MCWT………………………………………………… 2027 $ 7,145,507 2.00 $ 6,263,250 $ - $ 385,021 $ 5,878,229 General Obligation Refunding Bonds of 2005…… 2017 1,311,060 3.30 99,133 - 99,133 - General Obligation Refunding Bonds of 2008…… 2018 474,700 3.00 90,000 - 45,000 45,000 General Obligation Bonds of 2009………………… 2029 1,051,000 4.00 145,000 - 45,000 100,000 General Obligation Bonds of 2010………………… 2030 16,379,000 3.50 12,466,000 - 10,249,000 2,217,000 General Obligation Refunding Bonds of 2010…… 2021 1,705,000 1.50 - 2.50 595,000 - 125,000 470,000 General Obligation Refunding Bonds of 2012…… 2017 50,000 1.80 10,000 - 10,000 - General Obligation Refunding Bonds of 2013…… 2026 4,533,550 2.00-3.00 4,380,500 - 478,600 3,901,900 General Obligation Bonds of 2013………………… 2033 2,004,652 2.00-3.00 1,590,000 - 90,000 1,500,000 General Obligation Refunding Bonds of 2016…… 2029 655,000 2.00-3.00 655,000 - 2,000 653,000 General Obligation Bonds of 2017………………… 2020 235,000 3.00-4.00 - 235,000 - 235,000 General Obligation Refunding Bonds of 2017…… 2030 8,837,700 3.00-4.00 - 8,837,700 - 8,837,700 Total water bonds payable………………………………………………………...………………………… 26,293,883 9,072,700 11,528,754 23,837,829 Add: unamortized premium………………………………………………………………………………… - 1,158,158 - 1,158,158 Total governmental bonds payable, net……………………………………………………………………$ 26,293,883 $ 10,230,858 $ 11,528,754 $ 24,995,987 Debt service requirements for principal and interest for Water Enterprise Fund bonds payable in future years are as follows: Year Principal Interest Total 2018……………$ 2,071,600 $ 665,796 $ 2,737,396 2019…………… 1,909,335 637,077 2,546,412 2020…………… 1,943,829 576,097 2,519,926 2021…………… 1,862,289 520,164 2,382,453 2022…………… 1,760,716 466,948 2,227,664 2023…………… 1,787,112 411,131 2,198,243 2024…………… 1,830,682 355,702 2,186,384 2025…………… 1,890,829 301,027 2,191,856 2026…………… 1,835,956 245,269 2,081,225 2027…………… 1,600,269 191,322 1,791,591 2028…………… 1,572,655 138,813 1,711,468 2029…………… 1,552,567 86,085 1,638,652 2030…………… 1,520,085 37,914 1,557,999 2031…………… 494,905 7,650 502,555 2032…………… 100,000 4,650 104,650 2033…………… 105,000 - 105,000 Total……………$ 23,837,829 $ 4,645,645 $ 28,483,474 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 62 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, 2017, the Town had the following authorized and unissued debt: Purpose Amount Septic System……………………………………………………$ 1,500,000 Department of Public Works Vehicles and Equipment……… 10,000 Bound Brook Dam……………………………………………… 1,191,400 Bear Hill Water Tank Painting & Repairs……………………… 165,000 Total………………………………………………………………$ 2,866,400 Changes in Long-term Liabilities During the year ended June 30, 2017, the following changes occurred in long-term liabilities: Balance Balance Due June 30, June 30, Within 2016 Additions Reductions 2017 One Year Governmental Activities: Long-term bonds payable…………………………$ 18,611,215 $ 1,583,800 $ (3,549,348) $ 16,645,667 $ 3,345,445 Unamortized premium on bonds payable…… 476,592 - (114,517) 362,075 100,632 Total bonds payable……………………………… 19,087,807 1,583,800 (3,663,865) 17,007,742 3,446,077 Landfill closure……………………………………… 212,726 - (26,500) 186,226 26,500 Other postemployment benefits………………… 10,994,000 2,759,789 (2,014,864) 11,738,925 - Net pension liability………………………………… 19,761,947 1,096,009 (1,867,114) 18,990,842 - Total Governmental Activities…………………… $ 50,056,480 $ 5,439,598 $ (7,572,343) $ 47,923,735 $ 3,472,577 Business-Type Activities: Long-term bonds payable…………………………$ 38,386,037 $ 9,568,200 $ (12,791,218) $ 35,163,019 $ 2,816,118 Unamortized premium on bonds payable…… - 1,158,158 - 1,158,158 126,112 Total bonds payable……………………………… 38,386,037 10,726,358 (12,791,218) 36,321,177 2,942,230 Net pension liability………………………………… 136,703 7,582 (12,916) 131,369 - Total Business Type Activities….…………………$ 38,522,740 $ 10,733,940 $ (12,804,134) $ 36,452,546 $ 2,942,230 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, 2017 Town of Cohasset, Massachusetts 63 Comprehensive Annual Financial Report NOTE 9 – 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 $3,459,029, the Facilities Stabilization fund is $2,511, the Special Education Stabilization fund is $264,248, and the Capital Stabilization fund is $1,275,860. 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, 2017 Town of Cohasset, Massachusetts 64 Comprehensive Annual Financial Report As of June 30, 2017, the governmental fund balance consisted of the following: Nonmajor Total Governmental Governmental General Funds Funds Fund Balances Nonspendable: Permanent fund principal………………………$- $ 442,525 $ 442,525 Restricted for: Town grants…………………………………… - 258,088 258,088 School grants…………………………………… - 261,487 261,487 Receipts reserved for appropriation………… - 1,108,554 1,108,554 MCWT septic loan program…………………… - 47,279 47,279 Town revolving funds………………………… - 309,773 309,773 School revolving funds………………………… - 722,024 722,024 School lunch…………………………………… - 189,822 189,822 Community preservation……………………… - 2,778,519 2,778,519 Gifts and donations…………………………… - 1,475,041 1,475,041 Other Town special revenue………………… - 4,193 4,193 Capital projects bonded……………………… - 223,443 223,443 Capital projects non-bonded………………… - 1,195,276 1,195,276 Library expendable trust funds……………… - 1,314,002 1,314,002 Other expendable trust funds………………… - 802,412 802,412 Committed to: Administrative services…………………………251,015 - 251,015 Public safety…………………………………… 11,601 - 11,601 Education……………………………………… 136,329 - 136,329 Public works…………………………………… 17,950 - 17,950 Culture and recreation………………………… 550 - 550 Assigned to: Encumbrances: Administrative services………………………… 227,012 - 227,012 Public safety…………………………………… 16,253 - 16,253 Education……………………………………… 136,329 - 136,329 Public works/facilities………………………… 19,263 - 19,263 Health & welfare………………………………… 9,394 - 9,394 Culture and recreation………………………… 2,586 - 2,586 Unassigned…………………………………………… 6,687,417 - 6,687,417 Total Fund Balances…………………………………… $ 7,515,699 $ 11,132,828 $ 18,648,527 Governmental Funds Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 65 Comprehensive Annual Financial Report NOTE 10 – 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, 2017, the amount of the liability for workers’ compensation claims and unemployment benefits were immaterial and are therefore not reported. NOTE 11 – 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, 2016. The Town’s portion of the collective pension expense, contributed by the Commonwealth, of $4,279,013 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 $41,948,409 as of the measurement date. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 66 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, 2016. 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, 2016 was $1,880,030, (18.54%) 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, 2017, the Town reported a liability of $19,122,211 for its proportionate share of the net pension liability. The net pension liability was measured as of December 31, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of January 1, 2016. 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, 2016, the Town’s proportion was 3.66%, the same as its proportion as of December 31, 2015. Pension Expense For the year ended June 30, 2017, the Town recognized pension expense of $2,199,052. At June 30, 2017, the Town reported deferred outflows of resources related to pensions of $3,008,977 and deferred inflows of resources related to pensions of $1,457,520. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 67 Comprehensive Annual Financial Report The balances of deferred outflows and inflows related to pensions at June 30, 2017 consist of the following: Deferred Deferred Outflows Inflows Deferred category of Resources of Resources Total Differences between expected and actual experience………………… $ 299,802 $ - $ 299,802 Net difference between projected and actual investment earnings…… 1,747,490 - 1,747,490 Changes in proportion……………………………………………………… 961,685 (210,537) 751,148 Changes of assumptions…………………………………………………… - (1,246,983) (1,246,983) Total deferred outflows/(inflows) of resources……………………………$ 3,008,977 $ (1,457,520) $ 1,551,457 The Town’s net deferred outflows/(inflows) of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2018…………………………………………………$ 604,050 2019………………………………………………… 604,050 2020………………………………………………… 446,647 2021………………………………………………… (103,290) Total…………………………………………………$ 1,551,457 Actuarial Assumptions The total pension liability in the January 1, 2016 actuarial valuation was determined using the following actuarial methods and assumptions, applied to all periods including the measurement date that was updated through December 31, 2016: Valuation date………………………………… January 1, 2016 Actuarial cost method………………………… Entry Age Normal Cost Method. Asset valuation method……………………… Market value Investment rate of return/Discount rate…… 8.00% Projected salary increases…………………… 3.5% - 5.5% Inflation rate…………………………………… 4.00% Cost of living adjustments…………………… 3.0% of the first $15,000 of retirement income. Mortality………………………………………… The RP-2000 Blue Collar Mortality Table adjusted with Scale with MP-2014. 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, 2017 Town of Cohasset, Massachusetts 68 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, 2017 are summarized in the following table: Target Long-Term Expected Asset Class Allocation Real Rate of Return Domestic equity……………… 32.00% 4.60% International equities………… 17.50% 4.60% Fixed income…………………… 19.00% 0.50% Real estate…………………… 9.00% 1.10% Private equity…………………… 8.50% 6.30% Hedge funds…………………… 9.00% 9.10% Real assets…………………… 5.00% 3.50% 100.00% Rate of return For the year ended December 31, 2016, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 8.59%. 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 8.00%. 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 8.00%, as well as what the net position liability would be if it were calculated using a discount rate that is 1-percentage-point lower (7.00%) or 1-percentage-point higher (9.00%) than the current rate: Current 1% Decrease Discount 1% Increase (7.00%) (8.00%) (9.00%) Proportionate share of the net pension liability…………$ 23,981,712 $ 19,122,211 $ 14,974,490 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 69 Comprehensive Annual Financial Report Changes in Assumptions The January 1, 2016 actuarial valuation included an 8.00% assumed rate of return on Plan investments; this is a decrease from the 8.25% assumed rate included in the prior valuation. Additionally, the salary scale was changed to a tiered schedule ranging from 3.5% to 5.5% based on years of service, as compared to a level 4% assumption in the prior valuation. Changes in Plan Provisions Chapter 176 of the Acts of 2011, An Act Providing for Pension Reform and Benefit Modernization made a number of changes to the Chapter 32 pension law. There are several changes that will have the most impact on decreasing plan liabilities over the longer term. These include an increase in the normal retirement age by two years (for example, from age 65 to age 67 for Group 1 members), an increase in the age (early retirement) reduction factor for ages below the maximum age (from a 4.0% to a 6.0% annual reduction), and an increase in the period for determining a member’s average annual compensation (from 3 years to 5 years). Since these changes are effective only for members hired after April 1, 2012, this is the first actuarial valuation to reflect these changes. NOTE 12 – 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 health, dental and life insurance for eligible retirees and their spouses through a single-employer defined Other Postemployment Benefit (OPEB) plan. Chapter 32B of the MGL assigns authority to establish and amend benefit provisions of the plan. Benefit provisions are negotiated between the Town and the unions representing Town employees and are renegotiated each bargaining period. The Retiree Health Plan does not issue a publicly available financial report. Funding Policy – The contribution requirements of plan members and the Town are established and may be amended by the Town. 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 percentage of their premium costs. For 2017, the Town’s age-adjusted contribution to the plan totaled $2.0 million. The Town’s average contribution rate was 9.34% of covered-employee payroll. The Commonwealth of Massachusetts passed special legislation that has allowed the Town to establish a postemployment benefit trust fund and to enable the Town to raise taxes necessary to begin pre-funding its OPEB liabilities. During 2017, the Town pre-funded future OPEB liabilities by contributing funds to the Other Postemployment Benefit Fund in excess of the pay-as-you-go required contribution. These funds are reported within the Fiduciary Funds financial statements. As of June 30, 2017, the balance of this fund totaled $2.2 million. The annual money-weighted rate of return on OPEB plan investments was 10.20%. The money-weighted rate of return expresses investment performance, net of OPEB plan investment expense, adjusted for the changing amounts actually invested. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 70 Comprehensive Annual Financial Report Plan Membership – The following table represents the Plan’s membership at June 30, 2017: Current retirees, beneficiaries, and dependents…… 182 Current active members……………………………… 341 Total………………………………………………………523 Components of OPEB Liability – The following table represents the components of the Plan’s OPEB liability as of June 30, 2017: Total OPEB liability…………………………………………………$ 43,319,487 Less: OPEB plan's fiduciary net position………………………… (2,158,712) Net OPEB liability………………………………………………… $ 41,160,775 The OPEB plan's fiduciary net position as a percentage of the total OPEB liability…………………… 4.98% Significant Actuarial Methods and Assumptions – The total OPEB liability in the July 1, 2016 actuarial valuation was determined by using the following actuarial assumptions actuarial, applied to all periods including the measurement date that was updated to June 30, 2017 to be in accordance with GASB #74: Valuation date…………………………… Actuarially determined contribution was calculated as of June 30, 2017 by updating the July 1, 2016 actuarial valuation. Actuarial cost method…………………… Individual Entry Age Normal Asset valuation method………………… Market Value of Assets as of the Reporting Date, June 30, 2017. Investment rate of return……………… 7.50% Discount rate…………………………… 3.89% blended rate, prior year 2.58% Inflation…………………………………… 3.00% Salary increases………………………… 3.50% Healthcare cost trend rate……………… 8.0% initial, decreasing 1.0% per year to an ultimate rate of 5.0%. Pre-Retirement mortality Town………… RP-2000 Employees Mortality Table, base year 2009, projected with generational mortality improvement using scale BB. Post-Retirement mortality Town……… RP-2000 Healthy Annuitant Mortality Table, base year 2009, projected with generational mortality improvement using scale BB. Pre-Retirement mortality Teachers…… RP-2014 Employees Mortality Table, base year 2014, projected with generational mortality improvement using scale BB. Post-Retirement mortality Teachers…… RP-2014 Healthy Annuitant Mortality Table, base year 2014, projected with generational mortality improvement using scale BB. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 71 Comprehensive Annual Financial Report Investment Policy The Town’s policy in regard to the allocation of invested assets is established and may be amended by the Board of Selectmen by a majority vote of its members. The OPEB plan’s assets are managed on a total return basis with a long-term objective of achieving and maintaining a fully funded status for the benefits provided through the OPEB plan. The long-term real rate of return on OPEB investments was determined using the Town’s investment policy. The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real of returns (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 of by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation and subtracting expected investment expenses and a risk margin. The System’s expected future real rate of return is added to the expected inflation of 3.00% to produce the long-term expected nominal rate of return of 7.5%. Best estimates of arithmetic real rates of return for each major asset class included in the OPEB plan’s target asset allocation as of June 30, 2017 are summarized in the following table. Long-Term Expected Long-Term Expected Asset Class Asset Allocation Real Rate of Return Equities…………………………………………… 53.00% 5.31% Fixed Income……………………………………… 24.00% 2.38% Alternatives………………………………………… 10.00% 4.80% Real Estate………………………………………… 5.00% 3.50% Timberland………………………………………… 2.00% 3.00% Portfolio Completion Strategies………………… 6.00% 3.48% Total Asset Allocation………………….…………100.00% Discount Rate As of June 30, 2017 the plan’s fiduciary net position was projected to be insufficient to make all of the projected benefit payments of current plan members. The discount rate is a blend of the long-term expected rate of return of the Plan investments of 7.5%, applied to the first 14 periods of projected future benefit payments and, a yield or index rate for 20 year, tax-exempt general obligation municipal bonds with and average rating of AA/Aa or higher shown on the Bond Buyer 20-Bond General Obligation Bond Index (3.58% as of June 30, 2017 and 2.85% as of June 30, 2016) for the remaining periods. Sensitivity of the net position liability to changes in the discount rate – The following table presents the net other postemployment benefit liability and service cost, calculated using the discount rate of 3.89%, as well as what the net other postemployment benefit liability would be if it were calculated using a discount rate that is 1-percentage- point lower (2.89%) or 1-percentage-point higher (4.89%) than the current rate. Current 1% Decrease Discount Rate 1% Increase 2.89% 3.89% 4.89% Net OPEB liability……………………… $ 48,747,719 $ 41,160,775 $ 35,175,385 Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 72 Comprehensive Annual Financial Report Sensitivity of the net position liability to changes in the healthcare trend – The following table presents the net other postemployment benefit liability and service cost, calculated using the current healthcare trend rate of 8.00% in year 1 decreasing by 1.00% per year until reaching 5.00%, as well as what the net other postemployment benefit liability would be if it were calculated using a healthcare trend rate that is 1-percentage- point lower or 1-percentage-point higher. 1% Decrease 1% Increase 7.00% Year 1 8.00% Year 1 9.00% Year 1 Decreasing to Decreasing to Decreasing to 4.00% 5.00% 6.00% Net OPEB liability……………………… $ 33,932,657 $ 41,160,775 $ 51,149,265 Annual OPEB Cost and Net OPEB Obligation – The Town’s annual 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………………………………………$ 2,676,614 Interest on net OPEB obligation………………………………… 522,216 Adjustments to annual required contribution…………………… (439,058) Annual OPEB cost/expense…………………..………………… 2,759,772 Contributions made………………………………………………… (2,014,864) Increase/(Decrease) in net OPEB obligation…………………… 744,908 Net OPEB obligation - beginning of year………………………… 10,994,017 Net OPEB obligation - end of year………………………………$ 11,738,925 The Town’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for year 2017 and preceding two years are as follows: Percentage of Year Annual Annual OPEB Net OPEB Ended OPEB Cost Cost Contributed Obligation 6/30/2017 $ 2,759,772 73% $ 11,738,925 6/30/2016 2,622,000 69% 10,994,000 6/30/2015 2,492,000 61% 10,184,000 Funded Status and Funding Progress – As of July 1, 2016, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $30.6 million. The actuarial value of assets for the plan was $1.5 million. The remaining $29.1 million was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $21.6 million, and the ratio of the UAAL to the covered payroll was 134.8%. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 73 Comprehensive Annual Financial Report 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, 2016, actuarial valuation, actuarial liabilities were determined using the entry age normal method. The actuarial assumptions included a 6.0% 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, and an annual medical/drug cost trend of 5.0% and included a 3.0% inflation assumption. The UAAL is being amortized over a 30 year period, with amortization payments increasing at 3.5% per year, open. The remaining amortization period at July 1, 2016, is 30 years. NOTE 13 – 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 $186,000 post-closure care liability at June 30, 2017 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 14 – 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, 2017, 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, 2017, cannot be ascertained, management believes any resulting liability should not materially affect the financial position at June 30, 2017. Notes to Basic Financial Statements Year Ended June 30, 2017 Town of Cohasset, Massachusetts 74 Comprehensive Annual Financial Report NOTE 15 – SUBSEQUENT EVENTS Management has evaluated subsequent events through December 21, 2017, which is the date the financial statements were available to be issued. NOTE 16 – IMPLEMENTATION OF NEW GASB PRONOUNCEMENTS During 2017, the following GASB pronouncements were implemented: • GASB Statement #74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. The basic financial statements, related notes and required supplementary information were updated to be in compliance with this pronouncement. • GASB Statement #77, Tax Abatement Disclosures. This pronouncement did not impact the basic financial statements. • GASB Statement #78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans. This pronouncement did not impact the basic financial statements. • GASB Statement #80, Blending Requirements for Certain Component Units – an amendment of GASB Statement #14. This pronouncement did not impact the basic financial statements. • GASB Statement #82, Pension Issues – an amendment of GASB Statements #67, #68, and #73. The basic financial statements and related notes were updated to be in compliance with this pronouncement. The following GASB pronouncements will be implemented in the future: • 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 #81, Irrevocable Split-Interest Agreements, which is required to be implemented in 2018. • The GASB issued Statement #83, Certain Asset Retirement Obligations, which is required to be implemented in 2019. • The GASB issued Statement #84, Fiduciary Activities, which is required to be implemented in 2020. • The GASB issued Statement #85, Omnibus 2017, which is required to be implemented in 2018. • The GASB issued Statement #86, Certain Debt Extinguishment Issues, which is required to be implemented in 2018. • The GASB issued Statement #87, Leases, which is required to be implemented in 2021. Management is currently assessing the impact the implementation of these pronouncements will have on the basic financial statements. Town of Cohasset, Massachusetts 75 Comprehensive Annual Financial Report Required Supplementary Information Town of Cohasset, Massachusetts 76 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 77 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……………………………………………$ 35,760,114 $ 35,760,114 $ 35,672,876 $ - $ (87,238) Motor vehicle and other excise taxes………………………… 1,365,507 1,365,507 1,835,268 - 469,761 Penalties and interest on taxes……………………………… 160,000 160,000 133,798 - (26,202) Fees and rentals………………………………………………… 905,000 905,000 872,814 - (32,186) Licenses and permits…………………………………………… 600,000 600,000 637,919 - 37,919 Fines and forfeitures…………………………………………… 34,000 34,000 25,226 - (8,774) Intergovernmental……………………………………………… 3,101,953 3,101,953 3,142,029 - 40,076 Departmental and other………………………………………… 171,278 171,278 281,288 - 110,010 Special assessments…………………………………………… 350,000 350,000 372,938 - 22,938 Investment income……………………………………………… 33,000 33,000 40,049 - 7,049 TOTAL REVENUES…………………………………… 42,480,852 42,480,852 43,014,205 - 533,353 EXPENDITURES: ADMINISTRATIVE SERVICES Town Moderator…………………………………………… 500 500 - - 500 Board of Selectmen………………………………………… 214,005 195,005 151,231 38,747 5,027 Town Manager……………………………………………… 550,941 475,124 319,858 154,178 1,088 Human Resource Management…………………………… 86,500 86,500 84,262 131 2,107 School Support Officer……………………………………… 63,500 73,575 73,575 - - Advisory Committee………………………………………… 360 360 176 - 184 Reserve Fund……………………………………………… 200,000 - - - - Director of Finance………………………………………… 241,283 244,583 239,373 2,250 2,960 Board of Assessors………………………………………… 220,686 220,686 212,601 1,909 6,176 Treasurer/Collector………………………………………… 306,614 306,614 303,219 2,752 643 Legal Services……………………………………………… 152,961 338,976 332,872 3,143 2,961 Chief Technology Office…………………………………… 669,788 669,788 462,769 160,370 46,649 Town Technology…………………………………………… 88,000 88,000 75,506 - 12,494 Town Clerk…………………………………………………… 160,565 162,502 160,425 - 2,077 Permits & Inspections……………………………………… 326,730 326,730 192,645 114,547 19,538 Unclassified………………………………………………… 408,660 412,246 412,246 - - Total Administrative services………………………………… 3,691,093 3,601,189 3,020,758 478,027 102,404 PUBLIC SAFETY Police………………………………………………………… 2,340,530 2,408,339 2,404,987 - 3,352 Fire…………………………………………………………… 2,364,293 2,364,293 2,321,894 16,211 26,188 Building Comissioner……………………………………… 150,140 150,140 139,257 1,150 9,733 Emergency Management…………………………………… 40,734 40,734 32,104 4,225 4,405 Harbormaster………………………………………………… 121,516 121,516 115,216 6,268 32 Shellfish Constable………………………………………… 475 475 475 - - Total Public Safety……………………………………………… 5,017,688 5,085,497 5,013,933 27,854 43,710 EDUCATION Cohasset Schools…………………………………………… 18,497,256 18,497,256 18,116,793 272,658 107,805 South Shore Vocational…………………………………… 84,057 84,057 84,057 - - Total Education………………………………………………… 18,581,313 18,581,313 18,200,850 272,658 107,805 PUBLIC WORKS/FACILITIES Department of Public Works……………………………… 1,330,703 1,330,703 1,303,168 2,447 25,088 Snow & Ice Removal……………………………………… 125,000 219,467 219,467 - - Street Lighting……………………………………………… 45,000 87,000 72,161 14,839 - Transfer Station……………………………………………… 489,322 489,322 471,342 - 17,980 Facilities Management……………………………………… 917,556 858,250 821,633 19,927 16,690 Total Public Works/Facilities…………………………………… 2,907,581 2,984,742 2,887,771 37,213 59,758 (Continued) Budgeted Amounts GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2017 Town of Cohasset, Massachusetts 78 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, 2017 HEALTH & WELFARE Board of Health……………………………………………… 156,810 156,810 147,186 3,467 6,157 Elder Affairs………………………………………………… 278,092 278,092 269,346 5,862 2,884 Veterans Services…………………………………………… 138,850 138,850 90,838 65 47,947 Total Health & Welfare………………………………………… 573,752 573,752 507,370 9,394 56,988 CULTURE AND RECREATION Library………………………………………………………… 613,317 613,317 601,536 3,136 8,645 Recreation…………………………………………………… 125,989 128,141 128,141 - - Common Historical Commission…………………………… 500 500 - - 500 Historical Preservation……………………………………… 600 600 600 - - Total Culture and Recreation………………………………… 740,406 742,558 730,277 3,136 9,145 DEBT SERVICE Principal……………………………………………………… 2,755,282 2,780,457 2,780,457 - - Interest……………………………………………………… 417,761 417,761 411,394 - 6,367 Total Debt Service……………………………………………… 3,173,043 3,198,218 3,191,851 - 6,367 BENEFITS & INSURANCE Pension Assessment……………………………………… 1,880,030 1,880,030 1,880,030 - - Workers Compensation…………………………………… 180,943 188,233 188,233 - - Unemployment……………………………………………… 5,000 5,000 2,505 - 2,495 Health Insurance…………………………………………… 5,338,705 5,338,705 5,201,149 - 137,556 Life Insurance……………………………………………… 9,738 9,738 6,584 - 3,154 Medicare Tax………………………………………………… 309,594 324,295 324,295 - - Property & Liability Insurance……………………………… 310,884 312,299 312,299 - - Total Benefits & Insurance…………………………………… 8,034,894 8,058,300 7,915,095 - 143,205 State and County Assessment………………………………… 388,022 388,022 401,673 - (13,651) TOTAL EXPENDITURES……………………………… 43,107,792 43,213,591 41,869,578 828,282 515,731 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES…………………………………… (626,940) (732,739) 1,144,627 (828,282) 1,049,084 OTHER FINANCING SOURCES (USES): Transfers in……………………………………………………… 1,114,191 1,114,191 1,114,191 - - Transfers out…………………………………………….……… (3,023,500) (3,098,000) (3,098,000) - - TOTAL OTHER FINANCING SOURCES (USES)…… (1,909,309) (1,983,809) (1,983,809) - - NET CHANGE IN FUND BALANCE……………………………… (2,536,249) (2,716,548) (839,182) (828,282) 1,049,084 BUDGETARY FUND BALANCE, Beginning of year…………… 3,287,399 3,287,399 3,287,399 - - BUDGETARY FUND BALANCE, End of year……………………$ 751,150 $ 570,851 $ 2,448,217 $ (828,282) $ 1,049,084 See notes to required supplementary information.(Concluded) Town of Cohasset, Massachusetts 79 Comprehensive Annual Financial Report Town of Cohasset, Massachusetts 80 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, December 31, December 31, 2014 2015 2016 Town's proportion of the net pension liability (asset)……………………………… 3.30% 3.66% 3.66% Town's proportionate share of the net pension liability (asset)……………………$ 17,115,594 $ 19,898,650 $ 19,122,211 Town's covered employee payroll……………………………………………………$ 8,086,454 $ 9,836,750 $ 10,142,562 Net pension liability as a percentage of covered-employee payroll…………………………………………………………………………………… 211.66% 202.29% 188.53% Plan fiduciary net position as a percentage of the total pension liability…………………………………………………………………… 60.10% 58.60% 61.60% 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 TOWN'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY NORFOLK COUNTY CONTRIBUTORY RETIREMENT SYSTEM Town of Cohasset, Massachusetts 81 Comprehensive Annual Financial Report June 30, June 30, June 30, 2015 2016 2017 Actuarially determined contribution……………………$ 1,596,748 $ 1,706,914 $ 1,880,030 Contributions in relation to the actuarially determined contribution……………………………… 1,596,748 1,706,914 1,880,030 Contribution deficiency (excess)………………… $ - $ - $ - Covered-employee payroll………………………………$ 8,207,751 $ 9,984,301 $ 10,294,700 Contributions as a percentage of covered- employee payroll……………………………………… 19.45% 17.10% 18.26% 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 TOWN CONTRIBUTIONS NORFOLK COUNTY CONTRIBUTORY RETIREMENT SYSTEM Town of Cohasset, Massachusetts 82 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 2017 $ 41,948,409 $ 4,279,013 52.73% 2016 38,868,017 3,152,542 55.38% 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 83 Comprehensive Annual Financial Report Town of Cohasset, Massachusetts 84 Comprehensive Annual Financial Report Other Postemployment Benefits Plan Schedules GASB 74 Schedules The Schedule of Changes in the Town’s Net Other Postemployment Benefit Liability and Related Ratios presents multi-year trend information on changes in the Plan’s total OPEB liability, changes in the Plan’s net position, and ending net OPEB liability. It also demonstrates the Plan’s net position as a percentage of the total liability and the Plan’s net other postemployment benefit liability as a percentage of covered employee payroll. The Schedule of the Town’s Contributions presents multi-year trend information on the Town’s actual contributions to the other postemployment benefit plan and related ratios. The Schedule of Investment Return presents multi-year trend information on the money-weighted investment return on other postemployment assets, net of investment expense. GASB 45 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 June 30, 2017 Total OPEB Liability Service Cost………………………………………………………$ 2,645,732 Interest…………………………………………………………… 1,441,497 Changes of benefit terms……………………………………..… - Differences between expected and actual experience……… - Changes of assumptions……………………………………… (7,930,903) Benefit payments……………………………………………...… (1,539,864) Net change in total OPEB liability……………………………… (5,383,538) Total OPEB liability- beginning……………………………..… 48,703,025 Total OPEB liability- ending (a)…………………………………$ 43,319,487 Plan fiduciary net position Employer contributions to the trust……………………………$ 475,000 Employer contributions to pay benefit payments…………… 1,539,864 Net investment income………………………...……………… 191,237 Benefit payments……………………………...………………… (1,539,864) Net change in plan fiduciary net position……………………… 666,237 Plan fiduciary net position- beginning………………………… 1,492,475 Plan fiduciary net position- ending (b)…………………………$ 2,158,712 Town's net OPEB liability- ending (a)-(b)……………………$ 41,160,775 Plan fiduciary net position as a percentage of the total OPEB liability………………………..……………………… 4.98% Covered-employee payroll………………………………..………$ 21,581,455 Town's net OPEB liability as a percentage of covered-employee payroll…………………………..………… 190.72% 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 CHANGES IN THE TOWN'S NET OPEB LIABILITY AND RELATED RATIOS OTHER POSTEMPLOYMENT BENEFIT PLAN Town of Cohasset, Massachusetts 85 Comprehensive Annual Financial Report June 30, 2017 Actuarially determined contribution…………………………………$ 2,676,614 Contributions in relation to the actuarially determined contribution……………………………………………(2,014,864) Contribution deficiency (excess)……………………………………$ 661,750 Covered-employee payroll……………………………………………$ 21,581,455 Contributions as a percentage of covered- employee payroll…………………………………………………… 9.34% 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 TOWN CONTRIBUTIONS OTHER POSTEMPLOYMENT BENEFIT PLAN Town of Cohasset, Massachusetts 86 Comprehensive Annual Financial Report 2017 Annual money-weighted rate of return, net of investment expense……………………………………… 10.20% 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 INVESTMENT RETURNS OTHER POSTEMPLOYMENT BENEFIT PLAN Town of Cohasset, Massachusetts 87 Comprehensive Annual Financial Report 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) 7/1/2016 $ 1,492,475 $ 30,583,576 $ 29,091,101 4.88% $ 21,581,455 134.8% 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 2017 $ 2,676,614 $ 2,014,864 75.3% 2016 2,545,000 1,812,000 71.2% 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% 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 88 Comprehensive Annual Financial Report Actuarial Methods: Valuation date…………………………………………… July 1, 2016 Actuarial cost method…………………………………… Entry Age Normal Amortization method…………………………………… Increasing at 3.50% over thirty years on an open amortization period. Remaining amortization period………………………… 30 years at July 1, 2016. Asset valuation method………………………………… Market value Actuarial Assumptions: Investment rate of return……………………………… 6.0%, net of OPEB plan investment expense, including inflation. Inflation rate……………………………………………… 3.0% per annum. Medical/drug cost trend rate…………………………… 8% initially, graded to 5% ultimate rate. Plan Membership: Current retirees, beneficiaries, and dependents…… 182 Current active members………………………………… 341 Total………………………………………………………523 See notes to required supplementary information. OTHER POSTEMPLOYMENT BENEFITS PLAN ACTUARIAL METHODS AND ASSUMPTIONS Town of Cohasset, Massachusetts 89 Comprehensive Annual Financial Report Notes to Required Supplementary Information Year Ended June 30, 2017 Town of Cohasset, Massachusetts 90 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 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 (departmental) 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 2017 approved budget authorized $46.1 million in appropriations and other amounts to be raised. During 2017, $180,000 of supplemental appropriations were approved primarily for snow and ice costs. The Finance Director/Town Accountant’s office has the responsibility to ensure that budgetary control is maintained. Budgetary control is exercised through the accounting system. B. Budgetary - GAAP Reconciliation For budgetary financial reporting purposes, the Uniform Municipal Accounting System basis of accounting (established by the Commonwealth) is followed, which differs from the GAAP basis of accounting. A reconciliation of budgetary-basis to GAAP-basis results for the general fund for the year ended June 30, 2017, is presented below: Net change in fund balance, budgetary basis…………………$ (839,182) Perspective difference: Activity of the stabilization fund recorded in the general fund for GAAP……………………………………… 1,632,759 Basis of accounting differences: Net change in recording revenue accruals…………………… 30,294 Recognition of revenue for on-behalf payments…………… 4,279,013 Recognition of expenditures for on-behalf payments……… (4,279,013) Net change in fund balance - GAAP basis……………………$ 823,871 Notes to Required Supplementary Information Year Ended June 30, 2017 Town of Cohasset, Massachusetts 91 Comprehensive Annual Financial Report C. Appropriation Deficits Expenditures exceeded appropriations for state and county assessments. State and county assessments are based on state assessments which are not required to be raised. 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 The January 1, 2016 actuarial valuation included an 8.00% assumed rate of return on Plan investments; this is a decrease from the 8.25% assumed rate included in the prior valuation. Additionally, the salary scale was changed to a tiered schedule ranging from 3.5% to 5.5% based on years of service, as compared to a level 4% assumption in the prior valuation. E. Changes in Plan Provisions Chapter 176 of the Acts of 2011, An Act Providing for Pension Reform and Benefit Modernization made a number of changes to the Chapter 32 pension law. There are several changes that will have the most impact on decreasing plan liabilities over the longer term. These include an increase in the normal retirement age by two years (for example, from age 65 to age 67 for Group 1 members), an increase in the age (early retirement) reduction factor for ages below the maximum age (from a 4.0% to a 6.0% annual reduction), and an increase in the period for determining a member’s average annual compensation (from 3 years to 5 years). Since these Notes to Required Supplementary Information Year Ended June 30, 2017 Town of Cohasset, Massachusetts 92 Comprehensive Annual Financial Report changes are effective only for members hired after April 1, 2012, this is the first actuarial valuation to reflect these changes. NOTE C – OTHER POSTEMPLOYMENT BENEFITS The Town administers a single-employer defined benefit healthcare plan (“the 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 Other Postemployment Benefit Plan The Schedule of Changes in the Town’s Net Other Postemployment Benefit Liability and Related Ratios The Schedule of Changes in the Town’s Net Other Postemployment Benefit Liability and Related Ratios presents multi-year trend information on changes in the Plan’s total OPEB liability, changes in the Plan’s net position, and ending net OPEB liability. It also demonstrates the Plan’s net position as a percentage of the total liability and the Plan’s net other postemployment benefit liability as a percentage of covered employee payroll. Schedule of the Town’s Contributions The Schedule of the Town’s Contributions includes the Town’s annual required contribution to the Plan, along with the contribution made in relation to the actuarially determined contribution and the covered employee payroll. The Town is not required to fully fund this contribution. It also demonstrates the contributions as a percentage of covered payroll. Schedule of Investment Return The Schedule of Investment Return includes the money-weighted investment return on the Plan’s other postemployment assets, net of investment expense. The Town 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. Schedule of Funding Progress and Employer Contributions The Schedule of Funding Progress and Employer Contributions 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. Schedule of Actuarial Methods and Assumptions The Schedule of Actuarial Methods and Assumptions presents factors that significantly affect the identification of trends in the amounts reported. Notes to Required Supplementary Information Year Ended June 30, 2017 Town of Cohasset, Massachusetts 93 Comprehensive Annual Financial Report Changes in Assumptions The discount rate increased to 3.89% from 2.58% used in the prior year. Changes in Plan Provisions None. Town of Cohasset, Massachusetts 94 Comprehensive Annual Financial Report This page intentionally left blank. Town of Cohasset, Massachusetts 95 Comprehensive Annual Financial Report Combining and Individual Fund Statements Combining and Individual Fund Statements Town of Cohasset, Massachusetts 96 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 97 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…………………………………………$ 259,411 $ 175,444 $ 1,110,555 $ 47,279 $ 329,751 Investments…………………………………………………………… - - - - - Receivables, net of uncollectibles: Tax liens…………………………………………………………… - - - - - Departmental and other………………………………………… -- --- Special assessments…………………………………………… - - 828,118 - - Intergovernmental………………………………………………… - 97,548 - - - TOTAL ASSETS…………………………………………………… $ 259,411 $ 272,992 $ 1,938,673 $ 47,279 $ 329,751 LIABILITIES Warrants payable…………………………………………………$ 923 $ 9,991 $ 2,001 $ - $ 18,553 Accrued payroll…………………………………………………… 400 1,514 - - 1,425 Notes payable…………………………………………………… - - - - - TOTAL LIABILITIES………………………………………………… 1,323 11,505 2,001 - 19,978 DEFERRED INFLOWS OF RESOURCES Unavailable revenues…………………………………………… - - 828,118 - - FUND BALANCES Nonspendable…………………………………………………… - - - - - Restricted………………………………………………………… 258,088 261,487 1,108,554 47,279 309,773 TOTAL FUND BALANCES………………………………………… 258,088 261,487 1,108,554 47,279 309,773 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES…………………$ 259,411 $ 272,992 $ 1,938,673 $ 47,279 $ 329,751 Special Revenue Funds NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2017 Town of Cohasset, Massachusetts 98 Comprehensive Annual Financial Report School Other Revolving School Community Gifts and Town Special Funds Lunch Preservation Donations Revenue Funds Sub-total $ 734,161 $ 193,996 $ 2,780,364 $ 1,011,071 $ 4,193 $ 6,646,225 - - - 556,054 - 556,054 - - 10,729 - - 10,729 - - 4,598 - - 4,598 -----828,118 - - - - - 97,548 $ 734,161 $ 193,996 $ 2,795,691 $ 1,567,125 $ 4,193 $ 8,143,272 $ 10,670 $ 3,774 $ 39 $ 55,429 $ - $ 101,380 1,467 400 - 36,655 - 41,861 - - - - - - 12,137 4,174 39 92,084 - 143,241 - - 17,133 - - 845,251 - - - - - - 722,024 189,822 2,778,519 1,475,041 4,193 7,154,780 722,024 189,822 2,778,519 1,475,041 4,193 7,154,780 $ 734,161 $ 193,996 $ 2,795,691 $ 1,567,125 $ 4,193 $ 8,143,272 (Continued) Special Revenue Funds Town of Cohasset, Massachusetts 99 Comprehensive Annual Financial Report Capital Projects Capital Projects Chapter 90 Bonded Non-Bonded Sub-total ASSETS Cash and cash equivalents……………………………………………$ 390 $ 821,364 $ 1,216,531 $ 2,038,285 Investments…………………………………………………………… - - - - Receivables, net of uncollectibles: Tax liens…………………………………………………………… - - - - Departmental and other…………………………………………… - - - - Special assessments……………………………………………… - - - - Intergovernmental………………………………………………… 426,931 - - 426,931 TOTAL ASSETS………………………………………………………$ 427,321 $ 821,364 $ 1,216,531 $ 2,465,216 LIABILITIES Warrants payable………………………………………………… $ - $ 522 $ 21,255 $ 21,777 Accrued payroll…………………………………………………… - - - - Notes payable……………………………………………………… - 597,399 - 597,399 TOTAL LIABILITIES…………………………………………………… - 597,921 21,255 619,176 DEFERRED INFLOWS OF RESOURCES Unavailable revenues……………………………………………… 426,931 - - 426,931 FUND BALANCES Nonspendable……………………………………………………… - - - - Restricted…………………………………………………………… 390 223,443 1,195,276 1,419,109 TOTAL FUND BALANCES…………………………………………… 390 223,443 1,195,276 1,419,109 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES……………………$ 427,321 $ 821,364 $ 1,216,531 $ 2,465,216 Capital Project Funds NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2017 Town of Cohasset, Massachusetts 100 Comprehensive Annual Financial Report Total Nonmajor Library Other Governmental Trust Fund Trust Funds Sub-total Funds $ 38,549 $ 151,177 $ 189,726 $ 8,874,236 1,510,067 859,146 2,369,213 2,925,267 - - - 10,729 - - - 4,598 - - - 828,118 - - - 524,479 $ 1,548,616 $ 1,010,323 $ 2,558,939 $ 13,167,427 $- $ - $ - $ 123,157 - - - 41,861 - - - 597,399 - - - 762,417 - - - 1,272,182 234,614 207,911 442,525 442,525 1,314,002 802,412 2,116,414 10,690,303 1,548,616 1,010,323 2,558,939 11,132,828 $ 1,548,616 $ 1,010,323 $ 2,558,939 $ 13,167,427 (Concluded) Permanent Funds Town of Cohasset, Massachusetts 101 Comprehensive Annual Financial Report Receipts MCWT Town Town School Reserved For Septic Loan Revolving Grants Grants Appropriation Program Funds REVENUES: Charges for services………………………………………………………$- $ - $ 1,277 $ - $ - Penalties and interest on taxes………………………………………… - - 451 - - Intergovernmental………………………………………………………… 313,133 1,179,326 - - - Departmental and other…………………………………………………… - - 71,805 600 411,564 Community preservation tax……………………………………………… - - - - - Contributions……………………………………………………………… - - - - - Special assessments……………………………………………………… - - 85,783 - - Investment income………………………………………………………… - - - - - TOTAL REVENUES……………………………………………… 313,133 1,179,326 159,316 600 411,564 EXPENDITURES: Current: Administrative services………………………………………………… 74,722 - 2,500 - 115,564 Public safety…………………………………………………………… 13,343 - - - 8,177 Education……………………………………………………………… - 1,380,228 - - - Public works…………………………………………………………… 157,515 - - - - Health and welfare…………………………………………………… 19,113 - - 65,405 8,099 Culture and recreation………………………………………………… 13,914 - - - 245,996 Community preservation……………………………………………… - - - - - TOTAL EXPENDITURES………………………………………… 278,607 1,380,228 2,500 65,405 377,836 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES……………………………………… 34,526 (200,902) 156,816 (64,805) 33,728 OTHER FINANCING SOURCES (USES): Issuance of long-term debt……………………………………………… - - - - - Transfers in………………………………………………………………… 20,000 - - - - Transfers out……………………………………………………………… - - (145,338) - - TOTAL OTHER FINANCING SOURCES (USES)……………… 20,000 - (145,338) - - NET CHANGE IN FUND BALANCES……………………………………… 54,526 (200,902) 11,478 (64,805) 33,728 FUND BALANCES AT BEGINNING OF YEAR…………………………… 203,562 462,389 1,097,076 112,084 276,045 FUND BALANCES AT END OF YEAR…………………………………… $ 258,088 $ 261,487 $ 1,108,554 $ 47,279 $ 309,773 NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2017 Special Revenue Funds Town of Cohasset, Massachusetts 102 Comprehensive Annual Financial Report School Other Revolving School Community Gifts and Town Special Funds Lunch Preservation Donations Revenue Funds Sub-total $ 719,679 $ 346,296 $ - $ - $ - $ 1,067,252 - - 1,206 - - 1,657 - 61,372 93,292 - - 1,647,123 - - - - 7,200 491,169 - - 473,928 - - 473,928 199,459 - - 927,913 - 1,127,372 - - - - - 85,783 - - 10,195 13,284 - 23,479 919,138 407,668 578,621 941,197 7,200 4,917,763 - - - 138,814 - 331,600 - - - 32,865 - 54,385 808,044 440,190 - - - 2,628,462 - - - 197,038 - 354,553 - - - 3,400 7,500 103,517 - - - 733,388 - 993,298 - - 41,527 - - 41,527 808,044 440,190 41,527 1,105,505 7,500 4,507,342 111,094 (32,522) 537,094 (164,308) (300) 410,421 - - - - - - - - - 58,145 - 78,145 - - (25,377) - - (170,715) - - (25,377) 58,145 - (92,570) 111,094 (32,522) 511,717 (106,163) (300) 317,851 610,930 222,344 2,266,802 1,581,204 4,493 6,836,929 $ 722,024 $ 189,822 $ 2,778,519 $ 1,475,041 $ 4,193 $ 7,154,780 (Continued) Special Revenue Funds Town of Cohasset, Massachusetts 103 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……………………………………………… 187,375 158,001 56,250 401,626 Departmental and other………………………………………… - - - - Community preservation tax…………………………………… - - - - Contributions…………………………………………………… - - - - Special assessments…………………………………………… - - - - Investment income……………………………………………… - - - - TOTAL REVENUES……………………………………… 187,375 158,001 56,250 401,626 EXPENDITURES: Current: Administrative services……………………………………… - 1,419,536 116,893 1,536,429 Public safety………………………………………………… - 21,935 91,626 113,561 Education…………………………………………………… - 115,000 167,267 282,267 Public works………………………………………………… 187,375 252,419 428,094 867,888 Health and human services………………………………… - 33,469 - 33,469 Culture and recreation……………………………………… - - - - Community preservation…………………………………… - - - - TOTAL EXPENDITURES……………………………… 187,375 1,842,359 803,880 2,833,614 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES…………………………… - (1,684,358) (747,630) (2,431,988) OTHER FINANCING SOURCES (USES): Issuance of long-term debt…………………………………… - 1,417,000 - 1,417,000 Transfers in……………………………………………………… - 17,500 828,000 845,500 Transfers out…………………………………………………… - - - - TOTAL OTHER FINANCING SOURCES (USES)…… - 1,434,500 828,000 2,262,500 NET CHANGE IN FUND BALANCES…………………………… - (249,858) 80,370 (169,488) FUND BALANCES AT BEGINNING OF YEAR………………… 390 473,301 1,114,906 1,588,597 FUND BALANCES AT END OF YEAR……………………………$ 390 $ 223,443 $ 1,195,276 $ 1,419,109 YEAR ENDED JUNE 30, 2017 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Capital Project Funds Town of Cohasset, Massachusetts 104 Comprehensive Annual Financial Report Total Nonmajor Library Other Governmental Trust Fund Trust Funds Sub-total Funds $- $ - $ - $ 1,067,252 - - - 1,657 - - - 2,048,749 - - - 491,169 - - - 473,928 10,050 5,260 15,310 1,142,682 - - - 85,783 220,773 36,466 257,239 280,718 230,823 41,726 272,549 5,591,938 - 1,083 1,083 1,869,112 - - - 167,946 - - - 2,910,729 - 29,485 29,485 1,251,926 - - - 136,986 48 - 48 993,346 - - - 41,527 48 30,568 30,616 7,371,572 230,775 11,158 241,933 (1,779,634) - - - 1,417,000 - - - 923,645 (58,145) - (58,145) (228,860) (58,145) - (58,145) 2,111,785 172,630 11,158 183,788 332,151 1,375,986 999,165 2,375,151 10,800,677 $ 1,548,616 $ 1,010,323 $ 2,558,939 $ 11,132,828 (Concluded) Permanent Funds Town of Cohasset, Massachusetts 105 Comprehensive Annual Financial Report Town of Cohasset, Massachusetts 106 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 fund consists 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, 2017 Beginning End of Year Additions Deletions of Year Cash and cash equivalents……………$ 652,973 $ 2,154,268 $ (1,743,261) $ 1,063,980 Special details receivables…………… 177,887 876,203 (839,441) 214,649 TOTAL ASSETS……………………………$ 830,860 $ 3,030,471 $ (2,582,702) $ 1,278,629 Payroll withholdings……………………$ 637,040 $ 512,613 $ (510,835) $ 638,818 Liabilities due depositors……………… 193,820 2,517,858 (2,071,867) 639,811 TOTAL LIABILITIES………………………$ 830,860 $ 3,030,471 $ (2,582,702) $ 1,278,629 ASSETS LIABILITIES Town of Cohasset, Massachusetts 107 Comprehensive Annual Financial Report Town of Cohasset, Massachusetts 108 Comprehensive Annual Financial Report This page intentionally left blank. Statistical Section Crowds gather on a sunny afternoon. Photo: William Quigley Town of Cohasset, Massachusetts 109 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 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Governmental activitiesNet investment in capital assets………………………$ 50,643,262 $ 51,522,827 $ 51,634,686 $ 52,393,141 $ 45,256,816 $ 45,149,347 $ 45,942,136 $ 46,801,586 $ 48,845,082 $ 50,120,485 Restricted………………………………………………… 3,913,860 4,516,539 5,582,944 6,107,623 4,904,201 5,941,619 6,742,197 6,995,791 7,488,345 7,805,611 Unrestricted……………………………………………… 5,134,722 2,953,254 1,356,625 (867,326) 2,963,690 2,578,655 (13,865,740) (13,575,380) (15,146,493) (14,953,013) Total governmental activities net position……………… $ 59,691,844 $ 58,992,620 $ 58,574,255 $ 57,633,438 $ 53,124,707 $ 53,669,621 $ 38,818,593 $ 40,221,997 $ 41,186,934 $ 42,973,083 Business-type activitiesNet investment in capital assets………………………$ 15,134,636 $ 14,652,348 $ 18,013,611 $ 30,478,145 $ 23,986,222 $ 23,598,624 $ 24,552,663 $ 25,773,697 $ 26,675,077 $ 27,744,000 Restricted………………………………………………… - 4,824,658 - - - - - - - - Unrestricted……………………………………………… 4,809,853 498,502 2,446,486 1,593,511 13,812,098 14,040,400 13,279,974 13,128,471 13,304,136 13,199,348 Total business-type activities net position………………$ 19,944,489 $ 19,975,508 $ 20,460,097 $ 32,071,656 $ 37,798,320 $ 37,639,024 $ 37,832,637 $ 38,902,168 $ 39,979,213 $ 40,943,348 Primary governmentNet investment in capital assets………………………$ 65,777,898 $ 66,175,175 $ 69,648,297 $ 82,871,286 $ 69,243,038 $ 68,747,971 $ 70,494,799 $ 72,575,283 $ 75,520,159 $ 77,864,485 Restricted………………………………………………… 3,913,860 9,341,197 5,582,944 6,107,623 4,904,201 5,941,619 6,742,197 6,995,791 7,488,345 7,805,611 Unrestricted……………………………………………… 9,944,575 3,451,756 3,803,111 726,185 16,775,788 16,619,055 (585,766) (446,909) (1,842,357) (1,753,665) Total primary government net position……………………$ 79,636,333 $ 78,968,128 $ 79,034,352 $ 89,705,094 $ 90,923,027 $ 91,308,645 $ 76,651,230 $ 79,124,165 $ 81,166,147 $ 83,916,431 The Town implemented GASB 68 in fiscal year 2015 and revised the fiscal year 2014 balance to reflect the net pension liability recorded for the first time.Net Position By ComponentLast Ten YearsTown of Cohasset, Massachusetts110Comprehensive Annual Financial Report 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Expenses Governmental activities: Administration…………………………………………………$ 2,247,822 $ 2,077,306 $ 2,996,631 $ 3,194,742 $ 3,664,574 $ 3,447,387 $ 3,680,617 $ 3,997,974 $ 4,487,473 $ 4,413,663 Public safety………………………………………………… 5,241,554 5,603,698 6,078,695 6,622,695 6,643,418 6,455,507 6,623,281 6,991,258 7,738,244 7,609,256 Education……………………………………………………… 22,824,221 24,592,648 24,660,716 25,743,937 26,247,926 27,666,185 28,305,008 27,464,152 29,217,508 31,221,840 Public works………………………………………………… 3,000,931 3,303,838 3,319,593 3,740,913 3,014,490 3,378,422 3,476,400 4,136,781 4,251,519 4,788,976 Health and human services………………………………… - - 534,902 537,404 582,648 1,924,232 743,217 735,795 863,580 847,136 Culture and recreation……………………………………… 1,463,622 2,149,442 1,573,707 1,125,988 1,542,483 1,543,186 1,582,372 1,673,178 2,062,098 2,260,471 Community preservation…………………………………… 979,560 389,070 - - 46,183 161,798 438,778 271,225 259,568 41,527 Interest………………………………………………………… 1,728,188 1,138,051 902,237 921,343 1,244,644 1,146,440 966,501 810,989 643,741 594,413 Total governmental activities expenses……………………… 37,485,898 39,254,053 40,066,481 41,887,022 42,986,366 45,723,157 45,816,174 46,081,352 49,523,731 51,777,282 Business-type activities: Water and Sewer…………………………………………… 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 2,466,017 2,218,405 Water………………………………………………………… - 3,107,783 4,058,435 4,339,973 3,937,565 3,796,075 3,553,676 3,447,642 3,584,724 3,473,117 Total business-type activity expenses………………………… 4,872,635 5,682,661 7,305,696 8,505,137 6,748,188 6,537,898 5,933,469 5,762,820 6,050,741 5,691,522 Total primary government expenses…………………………$ 42,358,533 $ 44,936,714 $ 47,372,177 $ 50,392,159 $ 49,734,554 $ 52,261,055 $ 51,749,643 $ 51,844,172 $ 55,574,472 $ 57,468,804 Program Revenues Governmental activities: Charges for services: Administration………………………………………………$ 608,963 $ 568,125 $ 326,584 $ 360,593 $ 495,669 $ 570,288 $ 594,218 $ 685,031 $ 572,046 $ 552,000 Public safety charges for services……………………… 542,269 728,561 1,123,285 1,147,747 878,441 954,524 1,034,736 1,058,895 1,293,966 1,071,160 Education charges for services………………………… 1,046,450 1,111,911 1,111,911 1,145,164 975,482 1,064,381 1,090,505 1,129,365 1,143,391 1,072,356 Public works charges for services……………………… 348,594 332,941 338,641 178,356 238,427 314,016 303,932 292,558 276,478 249,587 Health and human Services……………………………… - - 16,103 21,499 46,623 44,208 37,433 32,907 25,905 21,025 Culture and recreation…………………………………… 220,554 329,764 306,237 332,205 77,414 15,219 20,849 10,000 20,030 14,164 Operating grants and contributions………………………… 5,937,188 6,549,047 7,839,025 6,417,307 7,713,034 9,315,471 8,814,016 7,583,649 8,817,175 10,318,668 Capital grants and contributions…………………………… 621,442 1,118,972 470,782 662,105 928,013 517,534 470,004 695,888 328,686 689,367 Total government activities program revenues...…………… 9,325,460 10,739,321 11,532,568 10,264,976 11,353,103 12,795,641 12,365,693 11,488,293 12,477,677 13,988,327 Business-type activities: Charges for services: Water and Sewer………………………………………… 4,317,447 - - - - - - - - - Sewer……………………………………………………… - 1,132,954 938,375 1,684,014 2,175,548 1,936,177 1,840,085 1,807,723 1,819,131 1,728,175 Water……………………………………………………… - 3,103,861 3,994,707 4,732,701 5,102,955 4,562,181 4,507,575 5,143,208 5,385,579 5,089,666 Capital grants and contributions…………………………… 729,889 521,528 772,599 13,875,299 222,911 37,676 4,152 - - 12,300 Total business-type activities program revenues...………… 5,047,336 4,758,343 5,705,681 20,292,014 7,501,414 6,536,034 6,351,812 6,950,931 7,204,710 6,830,141 Total primary government program revenues………………$ 14,372,796 $ 15,497,664 $ 17,238,249 $ 30,556,990 $ 18,854,517 $ 19,331,675 $ 18,717,505 $ 18,439,224 $ 19,682,387 $ 20,818,468 Net (Expense)/Revenue Governmental activities…………………………………………$ (28,160,438) $ (28,514,732) $ (28,533,913) $ (31,622,046) $ (31,633,263) $ (32,927,516) $ (33,450,481) $ (34,593,059) $ (37,046,054) $ (37,788,955) Business-type activities………………………………………… 174,701 (924,318) (1,600,015) 11,786,877 753,226 (1,864) 418,343 1,188,111 1,153,969 1,138,619 Total primary government net expense………………………$ (27,985,737) $ (29,439,050) $ (30,133,928) $ (19,835,169) $ (30,880,037) $ (32,929,380) $ (33,032,138) $ (33,404,948) $ (35,892,085) $ (36,650,336) General Revenues and other Changes in Net Position Governmental activities: Real estate, personal property taxes and tax liens, net of tax refunds payable………………………………$ 25,363,080 $ 26,301,119 $ 27,205,991 $ 28,117,764 $ 29,542,428 $ 30,668,230 $ 31,786,548 $ 33,093,668 $ 34,635,305 $ 35,883,703 Motor vehicle and other excise taxes…………………… 1,301,850 1,125,863 1,083,885 1,115,676 1,162,053 1,299,064 1,396,984 1,539,272 1,556,866 1,832,408 Community preservation tax…………….…………..…… 329,500 347,755 289,045 364,940 388,279 402,419 416,990 436,967 454,855 480,755 Penalties and interest on taxes…………………….…… - 157,070 199,216 118,155 206,230 243,820 189,395 166,014 280,132 135,455 Grants and contributions not restricted to specific programs………………………………………… 1,281,172 577,913 478,507 531,931 507,739 441,823 445,448 457,801 490,188 578,281 Unrestricted investment income………………………… 345,926 261,154 289,538 353,846 109,608 239,803 426,962 147,933 392,935 464,935 Transfers…………………………………………………… 111,770 (440,022) (1,430,634) (729,614) (172,726) 177,271 152,423 154,808 200,710 199,567 Total governmental activities………………………………… 28,733,298 28,330,852 28,115,548 29,872,698 31,743,611 33,472,430 34,814,750 35,996,463 38,010,991 39,575,104 Business-type activities: Unrestricted investment income (loss)………………… - - - - 6,862 19,839 39,862 36,228 123,786 25,083 Transfers…………………………………………………… (111,770) 440,022 1,430,634 729,614 172,726 (177,271) (152,423) (154,808) (200,710) (199,567) Total business-type activities………………………………… (111,770) 440,022 1,430,634 729,614 179,588 (157,432) (112,561) (118,580) (76,924) (174,484) Total primary government………………………………………$ 28,621,528 $ 28,770,874 $ 29,546,182 $ 30,602,312 $ 31,923,199 $ 33,314,998 $ 34,702,189 $ 35,877,883 $ 37,934,067 $ 39,400,620 Changes in Net Position Governmental activities…………………………………………$ 572,860 $ (183,880) $ (418,365) $ (1,749,348) $ 110,348 $ 544,914 $ 1,364,269 $ 1,403,404 $ 964,937 $ 1,786,149 Business-type activities………………………………………… 62,931 (484,296) (169,381) 12,516,491 932,814 (159,296) 305,782 1,069,531 1,077,045 964,135 Total primary government………………………………………$ 635,791 $ (668,176) $ (587,746) $ 10,767,143 $ 1,043,162 $ 385,618 $ 1,670,051 $ 2,472,935 $ 2,041,982 $ 2,750,284 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 111 Comprehensive Annual Financial Report 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017General FundReserved………………………………$ 946,813 $ 650,882 $ 635,676 $ - $ - $ - $ - $ - $ - $ - Unreserved…………………………… 598,305 366,706 328,674 - - - - - - - Committed……………………………… - - - - 563,210 481,523 481,240 471,938 381,282 417,445 Assigned……………………………… - - - 261,659 100,724 177,296 161,245 351,097 274,535 410,837 Unassigned…………………………… - - - 1,654,551 2,194,199 3,080,514 4,640,534 5,195,715 6,036,011 6,687,417 Total general fund……………………… $ 1,545,118 $ 1,017,588 $ 964,350 $ 1,916,210 $ 2,858,133 $ 3,739,333 $ 5,283,019 $ 6,018,750 $ 6,691,828 $ 7,515,699 All Other Governmental FundsUnreserved, reported in:Special revenue funds………………$ 4,171,263 $ 4,686,206 $ 4,447,470 $ - $ - $ - $ - $ - $ - $ - Capital projects funds……………… 347,869 1,564,003 1,547,657 - - - - - - - Permanent funds…………………… 929,869 470,507 602,861 - - - - - - - Nonspendable………………………… - - - 223,414 223,414 223,414 424,735 424,735 425,885 442,525 Restricted……………………………… - - - 7,091,227 6,121,494 7,777,139 8,224,501 9,133,351 10,374,792 10,690,303 Unassigned…………………………… - - - (216,907) - - - - - - Total all other governmental funds…. $ 5,449,001 $ 6,720,716 $ 6,597,988 $ 7,097,734 $ 6,344,908 $ 8,000,553 $ 8,649,236 $ 9,558,086 $ 10,800,677 $ 11,132,828 The Town implemented GASB 54 in year 2011, fund balances prior to year 2011 have been reported in the pre-GASB 54 format.Fund Balances, Governmental FundsLast Ten YearsTown of Cohasset, Massachusetts112Comprehensive Annual Financial Report 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues:Real estate, personal property taxes and tax liens, net of tax refunds……………………………………………$ 25,068,139 $ 26,358,347 $ 26,911,817 $ 28,288,869 $ 29,566,547 $ 30,728,408 $ 31,740,271 $ 33,054,033 $ 34,705,407 $ 35,703,170 Motor vehicle and other excise taxes………………………… 1,284,858 1,151,630 1,013,543 1,141,926 1,145,219 1,323,667 1,423,062 1,561,442 1,545,914 1,835,268 Licenses, permits, and fees…………………………………… 353,673 354,247 478,108 543,407 1,286,403 1,572,712 1,588,933 1,628,690 1,812,251 1,510,733 Penalties and interest on taxes………………………………… 165,983 157,070 199,216 118,155 206,230 243,820 189,395 166,014 280,132 135,455 Fines and Fees………………………………………………… 38,255 31,905 66,214 41,603 26,240 36,648 52,336 36,523 35,719 25,226 Charges for services…………………………………………… - - - - 975,618 1,065,228 1,091,101 1,090,181 1,135,036 1,067,252 Intergovernmental……………………………………………… 11,852,317 7,902,111 6,815,415 7,283,379 8,276,896 7,869,826 9,043,567 7,644,901 9,015,361 10,273,585 Departmental and other………………………………………… 2,353,281 2,611,334 3,401,009 2,541,449 1,097,591 624,797 685,874 849,262 740,897 797,096 Community preservation taxes………………………………… 329,500 347,755 289,045 364,940 386,736 406,634 416,852 430,473 457,336 473,928 Contributions…………………………………………………… 359,123 343,821 1,231,690 327,964 685,050 1,199,670 712,636 811,760 1,106,298 1,142,682 Special assessments…………………………………………… - - - - 543,308 528,928 588,606 554,695 500,308 458,721 Investment income……………………………………………… 345,926 261,154 289,538 353,846 101,859 239,803 426,962 147,933 392,935 464,935 Total revenue…………………………………………………… 42,151,055 39,519,374 40,695,595 41,005,538 44,297,697 45,840,141 47,959,595 47,975,907 51,727,594 53,888,051 Expenditures: Administration…………………………………………………… 1,948,258 2,021,005 2,371,786 2,233,776 2,928,984 2,752,661 2,872,276 3,094,345 3,560,252 4,892,650 Public safety……………………………………………………… 4,015,495 4,252,024 4,674,695 4,584,957 4,423,141 4,676,241 4,980,413 4,908,286 5,127,862 5,181,879 Education………………………………………………………… 16,140,775 16,866,182 17,614,538 17,678,808 17,790,989 18,395,033 18,736,662 20,039,676 20,372,298 21,111,579 Public works……………………………………………………… 4,318,823 3,566,755 2,432,446 3,144,958 2,274,672 2,239,202 2,737,423 3,289,689 3,902,865 4,139,697 Health and welfare……………………………………………… - - 361,930 384,277 477,299 1,788,316 602,257 579,058 1,634,611 644,356 Culture and recreation………………………………………… 1,321,206 1,317,249 2,121,394 903,198 1,130,054 1,159,141 1,189,344 1,244,446 1,588,856 1,723,623 Pension benefits………………………………………………… 3,689,572 3,913,458 4,154,230 4,577,048 4,432,165 4,819,457 4,943,764 3,611,380 4,859,456 6,159,043 Employee benefits……………………………………………… 2,901,546 2,754,754 2,891,482 2,777,999 3,570,122 4,022,985 4,191,000 4,366,746 5,792,801 6,035,065 Community preservation……………………………………… 979,560 389,070 278,054 295,713 207,144 161,798 438,778 271,225 259,568 41,527 State and county charges……………………………………… 1,079,456 1,069,319 1,036,228 988,613 973,754 922,630 937,872 1,015,079 418,365 401,673 Debt service Principal……………………………………………………… 2,278,880 1,954,979 1,838,109 2,034,985 3,264,323 2,925,391 3,303,933 3,219,630 3,223,085 3,373,347 Interest………………………………………………………… 1,841,793 1,075,004 1,015,231 921,343 1,152,362 1,332,712 985,927 846,574 705,104 622,298 Total expenditures……………………………………………… 40,515,364 39,179,799 40,790,123 40,525,675 42,625,009 45,195,567 45,919,649 46,486,134 51,445,123 54,326,737 Excess (deficiency) of revenues over (under) expenditures……………………………………… 1,635,691 339,575 (94,528) 479,863 1,672,688 644,574 2,039,946 1,489,773 282,471 (438,686) Other financing sources (uses): Premium from issuance of bonds……………………………… - - - - 7,749 - - - - - Issuance of long-term debt…………………………………… 1,089,751 1,360,000 1,349,196 - - 1,715,000 - - 1,208,000 1,417,000 Issuance of refunding bonds…………………………………… - - - - 9,039,000 696,450 - - 193,500 166,800 Premium from issuance of refunding bonds………………… - - - - 1,063,518 41,802 - - - - Payment to refunded bond escrow agent…………………… - - - - (9,973,238) (738,252) - - (203,216) (188,659) Payments of current refunded debt…………………………… (3,974,951) - - - (200,000) - - - - - Transfers in……………………………………………………… 414,857 348,660 487,366 632,099 1,726,682 809,333 890,222 1,483,532 2,340,343 1,293,927 Transfers out…………………………………………………… (303,087) (788,682) (1,918,000) (1,361,713) (1,899,408) (632,062) (737,799) (1,328,724) (2,139,633) (1,094,360) Total other financing sources (uses)…………………………… (2,773,430) 919,978 (81,438) (729,614) (235,697) 1,892,271 152,423 154,808 1,398,994 1,594,708 Net change in fund balance………………………………………$ (1,137,739) $ 1,259,553 $ (175,966) $ (249,751) $ 1,436,991 $ 2,536,845 $ 2,192,369 $ 1,644,581 $ 1,681,465 $ 1,156,022 Debt service as a percentage of noncapital expenditures…… 11.32% 8.09% 7.41% 7.48% 11.04% 9.55% 9.99% 8.88% 8.09% 7.78%Note: Charges for services were reported as departmental revenue prior to FY2012.Changes in Fund Balances, Governmental FundsLast Ten YearsTown of Cohasset, Massachusetts113Comprehensive Annual Financial Report Assessed and Actual Values and Tax Rates Personal Total Commercial Total Residential Residential Commercial Industrial Property Commercial Commercial % of Town Year Value Tax Rate Value Value Value Value Tax Rate Total Value Value 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 2016 $2,485,772,774 $12.88 $164,369,961 $1,070,900 $24,387,410 $189,828,271 $12.88 7.1% $2,675,601,045 2017 (1) $2,564,462,219 $13.06 $163,904,671 $1,070,900 $25,930,820 $190,906,391 $13.06 6.9% $2,755,368,610 (1) Revaluation year. Source: Assessor's Department, Town of Cohasset and Official Statements. All property in the Commonwealth of Massachusetts is assessed at 100% of fair cash value. Note: Chapter 59, Section 21C of the Massachusetts General Laws, known as "Proposition 2 1/2", imposes 2 separate limits on the annual tax levy of the Town. The primary limitation is that the tax levy cannot exceed 2 1/2 percent of the full and fair cash value. The secondary limitation is that the tax levy cannot exceed the maximum levy limit for the preceding year as determined by the State Commissioner of Revenue by more than 2 1/2 percent, subject to an exception for property added to the tax rolls and for certain substantial valuation increases other than as part of a general revaluation. The secondary limit may be exceeded in any year by a majority vote of the voters, however it cannot exceed the primary limitation. Assessed Value and Actual Value of Taxable Property by Classification and Tax Rates Last Ten Years 93% 6%0%1% Total Assessed Value by Classification Year Ended June 30, 2017 Residential Commercial Industrial Personal Property 93% 6%0%1% Total Assessed Value by Classification Year Ended June 30, 2016 Residential Commercial Industrial Personal Property 6.6% 6.7% 6.8% 6.9% 7.0% 7.1% 7.2% 7.3% 7.4% 7.5% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Commercial Value as % of Total Value Town of Cohasset, Massachusetts 114 Comprehensive Annual Financial Report Principal Taxpayers Current Year and Nine Years AgoPercentage of Percentage ofTotal Taxable Total TaxableNature of Assessed Assessed Assessed AssessedName BusinessValuation RankValueValuation RankValueAvalon Cohasset Inc. Residential 49,500,000$ 1 1.80% -$ -Minot International Residential 17,535,800 2 0.64% - -Cushing Station LLC Retail 14,374,700 3 0.52% - -Roy, Peter A Residential 11,890,800 4 0.43% 9,626,700 4 0.40%Connell Cohasset Greenbush LLC Commercial 9,750,800 5 0.35% - -Hingham Lumber Company Inc. Commercial 9,568,600 6 0.35% 8,237,500 6 0.34%-Chute, Ruth Residential 8,678,700 7 0.31% 7,044,500 8 0.29%Roy, Mary L. Residential 8,031,500 8 0.29% - -Metropolitan/Cohasset Senior Housing Assisted Living 7,473,600 9 0.27% 7,539,600 7 0.31%Atlantic LLC Commercial 7,401,500 10 0.27% - -Cedarmere Venture LLC Retail - - 14,465,700 1 0.60%CSDV Limited Partnership Retail - - 11,804,900 3 0.49%Whitehead Road Limited Residential - - 14,033,100 2 0.58%Staszko, Donald E & Opray, Barbara Residential/Commercial - - 9,186,700 5 0.38%Cohasset Golf Club Recreation - - 7,033,957 9 0.29%Rose Garth Residential - - 6,607,900 10 0.27%Totals144,206,000$ 5.23% 95,580,557$ 3.98%Source: Official Statements, Town of Cohasset2017 2008Town of Cohasset, Massachusetts115Comprehensive 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 Levy2008 (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% $562,904 $32,545,881 98.40%2016 $34,461,741 $118,371 $34,343,370 99.66% $33,666,964 98.03% $197,444 $33,864,408 98.61%2017 (1) $35,985,114 $119,374 $35,865,740 99.67% $35,430,892 98.79% $0 $35,430,892 98.79% (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$35,000,000$40,000,0002008 2009 2010 2011 2012 2013 2014 2015 2016 2017Real Estate Tax Levies vs. First Year CollectionsLast Ten YearsReal Estate Tax LevyFirst Year Current Tax CollectionsTown of Cohasset, Massachusetts116Comprehensive Annual Financial Report General Less Net General Percentage Percentage Percentage PercentageU. S. Census Personal Assessed Obligation Amounts Obligation Per of Personal of Assessed Per of Personal of AssessedYear Population Income Value Bonds Available (2) Bonds Capita Income Value Capita Income Value2008 7,617 627,893,000$ 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 8,084 672,879,824$ 2,613,497,066$ $21,223,504 ($548,047) $20,675,457 $2,590 3.15% 0.81% 2,523$ 3.07% 0.79%2016 8,273 796,681,627$ 2,675,601,045$ $19,087,807 ($487,153) $18,600,654 $2,307 2.40% 0.71% 2,248$ 2.33% 0.70%2017 8,342 739,699,000$ 2,755,368,610$ $17,007,742 ($426,258) $16,581,484 $2,039 2.30% 0.62% 1,988$ 2.24% 0.60%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 Value2008 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% $7,476 9.10% 2.34%2016 38,386,037$ $57,473,844 $56,986,691 $6,947 7.21% 2.15% $6,888 7.15% 2.13%2017 36,321,177$ $53,328,919 $52,902,661 $6,393 7.21% 1.94% $6,342 7.15% 1.92%(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, Massachusetts117Comprehensive Annual Financial Report Share of Debt Percentage Overlapping Town of Cohasset, Massachusetts Outstanding Applicable Debt Overlapping debt repaid with property taxes Norfolk County………………………………………………… $11,830,000 (a) 2.17% $ 132,476 Massachusetts Bay Transportation Authority……………… 5,656,191,000 (a) 0.11% 178,924 South Shore Regional Vocational School District…………… 690,000 (a) 1.16% 84,057 Subtotal, overlapping debt……………………………………………………………………………………………… 395,457 Total Town direct debt………………………………………………………………………………………………… 17,007,742 Total direct and overlapping debt………………………………………………………………………………………$ 17,403,199 (a) Outstanding debt as of June 30, 2016 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, 2017 Direct and Overlapping Governmental Activities Debt Town of Cohasset, Massachusetts 118 Comprehensive Annual Financial Report 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Equalized Valuation……………………………$ 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 $ 2,675,601,045 $ 2,755,368,610 Debt Limit -5% of Equalized Valuation………$ 120,156,010 $ 122,758,711 $ 121,936,988 $ 122,015,081 $ 123,287,761 $ 126,076,313 $ 127,113,873 $ 130,674,853 $ 133,780,052 $ 137,768,431 Less: Outstanding debt applicable to limit………… 46,684,604 64,610,320 62,821,695 59,198,694 55,258,487 57,170,731 52,775,014 54,516,104 45,619,522 43,184,437 Legal debt margin…………………………$ 73,471,406 $ 58,148,391 $ 59,115,293 $ 62,816,387 $ 68,029,274 $ 68,905,582 $ 74,338,859 $ 76,158,749 $ 88,160,530 $ 94,583,994 Total debt applicable to the limit as a percentage of the limit………………… 38.85% 52.63% 51.52% 48.52% 44.82% 45.35% 41.52% 41.72% 34.10% 31.35%Source: Treasurer's Department, Town of CohassetComputation of Legal Debt MarginLast Ten YearsTown of Cohasset, Massachusetts119Comprehensive Annual Financial Report PerCapitaPopulation Personal Personal Median School UnemploymentYear Estimates Income Income Age Enrollment Rate2008 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%2016 8,273 796,681,627$ 96,299$ 44 1,637 3.40%2017 8,342 739,699,000$ 89,411$ 44 1,593 2.10%Source: U. S. Census, Division of Local ServicesMedian age is based on most recent census dataDemographic and Economic StatisticsLast Ten YearsTown of Cohasset, Massachusetts120Comprehensive Annual Financial Report Nature Percentage of Percentage ofof Total Town Total TownEmployer Business Employees Rank Employment Employees Rank EmploymentShaw's Grocery Store 130 1 3.18% 130 2 3.73%Super Stop & Shop Grocery Store 119 2 2.91% 155 1 4.45%South Shore Music Circus Seasonal Entertainment 100 3 2.45% 87 3 2.49%Hingham Lumber Building Supplies 88 4 2.15% 80 4 2.29%Harborview Center for Nursing Rehab Rehabilitation Hospital 68 5 1.66% - - -Sunrise Assisted Living Facility 64 6 1.57% 80 5 2.29%Red Lion Inn Inn/Restaurant 48 7 1.17% 50 7 1.43%Cohasset Pediatrics Health Services 40 8 0.98% - - -Pilgrim Bank Bank 36 9 0.88% - - -Health Care South Health Services 35 10 0.86% - - -Golden Living Center Rehabilitation Hospital - - - 60 6 1.72%Cohasset Harbor Restaurant Motel/Restaurant - - - 10 8 0.29%728 17.82% 652 18.70%Source: Massachusetts Workplace Development Agency & the Town's personnel and department records.2017 2008Principal EmployersCurrent Year and Nine Years AgoTown of Cohasset, Massachusetts121Comprehensive Annual Financial Report 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Function Administration…………… 15 15 20 21 21 24 22 22 23 22 Police…………………… 128 185 109 112 87 89 102 96 100 50 Fire……………………… 30 25 27 27 35 36 35 33 31 50 Education……………… 344 349 336 332 334 337 345 313 363 359 Sewer…………………… 1 1 1 1 1 1 1 1 1 1 Public works…………… 27 25 26 27 25 25 25 27 34 29 Human services………… 11 12 11 10 13 14 12 12 9 10 Culture and recreation… 52 44 43 53 68 69 74 75 118 130 Total …………………… 608 656 573 583 584 595 616 579 679 651 Source: Town personnel records and various Town departments. Full-time Equivalent Town Employees by Function Last Ten Years Town of Cohasset, Massachusetts 122 Comprehensive Annual Financial Report Function/Program2008 2009 2010 2011 2012 2013 2014 2015 2016 2017AdministrationPopulation……………………………………………… 7,617 7,777 7,874 7,846 7,490 7,895 7,870 8,064 8,225 8,018 Registered voters, annual town election…………… 873 272 5,239 5,398 5,424 5,814 5,679 5,675 5,857 5,973 Town Clerk Births………………………………………………… 75 66 70 58 65 49 61 73 69 76 Marriages…………………………………………… 32 33 27 29 35 27 23 35 33 35 Deaths……………………………………………… 73 83 60 77 67 87 73 88 67 77 Police Accidents covered by an officer……………………. 161 133 155 133 140 160 158 165 180 165 Citations issued……………………………………… 904 768 1,825 2,401 1,739 928 1,571 1,133 1,428 1,104 Arrests………………………………………………… 105 144 104 113 115 151 167 141 163 131 Larcenies………………………………….…………… 96 75 73 89 80 56 76 87 82 75 Fire Total Reponses……………………………………… 2,289 2,515 2,108 2,086 2,218 2,154 1,418 2,357 2,080 2,376 Fire related calls……………………………………… 101 78 45 71 70 48 59 77 84 93 EMS/Rescue related calls………………………….. 890 967 937 930 953 1,001 715 1,019 984 944 Building Department Building permits issued……………………………… 426 335 301 407 304 388 398 421 501 472 Education Public school enrollment……………………………… 1,421 1,466 1,496 1,535 1,530 1,594 1,632 1,614 1,637 1,593 Public Works Cemetery Interments…………………………………………… 32 31 28 42 33 28 38 37 43 37 Water Service connections………………………...……… 2,449 2,433 2,467 2,492 2,512 2,567 2,571 2,580 2,611 2,638 Consumption in billions of gallons……………… 0.344 0.306 0.281 0.305 0.269 0.272 0.268 0.275 0.290 0.284Daily consumption in millions of gallons………… 0.941 0.838 0.771 0.836 0.736 0.745 0.734 0.754 0.794 0.778Sewer Service connections………………………...……… 874 1,031 1,134 1,274 1,385 1,538 1,559 1,562 1,593 1,610 Daily average collection (MGD)………………… 0.279 0.226 0.223 0.2393 0.224 0.277 .274 .279 .299 .319HighwayMiles 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……………………………………… 26 21 31 26 21 17 29 32 35 25 Council on AgingHome delivered meals…………………………… n/a 5,000 2,302 3,470 3,630 2,936 3,607 3,613 3,029 3,258 Transportation……………………………………… 3,116 3,820 4,209 4,510 5,031 4,369 3,024 3,699 3,864 4,210 Volunteer service hours…………………………… 7,304 7,831 8,304 9,235 7,752 7,755 10,697 8,558 7,650 6,913 Fitness/exercise program participants…………… 204 190 212 172 301 319 219 255 297 190 Recreation/social event participants……………… 1,605 1,106 1,013 1,137 1,057 1,148 265 360 412 475 Libraries Volumes in collection………………………………… 66,319 62,306 64,924 70,364 68,404 67,396 222,020 220,014 220,014 127,853 Circulation…………………………………..………… 149,974 149,299 139,221 149,224 152,773 157,437 155,411 155,974 158,433 150,188 Program attendance………………………………… 5,441 5,962 6,314 7,067 8,454 9,683 10,636 10,675 12,899 12,458 Source: Various Town Departmentsn/a: Information not availableOperating Indicators by Function/ProgramLast Ten YearsTown of Cohasset, Massachusetts123Comprehensive Annual Financial Report Function/Program2008 2009 2010 2011 2012 2013 2014 2015 2016 2017AdministrationNumber 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 10 10 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 46 46 46 46 46 46 46 46 46 Fire hydrants……………………………… 496 496 496 496 496 496 496 496 496 496 Sanitary sewers (miles)………………… 22 33 33 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 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 Capital Asset Statistics by Function/ProgramLast Ten YearsTown of Cohasset, Massachusetts124Comprehensive Annual Financial Report