FLORENCE TOWNSHIP FIRE DISTRICT NO.1 County of Burlingtonmembersonly.ftfd40.org/assets/florencetwpfire2013.pdf · 2016. 3. 10. · FLORENCE TOWNSHIP FIRE DISTRICT NO.1 FLORENCE, NEW

FLORENCE TOWNSHIPFIRE DISTRICT NO.1

County of Burlington

REPORT OF AUDITFOR THE YEAR ENDED DECEMBER 31, 2013

************

FLORENCE TOWNSHIP FIRE DISTRICT NO.1

Roster of Officials 1

FINANCIAL SECTION

Independent Auditor's Report 3

Report on Compliance and on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial StatementsPerformed in Accordance with Government Auditing Standards 5

Required Supplementary Information - Part IManagement's Discussion and Analysis 8

Basic Financial Statements

A. District-wide Financial Statements:

A-IA-2

Statement of Net PositionStatement of Activities

1617

B. Fund Financial Statements:

Governmental Funds:B-1 Balance SheetB-2 Statement of Revenues, Expenditures, and Changes in Fund Balances

1920

B-3 Reconciliation of the Statement of Revenues, Expenditures, and Changes inFund Balances of Governmental Funds to the Statement of Activities 21

Fiduciary Funds:B-4 Statement of Fiduciary Net Position 22

Notes to the Financial Statements 23

Required Supplementary Information - Part II

C. Budgetary Comparison Schedules

C-lC-2

Budgetary Comparison Schedule - General FundBudget-to-GAAP Reconciliation

3840

Other Supplementary Information

D. Special Revenue FundD-I Combining Schedule of Revenues and Expenditures

Special Revenue Fund - Budgetary Basis N/A

E. Capital Projects Fund:E-l Summary Statement of Project Expenditures 43

F. Fiduciary Funds:F-1 Combining Statement of Fiduciary Net PositionF-2 Payroll Agency Fund Schedule of Receipts and Disbursements

4546

G. Long-Term Debt:G-l Schedule of Serial BondsG-2G-3G-4

Schedule of Obligations Under Capital LeasesBudgetary Comparison Schedule - Debt Service FundSchedule of Loan Payable

48495051

GENERAL COMMENTS AND RECOMMENDATIONS

Schedule of Findings and Questioned CostsSummary Schedule of Prior Audit FindingsAppreciation

535353

FLORENCE TOWNSHIP FIRE DISTRICT NO.1FLORENCE, NEW JERSEY

ROSTER OF OFFICIALSDECEMBER 31, 2013

Members of the Board of Commissioners

Scott Arnold - Chairman

William Rzomp - Vice-Chairman

Barbara Mayer - Secretary

Francis Roberson - Treasurer

Charles Bauer - Commissioner

Other Officials

Kevin Mullen - Battalion Chief / Business Manager

1

Financial Section

INVERSO & STEWART, LLC

Certified Public Accountants

651 Route 73 North, Suite 402Marlton, New Jersey 08053(856) 983-2244Fax (856) 983-6674E-Mail: IscpasCii)concentric.net

-Member of-American Institute of CPAsNew Jersey Society of CPAs

INDEPENDENT AUDITOR'S REPORT

Board of Fire CommissionersFlorence Township Fire District No. 1County of BurlingtonFlorence, New Jersey

Report on the Financial Statements

I have audited the accompanying financial statements of the governmental activities, and each major fund of the FlorenceTownship Fire District No.1, in the County of Burlington, State of New Jersey, as of and for the year ended December31, 2013, and the related notes to the financial statements, which collectively comprise the Fire District's basic financialstatements 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 withaccounting principles generally accepted in the United States of America; this includes the design, implementation andmaintenance of internal control relevant to the preparation and fair presentation of financial statements that are free frommaterial misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express opinions on these financial statements based on my audit. I conducted my audit inaccordance with auditing standards generally accepted in the United States of America; the standards applicable tofinancial audits contained in Government Auditing Standards. issued by the Comptroller General of the United States; andin compliance with audit requirements as prescribed by the Bureau of Authority Regulation, Division of LocalGovernment Services, Department of Community Affairs, State of New Jersey. Those standards require that I plan andperform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the Fire District's preparation and fair presentation of the financial statements inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Fire District's internal control. Accordingly, I express no such opinion. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinions.

Opinions

In my opinion, the financial statements referred to above present fairly, in all material respects, the respective financialposition of the governmental activities and each major fund of the Florence Township Fire District No.1, in the Countyof Burlington, State of New Jersey, as of December 31, 2013, and the respective changes in financial position thereof forthe year then ended in accordance with accounting principles generally accepted in the United States of America.

3

Other Matters

Accounting principles generally accepted in the United States of America require that the management's discussion andanalysis and budgetary comparison information as listed in the table of contents be presented to supplement the basicfinancial statements. Such information, although not a part of the basic fmancial statements, is required by theGovernmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing thebasic financial statements in an appropriate operational, economic, or historical context. I have applied certain limitedprocedures to the required supplementary information in accordance with auditing standards generally accepted in theUnited States of America, which consisted of inquiries of management about the methods of preparing the informationand comparing the information for consistency with management's responses to my inquiries, the basic financialstatements, and other knowledge I obtained during my audit of the basic financial statements. I do not express an opinionor provide any assurance on the information because the limited procedures do not provide me with sufficient evidence toexpress an opinion or provide any assurance.

Other Information

My audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise theFlorence Township Fire District No. l's basic financial statements. The related major fund supporting statements andschedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of thebasic financial statements.

The statements and schedules previously referred to are the responsibility of management and were derived from andrelate directly to the underlying accounting and other records used to prepare the basic financial statements. Suchinformation has been subjected to the auditing procedures applied in the audit of the basic financial statements and certainadditional procedures, including comparing and reconciling such information directly to the underlying accounting andother records used to prepare the basic financial statements or to the basic financial statements themselves, and otheradditional procedures in accordance with auditing standards generally accepted in the United States of America. In myopinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as awhole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, I have also issued my report dated April 4, 2014 on myconsideration of the Florence Township Fire District No.1 's internal control over financial reporting and my tests of itscompliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purposeof that report is to describe the scope of my testing of internal control over financial reporting and compliance and theresults 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 consideringthe Florence Township Fire District No.1 's internal control over financial reporting and compliance.

Respectfully submitted,

INVERSO & STEWART, LLCCertified Public Accountants

Robert P. InversoCertified Public AccountantRegistered Municipal Accountant

Marlton, New JerseyApri14,2014

4


Certified Public Accountants651 Route 73 North, Suite 402Marlton, New Jersey 08053(856) 983-2244Fax (856) 983-6674E-Mail: [email protected]

-Member of-American Institute of CPAsNew Jersey Society of CPAs

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTINGAND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCEWITH GOVERNMENT AUDITING STANDARDS

INDEPENDENT AUDITOR'S REPORT

Board of Fire CommissionersFlorence Township Fire District No. 1County of BurlingtonFlorence, New Jersey

I have audited, in accordance with the auditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller Generalof the United States, and the audit requirements as prescribed by the Bureau of Authority Regulation, Division of LocalGovernment Services, Department of Community Affairs, State of New Jersey, the financial statements of thegovernmental activities, and each major fund of Florence Township Fire District No.1, in the County of Burlington, Stateof New Jersey, as of and for the year ended December 31, 2013, and the related notes to the financial statements, whichcollectively comprise the Fire District's basic financial statements, and have issued my report thereon dated April 4, 2014.

Internal Control Over Financial Reporting

In planning and performing my audit of the financial statements, I considered the Florence Township Fire District No.l'sinternal control over financial reporting (internal control) to determine the audit procedures that are appropriate in thecircumstances for the purpose of expressing my opinions on the financial statements, but not for the purpose ofexpressing an opinion on the effectiveness of the Fire District's internal control. Accordingly, I do not express an opinionon the effectiveness of the Florence Township Fire District No.1 's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements ona timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is areasonable possibility that a material misstatement of the Fire District's financial statements will not be prevented, ordetected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, ininternal control that is less severe than a material weakness, yet important enough to merit attention by those charged withgovernance.

My consideration of internal control was for the limited purpose described in the first paragraph of this section and wasnot designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.Given these limitations, during my audit I did not identify any deficiencies in internal control that I consider to bematerial weaknesses. However, material weaknesses may exist that have not been identified.

5

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Florence Township Fire District No.1 's financial statementsare free of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations,contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objectiveof my audit and, accordingly, I do not express such an opinion. The results of my tests disclosed no instances ofnoncompliance or other matters that are required to be reported under Government Auditing Standards and auditrequirements as prescribed by the Bureau of Authority Regulation, Division of Local Government Services, Departmentof Community Affairs, State of New Jersey.

Purpose of this Report

The purpose of this report is solely to describe the scope of my testing of internal control and compliance and the resultsof that testing, and not to provide an opinion on the effectiveness of the Fire District's internal control or on compliance.This report is an integral part of an audit performed in accordance with Government Auditing Standards and auditrequirements as prescribed by the Bureau of Authority Regulation, Division of Local Government Services, Departmentof Community Affairs, State of New Jersey in considering the Fire District's internal control and compliance.Accordingly, this communication is not suitable for any other purpose.


INVERSO & STEWART, LLCCertified Public Accountants

()tp)-Robert P. InversoCertified Public AccountantRegistered Municipal Accountant

Marlton, New JerseyApril 4, 2014

6

Required Supplementary Information - Part I

Management's Discussion and Analysis

Florence Township Fire District No.1Management's Discussion and Analysis

For the Fiscal Year Ended December 31, 2013

As management of the Florence Township Fire District No.1, New Jersey (Fire District), we offer readersof the Fire District's financial statements this narrative overview and analysis of the Fire District for thefiscal year ended December 31, 2013.

Financial Highlights

• The liabilities of the Fire District exceeded its assets at the close of the most recent fiscal yearby $238,490.

• Governmental activities have unrestricted net position of $60,708.

• The total net position of the Fire District decreased by $47,454, or a 24.84% decrease fromthe prior fiscal year-end balance. The majority of the decrease is attributable to General Fundresults of operations and depreciation.

• Fund balance of the Fire District's governmental funds decreased by $16,847resulting in an ending fund balance of $362,588. This decrease is due to the net decrease inthe General Fund.

Overview of the Basic Financial Statements

This discussion and analysis is intended to serve as an introduction to the Fire District's basic financialstatements. The basic financial statements are comprised of three components: 1) District-wide financialstatements, 2) Fund financial statements, and 3) Notes to the basic financial statements. This report alsocontains other supplementary information in addition to the basic financial statements themselves.

District-wide Financial Statements

The district-wide financial statements are designed to provide the reader with a broad overview of thefinancial activities in a manner similar to a private-sector business. The district-wide financial statementsinclude the statement of net position and the statement of activities.

The statement of net position presents information about all of the Fire District's assets and liabilities. Thedifference between the assets and liabilities is reported as net position. Over time, changes in net positionmay serve as a useful indicator of whether the financial position of the Fire District is improving ordeteriorating.

The statement of activities presents information showing how the net position of the Fire District changedduring the current fiscal year. Changes in net position are recorded in the statement of activities when theunderlying event occurs, regardless of the timing of related cash flows. Thus, revenues and expenses arereported in this statement even though the resulting cash flows may be recorded in a future period.

Both of the district-wide financial statements distinguish functions of the Fire District that are supportedfrom taxes and intergovernmental revenues (governmental activities). Governmental activities consolidategovernmental funds including the General Fund, Capital Projects Fund, Special Revenue Fund and DebtService Fund.

8

Fund Financial Statements

Fund financial statements are designed to demonstrate compliance with finance-related requirements. Afund is a grouping of related accounts that is used to maintain control over resources that have beensegregated for specific objectives. All of the funds of the Fire District are governmentalfunds.

Governmental funds account for essentially the same information reported in the governmental activities ofthe district-wide financial statements. However, unlike the district-wide financial statements, thegovernmental fund financial statements focus on near-term financial resources and fund balances. Suchinformation may be useful in evaluating the financing requirements in the near term.

Since the governmental funds and the governmental activities report information using the same functions,it is useful to compare the information presented. Because the focus of each report differs, a reconciliationis provided on the fund financial statements to assist the reader in comparing the near-term requirementswith the long-term needs.

The Fire District maintains four individual governmental funds. The major funds are the General Fund, theSpecial Revenue Fund, the Capital Projects Fund, and the Debt Service Fund. They are presentedseparately in the fund financial statements.

The Fire District adopts an annual appropriated budget for the General Fund and the Debt Service Fund. Abudgetary comparison statement has been provided for each of these funds to demonstrate compliance withbudgetary requirements.

Notes to the Basic Financial Statements

The notes to the basic financial statements provide additional information that IS essential to a fullunderstanding of the data provided in the basic financial statements.

District-wide Financial Analysis

The assets of the Fire District are classified as current assets and capital assets. Cash, investments, andreceivables are current assets. These assets are available to provide resources for the near-term operationsof the Fire District. The majority of the current assets are the results of the bond proceeds.

Capital assets are used in the operations of the Fire District. These assets are land, construction in progress,buildings, and equipment. Capital assets are discussed in greater detail in the section titled, Capital Assetsand Debt Administration, elsewhere in this analysis.

Current and long-term liabilities are classified based on anticipated liquidation either in the near-term or inthe future. Current liabilities include accounts payable and current debt obligations. The liquidation ofcurrent liabilities is anticipated to be either from currently available resources, current assets or newresources that become available during fiscal year 2013. Long-term liabilities such as long-term debtobligations will be liquidated from resources that will become available after fiscal year 2013. Theliabilities of the primary government activities exceeded assets by $238,490 with an unrestricted balance of$60,708. The net position of the primary government does not include internal balances.

A net investment of $3,212,257 in land, buildings, and equipment which provide the services to the FireDistrict's citizens is offset by $3,661,455 in related debt obligations. Net position of $120,000has been restricted for appropriation in the 2014 Budget.

9

Florence Township Fire District No.1Statement of Changes in Net Position

For the Year Ended December 31, 2013 and 2012

Assets:

Current assets

Capital assets

$ 433,690 $ 514,513

3,212,257 3,399804

3,645,947 3,914,317

415,723 379,325

3468,714 3,655,239

3,884,437 4,034564

(238,490) $ ~120,247)

Total assets

Liabilities:

Current Liabilities

Noncurrent Liabilities

Total liabilities

Net position $--..,..;=~

Net Investment in capital

Assets $ (449,198) $ (417,244)

Restricted net position 150,000 274,000

Unrestricted net position 60,708 22,997

Net position $ (238,490) $ (120,247)

Governmental Activities

Net position of the Fire District decreased by $47,453 during the current fiscal year. Key elements of thedecrease in net position for the district are as follows:

• Depreciation expense of $322,525• Investment in equipment of $134,978

10

Florence Township Fire District No.1Changes in Net Position

For the Year Ended December 31, 2013 and 2012

2013 2012

Revenues:

General Revenues:

Property Taxes $ 1,331,004 $ 1,270,020

Unrestricted State Aid 40,176 4,012

Other Revenues 404635 343,557

Total Revenues 1,775,815 1,617,589

Expenses:Governmental Activities:

Administration 225,289 218,384

Cost of Operations 1,092,466 1,047,619

Interest on long-termDebt 182,989 191,606

Unallocated 322,525 327,874

Total Expenses 1,823,269 1.785.483

Changes in net position (47,454) (167,894)

Net position, January 1 - restated {191,036) 47,647

Net position, December 31 $ (238,490~ $ !120,247l

Financial Analysis of the Governmental Funds

As noted earlier, the Fire District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds - The focus of the Fire District's governmental funds is to provide information onnear-term inflows, outflows, and balances of spendable resources. Such information is useful in assessingthe Fire District's financing requirements. In particular, unreserved fund balance may serve as a usefulmeasure of a government's net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the Fire District's governmental funds reported a combined endingfund balance of $362,588, a decrease of $16,847 in comparison with the prior year. The decrease isattributable to the results of operations in the General fund.

The unassigned fund balance for the Fire District at the end of the fiscal year includes an unassigned fundbalance for the General Fund of$212,588. Fund balance in the amount of$120,000, is reserved to indicatethat it is not available for new spending because it has already been committed as a revenue source in thesubsequent year's budget and $30,000 is reserved for future capital outlays.

11

General Fund Budgetary Highlights

At the end of the current fiscal year, unassigned fund balance of the general fund was $212,588while total fund balance was $362,588. As a measure of the general fund's liquidity, it may be useful tocompare both unassigned fund balance and total fund balance to total general fund expenditures. Actualexpenditures of the General Fund including other financing uses amounted to $1,375,814. Unassigned fundbalance (budgetary basis) represents 15.45% of expenditures while total fund balance represents 26.35% ofthat same amount.

Capital Asset and Debt Administration

The Fire District's investment in capital assets for its governmental activities as of December 31,2013,totaled $3,212,257 (net of accumulated depreciation). This investment in capital assets includes land,buildings, and equipment. The total decrease in the District's investment in capital assets for the currentfiscal year was $187,547, or a 5.52% decrease which is due to the depreciation expense and investment inequipment.

Capital Asset (net of accumulated depreciation)For the Year Ended December 31, 2013 and 2012

2013 2012

Land

Buildings

Equipment

$ 95,145 $

2,402,911

714,201

95,145

2,603,154

701505

Total $ 3,212,257 $ ...,;;;j3:;,,39;,;;9,i,;;8,;;..04,;_

Additional information on the Fire District's capital assets can be found in the notes to the basic financialstatements (Note 3) of this report.

Long-term debt - During the fiscal year ended December 31,2013, the Fire District had $3,395,000 serialbonds payable, $191,455 capital leases payable and $75,000 loan payable.

State statutes limit the amount of general obligation debt that the District may issue. At the end of thecurrent fiscal year, the legal debt limit was $24,332,262. The available amount as of December 31,2013 is$20,937,262.

Additional information on the Fire District's debt obligations can be found in the notes to the basicfinancial statements (Note 5) of this report.

12

Economic Factors and Next Year's Budgets and Rates

The following factors were considered and incorporated into the preparation of the Fire District's budgetfor the 2014 calendar year.

• For the 2014 calendar year the Fire District the local tax levy in the General Fund increased by$173,864 or 13.06% which resulted in an increase in the tax rate. The District has managed tocontrol costs in the 2014 Budget. The 2014 Budget is $45,624 more than the previous year or a2.30% increase.

For the Future

The Florence Township Fire District No. 1 is in good financial condition presently. However, a majorconcern is the continued growth of the Township and the ability to provide quality service at an affordablecost.

In conclusion, the Florence Township Fire District No.1 has committed itself to financial excellence formany years. In addition, the Fire District's system for financial planning and budgeting are well regarded.The Fire District plans to continue its sound fiscal management to meet the challenges of the future.

Requests for Information

This financial report is designed to provide a general overview of the Fire District's finances for all thosewith an interest in the Fire District. Questions concerning any of the information provided in this report orrequests for additional financial information should be addressed to the Florence Township Fire DistrictNo.1 Board of Fire Commissioners, 401Firehouse Lane, Florence, New Jersey, 08518.

13

Basic Financial Statements

District-Wide Financial Statements

A-1

FLORENCE TOWNSHIP FIRE DISTRICT NO.1Statement of Net Position

December 31, 2013

GovernmentalActivities

ASSETS:Cash and cash equivalents $ 329,702Receivables, net 103,988Capital assets, net (Note 3) 3,212,257

Total Assets 3,645,947

LIABILITIES:Accounts payable 71,102Accrued interest 81,177Noncurrent liabilties (Note 5)

Due within one year 263,444Due beyond one year 3,468,714

Total Liabilities 3,884,437

NET POSITION:Net Investment in Capital assets (449,198)Restricted for:

Capital projects 30,000Other purposes 120,000

Unrestricted 60708

Total Net Position $ ,238,49Ol

The accompanying Notes to the Basic Financial Statements are an integral part of this statement.

16

A-2

FLORENCE TOWNSHIP FIRE DISTRICT NO.1Statement of Activities

For the Fiscal Year Ended December 31,2013

FunctionslPrograms

Program Revenues

Net (Expense)Revenue and

Changes in Net Position

Expenses

IndirectExpensesAllocation

OperatingGrants and

ConbibutionsGovernmental

ActivitiesCharges for

Services

Governmental activities:Administration:

Salary and wagesFringe benefitsOther expenses

Cost of Operations:Salary and wagesFringe benefitsOther expenses:

Supplies and materialsInsuranceTrainingContracted servicesPurchase of nonbondable assets

Uniform Fire Safety ActDebt Service:

Interest and other chargesUnallocated

Total governmental activities

Total primary government

$ 112,294 $ (112,294)53,198 (53,198)59,797 (59,797)

481,207 (481,207)109,900 (109,900)

205,130 (205,130)88,337 (88,337)12,823 (12,823)24,000 (24,000)63,916 (63,916)

107,153 $ 32,939 (74,214)

182,989 416,848 233,859322,525 ~322,525)

1,823,269 449,787 (1,373,482)

$1,823,269 $ $ 449,787 $ ~1,373,482)

General revenues:Taxes:

District taxes, levied for general purposes, net 914,156Federal and State aid not restricted 40,176Investment earnings 914EMS RevenueJNJ Turnpike Revenue 366,499Miscellaneous income 4.283

Total general revenues, special items, extraordinary items and transfers 1,326,028Change in Net Position (47,454)

Net Position - January 1- Restated (191.036)Net Position -December 31 $ ~238.490)


Fund Financial Statements

ASSETS

Assets:Cash and cash equivalents

Receivables, net

Interfund receivable

Total assets

LIABILITIES AND FUND BALANCESLiabilities:Accounts payableDeferred revenue

Total liabilities

Fund Balances:Restriced Fund Balance:

Reserved for future capital outlaysAssigned Fund Balance:

Designated for subsequentyear's expenditures

Unassigned Fund Balance

Total fund balances

Total liabilities and fund balances

FLORENCE TOWNSHIP FIRE DISTRICT NO,l

GeneralFund

$ 329,702

Balance SheetGovernmental Funds

December 31, 2013

SpecialRevenue

Fund

Net position of governmental activities

CapitalProjects

Fund

DebtService

Fund

100,956

3032

$433,690

71,102

71102

30,000

120,000

212,588

362,588

$ 433,690

Amounts reported for governmental activities in the statement of net position(A-1) are different because:

19

Capital assets used in governmental activities are not financial resourcesand therefore are not reported in the funds. The cost of the assets is$6,298,032 and the accumulated depreciation is $3,085,774.

Accrued interest is not due and payable in the current period andtherefore is not reported as a liability in the funds.

Long-term liabilities, including bonds payable, are not due and payablein the current period and therefore are not reported as liabilities in thefunds.


8-1

TotalGovernmental

Funds

$ 329,702

100,956

3.032

$433,690

71,102

71.102

30,000

120,000

212,588

362,588

3,212,257

(81,177)

(3,732J58)

(238,490)

B-2FLORENCE TOWNSHIP FIRE DISTRICT NO.1

Statement of Revenues, Expenditures and Changes In Fund BalancesGovernmental Funds

for the Fiscal Year Ended December 31, 2013

Special Capital Debt TotalGeneral Revenue Projects Service Governmental

Fund Fund Fund Fund FundsREVENUES:Local sources:

Local tax levy $ 914,156 $ 416,846 $ 1,331,004Uniform Fire Safety Act 32,939 32,939Interest earned 914 914EMS RevenuelNJ Turnpike Revenue 366,499 366,499Miscellaneous 4283 4283

Total revenues-local sources 1,318,791 416,848 1,735,639

State sources 4,012 4,012

Federal sources 36,164 36,164

Total revenues 1,358,967 416848 1,775,615

EXPENDITURES:Current expense:

Administration:Salary and wages 112,294 112,294Fringe benefits 53,196 53,198Other expenses 59,797 59,797

Cost of Operations:Salary and wages 479,288 479,288Fringe benefits 109,900 109,900Other expenses:

Supplies and materials 205,130 205,130Insurance 88,337 88,337Training 12,823 12,823Contracted services 24,000 24,000Purchase of nonbondable assets 63,916 63,916

Uniform Fire Safety Act 107,153 107,153Capital Improvements:

Ambulance 59,978 59,978Debt Service:

Principal 230,593 230,593Interest and other charges 186,255 186,255

Total expenditures 1,375,814 416,648 1,792,662

Excess (deficiency) of revenues over(under) expenditures (16,847l (16,647l

Other Financing Sources (Uses):Proceeds of Capital LeaseOperating transfer out

Total other financing sources (uses)

Net change in fund balance (16,847) (16,847)Fund balances, January 1 379,435 379435

Fund balances, December 31 $ 362,568 s 362,586


20

FLORENCE TOWNSHIP FIRE DISTRICT NO.1Reconciliation of the Statement of Revenues, Expenditures

and Changes In Fund Balances of Governmental Fundsto the Statement of Activities

for the Fiscal Year Ended December 31,2013

Total net change in fund balances - governmental funds (from B-2)

Amounts reported for governmental activities in the statement of activities (A-2)are different because:

Capital outlays are reported in the governmental funds as expenditures.However, on the statement of activities, the cost of those assets is allocatedover their estimated useful lives as depreciation expense. This is the amountby which capital outlays exceeded depreciation in the current fiscal year.

Depreciation expenseCapital outlay

Repayment of bond principal is an expenditure in the governmental funds, butthe repayment reduces long-term liabilities in the statement of net position andis reported in the statement of activities.

Repayment of lease principal is an expenditure in the governmental funds, butthe repayment reduces long-term liabilities in the statement of net position andis reported in the statement of activities.

In the statement of activities, interest on long-term debt is accrued, regardless ofwhen due. In the governmental funds, interest is reported when due. The accruedinterest is an addition in the reconciliation.

The issuance of ambulance loan debt increases long-term liabilities, however hasno effect on net position.

In the statement of activities, certain operating expenses, e.c., compensatedabsences (vacations) are measured by the amounts earned during the year.In the governmental funds, however, expenditures for these items are reportedin the amount of financial resources used (paid). When the earned amountexceeds the paid amount, the difference is a reduction in the reconcilaition (-);when the paid amount exceeds the earned amount the difference ia anaddition to the reconciliation (+).

Change in net position of governmental activities

$ (322,525)134,978


21

B-3

$ (16,847)

(187,547)

140,000

90,593

3,266

(75,000)

(1,919)

$ (47,454)

8-4FLORENCE TOWNSHIP FIRE DSTRICT NO.1

Statement of Fiduciary Net PositionFiduciary Funds

December 31,2013

AgencyFund

ASSETS:Cash and cash equivalents $ 3,032

$ 3,032Total assets

LIABILITIES:

Interfund payable $ 3,032

Total liabilities $ 3,032


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Florence Township Fire District No.1Notes to Basic Financial Statements


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Reporting Entity - Florence Township Fire District No. I is located in Burlington County, New Jersey. Itis a political subdivision of the Township of Florence and was formed through the adoption of a Township ordinance. Asof the 2010 United States Census, the Township's population was 12,120. A Board of five commissioners oversees alloperations of the Fire District. The length of each commissioner's term is three years with the annual election held the thirdSaturday of every February.

Fire districts are governed by N.J.S.A. 40A: 14-70 et al. and are organized as a taxing District charged with theresponsibility of providing fire fighting services to the residents within its territorial location. Florence Township FireDistrict No. 1 has one fire company within its jurisdiction.

Component Units - GASB Statement No. 14 and GASB No. 39, provide guidance that all entities associated with aprimary government are potential component units and should be evaluated for inclusion in the fmancial reporting entity. Aprimary government is financially accountable not only for the organizations that meet the criteria established by GASBstatements No. 14 and No. 39. In addition, GASB Statement No. 61, provides additional guidance for organizations that donot meet the financial accountability criteria for inclusion as component units but that nevertheless should be includedbecause the primary government's management determines that it would be misleading to exclude them. As of December31, 2013, it has been determined by the District that no component units exist.

Basis of Presentation -The financial statements of the Fire District have been prepared in conformity with accountingprinciples generally accepted in the United States of America (GAAP) as applied to local governmental units. TheGovernmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmentalaccounting and financial reporting principles. The more significant of the District's accounting policies are describedbelow.

The district's basic financial statements consists of government-wide statements, including a Statement of Net Position anda Statement of Activities, and fund financial statements, which provide a more detailed level of financial information.

Government-wide Statements - The Statement of Net Position and the Statement of Activities display informationabout the District as a whole. These statements include the financial activities of the primary government.Elimination's have been made to minimize the double counting of internal activities The Statement of Net Positionpresents the financial condition of the governmental activities of the District at year end. The Statement ofActivities presents a comparison between direct expenses and program revenues for each program or function of theDistrict's governmental activities. Direct expenses are those that are specifically associated with a service, programor department and, therefore, are clearly identifiable to a particular function. Indirect expenses are not allocated toprograms. Program revenues include charges paid by the recipients of goods or services offered by the program,grants and contributions that are restricted to meeting the operational or capital requirements of a particular program.Revenues, which are not classified as program revenues, are presented as general revenues of the District, withcertain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to whicheach governmental function is self-financing or draws from the general revenues of the District.

Fund Financial Statements - During the fiscal year, the District segregates transactions related to certain Districtfunctions or activities in separate funds in order to aid financial management and to demonstrate legal compliance.Fund financial statements are designed to present financial information of the District at this more detailed levelreporting. The District uses funds to maintain its financial records during the year. A fund is defined as a fiscal andaccounting entity with a self balancing set of accounts. There are two categories of funds: governmental andfiduciary.

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Governmental Fund - Governmental funds are those through which most governmental functions typically are fmanced.Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assetsare assigned to the various governmental funds according to the purposes for which they mayor must be used. Currentliabilities are assigned to the fund from which they will be paid. The difference between governmental fund assets andliabilities is reported as fund balance. The following are the Fire District's major governmental funds:

General Fund - The General Fund is the general operating fund of the Fire District and is used to account for allexpendable financial resources except those required to be accounted for in another fund. The acquisition of certaincapital assets, such as fire fighting apparatus and equipment, is accounted for in the General Fund when it isresponsible for the financing of such expenditures.

Special Revenue Fund - The Special Revenue Fund is used to account for the proceeds of specific revenue sources,such as state or federal government grants and appropriations that are legally restricted to expenditures for specifiedpurposes.

Capital Projects Fund - The Capital Projects Fund is used to account for all fmancial resources to be used for theacquisition or construction of major capital facilities such as fire houses. The financial resources are derived fromtemporary notes or serial bonds which are specifically authorized by the voters as a separate question on the balloteither during the annual election or at a special election.

Debt Service Fund - The Debt Service Fund is used to account for resources that will be used to service principaland interest payments on general long-term liabilities.

Fiduciary Funds - Fiduciary Funds focus on Net Position and changes in Net Position. The fiduciary fund category isused to account for assets held by the Fire District in a trustee capacity or as an agent for individuals, private organizationsand other governments. The Fiduciary Funds are not included in the government-wide financial statements. The FireDistrict maintains the following fiduciary fund:

Agency Funds - Agency funds are used to account for the assets held by the Fire District in a trustee capacity or as anagent for individuals, private organizations, other governments, and/or other funds. They are custodial in nature (assetsequal liabilities ) and do not involve measurement of results of operations. Agency funds include the Payroll Fund.

Measnrement Focus

Government-wide Financial Statements - The government-wide financial statements are prepared using the economicresources measurement focus. All assets and all liabilities associated with the operation of the Fire District are included onthe statement of Net Position.

Fund Financial Statements - All governmental funds are accounted for using a flow of current financial resourcesmeasurement focus. With this measurement focus, only current assets and current liabilities are included on the balancesheet. The Statement of Revenues, Expenditures and Changes in Fund Balance reports on the sources (i.e. revenues andother financing sources) and uses (i.e. expenditures and other financing uses) of current financial resources. This approachdiffers from the manner in which the governmental activities of the government-wide financial statements are prepared.Governmental fund financial statements therefore include a reconciliation with brief explanations to better identify therelationship between the government-wide statements and the statements for governmental funds.

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Basis of Accounting - Basis of accounting determines when transactions are recorded in the financial records and reportedon the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting.Governmental funds use the modified accrual basis of accounting. Fiduciary funds also use the accrual basis ofaccounting. Differences in the accrual and the modified accrual basis of accounting arise in the recognition of revenue, therecording of deferred revenue, and in the presentation of expenses versus expenditures.

Revenues and Expenses - Revenues are recorded when they are determined to be available and measurable. Generally,fees and other non-tax revenues are recognized when received. Grants from other governments are recognized whenqualifying expenditures are incurred. Expenditures are recorded when the related liability is incurred, if measurable,except for unmatured interest on general long-term debt, which is recognized when due.

Expenses/Expenditures - On the accrual basis of accounting, expenses are recognized at the time they are incurred. Themeasurement focus of governmental fund accounting is on decreases in net financial resources (expenditures) rather thanexpenses. Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, ifmeasurable. Allocations of cost, such as depreciation and amortization, are not recognized in governmental funds

Fire District Taxes - Upon the proper certification to the assessor of the municipality in which the Fire District is located,the assessor shall assess the amount of taxes to be raised in support of the Fire District's budget in the same manner as allother municipal taxes. The collector or treasurer of the municipality shall then pay over to the treasurer or custodian offunds of the Fire District the taxes assessed in accordance with the following schedule: on or before April 1, an amountequaling 21.25% of all moneys assessed; on or before July 1, an amount equaling 22.5% of all moneys assessed; on orbefore October 1, an amount equaling 25% of all moneys assessed; and on or before December 31, an amount equaling thedifference between the total of all moneys so assessed and the total amount of moneys previously paid over.

Budgets/Budgetary Control - The Fire District must adopt an annual budget in accordance with N.J.S.A. 40A: 14-78.1 eta1.

The fire commissioners must introduce and approve the annual budget not later than sixty days prior to the annual election.At introduction, the commissioners shall fix the time and place for a public hearing on the budget and must advertise thetime and place at least ten days prior to the hearing in a newspaper having substantial circulation in the Fire District. Thepublic hearing must not be held less than twenty-eight days after the date the budget was introduced. After the hearing hasbeen held, the fire commissioners may, by majority vote, adopt the budget. Amendments may be made to the Fire Districtbudget in accordance with NJ.S.A. 40A: 14-78.3. The budget may not be amended subsequent to its final adoption andapproval, except for provisions allowed by N.J.S.A. 40A: 14-78.3.

Subsequent to the adoption of the Fire District budget, the amount of money to be raised by taxation in support of the FireDistrict budget must appear on the ballot for the annual election for the approval of the legal voters. If the voters reject thebudget, the Township Council is required to review and determine the annual budget. Amounts reported under the finalbudget on Exhibits C-l and 1-3, include modifications to the adopted budget that were made during the year as approved bythe Board of Commissioners.

Encumbrances - Under encumbrance accounting purchase orders, contracts and other commitments for the expenditure ofresources are recorded to reserve a portion of the applicable appropriation. Open encumbrances in governmental funds,other than the special revenue fund, are reported as reservations of fund balances at fiscal year end as they do not constituteexpenditures or liabilities but rather commitments related to unperformed contracts for goods and services.

Open encumbrances in the special revenue fund, for which the Fire District has received advances, are reflected in thebalance sheet as deferred revenues at fiscal year end.

The encumbered appropriation District carries over into the next fiscal year. An entry will be made at the beginning of thenext fiscal year to increase the appropriation reflected in the adopted budget by the outstanding encumbrance amount as ofthe current fiscal year end.

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Cash, Cash Equivalents and Investments - Cash and cash equivalents include petty cash, change funds and cash ondeposit with public depositories. All certificates of deposit are recorded as cash regardless of the date of maturity.Investments are stated at cost. Consequently, unrealized gain or loss on investments has not been recorded in accordancewith Governrnental Accounting Standards Board Statement No. 31.

Cash and cash equivalents include petty cash, change funds and cash on deposit with public depositories. All certificatesof deposit are recorded as cash regardless of the date of maturity. Investments are stated at cost. Consequently, unrealizedgain or loss on investments has not been recorded in accordance with Governrnental Accounting Standards BoardStatement No. 31.

New Jersey municipal units are required by N.J.S.A. 40A:5-14 to deposit public funds in a bank or trust company havingits place of business in the State of New Jersey and organized under the laws of the United States or of the State of NewJersey or in the New Jersey Cash Management Fund. N.J.S.A. 40A:5-15.l provides a list of investments which may bepurchased by New Jersey municipal units. In addition, other State statutes permit investments in obligations issued bylocal utilities and other state agencies.

N.J.S.A. 17:9-41et seq. establishes the requirements for the security of deposits of governrnental units. The statute requiresthat no governrnental unit shall deposit public funds in a public depository unless such funds are secured in accordancewith the Governrnental Unit Deposit Protection Act ("GUDPA"), a multiple financial institutional collateral pool, whichwas enacted in 1970 to protect governrnental units from a loss of funds on deposit with a failed banking institution in NewJersey. Public depositories include State or federally chartered banks, savings banks or associations located in or having abranch office in the State of New Jersey, the deposits of which are federally insured. All public depositories must pledgecollateral, having a market value at least equal to five percent of the average daily balance of collected public funds, tosecure the deposits of governrnental units. If a public depository fails, the collateral it has pledged, plus the collateral of allother public depositories, is available to pay the amount of their deposits to the governrnental units.

The cash management plan adopted by the Fire District requires it to deposit funds in public depositories protected fromloss under the provisions of the Act.

Inventories and Prepaid Expenses - Inventories and prepaid expenses which benefit future periods, other than thoserecorded in the enterprise funds, are recorded as an expenditures during the year of purchase.

Short- Term Interfund Receivables / Payables - Short-term interfund receivables / payables represent amounts that areowed, other than charges for goods or services rendered to/from a particular fund in the Fire District and that are due withinone year. These amounts are eliminated in the governrnental column of the Statement of Net Position

Capital Assets

These assets result from expenditures in the governrnental funds. These assets are reported in the governrnental activitiescolumn of the government-wide Statement of Net Position but are not reported in the fund financial statements. All capitalassets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year.Donated fixed assets are valued at their estimated fair market value on the date received. The Fire District maintains acapitalization threshold of $5,000. The Fire District does not possess any infrastructure. Improvements are capitalized; thecost of normal repairs and maintenance that do not add to the value of the asset or materially extend assets' lives are not.All reported capital assets except land, land improvements and construction in progress are depreciated. Improvements aredepreciated over the remaining useful lives of the related capital assets.

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Capital Assets (Continued)

Depreciation is computed using the straight-line method over the following useful lives:

Asset Class

GovernmentalActivities

Estimated Lives

BuildingsBuilding ImprovementsMachinery and EquipmentVehicles

30 years20 years

5-20 years5-20 years

N.J.S.A. 40A:14-84 governs the procedures for the acquisition of property and equipment for Fire Districts, and NJ.S.A.40A: 14-85 to 87 governs procedures for the issuance of any debt related to such purchases. In summary, Fire districts maypurchase fire fighting apparatus and equipment and land and buildings to house such property in an amount not exceeding5 mils on the dollar of the last assessed valuation of property within the district upon the approval of the legal voters. Debtmay be issued up to $60,000 or two percent (2%) of the assessed valuation of property, whichever is larger.

Compensated Absences - Compensated absences are those absences for which employees will be paid, such as vacation,sick leave, and sabbatical leave. A liability for compensated absences that are attributable to services already rendered, andthat are not contingent on a specific event that is outside the control of the Fire District and its employees, is accrued as theemployees earn the rights to the benefits. Compensated absences that relate to future services, or that are contingent on aspecific event that is outside the control of the Fire District and its employees, are accounted for in the period in whichsuch services are rendered or in which such events take place.

The entire compensated absence liability is reported on the government-wide financial statements.

For governmental funds, the current portion of unpaid compensated absences is the amount that is normally expected to bepaid with expendable available financial resources. In proprietary funds, the entire amount of compensated absences isrecorded as a fund liability.

Unearned Revenue - Unearned revenue arises when assets are recognized before revenue recognition criteria have beensatisfied and are recorded as a liability until the revenue is both measurable and the Fire District is eligible to realize therevenue.

Accrued Liabilities and Long-Term Obligations - All payables, accrued liabilities, and long-term obligations arereported on the government-wide financial statements, and all payables, accrued liabilities and long-term obligationspayable from proprietary funds are reported on the proprietary fund fmancial statements. In general, governmental fundpayables and accrued liabilities that, once incurred, are paid in a timely manner and in full from current financial resourcesare reported as obligations of the funds. However, claims and judgments, compensated absences, special terminationbenefits and contractually required pension contributions that will be paid from governmental funds are reported as aliability in the fund financial statements only to the extent that they are normally expected to be paid with expendableavailable financial resources. Bonds are recognized as a liability on the fund financial statements when due.

Net Position - Net position represents the difference between the summation of assets and deferred outflows of resources,and the summation of liabilities and deferred inflows of resources. Net position is classified into the following threecomponents:

Net Investment in Capital Assets - This component represents capital assets, net of accumulated depreciation, net ofoutstanding balances of borrowings used for the acquisition, construction, or improvement of those assets.

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Restricted - Net position is reported as restricted when there are limitations imposed on their use either through theenabling legislation adopted by the Fire District or through external restrictions imposed by creditors, grantors or law orregulations of other governments.

Unrestricted - Net position is reported as unrestricted when it does not meet the criteria ofthe other two componenets ofnet position.

It is the Fire District's policy to apply restricted resources when an expense is incurred for purposes for which bothrestricted and unrestricted assets are available.

Fund Balance - The Fire District reports fund balance in classifications that comprise a hierarchy based primarily on theextent to which the Fire District is bound to honor constraints on the specific purposes for which amounts in those fundscan be spent. The I Fire District's classifications, and policies for determining such classifications, are as follows:

Nonspendable - The nonspendable fund balance classification includes amounts that cannot be spent because theyare either not in spendable form or are legally or contractually required to be maintained intact. The "not inspendable form" criteria includes items that are not expected to be converted to cash, such as inventories and prepaidamounts.

Restricted - This fund balance classification includes amounts that are restricted to specific purposes. Suchrestrictions, or constraints, are placed on the use of resources either by being (a) externally imposed by creditors,grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutionalprovisions or enabling legislation.

Committed - This fund balance classification includes amounts that can only be used for specific purposes pursuantto constraints imposed by formal action of the Fire District's highest level of decision making authority, which for theFire District is the Board of Fire Commissioners. Once committed, amounts cannot be used for any other purposeunless the Board of Fire Commissioners removes, or changes, the specified use by taking the same type of actionimposing the commitment.

Assigned - This fund balance classification includes amounts that are constrained by the Fire District's intent to beused for specific purposes, but are neither restricted nor committed. The Board of Fire Commissioners has theauthority to assign amounts to be used for specific purposes.

Unassigned - This fund balance classification is the residual classification for the General Fund. It represents fundbalance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specificpurposes within the general fund. The general fund is the only fund that reports a positive unassigned fund balanceamount. In other governmental funds, if expenditures incurred for specific purposes exceed the amounts restricted,committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance.

When an expenditure is incurred for purposes for which both restricted and unrestricted fund balances are available, it isthe Fire District's policy to spend restricted fund balances first. Likewise, when an expenditure is incurred for purposes forwhich amounts in any of the unrestricted fund balance classifications can be used, it is the policy of the Fire District tospend fund balances, if appropriate, in the following order: committed, assigned, then unassigned.

Interfunds - Interfund receivables and payables that arise from transactions between funds are recorded by all fundsaffected by such transactions in the period in which the transaction is executed.

Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in theUnited State of America requires management to make estimates and assumptions that affect the amounts reported in thefinancial statements and accompanying notes. Actual results may differ from those estimates.

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NOTE 2. CASH AND CASH EQUIVALENTS

Custodial Credit Risk Related to Deposits - Custodial credit risk refers to the risk that, in the event of a bank failure, theDistrict's deposits may not be recovered. Although the Fire District does not have a formal policy regarding custodialcredit risk, N.J.S.A. 17:9-41 et seq. requires that governmental units shall deposit public funds in public depositoriesprotected from loss under the provisions of the Governmental Unit Deposit Protection Unit. Under the Act, the first$250,000 of governmental deposits in each insured depository is protected by the Federal Deposit Insurance Corporation(FDIC). Public funds owned by the municipality in excess of FDIC insured amounts are protected by GUDP A. However,GUDP A does not protect intermingled trust funds such as salary withholdings or funds that may pass to the Fire Districtrelative to the happening of a future condition. Such funds are shown as uninsured and uncollateralized. Of the FireDistrict's amount on deposit of $346,161 as of December 31,2013, $250,000 was insured under FDIC and the remainingbalance of$96,161 was collateralized under GUDPA.

3. CAPITAL ASSETS

Capital asset activity for the fiscal year ended December 31, 2013, was as follows:

Balance Balance,December 311 Additions Disnosals December 311

;2012 20l_3Governmental Activities:Capital Assets, not being depreciated:

Land $ 95,145 $ 95,145Construction in progress

Total capital assets, not beingDepreciated 95,145 95,145

Capital Assets, being depreciated:Site ImprovementsBuilding and Building Improvements 4,004,855 4,004,855Equipment 2,063,054 $ 134,978 2,198,032

Totals at historical cost 6,067,909 134,978 6,202,887Less Accumulated Depreciation:

Site ImprovementsBuilding and Building Improvements (1,401,701) $ (200,243) (1,601,944)Equipment (1,361,549) (122,282) (1,483,831)Totals accumulated depreciation (2,763,250) (322,525) (3,085,775)

Total Capital Assets, beingdepreciated, net 3,304,659 ~187,547~ 3,117,112

Governmental Activities CapitalAssets, Net $ 3,399,804 $ ~187,547) $ $ 3,212,257

Depreciation expense in the amount of $322,525 was charged to governmental functions as follows:

Function Amount

Unallocated $ 322,525

Total $~ __ 3_22....:.,_52_5

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Florence Township Fire District No. 1Notes to Basic Financial Statements


4. RECEIVABLES

Receivables as of year-end for the Fire District's individual major and fiduciary funds, in the aggregate, are as follows:

SpecialGeneral Revenue Fiduciary

Fund Fund Funds Total

Other Receivables $ 100,956 $ 100,956

Total Accounts Receivable $ 100,956 $ $ $ 100,956

5. LONG-TERM OBLIGATIONS

During the fiscal year ended December 31,2013, the following changes occurred in long-term obligations:

Principal Principal Amounts DueOutstanding Outstanding Within

January I. 2013 Additions Reductions December 31. 2013 One Year

Capital Leases Payable $ 282,048 $ 90,593 $ 191,455 $ 93,974Bonds Payable 3,535,000 140,000 3,395,000 145,000Loan Payable $ 75,000 75,000 24,470Compensated Absences 68,784 1,919 70,703

$ 3,885,832 $ 76,919 $ 230,593 $ 3,732,158 $ 263,444

Bonds Payable - Bonds issued by the Fire District are as follows:

2007 Fire District Bonds dated June 1, 2005 in the amount of $3,395,000 due in annual installments throughJuly 15, 2029, bearing an interest rate of 4.50%-5.125%.

Debt Service Requirements

Principal and interest due on bonds outstanding is as follows:

Year endinK December 311 Princil!al Interest Total

2014 $ 145,000 $ 170,355 $ 315,3552015 150,000 163,830 313,8302016 160,000 156,330 316,3302017 165,000 148,330 313,3302018 175,000 140,080 315,080

2019-2023 1,005,000 560,650 1,565,6502024-2028 1,290,000 281,802 1,571,802

2029 305,000 15,631 320,631

Total $ 3,395,000 $ 1,637,008 $ 5,032,008

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5. LONG-TERM OBLIGATIONS (Continued)

Capital Lease Payable - The Fire District is leasing with option to purchase a Ladder Fire Truck. The first truck totaled$600,000 at an interest rate of 4.36% and a lease term of seven years. The following is a schedule of the future minimumlease payments under this capital lease at December 31, 2013.

6,2192,712

Total

100,193100,193

Year ending December 31.

20142015

$

Principal

93,974 $97,481

Interest

Total $ 191,455 $ 8,931 $ 2.;,.00.;d..,3;_8_6

Loan Payable - The Fire District obtained a loan to purchase an ambulance. The loan totaled $75,000 at an interest rate of2% and a term of three years. The following is a schedule of the future minimum loan payments at December 31, 2013.

Year ending December 31~ Principal Interest Total

2014 $ 24,470 $ 1,383 $ 25.8532015 25,033 821 25.8542016 25,497 356 25,853

Total $ 75,000 $ 2.560 $ 77,560

6. DEFERRED COMPENSATION SALARY PLAN

The Fire District offers its employees a Deferred Compensation Plan in accordance with Internal Revenue Code Section457, which has been approved by the Director of the Division of Local Government Services. The Plan, available to allfull time employees at their option, permits employees to defer a portion of their salary to future years. The deferredcompensation is not available to participants until termination, retirement, death, unforeseeable emergency.

Amounts deferred under Section 457 plans must be held in trust for the exclusive benefit of participating employees andare not accessible by the Fire District or its creditors.

7. PENSION PLANS

Substantially all of the Fire District's employees participate in one of the following pension plans which have beenestablished by State statute, and are administered by the New Jersey Division of Pensions and Benefits (Division): thePolice and Firemen's Retirement System (PFRS), the Public Employees' Retirement System (PERS) or the DefinedContribution Retirement Program (DCRP). Each plan has a Board of Trustees that is primarily responsible for itsadministration. The Division issues a publicly available financial report that includes financial statements and requiredsupplementary information. That report may be obtained by writing' to the State of New Jersey, Division of Pensions andBenefits. P.O. Box 295, Trenton, New Jersey, 08625-0295.

Public Employees' Retirement System (PERS)

The Public Employees' Retirement System was established in 1955. The PERS provides retirement, death and disability,and medical benefits to qualified members. Vesting and benefit provisions are established by N.J.S.A. 43: 15A and 43:3B.

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7. PENSION PLANS (Continued)

Public Employees' Retirement System (PERS) (Continued)

The contribution requirements of plan members are determined by State statute. In accordance with Chapter 62, P.L. 1994,plan members enrolled in the Public Employees' Retirement System were required to contribute 5% of their annualcovered salary. Effective July 1, 2008, however, in accordance with Chapter 92 P.L. 2007 and Chapter 103, P.L. 2007,plan members are required to contribute 5.5% of their annual covered salary. For employees enrolled in the retirementsystem prior to July 1, 2008, the increase is effective with the payroll period that begins immediately after July 1, 2008.Pursuant to the provisions of Chapter 78, P.L. 2011, effective October 1,2011, the active member contribution rate wasincreased to 6.5%. An additional 1.0% increase will be phased-in over seven years beginning on July 1, 2012. The StateTreasurer has the right under the current law to make temporary reductions in rates based on the existence of surpluspension assets in the retirement system; however, statute also requires the return to the normal rate when such surpluspension assets no longer exist.

Police and Firemen's Retirement System (PFRS)

The Police and Firemen's Retirement System was established in 1944. The PFRS provides retirement, death and disability,and medical benefits to qualified members. Vesting and benefit provisions are established by N.J.S.A. 43: 16A and 43:3B.

The contribution requirements of plan members are determined by State statute. In accordance with Chapter 204, P.L.1989, plan members enrolled in the PFRS are required to contribute 8.5% of their annual covered salary. Pursuant to theprovisions of Chapter 78, P.L. 2011, the active member contribution rate increased to 10.0% in October, 2011. The StateTreasurer has the right under the current law to make temporary reductions in member rates based on the existence ofsurplus pension assets in the retirement system; however, the statute also requires the return to the normal rate when suchsurplus pension assets no longer exist.

The Fire District is billed annually for its normal contributions plus any accrued liability. These contributions, equal to therequired contributions are detailed below.

2013 2012 2011PERS PFRS PERS PFRS PERS PFRS

Normal Contribution $ 6,983 $ 17,669 $ 7,811 $ 18,572 $ 7,999 $ 29,759Accrued Liability 16,695 23,383 15,621 20,901 12,746 17,053Total Regular Contributions 23,678 41,052 23,432 39,473 20,745 46,812Non-Contributory Group

Life Insurance 1,409 1,695 1,493 1,446 1,576 2,888Total Due $ 25,087 $ 42,747 $ 24,925 $ 40,919 $ 22,321 $ 49,700

Defined Contribution Retirement Program (DCRP)

The Defined Contribution Retirement Program was established in 2007, under the provisions of Chapter 92, P.L. 2007 andChapter 103, P.L. 2007 (NJ.S.A.43:15C-l et. seq), and expanded under the provisions of Chapter 89, P.L. 2008 andChapter 1, P.L. 2010. The Defined Contribution Retirement Program Board oversees the DCRP, which is administered byPrudential Financial on behalf of the Divisions of Pensions and Benefits. The DCRP provides eligible members, and theirbeneficiaries, with a tax-sheltered, defined contribution retirement benefit, along with life insurance and disabilitycoverage. Vesting and benefit provisions are established by NJ.S.A. 43: 15C-l et. seq.

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7. PENSION PLANS (Continued)

Defined Contribution Retirement Program (DCRP)

The contribution requirements of plan members are determined by State statute. In accordance with Chapter 92, P.L. 2007and Chapter 103, P.L. 2007, plan members are required to contribute 5.5% of their annual covered salary. Chapter 78 P.L.2013 changed the employee contribution rate as follows: Effective with the first payroll check to be paid on or afterOctober 1, 2011 plan members rate increased to 6.5%. An additional 1% increase will be phased-in over the next sevenyears beginning on July 1, 2012. The State Treasurer has the right under the current law to make temporary reductions inrates based on the existence of surplus pension assets in the retirement system; however, state statute also requires thereturn to the normal rate when such surplus pension assets no longer exist. The employee contributions along with the FireDistrict's contribution for each pay period are transmitted to Prudential Financial not later than the fifth business day afterthe date on which the employee is paid for that pay period.

There were no Fire District employees enrolled in the DCRP for the years ended December 31,2013,2012 and 2011.

9. RISK MANAGEMENT

The Fire District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors andomissions; employee health and accident claims; and natural disasters.

Joint Insurance Fund - The Fire District is a member of the First Responder Joint Insurance Fund and the MunicipalExcess Liability Joint Insurance Fund (MEL). These Funds provide the Fire District with coverage for property andcontents, auto and general liability, employee dishonesty, workers compensation and employers liability.

to. INTERFUND RECEIVABLES AND PAY ABLES

The following interfund balances were recorded on the various balance sheets as of December 31,2013:

Fund Interfund InterfundReceivable Pa:yable

General Fund $ 3,032Fiduciary Fund $ 3,032

$ 3,032 $ 3,032

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n. PROPERTY TAXES

The following is a five year comparison of certain statistical information relative to property taxes and property taxcollections for the current and previous four years.

Comparative Schedule of Tax Rates

R2010

Tax Rate $ .__ 0_.1_10 $ _.....;0_.1_0_4_$ __ 0_.1.....;0_4_~$__ 0_.1_05__ $ __ 0_.1_87__

R - Revaluation

Assessed Valuation

20132012201120102009

$ 1,216,613,080$ 1,225,669,840

$

R

1,241,358,100$ 1,213,644,900

$ 615,350,800

R - Revaluation

12. FUND BALANCES

The Fire District has classified its fund balances with the following hierarchy:

Nonspendable - The Fire District does not have any nonspendable funds.

Spendable - The Fire District has classified the spendable fund balances as Restricted, Assigned and Unassigned andconsidered each to have been spent when expenditures are incurred. The Fire District currently has no funds classifiedas Committed.

Restricted Items:

Reserve for Future Capital Outlays - As of December 31, 2013, the balance in the Reserve for future capitaloutlays is $30,000.

Assigned:

Designated for Subsequent Year's Expenditures - The Fire District has assigned a total of $120,000 forappropriation of existing unassigned fund balance at year-end to eliminate a deficit in the upcoming 2014 budget.

Unassigned items - Represents the remainder of the Fire District's equity in governmental fund type balances. Thebalance at December 31,2013 is $212,588.

34



12. FUND BALANCES (Continued)

The following presents the assigned and unassigned fund balance as of the last five years and the amount utilized inthe subsequent year's budget:

Utilized In Percental:;eBalance Budl:;etOf Budl:;etof

Year Dec. 31. Succeeding Year Succeeding Year

2013 $ 332,588 $ 120,000 36.08%2012 349,435 244,000 69.82%2011 358,163 150,000 41.88%2010 282,068 80,000 28.36%2009 238,963 65,000 27.20%

13. RESTATEMENT OF NET POSITION

As a result of the implementation of GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, netposition as of December 31,2012 has been restated as follows:

Net Position, December 31,2012 s (120,247)

(70,789)Expense of Bond Issuance Costs (1)

Net Position, December 31, 2012 (Restated) s __ .(1.;..,;91;.;;,;,0;.;.36.;.,:.)

(1) Formerly reported as a deferred asset and amortized over the life of the related debt.

35

Required Supplementary Information - Part II

Budgetary Comparison Schedules

C-lFLORENCE TOWNSHIP FIRE DISTRICT NO.1

Budgetary Comparison ScheduleGeneral Fund

Fiscal Year Ended December 31,2013

VarianceOriginal Budget Final Final toBudget Transfers Budget Actual Actual

REVENUES:Local sources:

Local tax levy $ 914,156 $ 914,156 $ 914,156Interest on investments 500 500 914 $ 414Uniform Fire Safety Act 30,000 30,000 32,939 2,939EMSI NJ Turnpike Revenue 336,000 336,000 366,499 30,499Miscellaneous 4283 4283

Total local sources 1,280,656 1,280,656 1,318,791 38,135

State sources:Supplemental Fire Services Grant 4012 4012

Total state sources 4012 4012

Federal sources:FEMAGrant 37240 37,240 36,164 !1,076)

Total state sources 37,240 37240 36164 !1,076)

TOTAL REVENUES 1,317,896 1,317,896 1,358,967 41071

EXPENDITURES:GENERAL EXPENSE:

AdminiS1ration:Salaries and wages 116,393 $ (2,000) 114,393 112,294 2,099Fringe benefits 58,473 (3,000) 55,473 53,198 2,275

Other Expenses:Elections 2,000 (500) 1,500 1,303 197Office expense 12,000 12,000 11,942 58Professional services 36,000 5,500 41,500 37,828 3,672Office equipment 9000 9,000 8724 276

Total Administration 233,866 233,866 225,289 8577

See Management's Discussion and Analysis section of this report for explanation of significant budget variances, original and final.

(CONTINUED TO NEXT PAGE)

38

C-1FLORENCE TOWNSHIP FIRE DISTRICT NO.1

Budgetary Comparison ScheduleGeneral Fund

Fiscal Year Ended Decamber 31,2013

Variance(Continued from prior page) Original Budget Final Final to

Bud!aet Transfers Budget Actual Actual

Cost of Operations:Salaries and wages $ 532,659 $ (10,000) $ 522.659 $ 479,288 $ 43,371Fringe benefits 138,224 (10,000) 128,224 109,900 18,324

Other Expenses:Supplies and materials 210,515 210,515 205,130 5,385Insurance 90,000 90,000 88,337 1,663Training 26,500 (5,000) 21,500 12,823 8,677Contracted services 24,000 24,000 24,000Purchase of non bondable assets 52240 25.000 77240 63916 13.324

Total Other Expense 1.074.138 1,074,138 983.394 90,744

Total Cost of Operations 1.074,138 1,074.138 983,394 90744

Appropriations Ott-Set with Revenues:Salaries and wages 67,344 67,344 57,318 10,026Fringe benefits 36,548 36,548 34,962 1,586Other expenses 15,000 15.000 14873 127

Total Appropriations Ott-Sst with Revenues 118.892 118.892 107.153 11739

Capital Improvements:Ambulance 135,000 135,000 59978 75.022

Total Appropriations Off-Set with Revenues 135.000 135..000 59.978 75022

Total Expenditures 1.561,896 1,561,896 1,375,814 186.082

Excess (Deficiency) of RevenuesOver (Under) Expenditures: 1244,OOOl (244.000l 116,847l 227.153

Other finanCing sources (uses):

Total other financing sources (uses)

Excess (Deficiency) of Revenues Over (Under)Expenditures and Other Financing Sources (Uses) (244,000) (244,000) (16,847) 227,153

Fund Balance, January 1 379,435 379.435 379,435

Fund Balance, December 31 s 135.435 s $ 135A35 $ 3621588 s 227,153

Recapitulation of Fund Balance:Restriced Fund Balance:

Reserve lor Future Capital Outlays $ 30,000Assigned Fund Balance:

Designated lor Subsequent Year's Expenditures 120,000Unassigned Fund Balance 212.588

Fund Balance per Governmental Funds (GAAP) $ 3621588

See Management's Discussion and Analysis section of this report lor explanation of signilicant budget variances, original and final.

39

FLORENCE TOWNSHIP FIRE DISTRICT NO.1Notes to Required Supplementary Information

Budgetary Comparison

C-2

Explanation of Differences between Budgetary Inflows and Outflows and GAAPRevenues and Expenditures

Sources/Inflows of resourcesActual amounts (budgetary basis) "revenue"

from the budgetary comparison schedulesDifference - budget to GAAP:

Grant accounting budgetary basis differs from GAAP in thatencumbrances are recognized as expenditures, and therelated revenue is recognized.

Total revenues as reported on the statement of revenues,expenditures, and changes in fund balances -governmental funds.

Uses/outflows of resourcesActual amounts (budgetary basis) "total expenditures" from

the budgetary comparison scheduleDifferences - budget to GAAP

Encumbrances for supplies and equipment ordered but notreceived is reported in the year the order is placed for budgetarypurposes, but in the year the supplies are received for financialreporting purposes.

Total expenditures as reported on the statement of revenues,expenditures, and changes in fund balancesgovernmental funds

40

GeneralFund

$ 1,358,967

$==.....,;,1,1,;i,3_5_8,r.;;;9_67,;,..

$ 1,375,814

$======1._37_5io!i,8_1 ....4

Other Supplementary Information

Capital Projects FundDetail Statements

FLORENCE TOWNSHIP FIRE DISTRICT NO.1Capital Projects Fund

Summary Statement of Project ExpendituresYear Ended December 31,2013

E·1

Purpose

Ambulance

Total

DateAuthorized

04/12/2004

Appropriations

s 135,000

s 135,000

43

Expenditures to DatePrior Years Current Year

$ 134,978

s $ 134,978

Canceled

$

s

UnexpendedBalance

22 s

22 $

Fiduciary FundsDetail Statements

FLORENCE TOWNSHIP FIRE DISTRICT NO.1Fiduciary Funds

Combining Statement of Net PositionDecember 31, 2013

F-1

ASSETS:

Cash and cash equivalents

TOTAL ASSETS

LIABILITIES

LIABILITIES:Interfund payable

Total liabilities

45

Agency Funds

Payroll

$ 3,032

$ 3,_032

$ 3,032

$ 3,032

F-2

FLORENCE TOWNSHIP FIRE DISTRICT NO.1Payroll Agency Fund

Schedule of Receipts and Disbursementsfor the Fiscal Year ended December 31, 2013

Balance BalanceJanua~ 1, 2013 Increases Decreases December 31, 2013

ASSETS:

Cash and cash equivalents $ 3,757 $ 722,301 $ 723,026 $ 3,032

Total assets $ 3,757 $ 722,301 $ 723,026 $ 3,032

LIABILITIES:

Payroll deductionsand with holdings $ 399,859 $ 399,859

Net payroll 323,167 323,167Interfund payable $ 3,757 725 $ 3,032

Total liabilities $ 3,757 $ 723,026 $ 723,751 $ 3,032

46

Long-Term Debt Schedules

FLORENCE TOWNSHIP FIRE DISTRICT NO.1General Long-Term Debt Account Group

Schedule of Serial BondsDecember 31, 2013

G·'

Issue

Fire DistrictBonds

Total

Dateof

Issue

06/01/2004

Amountof

Issue

RateAnnual Maturities of Balance

Date Amount Interest January 1, 2013

07/15/14 $ 145,000 4.500% $ 3,535,00007/15/15 150,000 5.000%07/15/16 160,000 5.000%07/15/17 165,000 5.000%07/15118 175,000 5.000%07/15119 185,000 5.000%07/15/20 190,000 5.000%07/15121 200,000 5.000%07/15122 210,000 5.000%07/15/23 220,000 5.000%07/15124 235,000 5.000%07/15/25 245,000 5.000%07/15126 255,000 5.100%07/15127 270,000 5.125%07/15/28 285,000 5.125%07/15129 305,000 5.125%

Issued Retired

$ 140,000

$ 140,000

BalanceDecember 31,2013

$ 3,395,000

$ 3,395,000

FLORENCE TOWNSHIP FIRE DISTRICT NO.1General Long-Term Debt Account Group

Schedule of Capital Leases PayableDecember 31,2013

G-2

InterestRate

Ladder Rre Truck 4.36%

Total

Amount ofOriginal Balance

Tenn Issue January 1, 2013 Issued

7 Years $ 600,000 $ 282,048

$ 282,048

Retired

$ 90,593

$ 90,593

BalanceDecember 31.2013

$ 191,455

$ 191,455

VarianceOriginal Budget Final Final toBudget Transfers Budget Actual Actual

REVENUES:Local sources:

Local tax levy $ 416,848 $ 4161848 ~ 4161848Total revenues -local sources 416,848 4161848 4161848

Total Revenues 4161848 416,848 416,848

EXPENDITURES:Regular debt service:

Redemption of principal 230,593 230,593 230,593Interest 186,255 186,255 186,255

Total Expenditures 416,848 4161848 416,848

Excess (Deficiency) of revenues over(under) expenditures

Fund Balances, January 1

Fund Balances, December 31

FLORENCE TOWNSHIP FIRE DISTRICT NO.1Budgetary Comparison Schedule

Debt Service FundFiscal Year Ended December 31,2013

50

G-3

FLORENCE TOWNSHIP FIRE DISTRICT NO.1General Long- Tenn Debt Account Group

Schedule of Loan PayableDecemnber31,2013

G-4

Purpose

Ambulance

Total

01.....

InterestRate

1.85%

Tenn

3 Years

Amount ofOriginal

Issue

$ 75,000

BalanceJanuary 1, 2013

$

$

Issued

$ 75,000

s 75,000

Retired

$

$

BalanceDecember 31, 2013

$ 75,000

$ 75,000

General Comments and Recommendations

SCHEDULE OF FINANCIAL STATEMENT FINDINGS

This section identifies the reportable conditions, material weaknesses, and instances of noncompliancerelated to the financial statements that are required to be reported in accordance with Government AuditingStandards and with the requirements as prescribed by the Bureau of Authority Regulation, Division ofLocal Government Services, Department of Community Affairs, State of New Jersey.

None

SUMMARY SCHEDULE OF PRIOR YEAR AUDIT FINDINGSAND RECOMMENDATIONS AS PREPARED BY MANAGEMENT

This section identifies the status of prior year audit findings related to the financial statementsthat are required to be reported in accordance with Government Auditing Standards.

There were no prior year audit findings requiring corrective action.

APPRECIATION

We express our appreciation for the assistance and courtesies extended to us by the Fire DistrictCommissioners during the course of the audit.



(}r~)-Robert P. InversoCertified Public AccountantRegistered Municipal Accountant

April 4, 2014

53

Documents

FLORENCE TOWNSHIP FIRE DISTRICT NO.1 County of Burlingtonmembersonly.ftfd40.org/assets/florencetwpfire2013.pdf · 2016. 3. 10. · FLORENCE TOWNSHIP FIRE DISTRICT NO.1 FLORENCE, NEW