Embed Size (px)
Citation preview
REFUNDING ISSUE SERIAL BONDS
MOODY’S RATING: “Aa3” RATING: See “BOND RATING” herein
In the opinion of Hiscock & Barclay, LLP, Albany, New York, Bond Counsel, under existing law (1) interest on the Bonds is excluded
from the gross income of the owners thereof for federal income tax purposes and is not an "item of tax preference" for purposes of the
individual and corporate alternative minimum taxes imposed by the Internal Revenue Code of 1986, as amended (the “Code”), except that
(A) interest on the Bonds is included in the adjusted current earnings of corporations for purposes of calculating corporate alternative
minimum taxable income for federal income tax purposes, and (B) the School District, by failing to comply with certain restrictions
contained in the Code, may cause interest on the Bonds to become subject to federal income taxation from the date of issuance thereof, and
(2) interest on the Bonds is exempt from personal income taxes imposed by the State of New York or any political subdivision thereof
(including The City of New York). See the caption “TAX EXEMPTION” herein.
The Bonds will be designated as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Code.
$8,175,000 WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
DUTCHESS AND COLUMBIA COUNTIES, NEW YORK
GENERAL OBLIGATIONS
$8,175,000 School District Refunding (Serial) Bonds, 2012
(referred to hereinafter as the “Bonds”)
CUSIP BASE #: 94844W Dated: Date of Delivery Due: December 15, 2012-2021
MATURITIES**
Year Amount Rate Yield CUSIP Year Amount Rate Yield CUSIP
2012 $ 110,000 2.00% 0.70% AZ5 2017 $ 1,125,000 4.00% 1.16% BE1
2013 5,000 2.00 0.73 BA9 2018 1,090,000 4.00 1.43 BF8
2014 5,000 2.00 0.75 BB7 2019 1,130,000 4.00 1.75 BG6
2015 1,265,000 3.00 0.77 BC5 2020 1,095,000 4.00 1.99 BH4
2016 1,305,000 2.00 0.92 BD3 2021 1,045,000 4.00 2.22 BJ0
** The Bonds are not subject to redemption prior to maturity.
The Bonds are general obligations of the Webutuck (Northeast) Central School District, Dutchess and Columbia
Counties, New York, containing a pledge of the faith and credit of the School District for the payment of debt service, all the
taxable real property within which is subject to the levy of ad valorem taxes to pay the Bonds and interest thereon. See
“REAL PROPERTY TAX LEVY CAP” herein.
The Bonds will be issued as registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee
of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Bonds.
Individual purchases will be made in book-entry form only, in the principal amount of $5,000 each or integral multiples
thereof. Purchasers will not receive certificates representing their ownership interest in the Bonds. Interest on the Bonds will
be payable on December 15, 2012 and semi-annually thereafter on June 15 and December 15 in each year until maturity.
Principal and interest will be paid by the School District to DTC, which will in turn remit such principal and interest to its
participants, for subsequent distribution to the beneficial owners of the Bonds, as described herein.
The Bonds are offered when, as and if issued and received by the Underwriter and subject to the receipt of the approving
legal opinion as to the validity of the Bonds by Hiscock & Barclay, LLP, Bond Counsel, Albany, New York. Certain legal
matters will be passed on for the Underwriter by its counsel, Hodgson Russ LLP, Albany, New York. It is anticipated that the
Bonds will be available for delivery through the facilities of DTC in New York, New York on or about October 10, 2012.
September 18, 2012
SCHOOL DISTRICT OFFICIALS
BOARD OF EDUCATION
WILLIAM MCGHEE JUDY MORAN
President Vice President
JOANNE BOYD
KRISTIN PANZER
JOHN PEROTTI
ROBERT TROTTA
JUDY WESTFALL
* * * * * *
JAMES GRATTO, JR
Superintendent of Schools
MARY GRDEN
School Business Manager
THERESE TROTTER
School District Clerk
VALERIE BURDICK
Treasurer
MARY CLINTON
Deputy Treasurer
GIRVIN & FERLAZZO, P.C.
School District Attorney
FISCAL ADVISORS & MARKETING, INC.
School District Financial Advisors
HISCOCK & BARCLAY, LLP
Bond Counsel
No person has been authorized by the Webutuck (Northeast) Central School District to give any information or to make any representations not
contained in this Preliminary Official Statement, and, if given or made, such information or representations must not be relied upon as having been
authorized. This Preliminary Official Statement does not constitute an offer to sell or solicitation of an offer to buy any of the Bonds in any jurisdiction to
any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. The information, estimates and expressions of opinion herein are
subject to change without notice, and neither the delivery of this Preliminary Official Statement nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the affairs of the Webutuck (Northeast) Central School District.
The Underwriter has provided the following sentence for inclusion in this Official Statement. “The Underwriter has reviewed the information in this
Preliminary Official Statement in accordance with, and as a part of its responsibilities under the federal securities law, but the Underwriter does not
guaranty the accuracy or completeness of such information.”
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR
MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKETS. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
TABLE OF CONTENTS
Page
DESCRIPTION OF THE BONDS ........................................... 4
No Optional Redemption ........................................................ 4
Book-Entry-Only System ........................................................ 5
Certificated Bonds ................................................................... 6
AUTHORIZATION AND PLAN OF REFUNDING .............. 7
Authorization and Purpose ...................................................... 7
The Refunding Financial Plan ................................................. 7
Verification of Mathematical Computations ........................... 8
Sources and Uses of Bond Proceeds ....................................... 8
THE SCHOOL DISTRICT ...................................................... 9
General Information ................................................................ 9
Larger Employers .................................................................... 9
Population ............................................................................... 9
Wealth and Income Indicators ................................................. 9
Form of School Government ................................................. 10
Budgetary Procedures ........................................................... 10
Investment Policy .................................................................. 10
State Aid ................................................................................ 11
School Facilities .................................................................... 12
Enrollment Trends ................................................................. 12
Employees ............................................................................. 12
Status and Financing of Employee Pension Benefits ............ 13
Post-Employment Health Benefits ........................................ 14
Unemployment Rate Statistics ............................................... 15
Other Information .................................................................. 15
Financial Statements ............................................................. 16
TAX INFORMATION ............................................................ 16
Valuations ............................................................................ 16
State Equalization Rate ......................................................... 16
Tax Rates Per M (Assessed) .................................................. 17
Tax Collection Procedure ...................................................... 17
Tax Collection Record .......................................................... 17
Ten Larger Taxpayer for 2011 Tax Roll for 2011-12 ............ 17
STAR – School Tax Exemption ............................................ 18
Additional Tax Information ................................................... 18
REAL PROPERTY TAX CAP .............................................. 18
STATUS OF INDEBTEDNESS ............................................. 19
Constitutional Requirements ................................................. 19
Statutory Procedure ............................................................... 19
Debt Outstanding End of Fiscal Year .................................... 20
Page
Details of Outstanding Indebtedness ..................................... 20
Debt Statement Summary ...................................................... 21
Capital Project Plans ............................................................. 21
Cash Flow Borrowings .......................................................... 21
Bonded Debt Service ............................................................. 21
Estimated Overlapping Indebtedness .................................... 22
Debt Ratios ............................................................................ 22
SPECIAL PROVISIONS AFFECTING
REMEDIES UPON DEFAULT ....................................... 23
CONTINUING DISCLOSURE UNDERTAKING ................. 23
MARKET AND RISK FACTORS .......................................... 25
TAX EXEMPTION ................................................................... 25
LEGAL MATTERS .................................................................. 26
LITIGATION ............................................................................ 26
RATING ..................................................................................... 27
UNDERWRITING .................................................................... 27
MISCELLANEOUS .................................................................. 27
APPENDIX - A
GENERAL FUND - Balance Sheets
APPENDIX - A1
GENERAL FUND – Revenues, Expenditures and
Changes in Fund Balance
APPENDIX - A2
GENERAL FUND – Revenues, Expenditures and
Changes in Fund Balance - Budget and Actual
APPENDIX - B
BONDED DEBT SERVICE
APPENDIX - C
GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2011
PREPARED WITH THE ASSISTANCE OF
FA FISCAL ADVISORS & MARKETING, INC.
CORPORATE HEADQUARTERS
120 Walton Street • Suite 600
Syracuse NY 13202
Phone • 315.752.0051 • Fax • 315.752.0057 • Internet http://www.fiscaladvisors.com
4
OFFICIAL STATEMENT
of the
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
DUTCHESS AND COLUMBIA COUNTIES, NEW YORK
Relating To
$8,175,000 School District Refunding (Serial) Bonds, 2012
This Official Statement, which includes the cover page, has been prepared by the Webutuck (Northeast) Central School
District, Dutchess and Columbia Counties, New York (the "School District" or "District", "Counties", and "State",
respectively) in connection with the sale by the School District of $8,175,000 principal amount of School District Refunding
(Serial) Bonds, 2012 (the "Bonds").
The factors affecting the School District’s financial condition and the Bonds are described throughout this Official
Statement. Inasmuch as many of these factors, including economic and demographic factors, are complex and may influence
the School District tax base, revenues, and expenditures, this Official Statement should be read in its entirety, and no one
factor should be considered more or less important than any other by reason of its relative position in this Official Statement.
All quotations from and summaries and explanations of provisions of the Constitution and laws of the State and acts and
proceedings of the School District contained herein do not purport to be complete and are qualified in their entirety by
reference to the official compilations thereof, and all references to the Bonds and the proceedings of the School District
relating thereto are qualified in their entirety by reference to the definitive forms of the Bonds and such proceedings.
DESCRIPTION OF THE BONDS
The Bonds are general obligations of the School District, and will contain a pledge of its faith and credit for the payment
of the principal of and interest on the Bonds as required by the Constitution and laws of the State (State Constitution, Art.
VIII, Section 2; Local Finance Law, Section 100.00). All the taxable real property within the School District is subject to the
levy of ad valorem taxes to pay the Bonds and interest thereon. See “REAL PROPERTY TAX LEVY CAP” herein.
The Bonds will be dated the date of delivery and will mature in the principal amounts as set forth on the cover page. The
Bonds are not subject to redemption prior to maturity. The “Record Date” of the Bonds will be last business day of the
calendar month preceding each such interest payment date.
The Bonds will be issued as registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee
of DTC, which will act as securities depository for the Bonds. Individual purchases will be made in book-entry form only, in
the principal amount of $5,000 or integral multiples thereof. Purchasers will not receive certificates representing their
ownership interests in the bonds. Interest on the Bonds will be payable on December 15, 2012 and semi-annually thereafter
on June 15 and December 15 in each year until maturity. Principal and interest will be paid by the School District to DTC,
which will in turn remit such principal and interest to its participants, for subsequent distribution to the Beneficial Owners of
the Bonds, as described herein. See “Book-Entry-Only System” herein.
No Optional Redemption
The Bonds are not subject to redemption prior to maturity.
5
Book-Entry-Only System
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Bonds. The Bonds
will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other
name as may be requested by an authorized representative of DTC. One fully-registered Bond certificate will be issued for
each maturity of the Bonds in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York
Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency”
registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset
servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money
market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also
facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities,
through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the
need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers
and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, is the holding company for DTC, National
Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC
is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and
non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The DTC Rules
applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be
found at www.dtcc.com and www.dtc.org.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit
for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in
turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation
from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the
Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by
entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system
for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of
DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC.
The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect
any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records
reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the
Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of
Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the
Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial
Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit
notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the
registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC’s
practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Redemption proceeds, and principal and interest payments on the Bonds will be made to Cede & Co., or such other
nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’
accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in
accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in
6
bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee,
Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of
redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an
authorized representative of DTC) is the responsibility of the School District, disbursement of such payments to Direct
Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable
notice to the School District. Under such circumstances, in the event that a successor depository is not obtained, Bond
certificates are required to be printed and delivered.
The School District may decide to discontinue use of the system of book-entry transfers through DTC (or a successor
securities depository). In that event, Bond certificates will be printed and delivered, as applicable.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that
School District believes to be reliable, but School District takes no responsibility for the accuracy thereof.
Source: The Depository Trust Company.
THE SCHOOL DISTRICT CANNOT AND DOES NOT GIVE ANY ASSURANCES THAT DTC, DIRECT PARTICIPANTS OR
INDIRECT PARTICIPANTS OF DTC WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE BONDS (1) PAYMENTS OF
PRINCIPAL OF OR INTEREST OR REDEMPTION PREMIUM ON THE BONDS (2) CONFIRMATIONS OF THEIR OWNERSHIP
INTERESTS IN THE BONDS OR (3) OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS PARTNERSHIP NOMINEE, AS THE
REGISTERED OWNER OF THE BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC, DIRECT
PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL
STATEMENT.
THE SCHOOL DISTRICT WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATIONS TO DTC, THE DIRECT
PARTICIPANTS, THE INDIRECT PARTICIPANTS OF DTC OR THE BENEFICIAL OWNERS WITH RESPECT TO (1) THE
ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS OF
DTC; (2) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS OF DTC OF ANY
AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL AMOUNT OF OR INTEREST OR
REDEMPTION PREMIUM ON THE BONDS; (3) THE DELIVERY BY DTC OR ANY DIRECT PARTICIPANTS OR INDIRECT
PARTICIPANTS OF DTC OF ANY NOTICE TO ANY BENEFICIAL OWNER THAT IS REQUIRED OR PERMITTED TO BE GIVEN
TO OWNERS OR (4) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE REGISTERED HOLDER OF THE
BONDS.
THE INFORMATION CONTAINED HEREIN CONCERNING DTC AND ITS BOOK-ENTRY SYSTEM HAS BEEN OBTAINED
FROM DTC AND THE SCHOOL DISTRICT MAKES NO REPRESENTATION AS TO THE COMPLETENESS OR THE ACCURACY
OF SUCH INFORMATION OR AS TO THE ABSENCE OF MATERIAL ADVERSE CHANGES IN SUCH INFORMATION
SUBSEQUENT TO THE DATE HEREOF.
Certificated Bonds
DTC may discontinue providing its services with respect to the Bonds at any time by giving notice to the School District
and discharging its responsibilities with respect thereto under applicable law, or the School District may terminate its
participation in the system of book-entry-only transfers through DTC at any time. In the event that such book-entry-only
system is discontinued, the following provisions will apply: the Bonds will be issued in fully registered form in
denominations of $5,000 or any integral multiple thereof for any single maturity. Principal of the Bonds when due will be
payable upon presentation at the office of a bank or trust company located and authorized to do business in the State as a
fiscal agent bank to be named by the School District upon termination of the book-entry-only system. Interest on the Bonds
will be payable on December 15, 2012 and semi-annually thereafter on June 15 and December 15 in each year until maturity.
Such interest will be payable by check drawn on the fiscal agent and mailed to the registered owner on each interest payment
date at the address as shown on the registration books of the fiscal agent as of the last business day of the calendar month
preceding each such interest payment date. Bonds may be transferred or exchanged at no cost to the registered owner at any
time prior to maturity at the office of the fiscal agent for Bonds of the same or any other authorized denomination or
denominations in the same aggregate principal amount upon the terms set forth in the Certificate of Determination of the
President of the Board of Education authorizing the sale of the Bonds and fixing the details thereof and in accordance with the
Local Finance Law. The fiscal agent shall not be obligated to make any such transfer or exchange of Bonds between the last
business day of the calendar month preceding an interest payment date and such interest payment date.
7
AUTHORIZATION AND PLAN OF REFUNDING
Authorization and Purpose
The Bonds are being issued pursuant to the Constitution and statutes of the State, including particularly Section 90.10 of
the Local Finance Law, a refunding bond resolution adopted by the Board of Education on April 16, 2012 (the “Refunding
Bond Resolution”) and other proceedings and determinations related thereto. The Refunding Bond Resolution authorizes the
refunding of all or a portion of the $8,245,000 outstanding principal balance of the School District (Serial) Bonds, 2005,
dated December 15, 2005 originally issued by the School District in the aggregate principal amount of $17,430,000 (the
“Refunded Bonds”) and authorizes issuance of the Bonds to provide the funds necessary to effect the refunding of the
Refunded Bonds.
The Refunded Bonds were authorized by the Board of Education pursuant to a bond resolution adopted to provide funds
for the following purposes and amounts:
$17,430,000 School District Serial Bonds, 2005 – dated December 15, 2005
Purposes Amount
Various construction projects $ 17,430,000
The proceeds of the Bonds are intended to be used to purchase a portfolio of non-callable direct obligations of the United
States of America (the “Government Obligations”) and pay certain costs of issuance related to the Bonds. The principal of
and investment income on the portfolio of Government Obligations together with other available cash on deposit in the
Escrow Deposit Fund (as hereinafter defined) are expected to be sufficient to pay the maturing principal of, interest on, and
redemption premiums of the Refunded Bonds.
The Refunding Financial Plan
The Bonds are being issued to effect the refunding of the Refunded Bonds pursuant to the School District’s refunding
financial plan (the “Refunding Financial Plan”). The Refunding Financial Plan provides that the proceeds of the Bonds (after
payment of the underwriting fee and other costs of issuance related to the Bonds) are to be applied to the purchase of the
Government Obligations. The Government Obligations are to be placed in an irrevocable trust fund (the “Escrow Deposit
Fund”) with The Bank of New York Mellon (the “Escrow Holder”), pursuant to the terms of an escrow contract (the “Escrow
Contract”) by and between the School District and the Escrow Holder. The Refunding Financial Plan further provides that
the Government Obligations will mature in amounts and bear interest sufficient, together with any un-invested cash deposited
into the Escrow Deposit Fund from proceeds of the Bonds, to meet principal and interest payments and redemption premiums
with respect to the Refunded Bonds on the dates such payments are due or, in the case of Refunded Bonds subject to
redemption prior to maturity, upon their earliest redemption date (the “Payment Dates”). The Refunding Financial Plan calls
for the Escrow Holder, pursuant to the Refunding Bond Resolution and the Escrow Contract, to call for redemption all the
then outstanding Refunded Bonds on their first permitted redemption date. The owners of the Refunded Bonds will have a
first lien on all of the cash and securities necessary for the refunding in the Escrow Deposit Fund into which are required to be
deposited all investment income on and maturing principal of the Government Obligations, together with the un-invested cash
deposit, until the Refunded Bonds have been paid, whereupon the Escrow Contract, given certain conditions precedent, shall
terminate.
The School District is expected to realize, as a result of the issuance of the Bonds, and in accordance with the Refunding
Financial Plan, cumulative dollar and present value debt service savings.
Under the Refunding Financial Plan, the Refunded Bonds will continue to be general obligations of the School District
and will continue to be payable from School District sources legally available therefore. However, inasmuch as the
Government Obligations and cash held in the Escrow Deposit Fund will have been verified to be sufficient to meet all
required payments of principal, interest and redemption premiums on the Refunded Bonds, it is not anticipated that such
School District sources of payment will be used.
8
$17,430,000 School District Serial Bonds, 2005 – dated December 15, 2005
CUSIP BASE: 94844W
Redemption Redemption
Due Dec 15th
Principal Amount Interest Rate Date Price CUSIP
2015 $ 1,265,000 4.000% 12/15/2014 100.00% AQ5
2016 1,320,000 4.000% 12/15/2014 100.00% AR3
2017 1,155,000 4.000% 12/15/2014 100.00% AS1
2018 1,125,000 4.000% 12/15/2014 100.00% AT9
2019 1,165,000 4.000% 12/15/2014 100.00% AU6
2020 1,130,000 4.125% 12/15/2014 100.00% AV4
2021 1,085,000 4.125% 12/15/2014 100.00% AW2
$ 8,245,000
Verification of Mathematical Computations
Causey Demgen & Moore Inc., a firm of independent public accountants, will deliver to the District, on or before the
settlement date of the Bonds, its attestation report indicating that it has verified, in accordance with standards established by
the American Institute of Certified Public Accountants, the information and assertions provided by the District and its
representatives. Included in the scope of its engagement will be a verification of the mathematical accuracy of (a) the
mathematical computations of the adequacy of the cash and the maturing principal of and interest on, the Government
Obligations used to fund the Escrow Deposit Fund to be established by the Escrow Holder to pay, when due, the maturing
principal of, interest on and related call premium requirements of the Refunded Bonds; and (b) the mathematical
computations supporting the conclusion of Bond Counsel that the Bonds are not “arbitrage bonds” under the Code and the
regulations promulgated thereunder.
The verification performed by Causey Demgen & Moore Inc. will be solely based upon data, information and documents
provided to Causey Demgen & Moore Inc. by the District and its representatives. Causey Demgen & Moore Inc., report of its
verification will state Causey Demgen & Moore Inc. has no obligations to update the report because of events occurring, or
data or information coming to their attention, subsequent to the date of the report.
Sources and Uses of Bond Proceeds
Proceeds of the Bonds are to be applied as follows:
Sources: Par Amount of the Bonds $ 8,175,000.00
Original Issue Premium (Discount) 961,748.50
Total $ 9,136,748.50
Uses: Deposit to Escrow Fund $ 9,031,409.65
Underwriter's Discount 45,558.00
Costs of Issuance 59,780.85
Total $ 9,136,748.50
9
THE SCHOOL DISTRICT
General Information
The District is located in the northeastern Mid-Hudson Valley area of New York State, in the Counties of Dutchess and
Columbia at the foothills of the Berkshires. It has a land area of approximately 79 square miles and a current population of
approximately 7,000. The School District is composed of portions of six towns: in Columbia County: Town of Ancram, and
in Dutchess County: Amenia, Northeast, Dover, Washington and Stanford. The District is located 90 miles north of New
York City and 25 miles east of the City of Poughkeepsie. Metro North rail service from Grand Central Station is available
with two area stops, Ten Mile River and Wassaic Station.
SUNY New Paltz and SUNY Albany are within commuting distance, while two community colleges, Dutchess
Community and Columbia-Greene, are within 25 miles of the District.
Major highways serving the District include U.S. Routes 44, 22 and 343. The area’s major industries are mainly
agriculture and tourism. Points of interest within the District are the Harlem Valley Rail Trail which offers an 8.2 scenic mile
paved pathway for bike riding, walking, running, roller-blading and the Cascade Mountain Vineyards & Winery. The locale
features rural scenic beauty, proximity to ski resorts, golf courses, historic sites and numerous cultural sites.
Larger Employers
The larger employers located within the area include:
Employer Type Employees
Sharon Hospital Hospital 383
Taconic DDSO State Agency 250
Pawling Corp. Manufacturer 150
Westchester Modulars Manufacturer 130
Millbrook Prep School Private School 105
Population
The population of the School District is estimated to be 7,000. (Source: U.S. Census Bureau)
Wealth and Income Indicators
Per capita income statistics are not available for the School District as such. The smallest areas for which such statistics
are available, which includes the School District, are the Towns of Ancram, Amenia, Dover, Northeast, Stanford and
Washington (collectively, the "Towns") and the Counties of Dutchess and Columbia (collectively the “Counties”). The
figures set below with respect to such Towns and Counties is included for information only. It should not be inferred from the
inclusion of such data in the Official Statement that the Towns or the Counties are necessarily representative of the School
District, or vice versa.
Per Capita Income Median Family Income
1990 2000 2010 1990 2000 2010
Towns of:
Ancram 14,165 22,541 37,193 34,444 47,708 65,000
Amenia 12,308 22,095 27,536 33,821 51,294 67,298
Dover 14,609 21,250 28,365 41,567 57,979 75,103
Northeast 13,818 24,650 26,419 34,779 48,179 71,250
Stanford 19,957 29,236 37,195 46,141 62,171 73,889
Washington 29,404 32,561 39,435 50,458 69,074 80,655
Counties of:
Dutchess 17,420 23,940 31,642 49,305 63,254 83,599
Columbia 14,044 22,265 31,844 35,144 49,357 69,132
State of:
New York 16,501 23,389 30,948 39,741 51,691 67,405
Source: U.S. Census reports 2006-2010 American Survey 3-Year Estimates. 2011 information is not available at this time.
10
Form of School Government
The Board of Education, which is the policy-making body of the School District, consists of seven members with
overlapping three-year terms so that as nearly as possible, an equal number is elected to the Board each year. Each Board
member must be a qualified voter of the School District and no Board member may hold other School District offices or
positions while serving on the Board of Education, with limited exceptions. The President and the Vice President are selected
by the Board members.
Budgetary Procedures
Pursuant to the Education Law, the Board of Education annually prepares or causes to be prepared a tentative budget of
the School District for the ensuing fiscal year. A public hearing on such budget is held not less than seven and not more than
fourteen days prior to the vote. The Board of Education causes notice of such public hearing to be published four times
beginning seven weeks prior to the vote. After the public hearing, but not less than six days prior to the budget vote, the
School District must mail a school budget notice to all qualified voters which contains the percentage increase or decrease in
the proposed budget as compared to the current budget, the percentage increase or decrease in the consumer price index and
the date, time and place of the budget vote.
After the budget hearing, a referendum upon the question of the adoption of the budget is held on the third Tuesday in
May of each year. All qualified School District residents may participate.
If, by majority vote, the budget is rejected, the Board of Education may change, alter or revise the budget and may hold
a second public hearing and referendum. However, such Board of Education may exercise its option, pursuant to the
Education Law, to adopt by resolution a contingency (also known as austerity) budget for the ensuing fiscal year. Such
contingency budget provides for ordinary contingent expenses, including debt service. The budget for the 2011-12 fiscal year
was approved by the qualified voters on May 17, 2011. The budget for the 2012-13 fiscal year was approved by the qualified
voters on May 15, 2012.
Pursuant to Chapter 97 of the Laws of 2011 (“Chapter 97”), beginning with the 2012 – 2013 fiscal year, if the proposed
budget requires a tax levy increase that does not exceed the lesser of 2% or the rate of inflation (the “School District Tax
Cap”), then a majority vote is required for approval. If the proposed budget requires a tax levy that exceeds the School
District Tax Cap, the budget proposition must include special language and a 60% vote is required for approval.. Any
separate proposition that would cause the School District to exceed the School District Tax Cap to be exceeded also must
receive at least 60% voter approval.
If the proposed budget is not approved by the required margin, the Board of Education may resubmit the original budget
or a revised budget to the voters on the 3rd
Tuesday in June, or adopt a contingency budget (which would provide for ordinary
contingent expenses, including debt service) that levies a tax levy no greater than that of the prior fiscal year (i.e. a 0%
increase in the tax levy).
If the resubmitted and/or revised budget is not approved by the required margin, the Board of Education must adopt a
budget that requires a tax levy no greater than that of the prior fiscal year (i.e. a 0% increase in the tax levy). For a complete
discussion of Chapter 97, see “REAL PROPERTY TAX LEVY CAP” herein.
Investment Policy
Pursuant to the statutes of the State of New York, the School District is permitted to invest only in the following
investments: (1) special time deposits or certificates of deposits in a bank or trust company located and authorized to do
business in the State of New York; (2) obligations of the United States of America; (3) obligations guaranteed by agencies of
the United States of America where the payment of principal and interest is guaranteed by the United States of America; (4)
obligations of the State of New York; (5) with the approval of the New York State Comptroller, tax anticipation notes and
bond anticipation notes issued by any New York municipality or district corporation, other than the School District; (6)
obligations of a New York public corporation which are made lawful investments by the School District pursuant to another
provision of law; (7) certain certificates of participation issued on behalf of political subdivisions of the State of New York;
and, (8) in the case of School District moneys held in certain reserve funds established pursuant to law, obligations issued by
the School District. These statutes further require that all bank deposits, in excess of the amount insured under the Federal
Deposit Insurance Act, be secured by either a pledge of eligible securities, an eligible surety bond or an eligible letter of
credit, as those terms are defined in the law.
11
Consistent with the above statutory limitations, it is the School District's current policy to invest in: (1) certificates of
deposit or time deposit accounts that are fully secured as required by statute, (2) obligations of the United States of America
or (3) obligations guaranteed by agencies of the United States of America where the payment of principal and interest is
guaranteed by the United States of America. In the case of obligations of the United States government, the School District
may purchase such obligations pursuant to a written repurchase agreement that requires the purchased securities to be
delivered to a third party custodian.
The School District has adopted its own Investment Policy, which, in addition to incorporating all of the provisions of
statute enumerated above, further restricts trading partners to commercial banks or trust companies licensed and doing
business in New York State. The Policy prohibits investing though any private entity or brokerage firm and provides for
written Security Agreements and/or Custodial Agreements with each commercial bank or trust company.
State Aid
The School District receives financial assistance from the State. In its adopted budget for the 2011-2012 fiscal year,
approximately 31.1% of the revenues of the School District are estimated to be received in the form of State aid. In its
adopted budget for the 2012-2013 fiscal year, approximately 29.6% of the revenues of the School District are estimated to be
received in the form of State aid. If the State should not adopt its budget in a timely manner, in any year, as this year,
municipalities and school districts in the State, including the School District, may be affected by a delay in the payment of
State aid.
The State is not constitutionally obligated to maintain or continue State aid to the School District. No assurance can be
given that present State aid levels will be maintained in the future. In view of the State’s continuing budget problems, future
State aid reductions are likely. State budgetary restrictions, which eliminate or substantially reduce State aid could have a
material adverse effect upon the School District requiring either a counterbalancing increase in revenues from other sources to
the extent available, or a curtailment of expenditures (See also “MARKET AND RISK FACTORS”).
A portion of the School District’s State aid consists of building aid which is related to outstanding indebtedness for
capital project purposes. In order to receive building aid, the District must have building plans and specifications approved
by the Facilities Planning Unit of the State Education Department. A maximum construction and incidental cost allowance is
computed for each building project that takes into account a pupil construction cost allowance and assigned pupil capacity.
For each project financed with debt obligations, a bond percentage is computed. The bond percentage is derived from the
ratio of total approved cost allowances to the total principal borrowed. Approved cost allowances are estimated until a
project final cost report is completed.
Aid on debt service is generally paid in the current fiscal year provided such debt service is reported to the Commissioner
of Education by November 15 of that year. Any debt service in excess of amounts reported by November 15 will not be aided
until the following fiscal year. The building aid received is equal to the approved building expense, or bond percent, times
the building aid ratio that is assigned to the School District. The building aid ratio is calculated based on a formula that
involves the full valuation per pupil in the District compared to a State wide average. The School District may elect to use the
highest building aid ratio that has been calculated since the 1981-82 fiscal year.
In Campaign for Fiscal Equity, Inc. et al. v. State, et al. (Supreme Court, New York County), plaintiffs challenged the
State’s method of providing funding for New York City public schools. Plaintiffs sought a declaratory judgment that the
State’s public school financing system violates Article 11, Section 1 of the State Constitution and Title VI of the Federal Civil
Rights Act of 1964 and injunctive relief that would require the State to satisfy State Constitutional Standards. State legislative
reforms in the wake of the Campaign for Fiscal Equity case include increased accountability for expenditure of State funds
and collapsing over 30 categories of school aid into one classroom operating formula referred to as foundation aid.
Foundation aid prioritizes funding distribution based upon student need.
The State 2011-2012 Enacted Budget included school aid of $19.6 billion. This reflected a reduction of $1.3 billion or
6.1% from the State’s 2010-11 Enacted Budget, including State operating funds and $608 million of Federal Jobs Bill
funding. This reduction represented a 2.5% of average school district total spending. The District anticipates receiving
$823,281 less in State aid in the 2011-2012 fiscal year than it received in the 2010-2011 fiscal year. In order to address the
reduction in State aid the District has reduced expenditures and has used fund balance.
The State’s 2012-2013 Enacted State Budget includes a total of approximately $20.4 billion for school aid, including
performance grants to reward academic improvement and school district efficiencies. This represents an increase of $805
million in total education spending, with most of the allocated increase targeted to high needs districts. The 2012-2013
12
Enacted State Budget includes a total of $125 million to be allocated for performance grants, including $50 million in
continuing payments to the school districts who will receive awards in the first round of grants, and an additional $75 million
for a second round of awards to school districts.
There can be no assurance that the State appropriation for building aid and other State aid to school districts will be
continued in future years, either pursuant to existing formulas or in any form whatsoever. State aid, including building aid
appropriated and apportioned to the School District, can be paid only if the State has such monies available therefor. The
availability of such monies and the timeliness of such payment could be affected by a delay in the adoption of the State budget
or their elimination therefrom.
The following table illustrates the percentage of total revenues of the District for each of the last five completed fiscal
years as well budgeted figures for the 2011-2012 and 2012-2013 fiscal years comprised of State aid (Does not include
STAR).
Percentage of
Total Revenues
Consisting of
Fiscal Year Total State Aid Total Revenues State Aid
2006-07 $ 6,333,024 $ 17,839,014 35.50%
2007-08 6,207,605 17,955,969 34.57%
2008-09 6,339,779 18,211,247 34.81%
2009-10 5,348,936 17,874,696 29.92%
2010-11 4,495,777 17,576,952 25.58%
2011-12 (Budgeted) 5,563,754 17,877,780 31.12%
2012-13 (Budgeted) 5,250,066 17,765,852 29.55%
School Facilities
Name Grades Capacity Year(s) Built
Webutuck High School/EBIS 4 - 12 1,000 1956, 1994, 2004
Webutuck Elementary School Pre K- 3 390 1965, 2004
Note: Millerton and Amenia Elementary Schools have been closed.
Enrollment Trends
Actual Projected
School Year Enrollment School Year Enrollment
2008-09 880 2013-14 750
2009-10 847 2014-15 750
2010-11 832 2015-16 750
2011-12 794 2016-17 750
2012-13 (estimated) 750 2017-18 750
Employees
The School District employs a total of 108 full-time and 62 part-time employees. Employees are represented by various
unions as follows:
Contract
Employees Union Representation Expiration Date
3 Administrative Association June 30, 2013
81 Webutuck Teachers’ Association June 30, 2012 (1)
70 CSEA, Local 1000 June 30, 2010 (1)
(1)
Currently under negotiation.
13
Status and Financing of Employee Pension Benefits
Substantially all employees of the School District are either members of the New York State and Local Employees’
Retirement System (“ERS”) (for non-teaching and non-certified administrative employees), or the New York State Teachers’
Retirement System (“TRS”) (for teachers and certified administrators). (Both Systems are referred to together hereinafter as
the “Retirement Systems” where appropriate). These Retirement Systems are cost-sharing multiple public employer
retirement systems. The obligation of employers and employees to contribute and the benefits to employees are governed by
the New York State Retirement System and Social Security Law (the “Retirement System Law”). The Retirement Systems
offer a wide range of plans and benefits which are related to years of service and final average salary, vesting of retirement
benefits; death and disability benefits and optional methods of benefit payments. All benefits generally vest after ten years of
credited service. The Retirement System Law generally provides that all participating employers in each retirement system
are jointly and severally liable for any unfunded amounts. Such amounts are collected through annual billings to all
participating employers. Generally, all employees, except certain part-time employees, participate in the Retirement Systems.
Other than members of Tier V and Tier VI described below, the Retirement Systems are non-contributory with respect to
members working ten or more years. All members (other than those in Tier V and tier VI) working less than ten years must
contribute 3% of gross annual salary toward the cost of retirement programs.
On December 12, 2009, a new Tier V was signed into law. The legislation created a new Tier V pension level, at the
time, the most significant reform of the State’s pension system in more than a quarter-century. Key components of Tier V
include:
Raising the minimum age at which most civilians can retire without penalty from 55 to 62 and imposing a
penalty of up to 38% for any civilian who retires prior to age 62.
Requiring ERS employees to continue contributing 3% of their salaries and TRS employees to continue
contributing 3.5% toward pension costs so long as they accumulate additional pension credits.
Increasing the minimum years of service required to draw a pension from 5 years to 10 years.
Capping the amount of overtime that can be considered in the calculation of pension benefits for civilians at
$15,000 per year, and for police and firefighters at 15% of non-overtime wages.
Additionally, on March 16, 2012, the Governor signed into law a new Tier VI pension program, effective for new ERS
and TRS employees hired after April 1, 2012. The Tier VI legislation provides for increased employee contribution rates of
between 3% and 6%, an increase in the retirement age from 62 years to 63 years, a readjustment of the pension multiplier, and
a change in the time period for final average salary calculation from 3 years to 5 years. Tier VI employees will vest in the
system after ten years of employment and will continue to make employee contributions throughout employment.
The School District’s payments to ERS and TRS since the 2005-2006 school year have been as follows:
Year ERS TRS
2005-2006 $ 201,667 $ 543,355
2006-2007 181,850 563,946
2007-2008 132,815 631,224
2008-2009 154,846 653,327
2009-2010 142,632 442,159
2010-2011 167,257 594,041
2011-2012 (Budgeted) 476,178 1,005,621
2011-2012 (Actual) 205,719 675,852
2012-2013 (Budgeted) 486,993 970,813
Pursuant to various laws enacted between 1991 and 2002, the State Legislature authorized local governments to make
available certain early retirement incentive programs to its employees. The School District currently does not have retirement
incentives outstanding.
Historically there has been a State mandate requiring full (100%) funding of the annual actuarially required local
governmental contribution out of current budgetary appropriations. With the strong performance of the Retirement System in
the 1990s, the locally required annual contribution declined to zero. However, with the subsequent decline in the equity
markets, the pension system became underfunded. As a result, required contributions increased substantially to 15% to 20%
of payroll for the employees' and the police and fire retirement systems, respectively. Wide swings in the contribution rate
resulted in budgetary planning problems for many participating local governments.
14
The annual required pension contribution is due February 1 annually with the ability to pre-pay on December 15 at a
discount.
On September 10, 2010, Comptroller Thomas P. DiNapoli announced increases over the previous year in the 2011-2012
employer contribution rates for the New York State Common Retirement Fund (the “Fund”). The average contribution rate
for ERS increased from 11.9% of salaries to 16.3% of salaries. On August 24, 2011, the Comptroller announced that for
fiscal year 2012-13, the average contribution rate for the ERS will increase from 16.3% of salaries to 18.9% of salaries for
fiscal year 2012-2013. The TRS rate for the 2010-2011 fiscal year was 8.62% (up from 6.19% in 2010). The TRS rate for
the 2011-2012 fiscal year was 11.11%. The TRS rate for the 2012-2013 fiscal year is 11.84%.
Chapter 57 of the Laws of 2010 (Part TT) amended the Retirement and Social Security Law to authorize participating
employers, if they so elect, to amortize an eligible portion of their annual required contributions to ERS when employer
contribution rates rise above certain levels. The option to amortize the eligible portion began with the annual contribution due
February 1, 2011. The amortizable portion of an annual required contribution is based on a “graded” rate by the State
Comptroller in accordance with formulas provided in Chapter 57. Amortized contributions are to be paid in equal annual
installments over a ten-year period, but may be prepaid at any time. Interest is to be charged on the unpaid amortized portion
at a rate to be determined by State Comptroller, which approximates a market rate of return on taxable fixed rate securities of
a comparable duration issued by comparable issuers. The interest rate is established annually for that year’s amortized
amount and then applies to the entire ten years of the amortization cycle of that amount. When in any fiscal year, the
participating employer’s graded payment eliminates all balances owed on prior amortized amounts, any remaining graded
payments are to be paid into an employer contribution reserve fund established by the State Comptroller for the employer, to
the extent that amortizing employer has no currently unpaid prior amortized amounts, for future such use.
Although permitted by recently enacted laws, the School District is not amortizing any pension payments nor does it
intend to do so in the foreseeable future.
The investment of monies and assumptions underlying same, of the Retirement Systems covering the School District’s
employees is not subject to the direction of the School District. Thus, it is not possible to predict, control or prepare for
future unfunded accrued actuarial liabilities of the Retirement Systems (“UAALs”). The UAAL is the difference between
total actuarially accrued liabilities and actuarially calculated assets available for the payment of such benefits. The UAAL is
based on assumptions as to retirement age, mortality, projected salary increases attributed to inflation, across-the-board raises
and merit raises, increases in retirement benefits, cost-of-living adjustments, valuation of current assets, investment return and
other matters. Such UAALs could be substantial in the future, requiring significantly increased contributions from the School
District which could affect other budgetary matters. Concerned investors should contact the Retirement Systems
administrative staff for further information on the latest actuarial valuations of the Retirement Systems.
While the School District is aware of the potential negative impact on its budget and will take the appropriate steps to
budget accordingly for the increase, there can be no assurance that its financial position will not be negatively impacted.
Post-Employment Health Benefits
It should also be noted that the School District provides employment healthcare benefits to various categories of former
employees. These costs may be expected to rise substantially in the future. There is now an accounting rule that will require
governmental entities, such as the School District, to account for employment healthcare benefits as it accounts for vested
pension benefits. GASB Statement No. 45 ("GASB 45") of the Governmental Accounting Standards Board ("GASB"),
described below, requires such accounting.
School districts and boards of cooperative educational services, unlike other municipal units of government in the State,
are prohibited from reducing retiree health benefits or increasing health care contributions received or paid by retirees below
the level of benefits or contributions afforded to or required from active employees. Legislative attempts to provide similar
protection to retirees of other local units of government in the State have not succeeded as of this date. Nevertheless, many
such retirees of all varieties of municipal units in the State do presently receive such benefits.
GASB 45 and OPEB. OPEB refers to "other post-employment benefits," meaning other than pension benefits, disability
benefits and OPEB consist primarily of health care benefits, and may include other benefits such as disability benefits and life
insurance. Until now, these benefits have generally been administered on a pay-as-you-go basis and have not been reported as
a liability on governmental financial statements.
15
GASB 45 requires municipalities and school districts to account for OPEB liabilities much like they already account for
pension liabilities, generally adopting the actuarial methodologies used for pensions, with adjustments for the different
characteristics of OPEB and the fact that most municipalities and school districts have not set aside any funds against this
liability. Unlike GASB 27, which covers accounting for pensions, GASB 45 does not require municipalities or school
districts to report a net OPEB obligation at the start.
Under GASB 45, based on actuarial valuation, an annual required contribution ("ARC") will be determined for each
municipality or school district. The ARC is the sum of (a) the normal cost for the year (the present value of future benefits
being earned by current employees) plus (b) amortization of the unfunded accrued liability (benefits already earned by current
and former employees but not yet provided for), using an amortization period of not more than 30 years. If a municipality or
school district contributes an amount less than the ARC, a net OPEB obligation will result, which is required to be recorded as
a liability on its financial statements.
GASB 45 does not require that the unfunded liability actually be amortized nor that it be advance funded, only that the
municipality or school district account for its unfunded accrued liability and compliance in meeting its ARC.
As of July 1, 2011, the most recent actuarial date, the School District’s plan was 0% funded. The actuarial accrued
liability for benefits (AAL) was $25,948,324, and the actuarial value of assets was zero, resulting in an unfunded actuarial
accrued liability (UAAL) of $25,948,324. The annual required contribution (ARC) is $2,450,141. The aforementioned
liability and ARC are recognized and disclosed in accordance with GASB 45 standards in the School District’s June 30, 2012
financial statements.
Actuarial Valuation will be required every 2 years for OPEB plans with more than 200 members, every 3 years if there
are less than 200 members.
Unemployment Rate Statistics
Unemployment statistics are not available for the School District as such. The smallest areas for which such statistics are
available (which includes the School District) is the Counties of Dutchess and Columbia. The information set forth below
with respect to the Counties of Dutchess and Columbia is included for informational purposes only. It should not be implied
from the inclusion of such data in this Official Statement that the Counties of Dutchess and Columbia are necessarily
representative of the School District, or vice versa.
Year Average
2006 2007 2008 2009 2010 2011
Dutchess County 3.9% 4.0% 5.1% 7.8% 7.8% 7.4%
Columbia County 3.8% 4.0% 4.8% 7.4% 7.6% 7.4%
New York State 4.6% 4.6% 5.4% 8.3% 8.6% 8.2%
2012 Monthly Figures
Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
Dutchess County 8.1% 8.1% 7.7% 7.4% 8.2% 8.6% 8.4% N/A N/A N/A N/A N/A
Columbia County 8.4% 8.4% 7.7% 7.2% 7.7% 7.9% 7.9% N/A N/A N/A N/A N/A
New York State 9.1% 9.2% 8.7% 8.1% 8.6% 9.1% 9.1% N/A N/A N/A N/A N/A
Source: Department of Labor, State of New York. Figures not seasonally adjusted.
Other Information
The statutory authority for the power to spend money is the Education Law and the Local Finance Law.
No principal or interest upon any obligation of the School District is past due.
The fiscal year of the School District is July 1 to June 30.
This Official Statement does not include the financial data of any political subdivision having power to levy taxes within
the School District.
16
Financial Statements
The financial accounts of the District are maintained in accordance with the New York State Uniform System of
Accounts for School Districts. The District retains an outside independent auditor and is audited annually. The last audited
report covers the period ending June 30, 2011 and may be found attached hereto as appendices to this Official Statement.
Certain financial information of the School District is included in the Appendices to this Official Statement.
The School District complies with the Uniform System of Accounts as prescribed by the State Comptroller for school
districts in New York State. Except for the accounting for fixed assets, this system conforms to generally accepted accounting
principles as prescribed by the American Institute of Certified Public Accounts' Industry Guide, "Audits of State and Local
Governmental Units", and codified in Government Accounting, Auditing and Financial Reporting (GAAFR), published by the
Governmental Accounting Standards Board (GASB).
Beginning with the fiscal year ending June 30, 2003 the School District issues its financial statements in accordance with
GASB Statement No. 34. This statement includes reporting of all assets including infrastructure and depreciation in the
Government Wide Statement of Activities, as well as the Management’s Discussion and Analysis. The School District is in
compliance with Statement No. 34.
TAX INFORMATION
Valuations
Years Ending June 30: 2008 2009 2010 2011 2012
Assessed Valuation
Town of:
Ancram $ 11,597,495 $ 20,216,096 (1)
$ 20,110,761 $ 20,385,461 $ 18,586,537
Amenia 520,729,663 (1)
506,843,015 512,807,176 508,092,307 519,921,153
Dover 1,093,024 1,121,437 1,339,479 1,339,143 1,338,768
Northeast 336,880,977 343,287,724 353,495,752 361,327,306 411,237,741
Stanford 31,836,077 31,888,052 31,365,740 31,598,774 31,807,073
Washington 42,243,788 41,316,829 408,057,723 35,545,450 33,526,773
Taxable
Assessed Valuation $ 944,381,024 $ 944,673,153 $1,327,176,631 $ 958,288,441 $1,016,418,045
State Equalization Rate
Town of:
Ancram 56.35% 100.00% (1)
93.95% 105.79% 100.00%
Amenia 100.00% (1)
100.00% 100.00% 100.00% 100.00%
Dover 37.00% 40.00% 42.00% 47.00% 50.00%
Northeast 92.50% 92.50% 92.50% 96.00% 100.00%
Stanford 47.00% 47.00% 48.75% 57.60% 57.78%
Washington 100.00% 100.00% 100.00% 100.00% 100.00%
Taxable
Full Valuation $1,018,440,735 $1,010,148,315 $1,391,957,497 $ 996,998,333 $1,040,998,326
(1)
Significant change from previous year due to Town-wide revaluation.
17
Tax Rate Per $1,000 (Assessed)
Years Ending June 30: 2008 2009 2010 2011 2012
Town of:
Ancram $ 19.17 $ 11.41 (1)
$ 12.02 $ 11.27 $ 11.65
Amenia 10.80 11.41 11.29 11.92 11.65
Dover 29.20 28.52 26.89 25.37 23.29
Northeast 11.68 12.33 12.21 12.42 11.65
Stanford 22.98 24.27 23.17 20.70 20.16
Washington 10.80 11.41 11.29 11.92 11.65
(1) Significant change from previous year due to Town-wide revaluation.
Tax Collection Procedure
The School District tax collection period is generally September 3 through November 5. The collection period is
sixty days, the first 30 days without penalty. Any payments received after the first thirty days must include an additional two
percent. Any uncollected taxes are returned to the County Treasurer on or about November 15.
The School District offers installment payments for towns located in Dutchess County with the first payment due to the
tax collector on or before September 15 and the second payment due March 15 paid directly to the Commissioner of Finance.
There is a 5% surcharge on installment payments which is due to the Commissioner.
The School District is reimbursed for the second installment payment during the month of January.
The School District is reimbursed by the Counties for all other unpaid taxes during the month of March so that it is
assured of 100% collection of its tax levy each year.
Tax Collection Record
Years Ending June 30: 2008 2009 2010 2011 2012
Total Tax Levy $ 11,001,690 $ 11,523,653 $ 11,578,617 $ 11,888,243 $ 12,124,186
Returned to the Counties (1)
718,664 713,740 780,763 772,562 688,506
% Uncollected when Due 6.53% 6.19% 6.74% 6.50% 5.68% (1)
See "Tax Collection Procedure".
Larger Taxpayers - 2011 Tax Roll for 2011-12
Full
Name Type Valuation
Martins Fox Hollow Farm LLC Farm $ 41,419,900
Hilltopper Properties Corp Farm 16,975,100
Higher Ground Country Club Golf Course 11,288,500
Heathcote Real Estate LLC Realty 10,158,600
Flaherty, James B Inn / Bed & Breakfast 7,585,600
Low Mountain Range LLC. Farm 7,560,000
Amenia K. Realty LLC Realty 5,040,000
Hall, Daryl Farm 4,812,000
Tanner, Mary C Estate 3,687,675
Ferragamo, Massimo Farm 3,217,415
Total $111,744,790
The larger taxpayers listed above have a full valuation of $111,744,790 which represents approximately 10.734% of the
tax base of the School District.
Source: School District Tax Rolls.
18
STAR – School Tax Exemption
The STAR (School Tax Relief) program provides State-funded exemptions from school property taxes to homeowners
for their primary residences. School Districts are reimbursed by the State for real property taxes exempted pursuant to the
STAR Program.
Homeowners over 65 years of age with household adjusted gross incomes, less the taxable amount of total distributions
from individual retirement accounts and undisclosed retirement annuities (“STAR Adjusted Gross Income”) of $79,050 or
less, increased annually according to a Cost-of-Living adjustment, are eligible for a “full value” exemption of the first
$62,200 (adjusted annually). Other homeowners with household STAR Adjusted Gross Income not in excess of $500,000 are
eligible for a $30,000 “full value” exemption on their primary residence.
$913,238 of the District’s $12,124,186 2011-2012 school tax levy was exempted by the STAR Program. The District
received full reimbursement in January 2012. The District anticipates that approximately $930,854 of the $12,358,056 2012-
2013 school tax levy will be exempted by the STAR Program. The District anticipates full reimbursement in January 2013.
Additional Tax Information
Real property located in the School District is assessed by the towns.
Senior Citizens' exemptions are offered to those who qualify.
REAL PROPERTY TAX LEVY CAP
Real Property Levy. Chapter 97 of the Laws of 2011 (“Chapter 97”) was enacted on June 24, 2011. Chapter 97 limits
the amount that a school district (other than the “Big 5” city school districts: Buffalo, New York City, Rochester, Syracuse
and Yonkers) may increase its real property tax levy to the lesser of the rate of inflation or 2% (the “Tax Cap”). Chapter 97
allows a school district to exceed the Tax Cap only with at least 60% voter approval. Any separate proposition that would
cause a school district’s tax levy limit to be exceeded also must receive at least 60% voter approval. School districts subject
to the Tax Cap are required to calculate their tax levy limit and submit the information to the Commissioner of Education,
State Comptroller, and Commissioner of Taxation and Finance no later than March 1st of each year.
In addition, Chapter 97:
• Exempts certain pension payments, court orders and judgments and voter approved capital expenditures.
Voter approved capital expenditures include the taxes associated with budgeted expenditures resulting from the
financing, refinancing, acquisition, design, construction, reconstruction, rehabilitation, improvement, furnishing and
equipping of, or otherwise providing for school district capital facilities or school district capital equipment, including debt
service and lease expenditures, and transportation capital debt service, subject to the approval of the qualified voters where
required by law. The portion of the tax levy necessary to support the local share of voter approved capital expenditures is an
exclusion from the Tax Cap. School district obligations issued to finance voter approved capital expenditures are hereinafter
referred to as “Capital Project Obligations”. Voter approved capital expenditures do not include debt service on tax
anticipation notes, revenue anticipation notes, budget notes and deficit notes.
• After a school district budget is rejected, allows a school district to resubmit the budget for another vote or adopt a
zero tax levy growth budget. School districts would be required to adopt a zero tax levy growth budget if the proposed budget
were twice rejected by voters.
• Includes a carryover provision of up to 1.5% from one year to the next of any amount in which the previous year's
tax levy was below that year's Tax Cap.
• Includes a tax base growth factor calculated by the Commissioner of Taxation and Finance to account for any
increase in the full value of taxable real property.
• Unless extended, sunsets on June 15, 2016.
19
The School District is required to comply with the provisions of Chapter 97 beginning with the fiscal year commencing
July 1, 2012. However, the Bonds will be Capital Project Obligations and, therefore, the portion of the tax levy necessary to
pay the local share of debt service on the Bonds will be excluded from the School District's calculation of the Tax Cap.
STATUS OF INDEBTEDNESS
Constitutional Requirements
The New York State Constitution limits the power of the School District (and other municipalities and certain school
districts of the State) to issue obligations and to contract indebtedness. Such constitutional limitations in summary form and
as generally applicable to the District include the following:
Purpose and Pledge. The School District shall not give or loan any money or property to or in aid of any individual or
private undertaking or give or loan its credit to or in aid of any of the foregoing or any public corporation.
The School District may contract indebtedness only for a School District purpose and shall pledge its faith and credit for
the payment of principal of and interest thereon.
Payment and Maturity. Except for certain short-term indebtedness contracted in anticipation of taxes or to be paid within
three fiscal year periods, indebtedness shall be paid in annual installments commencing no later than two years after the date
such indebtedness shall have been contracted and ending no later than the expiration of the period of probable usefulness of
the object or purpose as determined by statute; unless substantially level or declining annual debt service is utilized, no
installment may be more than fifty percent in excess of the smallest prior installment. The School District is required to
provide an annual appropriation for the payment of interest due during the year on its indebtedness and for the amounts
required in such year for amortization and redemption of its serial bonds and such required annual installments on its notes.
Debt Limit. The School District has the power to contract indebtedness for any School District purpose authorized by the
Legislature of the State provided the aggregate principal amount thereof shall not exceed ten per centum of the full valuation
of the taxable real estate of the School District and subject to certain enumerated deductions such as State aid for building
purposes. The statutory method for determining full valuation is by taking assessed valuation of taxable real estate for the last
completed assessment roll and applying thereto the ratio (equalization rate) which such assessed valuation bears to the full
valuation; such ratio is determined by the State Office of Real Property Services. The Legislature prescribes the manner by
which such ratio shall be determined.
Statutory Procedure
In general, the State Legislature has, by the enactment of the Local Finance Law, authorized the powers and procedure
for the School District to borrow and incur indebtedness subject, of course, to the constitutional provisions set forth above.
The power to spend money, however, generally derives from other law, including the Education Law.
The School District has the power to contract indebtedness for any School District purpose provided that the aggregate
principal amount thereof shall not exceed ten per centum of the full valuation of the taxable real estate of the School District
as required by the Local Finance Law and subject to certain enumerated deductions such as State aid for building purposes.
The statutory method for determining full valuation is by dividing the assessed valuation of taxable real estate for the last
completed assessment roll by the equalization rate established by the State Office of Real Property Services in accordance
with applicable State law.
The School District is generally required by such laws to submit propositions for the expenditure of money for capital
purposes to the qualified electors of the District. Upon approval thereby, the Board of Education may adopt a bond resolution
authorizing the issuance of bonds, and notes in anticipation of the bonds. No down payment is required in connection with
the issuance of District obligations.
Each bond resolution usually authorizes the construction, acquisition or installation of the object or purpose to be
financed, sets forth the plan of financing and specifies the maximum maturity of the bonds subject to the legal (Constitution,
Local Finance Law and case law) restrictions relating to the period of probable usefulness with respect thereto.
20
The Local Finance Law also provides that where a bond resolution is published with a statutory form of notice, the
validity of the bonds authorized thereby, including bond anticipation notes issued in anticipation of the sale thereof, may be
contested only if:
(1) Such obligations are authorized for a purpose for which the School District is not authorized to expend money, or
(2) There has not been substantial compliance with the provisions of law which should have been complied with in the
authorization of such obligations and an action contesting such validity, is commenced within twenty days after the
date of such publication or,
(3) Such obligations are authorized in violation of the provisions of the Constitution.
The School District has complied with this estoppel procedure in connection with the Bonds.
The Board of Education, as the finance board of the School District, has the power to enact bond resolutions. In
addition, such finance board has the power to authorize the sale and issuance of obligations. However, such finance board
may delegate the power to sell the obligations to the President of the Board of Education, the chief fiscal officer of the School
District, pursuant to the Local Finance Law.
The School District is further subject to constitutional limitation by the general constitutionally imposed duty on the State
Legislature to restrict the power of taxation and contracting indebtedness; however, the State Legislature is prohibited by a
specific constitutional provision from restricting the power of the School District to levy taxes on real estate for the payment
of interest on or principal of indebtedness theretofore contracted. See “REAL PROPERTY TAX LEVY CAP” for a
discussion of the limitations on the power of the School District to levy taxes imposed by Chapter 97.
Debt Outstanding End of Fiscal Year
Fiscal Year Ending June 30th
: 2008 2009 2010 2011 2012
Bonds $15,690,000 $14,765,000 $13,795,000 $12,780,000 $ 11,715,000
Bond Anticipation Notes 533,759 620,375 418,243 988,993 504,000
Total Debt Outstanding $16,223,759 $15,385,375 $14,213,243 $13,858,993 $ 12,219,000
Details of Outstanding Indebtedness
The following table sets forth the indebtedness of the School District evidenced by bonds as of August 21, 2012:
Amount
Maturity Outstanding
Bonds 2013-2022 $ 11,715,000 (1)
Bond Anticipation Notes
Reconstruction to District Buildings November 30, 2012 504,000
Total Indebtedness $ 12,219,000
(1)
$8,245,000 of these bonds will be refunded with the proceeds of the bonds. Debt service will be paid from a fully funded
escrow account.
21
Debt Statement Summary
Summary of Indebtedness, Debt Limit and Net Debt-Contracting Margin as of August 21, 2012:
Full Valuation of Taxable Real Property .......................................................................................... $ 1,040,998,326
Debt Limit 10% thereof .................................................................................................................... 104,099,832
Inclusions:
Serial Bonds (1)
....................................... $ 11,715,000
Bond Anticipation Notes ........................ 504,000
Principal of this Issue ............................. 8,175,000
Total Inclusions ........................ $ 20,394,000
Exclusions:
Building Aid (2)
....................................... $ 0
Total Exclusions ....................... $ 0
Total Net Indebtedness ..................................................................................................................... $ 20,394,000
Net Debt-Contracting Margin ........................................................................................................... $ 83,705,832
The percent of debt contracting power exhausted is ......................................................................... 19.59%
(1) $8,245,000 of these bonds will be refunded with the proceeds of the bonds. Debt service will be paid from a fully funded
escrow account.
(2)
The District receives New York State building aid in an amount approximating 59.4% of the debt service on its
indebtedness incurred for building projects, including the Bonds. A fundamental reform of building aid was enacted as
Chapter 383 of the Laws of 2001. The provisions legislate, among other things, a new “assumed amortization” payout
schedule for future State building aid payments based on an annual “average interest rate” and mandatory periods of
probable usefulness with respect to the allocation of building aid. The District has no reason to believe that it will not
ultimately receive all of the building aid it anticipates, however, no assurance can be given as to when and how much
building aid the District will receive in relation to the outstanding Bonds. The District did not apply for a building aid
exclusion and therefore no building aid is shown above.
Note: The State Constitution does not provide for the inclusion of tax anticipation or revenue anticipation notes in the
computation of the net indebtedness of the School District.
Capital Project Plans
The District will be undertaking a small capital project for $705,000. The District will use EXCEL aid of $285,529
along with regular building aid and the project is not expected to have any impact on the tax levy.
There are presently no other capital projects authorized and unissued by the School District, nor are any contemplated.
Cash Flow Borrowings
The School District has not found it necessary to issues revenue anticipation or tax anticipation notes in the past and does
not anticipate issuing either in the foreseeable future.
Bonded Debt Service
A schedule of Bonded Debt Service, including principal of the Bonds, may be found in APPENDIX - B to this Official
Statement.
22
Estimated Overlapping Indebtedness
In addition to the School District, the following political subdivisions have the power to issue obligations and to levy
taxes or cause taxes to be levied on taxable real property in the School District. The estimated outstanding indebtedness of
such political subdivisions is as follows:
% Within Applicable
Outstanding Net School Net
Unit Indebtedness (1)
Exclusions (2)
Indebtedness District Indebtedness
Counties of:
Dutchess $110,736,000 $ 0 $110,736,000 3.85% $ 4,263,336
Columbia 0 0 0 0.25% 0
Towns of:
Amenia 199,240 93,240 106,000 87.63% 92,888
Ancram 400,000 0 400,000 5.87% 23,480
Dover 238,635 238,635 0 0.36% 0
Northeast 1,027,000 572,000 455,000 74.10% 337,155
Stanford 51,426 51,426 0 7.61% 0
Washington 654,000 0 654,000 2.70% 17,658
Total $ 4,734,517
(1)
Bonds and bond anticipation notes as of close of last respective fiscal year adjusted to include subsequent bond sales,
if any. (2)
Sewer and Water Debt.
Source: 2010 State Comptrollers Report.
Debt Ratios
The following table sets forth certain ratios relating to the School District's indebtedness as of August 21, 2012:
Percentage
Amount of Per of Full
Indebtedness Capita (a)
Valuation (b)
Net Indebtedness (c)
$ 20,394,000 $ 2,913.43 1.96%
Net Indebtedness Plus Net
Overlapping Indebtedness (d)
25,128,517 3,589.79 2.41%
(a)
The District's estimated population is 7,000. (See "Population" herein.) (b)
The District's full valuation of taxable real estate for 2012 is $1,040,998,326. (See "Valuations" herein.) (c)
See "Calculation of Net Direct Indebtedness" herein. (d)
The District's estimated applicable share of net underlying indebtedness is $4,734,517. (See "Overlapping
Indebtedness" herein.)
Note: The above ratios do not take into account building aid the District will receive for outstanding capital projects. The
above includes both refunded and refunding bonds, which increases the ratios significantly. $8,245,000 of the bonds
will be refunded with debt service being paid from a fully funded escrow account.
23
SPECIAL PROVISIONS AFFECTING REMEDIES UPON DEFAULT
In the event of a default in the payment of the principal of and/or interest on the Bonds, the State Comptroller is required
to withhold, under certain conditions prescribed by Section 99-b of the State Finance Law, state aid and assistance to the
School District and to apply the amount thereof so withheld to the payment of such defaulted principal and/or interest, which
requirement constitutes a covenant by the State with the holders from time to time of the Bonds.
Section 3-a of the General Municipal Law provides, subject to exceptions not pertinent, that the rate of interest to be
paid by the School District upon any judgment or accrued claim against it shall not exceed nine per centum per annum. This
provision might be construed to have application to the holders of the Bonds in the event of a default in the payment of the
principal of or interest on the Bonds.
In accordance with the general rule with respect to municipalities, and school districts, judgments against the School
District would generally not be enforced by levy and execution against property owned by the School District.
The Federal Bankruptcy Code allows municipalities, recourse to the protection of a Federal Court for the purpose of
adjusting outstanding indebtedness. Section 85.80 of the Local Finance Law contains specific authorization for any
municipality in the State to file a petition under any provision of Federal bankruptcy law for the composition or adjustment of
municipal indebtedness. While these Local Finance Law provisions do not apply to school districts, there can be no assurance
that they will not be made so applicable in the future.
At the Extraordinary Session of the State Legislature held in November, 1975, legislation was enacted which purported to
suspend the right to commence or continue an action in any court to collect or enforce certain short-term obligations of The
City of New York. The effect of such act was to create a three-year moratorium on actions to enforce the payment of such
obligations. On November 19, 1976, the Court of Appeals, the State's highest court, declared such act to be invalid on the
ground that it violates the provisions of the State Constitution requiring a pledge by such City of its faith and credit for the
payment of such obligations.
As a result of the Court of Appeals decision, the constitutionality of that portion of Title 6-A of Article 2 of the Local
Finance Law enacted at the 1975 Extraordinary Session of the State legislature authorizing any county, city, town or village
with respect to which the State has declared a financial emergency to petition the State Supreme Court to stay the enforcement
against such municipality of any claim for payment relating to any contract, debt or obligation of the municipality during the
emergency period, is subject to doubt. In any event, no such emergency has been declared with respect to the School District
and it is not expected that any such emergency will be declared.
CONTINUING DISCLOSURE UNDERTAKING
In accordance with the requirements of Rule 15c2-12 as the same may be amended or officially interpreted from time to
time (the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission"), the School District has
agreed to provide, or cause to be provided,
(i) to the Electronic Municipal Market Access (“EMMA”) system of the Municipal Securities Rulemaking
Board (“MSRB”) or any other entity designated or authorized by the Commission to receive reports
pursuant to the Rule, during any succeeding fiscal year in which the Bonds are outstanding certain annual
financial information and operating data for the preceding fiscal year, in a form generally consistent with
the information contained or cross-referenced under the heading(s) “THE SCHOOL DISTRICT”, “TAX
INFORMATION”, “STATUS OF INDEBTEDNESS” and “LITIGATION” and all Appendices and a copy
of the audited financial statement (prepared in accordance with generally accepted accounting principles in
effect at the time of audit) for the preceding fiscal year, if any; such information, data and audit, if any, will
be so provided on or prior to the later of either the end of the sixth month of each such succeeding fiscal
year or, if audited financial statements are prepared, sixty days following receipt by the School District of
audited financial statements for the preceding fiscal year, but, in no event, not later than the last business
day of each such succeeding fiscal year.
(ii) in a timely manner not in excess of ten (10) business days after the occurrence of the event, notice of the
occurrence of any of the following events with respect to the Bonds, to EMMA or any other entity
designated or authorized by the Commission to receive reports pursuant to the Rule:
24
(a) principal and interest payment delinquencies
(b) non-payment related defaults, if material
(c) unscheduled draws on debt service reserves reflecting financial difficulties
(d) in the case of credit enhancement, if any, provided in connection with the issuance of the Bond,
unscheduled draws on credit enhancements reflecting financial difficulties
(e) substitution of credit or liquidity providers, or their failure to perform
(f) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material
notices or determinations with respect to the tax status of the Bond, or other material events
affecting the tax status of the Bond
(g) modifications to rights of Bondholders, if material
(h) Bond calls, if material and tender offers
(i) defeasances
(j) release, substitution, or sale of property securing repayment of the Bond
(k) rating changes
(l) bankruptcy, insolvency, receivership or similar event of the School District
(m) the consummation of a merger, consolidation, or acquisition involving the School District or the
sale of all or substantially all of the assets of the School District, other than in the ordinary course
of business, the entry into a definitive agreement to undertake such an action or the termination of
a definitive agreement relating to any such actions, other than pursuant to its terms, if material
(n) appointment of a successor or additional trustee or the change of name of a trustee, if material
Event (c) is included pursuant to a letter from the SEC staff to the National Association of Bond Lawyers dated
September 19, 1995. However, event (c) is not applicable, since no "debt service reserves" will be established for the Bonds.
With respect to event (d) the School District does not undertake to provide any notice with respect to credit enhancement
added after the primary offering of the Bonds.
The School District may from time to time choose to provide notice of the occurrence of certain other events in addition
to those listed above, if the School District determines that any such other event is material with respect to the Bonds; but the
School District does not undertake to commit to provide any such notice of the occurrence of any material event except those
events listed above.
(iii) in a timely manner to EMMA or any other entity designated or authorized by the Commission to receive
reports pursuant to the Rule, notice of its failure to provide the aforedescribed annual financial information
and operating data and such audited financial statement, if any, on or before the date specified.
The School District reserves the right to terminate its obligations to provide the aforedescribed annual financial
information and operating data and such audited financial statement, if any, and notices of material events, as set forth above,
if and when the School District no longer remains an obligated person with respect to the Bonds within the meaning of the
Rule. The School District acknowledges that its undertaking pursuant to the Rule described under this heading is intended to
be for the benefit of the holders of the Bonds (including holders of beneficial interests in the Bonds). The right of holders of
the Bonds to enforce the provisions of the undertaking will be limited to a right to obtain specific enforcement of the School
District's obligations under its continuing disclosure undertaking and any failure by the School District to comply with the
provisions of the undertaking will neither be a default with respect to the Bonds nor entitle any holder of the Bonds to recover
monetary damages.
25
The School District reserves the right to modify from time to time the specific types of information provided or the
format of the presentation of such information, to the extent necessary or appropriate in the judgment of the School District,
provided that, the School District agrees that any such modification will be done in a manner consistent with the Rule.
A Continuing Disclosure Undertaking Certificate to this effect shall be provided to the purchaser at closing.
The School District is in compliance with all prior undertakings pursuant to the Rule for the past five years.
MARKET AND RISK FACTORS
The financial and economic condition of the School District as well as the market for the Bonds could be affected by a
variety of factors, some of which are beyond the School District's control. There can be no assurance that adverse events in
the State and in other jurisdictions, including, for example, the seeking by a municipality or large taxable property owner of
remedies pursuant to the Federal Bankruptcy Code or otherwise, will not occur which might affect the market price of and the
market for the Bonds. If a significant default or other financial crisis should occur in the affairs of the State or another
jurisdiction or any of its agencies or political subdivisions thereby further impairing the acceptability of obligations issued by
borrowers within the State, both the ability of the School District to arrange for additional borrowings, and the market for and
market value of outstanding debt obligations, including the Bonds, could be adversely affected.
The School District is dependent in part on financial assistance from the State. However, if the State should experience
difficulty in borrowing funds in anticipation of the receipt of State taxes and revenues in order to pay State aid to
municipalities and school districts in the State, including the School District, in any year, the School District may be affected
by a delay, until sufficient taxes have been received by the State to make State aid payments to the School District. In several
recent years, the School District has received delayed payments of State aid which resulted from the State's delay in adopting
its budget and appropriating State aid to municipalities and school districts, and consequent delay in State borrowing to
finance such appropriations. (See also "State Aid").
TAX EXEMPTION
In the opinion of Hiscock & Barclay, LLP, Albany, New York, Bond Counsel, under existing law, (1) interest on the
Bonds is excluded from gross income of the owners thereof for Federal income tax purposes and is not an “item of tax
preference” for purposes of the individual and corporate alternative minimum taxes imposed by the Code, except that (A) the
School District, by failing to comply with certain restrictions contained in the Code, may cause interest on the Bonds to
become subject to Federal income taxation from the date of issuance thereof and (B) interest on the Bonds is included in the
adjusted current earnings of corporations for purposes of calculating corporate alternative minimum taxable income for
federal income tax purposes, and (2) interest on the Bonds is exempt from personal income taxes imposed by the State of New
York or any political subdivision thereof (including The City of New York).
In rendering the foregoing opinions, Bond Counsel noted that exclusion of the interest on the Bonds from gross income
for Federal income tax purposes is dependent, among other things, on compliance with the applicable requirements of the
Code that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded
from gross income for Federal income tax purposes. Non-compliance with such requirements could cause the interest on the
Bonds to be included in gross income retroactive to the date of issuance of the Bonds. Those requirements include, but are
not limited to, provisions that prescribe yield and other limits within which the proceeds of the Bonds are to be invested and
require, under certain circumstances, that certain investment earnings on the foregoing be rebated on a periodic basis to the
Treasury Department of the United States of America. The School District will covenant in the Tax Certificates as to
Arbitrage and Instructions as to Compliance with Provisions of Section 103(a) of the Code, that, to maintain the exclusion of
interest on the Bonds from gross income for Federal income tax purposes pursuant to Section 103(a) of the Code, and for no
other purpose, the School District shall comply with each applicable provision of the Code.
The Tax Increase Prevention and Reconciliation Act of 2005, enacted on May 17, 2006, contains a provision under
which interest paid on tax-exempt obligations will be subject to information reporting in a manner similar to interest paid on
taxable obligations. Although the new reporting requirement does not, in and of itself, affect the excludability of such interest
from gross income for federal income tax purposes, the reporting requirement causes the payment of interest on the Bonds to
be subject to backup withholding if such interest is paid to registered owners who either (a) fail to provide certain identifying
information (such as the registered owner's taxpayer identification number) in the required manner or (b) have been identified
by the IRS as having failed to report all interest and dividends required to be shown on their income tax returns. Amounts
26
withheld under the backup withholding rules from a payment to a beneficial owner would be allowed as a refund or a credit
against such beneficial owner's federal income tax liability provided the required information is furnished to the IRS.
Bond Counsel also has advised that (1) with respect to insurance companies subject to the tax imposed by Section 831 of
the Code, the Code provides that such insurance company’s deduction for loss is reduced by 15% of the sum of certain items,
including interest on the Bonds; (2) interest on the Bonds earned by certain foreign corporations doing business in the United
States could be subject to a branch profits tax imposed by Section 884 of the Code; (3) passive investment income, including
interest on the Bonds, may be subject to Federal income taxation under section 1375 of the Code for Subchapter S
corporations that have Subchapter C earnings and profits at the close of the year if greater than 25% of the gross receipts of
such Subchapter S corporation is passive investment income; (4) Section 86 of the Code requires recipients of certain Social
Security and certain Railroad Retirement benefits to take into account, in determining the taxability of such benefits, receipts
or accruals of interest on the Bonds; and (5) under Section 32 (i) of the Code, receipt of investment income, including interest
on the Bonds, may disqualify the recipient thereof from obtaining the earned income credit.
A Bondholder’s federal, state and local tax liability may otherwise be affected by the ownership or disposition of the
Bonds. The nature and extent of these other consequences will depend upon the Bondholder’s other items of income or
deduction. Bond Counsel has expressed no opinion regarding any such other tax consequences. Each purchaser of the Bonds
should consult its tax advisor regarding the impact of the foregoing and other provisions of the Code on its individual tax
position.
The Bonds will be designated or deemed designated by the School District as “qualified tax-exempt obligations” within
the meaning of Section 265(b)(3) of the Code.
Tax legislation, administrative actions taken by tax authorities and court decisions, whether at the federal or state level,
may adversely affect the tax-exempt status of interest on the Bonds under federal or state law and could affect the market
price for, or the marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisers
regarding the foregoing matters.
LEGAL MATTERS
The legality of the authorization and issuance of the Bonds will be covered by the unqualified legal opinion of Hiscock &
Barclay, LLP, Bond Counsel, Albany, New York to the effect that the Bonds are valid and legally binding obligations of the
School District, that all the taxable real property therein will be subject to the levy of ad valorem taxes to pay the Bonds and
the interest thereon without limitation as to rate or amount, that interest on the Bonds is excluded from gross income for
federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed
on individuals and corporations; and that interest on the Bonds is exempt from personal income taxes imposed by New York
State or any political subdivision thereof, including The City of New York. Interest on the Bonds is included in the adjusted
current earnings of corporations for purposes of calculating corporate alternative minimum taxable income for federal income
tax purposes. The opinion set forth in the preceding sentence is subject to the condition that the School District comply with
all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or
continue to be, excluded from gross income for federal income tax purposes. The School District will covenant to comply
with all such requirements. Failure to comply with all such requirements may cause interest on the Bonds to be included in
gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. Such opinion also will state
that: (a) the rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors’ rights generally and by equitable principles, whether
considered at law or in equity; (b) Bond Counsel expresses no opinion as to the accuracy, adequacy or completeness of the
Official Statement relating to the Bonds; and (c) such opinion is given as of its dated date and that Bond Counsel assumes no
obligation to update or supplement their opinion to reflect any facts or circumstances that may thereafter come to their
attention or any changes in law that may occur thereafter.
Certain legal matters will be passed on for the Underwriter by its counsel, Hodgson Russ LLP, Albany, New York.
LITIGATION
The School District is subject to a number of lawsuits in the ordinary conduct of its affairs. The School District does not
believe, however, that such suits, individually or in the aggregate, are likely to have a material adverse effect on the financial
condition of the School District.
27
RATING
Moody’s Investor Services, Inc. (Moody’s) has assigned an underlying rating of “Aa3” to the Bonds. No application was
made to any other rating agency for the purpose of obtaining an additional rating on the Bonds. A rating reflects only the
view of the rating agency assigning such rating and an explanation of the significance of such rating may be obtained from
such rating agency. Generally, rating agencies base their ratings on the information and materials furnished to it and on
investigations, studies and assumptions by the respective rating agency. There is no assurance that a rating will continue for
any given period of time or that it will not be revised downward or withdrawn entirely by such rating agency if, in its
judgment, circumstances so warrant. Any downward revision or withdrawal of the rating of the Bonds may have an adverse
effect on the market price of the Bonds.
UNDERWRITING
The Bonds are being purchased by Jefferies & Company, Inc. (the “Underwriter”) for reoffering to the public. The
purchase contract for the Bonds provides that the Underwriter will purchase all of the Bonds, if any are purchased, at a
purchase price equal to $9,091,190.50 (being the par amount of the Bonds plus (less) a net original issue premium (discount)
of $961,748.50, less an underwriter’s fee for the transaction of $45,558.00). The Underwriter is initially offering the Bonds
to the public at the public offering yields indicated on the cover page but the Underwriter may offer and sell the Bonds to
certain dealers, institutional investors and others (including sales for deposit into investment trusts, certain of which may be
sponsored or managed by the Underwriter) at yields higher than the public offering yields stated on the cover page and the
public offering yields may be changed from time to time by the Underwriter.
MISCELLANEOUS
So far as any statements made in this Official Statement involve matters of opinion or estimates whether or not expressly
stated, they are set forth as such and not as representations of fact, and no representation is made that any of the statements
will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be
construed as a contract with the holders of the Bonds.
Fiscal Advisors & Marketing, Inc. may place a copy of this Official Statement on its website at www.fiscaladvisors.com.
Unless this Official Statement specifically indicates otherwise, no statement on its website is included by specific reference or
constitutes a part of this Official Statement. Fiscal Advisors & Marketing, Inc. has prepared its website information for your
convenience, but you should not make any decision in reliance upon that information. Typographical or other errors may
have occurred in converting original source documents to digital format, and Fiscal Advisors & Marketing, Inc. assumes no
liability or responsibility for errors or omissions on its website. Further, Fiscal Advisors & Marketing, Inc. disclaims any duty
or obligation either to update or to maintain that information or any responsibility or liability for any damages caused by
viruses in the electronic files on its website. Fiscal Advisors & Marketing, Inc. also assumes no liability or responsibility for
any errors or omissions or for any updates to dated website information.
The School District will act as Paying Agent for the Bonds. The School District’s contact information is as follows: Ms.
Mary Grden, Webutuck (Northeast) Central School District, 194 Haight Road, PO Box N Amenia, New York 12501,
telephone (845) 373-4100, telefax (845) 373-4102, email address: [email protected].
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
Dated: September 18, 2012 WILLIAM MCGHEE
President of the Board of Education
& Chief Fiscal Officer
APPENDIX - A
GENERAL FUND
Balance Sheets
Fiscal Years Ending June 30: 2008 2009 2010 2011
ASSETS
Unrestricted Cash 6,767,668$ 6,743,138$ 6,032,448$ 6,217,395$
Restricted Cash 2,516 - - -
Taxes Receivable - - 3,164 -
Due from Other Funds 507,365 592,965 611,624 642,866
State and Federal Aid Receivable 131,954 90,952 567,600 271,074
Due from Other Governments - - - -
Deferred Expenditures - - - -
TOTAL ASSETS 7,409,503$ 7,427,055$ 7,214,836$ 7,131,335$
LIABILITIES AND FUND EQUITY
Accounts Payable 72,012$ 118,350$ 67,967$ 75,095$
Accrued Liabilities 635,180 385,190 339,346 294,429
Bond interest and matured bonds 2,516 2,516 2,516 2,516
Due to Teachers' Retirement System 653,326 642,517 523,909 674,425
Due to Employees' Retirement System 38,711 38,762 53,881 53,580
Other Post Employment Benefits 1,572,000 1,572,000 1,572,000 1,572,000
Due to Other Funds - - 26,455 20,715
Due to Other Governments 205,206 - - -
TOTAL LIABILITIES 3,178,951 2,759,335 2,586,074 2,692,760
FUND EQUITY
Reserved 1,722,174$ 1,591,694$ 1,738,383$ 1,401,804$
Unreserved:
Appropriated 1,854,954 2,298,427 2,100,000 2,407,753
Unappropriated 653,424 777,599 790,379 629,018
TOTAL FUND EQUITY 4,230,552 4,667,720 4,628,762 4,438,575
TOTAL LIABILITIES and FUND EQUITY 7,409,503$ 7,427,055$ 7,214,836$ 7,131,335$
Source: Audited financial reports of the School District.
Webutuck CSD
APPENDIX - A1
GENERAL FUND
Revenues, Expenditures and Changes in Fund Balance
Fiscal Years Ending June 30: 2006 2007 2008 2009 2010
REVENUES
Real Property Taxes 8,666,524$ 9,446,153$ 9,923,588$ 10,482,345$ 10,627,767$
Real Property Tax Items 999,190 1,060,671 1,100,753 1,061,381 973,566
Charges for Services 2,632 19,093 9,750 - -
Use of Money & Property 232,036 316,447 295,629 152,526 24,533
Sale of Property and
Compensation for Loss 21,802 34,137 33,516 24,135 22,529
Miscellaneous 156,651 607,998 371,959 151,081 223,745
Interfund Revenues - - - - -
Revenues from State Sources 5,673,056 6,333,024 6,207,605 6,339,779 5,348,936
Revenues from Federal Sources 55,989 21,491 13,169 - 653,620
Total Revenues 15,807,880$ 17,839,014$ 17,955,969$ 18,211,247$ 17,874,696$
Other Sources:
Interfund Transfers - - - - -
Total Revenues and Other Sources 15,807,880 17,839,014 17,955,969 18,211,247 17,874,696
EXPENDITURES
General Support 1,975,525$ 1,917,143$ 2,116,711$ 2,142,836$ 2,147,154$
Instruction 8,514,869 8,443,887 8,558,438 9,133,202 9,232,461
Pupil Transportation 911,632 958,160 1,080,296 1,049,934 1,082,124
Community Services - - - - -
Employee Benefits 3,385,090 4,756,970 3,920,080 3,942,348 3,874,639
Debt Service 152,861 116,825 169,495 173,318 217,018
Total Expenditures 14,939,977$ 16,192,985$ 15,845,020$ 16,441,638$ 16,553,396$
Other Uses:
Interfund Transfers 1,256,189 1,153,922 1,320,577 1,332,441 1,360,258
Total Expenditures and Other Uses 16,196,166 17,346,907 17,165,597 17,774,079 17,913,654
Excess (Deficit) Revenues Over
Expenditures (388,286) 492,107 790,372 437,168 (38,958)
FUND BALANCE
Fund Balance - Beginning of Year 3,849,554 3,461,268 3,953,375 4,742,747 4,667,720
Prior Period Adjustments (net) - - - (513,195) -
Fund Balance - End of Year 3,461,268$ 3,953,375$ 4,743,747$ 4,666,720$ 4,628,762$
Source: Audited financial reports of the School District.
Webutuck CSD
APPENDIX - A2
GENERAL FUND
Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
Fiscal Years Ending June 30: 2012 2013
Adopted Modified Adopted Adopted
Budget Budget Actual Budget Budget
REVENUES
Real Property Taxes 11,888,243$ 11,888,243$ 10,954,406$ 12,141,546$ 12,365,416$
Real Property Tax Items 17,620 17,620 946,333 - -
Charges for Services - - - - -
Use of Money & Property 80,000 80,000 37,421 30,000 17,890
Sale of Property and
Compensation for Loss 200 35,887 45,527 300 300
Miscellaneous 115,442 117,805 302,908 142,180 132,180
Interfund Revenues - - - - -
Revenues from State Sources 5,579,452 5,579,452 4,945,777 5,563,754 5,250,066
Revenues from Federal Sources - - 344,580 - -
Total Revenues 17,680,957$ 17,719,007$ 17,576,952$ 17,877,780$ 17,765,852$
Other Sources:
Interfund Transfers - - - - -
Total Revenues and Other Sources 17,680,957 17,719,007 17,576,952 17,877,780 17,765,852
EXPENDITURES
General Support 2,234,797$ 2,361,375$ 1,860,736$ 2,145,698$ 2,105,012$
Instruction 9,794,173 9,813,786 9,025,553 9,685,957 9,369,918
Pupil Transportation 1,081,844 1,118,510 1,042,992 1,091,453 1,121,756
Community Services - - - - -
Employee Benefits 5,077,190 5,000,949 4,247,729 5,611,495 5,683,347
Debt Service 232,695 232,695 229,871 292,909 242,550
Total Expenditures 18,420,699$ 18,527,315$ 16,406,881$ 18,827,512$ 18,522,583$
Other Uses:
Interfund Transfers 1,360,258 1,360,258 1,360,258 1,400,258 1,593,269
Total Expenditures and Other Uses 19,780,957 19,887,573 17,767,139 20,227,770 20,115,852
Excess (Deficit) Revenues Over
Expenditures (2,100,000) (2,168,566) (190,187) (2,349,990) (2,350,000)
FUND BALANCE
Fund Balance - Beginning of Year 2,100,000 2,168,566 4,628,762 2,349,990 2,350,000
Prior Period Adjustments (net) -
Fund Balance - End of Year -$ -$ 4,438,575$ -$ -$
Source: Audited financial report and budgets of the School District.
Webutuck CSD
2011
APPENDIX - B
Webtuck CSD
Fiscal Year Refunded Total New
Ending Bonds Debt Debt
June 30th Principal Interest Total Service Principal Interest Total Service
2013 1,105,000$ 449,268.75$ 1,554,268.75$ 332,568.76$ 110,000$ 193,436.81$ 303,436.81$ 1,525,136.80$
2014 1,155,000 404,068.75 1,559,068.75 332,568.76 5,000 283,600.00 288,600.00 1,515,099.99
2015 1,210,000 356,768.75 1,566,768.75 332,568.76 5,000 283,500 288,500.00 1,522,699.99
2016 1,265,000 307,268.75 1,572,268.75 1,572,268.76 1,265,000 264,475 1,529,475.00 1,529,474.99
2017 1,320,000 255,568.75 1,575,568.75 1,575,568.76 1,305,000 232,450 1,537,450.00 1,537,449.99
2018 1,155,000 206,068.75 1,361,068.75 1,361,068.76 1,125,000 196,900 1,321,900.00 1,321,899.99
2019 1,125,000 160,468.75 1,285,468.75 1,285,468.76 1,090,000 152,600 1,242,600.00 1,242,599.99
2020 1,165,000 114,668.75 1,279,668.75 1,279,668.76 1,130,000 108,200 1,238,200.00 1,238,199.99
2021 1,130,000 68,062.50 1,198,062.50 1,198,062.51 1,095,000 63,700 1,158,700.00 1,158,699.99
2022 1,085,000 22,378.13 1,107,378.13 1,107,378.13 1,045,000 20,900 1,065,900.00 1,065,900.00
2023
2024
2025
2026
2027
2028
2029
2030
TOTALS 11,715,000$ 2,344,590.63$ 14,059,590.63$ 10,377,190.72$ 8,175,000$ 1,799,761.81$ 9,974,761.81$ 13,657,161.71$
BONDED DEBT SERVICE
PRIOR TO REFUNDING REFUNDING SERIAL BONDS
APPENDIX - C
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT DUTCHESS AND COLUMBIA COUNTIES, NEW YORK
GENERAL PURPOSE FINANCIAL
STATEMENTS
JUNE 30, 2011
Such Audited Financial Statement and opinion were prepared as of date thereof and have not been reviewed and/or
updated in connection with the preparation and dissemination of this Official Statement.
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
TABLE OF CONTENTS
Management's Discussion and Analysis
Basic Financial Statements:
Independent Auditor's Report
Statement of Net Assets
JUNE 30, 201 1
Statement of Activities and Changes in Net Assets
Balance Sheet - Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds
Reconciliation of Net Change in Governmental Fund Balances to Governmental Activities Change in Net Assets
Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities
Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets
Notes to Basic Financial Statements
Supplementary Information:
Required Supplemental Schedules:
1 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non-GAAP) Basis and Actual - General Fund
2 Schedule of Funding Progress for Other Post-Employment Benefits
Supplemental Schedules:
3 Schedule of Change from Adopted to Final Budget and Schedule of Use of Unreserved Fund Balance - General Fund
4 Schedule of Project Expenditures - Capital Projects Fund
5 Schedule of Certain Revenues and Expenditures Compared with ST -3 Data
6 Schedule of Combined Balance Sheet - Non-Major Governmental Funds
1 0
1 2
13
14
1 5
1 6
1 7
18
19
20
49
5 1
52
53
54
55
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
TABLE OF CONTENTS (CONTINUED)
JUNE 30 , 20lJ
7 Schedule of Combined Revenues, Expenditures, and Changes in Fund Balances - Non-Major Governmental Funds
8 Schedule of Investment in Capital Assets, Net of Related Debt
Reports in Accordance with Government Auditing Standards:
Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Basic Financial Statements Performed in Accordance with Government Auditing Standards
Reports on Extraclassroom Activity:
Independent Auditor's Report
Statement of Assets, Liabilities, and Fund Balance - Cash Basis
Statement of Cash Receipts and Disbursements
Note to Financial Statements
Management Letter
56
57
58
60
61
62
63
64
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
This section of the School District's annual financial report presents its discussion and analysis of the District's performance during the fiscal year ending June 30, 2011. The section is a summary of the School District's financial activities based on currently known facts, decisions, or conditions. It is also based on both the government-wide and fund-based financial statements. The results of the current year are discussed in comparison with the prior year, with an emphasis placed on the current year. This section is only an introduction. It should be read in conjunction with the School District's financial statements, which immediately follow this section.
Financial Highlights
The School District's net assets changed from $-18.19 million in 2010 to $-20.96 million in 2011 or a decrease of $2. 77 million. This decrease in assets is largely attributed to a decrease in fixed assets, as a result of donating the Amenia Elementary School to the Town, which is part of the decrease in capital assets by $1.95 million.
The District engaged Harbridge Consulting Group to conduct a ten year projected actuarial study of its post-retirement benefit liabilities in 2009 and 2011. The actuarial accrued liability as rolled fOlward for benefits at June 30, 2010 was $24,439,883. The actuarial calculation to June 30, 20 II reflects an accrued liability of $25,948,324.
The District's Governmental Fund expenses were $19.13 million while revenues were $18.61 million.
The District monitors and manages its fiscal performance based on pre-established targets for reserves, fund balance, and tax levy levels. The unassigned fund balance in the General Fund for 2010-2011 is $.63 million.
Overview orthe Financial Statements
This annual repOlt consists of three parts: management's discussion and analysis (this section), the basic financial statements, and required supplementary information. The basic financial statements include two kinds of statements that present different views of the District:
• The first two statements are District-wide financial statements that provide both short-term and long-term information about the District's overall financial status.
• The remaining statements' are fund financial statements that focus on individual parts of the District, reporting the District's operations in more detail than the District-wide statements.
• The governmental funds statements tell how basic services such as regular and special education were financed in the short term as well as what remains for future spending.
• Fiduciary funds statements provide information about the financial relationships in which the District acts solely as a trustee or agent for the benefit of others.
-1-
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
The financial statements also include notes that explain some ofthe information in the statements and provide more detailed data. The statements are followed by a section ofrequired supplementary infonnation that further explains and supports the financial statements with a comparison of the District's budget for the year.
Figure A-I summarizes the major features of the District's financial statements, including the portion of the District's activities they cover and the types of information they contain. The remainder ofthis overview section of management's discussion and analysis highlights the structure and contents of each of the statements.
Figure A-l
Major Features of the District-Wide and Fund Financial Statements
District-\Vide Fund Financial Statements
Statements COvem mental Funds Fiduciary Funds Scope Entire district (except The activities of the Instances in which the
fiduciary funds) district that are not district administers
proprietary or fiduciary, resources on behalf of
such as special someone else, such as
education, cafeteria and scho1arship programs and
transportation expenses. student activities monies. Required financial Statement of Net Assets Balance sheet Statement offiduciary
statements Statement of Activities Statement of revenues, net assets
expenditures, and Statement of changes in
changes in fund balances fiduciary net assets
Accounting basis Accrual accounting IvIodified accrual Accrual accounting
and measurement and economic accounting and cur- and economic
focus resources focus rent fmancial focus resources focus
Type of assetl All assets and Generally assets All assets and
liability infonnation liabilities, both fman- expected to be used liabilities, both short-
cial and capital, up and liabilities that term and long-term;
short-term and long-term come due during the funds do not currently
year or soon there- contain capital after; no capital assets, although they
assets or long-telm can
liabilities included
Type of inflow lout All revenues and Revenues for which All additions and
flow information expenses during year, cash is received during deductions during
regardless of when or soon after the end of the year, regardless
cash is received or the year; expenditures of when cash is
paid when goods or services received or paid
have been received
and the related liability
is due and payable
-2-
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
District-Wide Statements
The District-wide statements repmi information abont the District as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Assets includes all ofthe District's assets and liabilities. All of the current year's revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid.
The two District-wide statements report the District's net assets and how they have changed. A net asset - the difference between the District's assets and liabilities - is one way to measure the District's financial health or position.
• Over time, increases or decreases in the District's net assets are an indicator of whether its financial position is improving or deteriorating, respectively.
• To assess the District's overall health, you need to consider additional non-financial factors such as changes in the District's property tax base and the condition of school buildings and other facilities.
In the District-wide financial statements, the District's activities are Governmental activities. Most of the District's basic services are included here, such as regular and special education, transportation, and administration. Property taxes and state formula aid finance most of these activities.
Fund Financial Statements
The fund financial statements provide more detailed information about the District's funds, focusing on its most significant or "m'\ior" funds - not the District as a whole. Funds are accounting devices the District uses to keep track of specific sources of funding and spending on particular programs:
• Some funds are required by state law and by bond covenants.
• The District establishes other funds to control and manage money for particular purposes (such as a fund for scholarship monies) or to show that it is properly using certain revenues (such as federal grants).
The District has two kinds of funds:
• Governmental Funds: Most of the District's basic services are included in governmental funds, which generally focus on (1) how cash and other fmancial assets that can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed sholt-term view that helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the District's programs. Because this information does not encompass the additional long-term focus of the District-wide statements, additional information at the bottom of the governmental funds statements explains the relationship ( or differences) between them.
• Fiduciary funds: The District is the trustee, or fiduciary, for assets that belong to others, such as the scholarship fund and the student activities funds. The District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.
-3-
Net Assets
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Financial Analysis of the District as a Whole
The following schedule shows the Net Assets for the School District as of June 30, 2011:
FigureA-2
C01ldensed Statement of Net Assets (in milliolls of dollars)
Assets
Current and other assets
Receivables, inventory
Capital assets
Total Assets
Payables
BANS payable
Liabilities
Long-term debt - payable in one year
Long-term debt - payable after one year
Post employment benefits payable
Total Liabilities
NetAssets
Invested in capital assets.
net of related debt
Restricted for Debt
Unrestricted
Total net assets
Note: Assets-Liabilities=Net Assets
Note: Totals may not add due to rounding.
$
$
-4-
Gwemmentai and Total
School District Activities
2011 2010
6.94 $ 6.93
0.61 0.94
13.02 14.97
20.57 22.84
0.35 0040
0.99 1.12
1.79 1.59
12.45 13.48
25.95 24.44
41.53 41.03
0.24 1.17
0.18 0040
(21.40) (19.77)
(20.96) ;;;.$�=,(�18;;;.1;;;;9.)
% Change
0.1%
-35.1%
-13.0%
-9.9%
-12.5%
-11.6%
12.6%
-7.6%
6.2%
1.2%
-79.5%
8.2'/0
15.2%
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRlCT
MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Governmental Activities/Changes in Net Assets
Figure A-3
Changes ill Net Assets from Operating Results (;11 11Iillions of dollars)
Governmental and Total School District
Activities
2011 2010 % Change
Revenues
Property Taxes & TaxItems $ 11.90 $ 11.60 2.6%
Charges for Services 0.0%
Use of Money & Property 0.04 0.07 -42.9"/0
State Fonnula Aid 5.06 5.53 -8.50/0
Federal Aid 1.13 1.32 -14.4%
Food Sales & Surplus 0.12 0.12 0.0%
Other 0.36 0.25 44.0%
Total Revenues 18.61 18.89 -1.5%
Expenses
General Support 1.88 2.17 -13.4%
Instruction 11.70 10.99 6.5%
Pupil Transportation 1.17 1.22 .4.1%
Employee Benefits 5.88 9.23 -36.3%
Debt Service 0.55 0.59 -6.8%
Other Expenses 0.0%
School Lunch Program 0.26 0.28 -7.1%
Total EJ.;penses 21.44 24.47 -12.4%
Excess (Deficiency) of Revenues Over Expense (2.83) (5.58) -49.3%
Increase (Decrease) in Net Assets $ (2.83) $ (5.58) -49.3%
Note: totals may not add due fa rounding.
-5-
•
III EmployeeBenefits 27%
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Figure A·4 - Sources of Revenues for Fiscal Year 2011
• Food Sales &
III Charges for Services
0%
MOther 2%
I Property Taxes & Tax Items
• Charges for Services
a Use ofMoney & Property
'" State Fonnula Aid
• Federal Aid
II Food Sales & Surplus
jj Other
Property Taxes & Tax Items 64%
Figure A·5 - Expenses for the Fiscal Year 2011
SChool Lunch Program
-6-
1 %. General Support 9%
• Instruction 55%
• Genera1 Support
iii Instruction
a Pupil Transportation
II Employee13enefits
II Debt Service
liI Other Expenses
� School Lunch Program
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 20 II
The table below presents the cost of eight major District activities: general support, instruction, pupil transpOltation, community service, employee benefits, debt service, other expense, and School Lunch Program. The table also shows each activity's net cost (total cost less fees generated by the activities and intergovernmental aid provided for specific programs). The net cost shows the financial burden placed on the District's taxpayers by each of these functions:
Figure A-6 Net Cost of Governmental Activities:
Total Cost of Services Net Cost of Services
Program Expenses 201 1 2010 % Change 2011 2010
General Support $ 1,884,321 $ 2,173,042 -13.3% $ 1,845,321 $ 2,138,178
Instruction 1 1,695,328 1 0,978,506 6.5% 10,786,042 9,826,687
Pupil Transportation 1,169,153 1,222,490 -4.4% 1 , 169,153 1,222,490
Community Service 0.0%
Employee Benefits 5,881,050 9,228,978 -36.3% 5,688,680 9,020,929
Debt Service - Interest 548,722 587,238 -6.6% 548,722 587,238
Other E:<penses 0.0%
Depreciation 0.0% School Lunch Program 263,429 276,046 A.6% 22,451 19,050
Total $ 21,442,003 $ 24,466,300 - 12.4% $ 20,060,369 $ 22,814,572
Note: Totals may not add due to rounding.
• The cost of all governmental activities this year was $21.4 million; a decrease of 12.4%.
• The cost of employee benefits is down 36.3%.
• The School Lunch program net cost is up by 1 7.9% and still operating at a loss.
Financial Analysis of the District's Funds
% Change
-13.7%
9.8%
-4.4%
0.0"10
-36.9%
-6.6%
0.0%
0.0"10 17.9%
-12.1%
The financial performance of the District as a whole is reflected in its governmental funds. As the District completed the year, its governmental funds reported combined fund balances of $3.7 million; a $.3 million decrease over last year's ending fund balances of$4.0 million.
General Fund Budgetary Highlights
• Actual revenues were $17.58 million against a budget of $19.88 million.
• Actual expenditures (including transfers out) were $17.76 million. The unassigned fund balance is $.63 million.
-7-
Capital Assets
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Capital Assets and Debt Administration
During the year end of2010-2011 , the, District had completed substantially all open capital projects including the Water Oil Separator.
'
As previously noted herein, the District had a fixed asset appraisal in 2009-2010 and in updating the information the opening fixed assets were restated for original cost and accumulated depreciation. This resulted in a net increase in capital asset value of $0.06 million.
The overall capital assets as of June 30, 2011, are given below in Figure A-7.
Long-Term Debt
Figure A-7
CapitaL Assets (net of depreciation, ill mil/iolls of dollars)
20ll
Land $ 0.09
Construction
Buildings and improvements 1 1.62
Vehicles 0.67 Furniture and equipment 0.65
Total $ 13.02
Note: Totals may not add due to rounding.
Capital Assets
$
2010 2010
After Before
Restatement
0.09 $ 0.09
0.14 0.14
13.37 13.80
0.72 0.72 __ ----"0"'.7-=2 0.22
$ ��,;; 1 5;;; .0;;;3 $ 1 4.97
During the 2005-2006 school year, the District issued $17.43 million in Serial Bonds. The total amount of long-term debt owed is reflected in Figure A-8.
FigureA-8
Outsta1lding Long-Term Debt (ill millions of dollars)
General obligation bonds & note $
Note: Totals may not add due to rounding.
-8-
Total School District
2 0 1 1 201 0
12.78 ;;;$��13;;;.7;;;9
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2011
Factors Bearing on the District's Future
A number of factors have and will continue to affect the fmancial health of Webutuck Schools. The erosion of state and federal funding creates a negative impact on the School District. The American Recovery and Reduction Act money is no longer available. 2011-12 will be the last year of the Educational Jobs Funds. Title grants have been seriously reduced throughout the years. The ability to provide various and quality programs and reasonable class size will be difficult without serious tax levy increases. With the enactment of the two percent tax levy cap, this option is no longer available putting pressure on the District to choose to eliminate programs and/or increase class size. The inability to control costs such as retirement contributions, health care increases, fuel or contractual obligations will put additional pressure on the finances of Webutuck Schools in future years. Currently, we are negotiating with the local CSEA unit, and the teachers' contract wiII expire June 30, 2012. Testing and educational requirements to meet new standards are also factors in creating a solid educational plan within budgetary limits.
Locally, the effect of property values continues to impact the amount of state aid we receive. Revaluation also changes the shifting of tax burden throughout the District.
Finally, Webutuck Schools has been frugal throughout the last few years limiting new equipment and capital improvement projects. We will need to look closely at the impact of not funding these. The Board is currently working on a long-range plan in conjunction with the Building Condition Survey for building repairs. They are also working with the New York State Power Authority to fund alternative energy sources for the District.
Contacting the District's Financial Management
This financial report is designed to provide the District's citizens, taxpayers, customers, investors, and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Business Office, Webutuck (Northeast) Central School District, PO Box 405, 194 Haight Rd., Amenia, New York.
-9-
SICKLER*TORCHIA ALLEN & CHURCHILL CERTIFIED PUBLIC ACCOUNTANTS, PC
INDEPENDENT AUDITORS' REPORT
To the Board of Education Webutuck (Northeast) Central School District Amenia, New York
Robert J. Allen, CPA
Lindley H. Churchill, CPA Victor V. Churchill, CPA
Craig R. Sickler, CPA
MichaelA. Torchia. Jr., CPA, eVA
Edward J. Gower II, CPA
We have audited the accompanying financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Webutuck (NOltheast) Central School District as of and for the year ended Jnne 30, 20 II, which collectively comprise the District's basic financial statements as listed in the table of contents. These basic fmancial statements are the responsibility of the School District's management. Our responsibility is to express opinions on these basic fmancial 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 perfonn the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements, An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly in all material respects, the respective financial position of the government activities, each m'\ior fund, and the aggregate remaining fund information of the Webutuck (Northeast) Central School District as of June 30,2011, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated September 27, 2011, on our consideration of the Webutuck (Northeast) Central School District's 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 fmancial 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 and should be considered in assessing the results of our audit.
- 10 -
4071 Route 9 • Stop 1 • Hudson, NY 12534 • Phone: 518.828.4616 • Fax: 518.828.0235
2215 Route 9W • P.o. Box 757 • Lake Katrine, NY 12449 • Phone: 845.336.7183 • Fax: 845.336.7186
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
INDEPENDENT AUDITORS' REPORT (CONTINUED)
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and the other required supplementary information contained in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic fmancial 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.
Our audit was conducted for the purpose of forming opinions on the fmancial statements that collectively comprise the Webutuck (Northeast) Central School District's financial statements as a whole. The supplemental schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the financial statements. The supplemental schedules listed in the table of contents are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
� ,4."d. .... / �'I'-� 1"/// /-�� Hudson, New 'york September 27, 2011
- II -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
STATEMENT OF NET ASSETS
JUNE 30, 2011
ASSETS
Cash: Unrestricted $ 6,943,975 Restricted
Investments: Unrestricted Restricted
Receivables: Taxes State and Federal aid 583,203 Due from other governments Due from fiduciary funds 7,124 Other 436
Inventories 14,771 Deferred expenditures Deferred bond costs, net Capital assets, net 13,020,791
Total Assets 20,570,300
LlABIUTIES
Payables: Accounts payable 78,916 Accrued liabilities 64,922 Due to other governments 184,200 Due to fiduciary funds Other liabilities 1,682
Bond interest and matured bonds 23,931 Notes payable:
Tax anticipation Revenue anticipation Bond anticipation 988,993
Deferred credits: Overpayments and collections in advance Deferred revenues - other Deferred revenues - planned balance
Long-tenn liabilities: Due and payable within one year:
Bonds payable 1,065,000 Installment purchase debt payable Due to teachers' retirement system 674,425 Due to employees' retirement system 53,580 Compensated absences payable Other post employment benefits payable 595,089 Other liabilities
Due and payable after one year: Bonds payable 11,715,000 BANs refmanced on a long-term basis Installment purchase debt payable Due to teachers' retirement system Due to employees' retirement system Compensated absences payable 732,328 Other post employment benefits payable 25,353,235 Other liabilities
Total Liabilities 41,531,301
NETASSETS
Investment in capital assets. net of related debt 240,791 Restricted 1,580,668 Uruestricted (22,782,460)
Total Net Assets $ (20,961,001)
See independent auditors' report and notes to the financial statements.
-12 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED JUNE 30, 2011
Expenses
Indirect
Expenses Allocation
Program Revenues
Charges for Operating Services Grants
Net (Expense) Revenue and
Changes in Net Assets
FUNCTIONSIPROGRAMS General support $ 1,884,321 $
11,695,328 1,169,153
$ $ (39,000) $ 1,845,321 Instruction Pupil transportation Community service Employee benefits Debt service Other expenses School lunch program Depreciation Amortization
Total Functions and Programs
GENERAL REVENUES Real property taxes Other tax items Non-property taxes Use of money and property Sale of property and compensation for loss Miscellaneous Illterfund revenue State sources Federal sources Medicaid reimbursement
Tota1 General Revenues
Change in Net Assets
Rounding
5,881,050 548,722
263,429
21,442,003
Total Net Assets - Beginning of Year, As Restated
Total Net Assets - End of Year
See independent auditors' report and notes to the financial statements.
-13 -
(909,286) 10,786,042 1,169,153
(46,494) (145,876) 5,688,680 548,722
(49,505) (191,473) 22,451
(95,999) (1,285,635) 20,060,369
10,954,406 946,333
39,336 45,527
302,908
4,945,777
17,234,287
(2,826,082)
(18,134,920)
$ (20,961,001)
See independent auditors' report and notes to the financial statements.
-14 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES • GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2011
Special Debt Capital Governmental General Aid Service Projects Non-Major Funds
REVENUES
Real property taxes $ 10,954,406 $ $ $ $ $ 10,954,406 Other tax items 946,333 946,333 Non-property taxes Charges for services Use of money and property 37,421 1,855 60 39,336 Sale of property and
compensation for loss 45,527 45,527 Miscellaneous 302,908 9,630 7,702 320,240 Interfund revenue State sources 4,945,777 105,987 8,186 5,059,950 Medicaid reimbursement Federal sources 344,580 633,965 155,146 1,133,691 Surplus food 20,439 20,439 Sales - school lunch 95,999 95,999
Total Revenues 17,576,952 749,582 1,855 60 287,472 18,615,921
EXPENDITURES
General support 1,860,736 1,860,736 Instruction 9,025,553 680,196 9,705,749 Pupil transportation 1,042,992 1,042,992 Conununity service Employee benefits 4,247,729 78,386 46,494 4,372,609 Debt service:
Principal 213,726 1,015,000 1,228,726 Interest 16,145 534,269 550,414
Cost of sales 260,536 260,536 Other expenditures Capital outlay 110,127 110,127
Total Expenditures 16,406,881 758,582 1,549,269 110,127 307,030 19,131,889
Excess (Deficiency) of Revenues Over Expenditures 1,170,071 (9,000) (1,547,414) (1I0,067) (19,558) (515,968)
OTHER FINANCING SOURCES AND USES
BAN's redeemed from appropriations 213,726 213,726 Operating transfers in 9,000 1,321,258 30,000 1,360,258 Operating transfers (out) (1,360,258) (1,360,258) Rounding
Total Other Sources (Uses) (1,360,258) 9,000 1,321,258 213,726 30,000 213,726
Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (190,187) (226,156) 103,n59 10,442 (302,242)
Fund Balances - Beginning of Year 4,628,762 403,933 (1,024,665) (7,020) 4,001,010
Fund Balances - End of Year $ 4,438,575 $ $ 177,777 $ (921,006) $ 3,422 $ 3,698,768
See independent auditorsl report and notes to the financial statements.
·15 •
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT RECONCILIATION OF NET CHANGE IN GOVERNMENTAL FUND
BALANCES TO GOVEfu'lMENT AL ACTIVITIES CHANGE IN NET ASSETS JUNE 30, 20ll
Total net changes in fund balances - governmental funds
Amounts reported for governmental activities in the Statement of Activities are different because:
Capital outlays to purchase or build capital assets are reported in governmental funds as expenditures. However, for governmental activities, those costs are shown in the statement and allocated over their estimated useful lives as annual depreciation expenses in the Statement of Activities. This is_the amount by which depreciation exceeds capital outlays in the period.
Depreciation expense Proceeds from sale of capital assets/loss on disposal
Capital outlays
In the Statement of Activities, certain operating expenses--compensated absences (vacations), special termination benefits (early retirement) and retirees' health insurance--are measured by the amounts earned during the year. In the governmental funds. however, expenditures for these items are measured by the amount of financial resources used (essentially. the amounts actuaIly paid).
Repayment of bond principal is an expenditure in the governmental funds. but it reduces longterm liabilities in the Statement of Net Assets and does not affect the Statement of Activities.
Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the Statement of Activities. however, interest expense is recognized as the interest accrues. regardless of when it is due.
Change in net assets of governmental activities.
See independent auditors' report and notes to the financial statements.
-16 -
$ (1,303,871) (854,691) 150,287
$ (302,242)
(2,008,275)
(1,532,257)
1,015,000
1,692
$ (2,826,082)
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT RECONCILIATION OF GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30, 20 I I
Total Long-Term Reclassifications Governmental Assets, and
Funds Liabilities Eliminations
ASSETS Cash:
Unrestricted $ 6,943,975 $ $ Restricted investments
I�v��tmelJt�� ------.-----Unrestricted Restricted
Receivables: Taxes Due from other funds 679,386 (672,262) State and Federal aid 583,203 Due from other governments Other 436
Inventories 14,771 Deferred expenditures Deferred bond costs, net Capital assets, net 13,020,791
Total Assets $ 8,221,771 $ 13,020,791 $ (672,262)
LIABILITIES Payables:
Accounts payable $ 78,916 $ $ Accrued liabilities 294,429 (229,507) Due to other funds 672,262 (672,262) Due to other governments 184,200 Retainage payable 1,682 Bond interest and matured bonds 2,516 21,415
Notes payable: Tax anticipation Revenue anticipation Bond anticipation 988,993
Deferred credits: Overpayments and collections in advance Deferred revenues Planned balance
Long-term liabilities: Bonds payable 12,780,000 Installment purchase debt payable Due to teachers' retirement system 674,425 Due to employees' retirement system 53,580 Compensated absences payable 517,445 214,883 Other post employment benefits payable 1,572,000 24,361,700 14,624 Judgments & claims payable Other liabilities
Total Liabilities 4,523,003 37,680,560 (672,262)
FUND EQUITYINET ASSETS Total Fund EquitylNet Assets 3,698,768 (24,659,769)
$
$
$
Total Liabilities, Equity and Other Credits $ 8,221,771 $ 13,020,791 $ (672,262) $
See independent auditors· report and notes to financial statements.
-17 -
Statement of Net Assets
Totals
6,943,975
7,124 583,203
436 14,771
13,020,791 20,570,300
78,916 64,922
184,200 1,682
23,93l
988,993
12,780,000
674,425 53,580
732,328 25,948,324
41,531,301
(20,961,001)
20,570,300
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRlCT RECONCILIATION OF GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2011
Total Long-Tenn Capital Long-Tenn Statement of
Governmental Revenue, Related Debt Activities Flmds EXEenses Items Transactions Totals
REVENUES Real property taxes $ 10,954,406 $ $ $ $ 10,954,406 Other tax items 946,333 946,333 Non-property taxes
.-Charges.forservices-- --
Use of money and property 39,336 39,336
Sale of property and compensation for loss 45,527 45,527
Miscellaneous 320,240 320,240 Interfund revenue State sources 5,059,950 5,059,950 Medicaid reimbursement Federal sources 1,133,691 1,133,691 Surplus food 20,439 20,439 Sales - school lunch 95,999 95,999
Total Revenues 18,615,921 18,615,921
EXPENDITURESIEXPENSES General support 1,860,736 23,585 1,884,321 Instruction 9,705,749 23,816 1,965,763 1l,695,328 Pupil transportation 1,042,992 126,161 1,169,153 Community service Employee benefits 4,372,609 1,508,441 5,881,050 Debt service 1,779,140 (1,692) (1,228,726) 548,722 Cost of sales 260,536 2,893 263,429 Other expenditures/expenses Capital outlay 1l0,127 (110,127) Depreciation - allocated Amortization
Total ExpenditureslExpenses 19,131,889 1,530,565 2,008,275 (1,228,726) 21,442,003
Excess (Deficiency) of Revenues Over ExpenditureslExpenses (515,968) (1,530,565) (2,008,275) 1,228,726 (2,826,082)
OTHER SOURCES AND USES BAN's redeemed from appropriations 213,726 (213,726) Operating transfers in 1,360,258 (1,360,258) Operating transfers (out) (1,360,258) 1,360,258 Rounding
Total Other Sources (Uses) 213,726 (213,726)
Net Change for the Year $ (302,242) $ (1,530,565) $ (2,008,275) $ 1,015,000 $ (2,826,082)
See independent auditors' report and notes to the fmancial statements.
-18 -
.�.- .- �--
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET ASSETS
Cash Accounts receivable Due from other funds ---- --- --- ---
Investments
Total Assets
Due to other funds
ASSETS
LIABILITIES
Extraclassroom activity balances Other liabilities
Total Liabilities
NET ASSETS Reserved for scholarships
JUNE 30, 2011
Private Purpose Trusts
$ 27,770
9,548
$ 37,318
$
-
$ 37,318
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FOR THE YEAR ENDED JUNE 30, 2011
Private Purpose Trusts
ADDITIONS: Contributions $ 10,844 Interest 91
Total Additions 10,935
DEDUCTIONS: Scholarships and awards 10,809
Change in Net Assets 126
Increase in Market Value ofinvestrnents 2,706
Net Assets - Beginning of Year 34,486
Net Assets - End of Year $ 37,318
See independent auditors' report and notes to the financial statements.
-19 -
Agency
$ 52,144
$ 52,144
$ 7,124 39,458
5,562
$ 52,144
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011
NOTE 1 - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES:
The financial statements ofthe Webutuck (Northeast) Central School District (the "Districf') have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. Those principles are prescribed by the Governmental Accounting Standards Board (GASB), which is the accepted standard-setting body for establishing governmental accounting and financial repOliing principles.
Certain significant accounting principles and policies utilized by the District are described below:
A. Reporting Entity:
The District is governed by the laws of New York State. The District is an independent entity governed by an elected Board of Education consisting of7 members. The President of the Board serves as the chief fiscal officer and the Superintendent is the chief executive officer. The Board is responsible for, and controls all activities related to public school education within the District. Board members have authority to make decisions, power to appoint management, and primary accountability for all fiscal matters.
The reporting entity of the District is based upon criteria set forth by GASB Statement 14, The Financial Reporting Entity, as amended by GASB Statement 39, Component Units. The financial reporting entity consists of the primary government, organizations for which the primary government is fmancially accountable and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.
The accompanying financial statements present the activities of the District and its component unit and other organizational entities determined to be includable in the District's financial reporting entity. The District is not a component unit of another reporting entity. The decision to include a potential component unit in the District's reporting entity is based on several criteria, including legal standing, fiscal dependency, and fmancial accountability. Based on the application of these criteria, the following is a brief description of certain entities included in the District's reporting entity.
Extraclassroom Activity Funds:
The Extraclassroom Activity Funds of the District represent funds of the students of the District. The Board of Education exercises general oversight of these funds. The Extraclassroom Activity Funds are independent of the District with respect to its fmancial transactions and the designation of student management. Separate audited fmancial statements (cash basis) of the Extraclassroom Activity Funds can be found at the District's business office. The District accounts for assets held as an agent for various student organizations in an Agency Fund.
See independent auditors' report.
- 20 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEtvIENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
B. Joint Venture:
The District is a component district in the Dutchess County Board of Cooperative Educational Services (BOCES). A BOCES is a voluntary, cooperative association of
- _. school districts in a geographic area that shares planning, services, and programs that provide educational and support activities. There is no authority or process by which a school district can terminate its status as a BOCES component.
BOCES are organized under § 1950 ofthe New York State Education Law. A BOCES Board is considered a corporate body. Members of a BOCES Board are nominated and elected by their component member boards in accordance with provisions of § 1 950 of the New York State Education Law. All BOCES property is held by the BOCES Board as a corporation (§1950(6)). In addition, BOCES Boards also are considered municipal corporations to permit them to contract with other municipalities on a cooperative basis under § 1 19-n(a) of the New York State General Municipal Law.
A BOCES' budget is comprised of separate budgets for administrative, program and capital costs. Each component district's share of administrative and capital cost is determined by resident public school district enrollment, as defined in the New York State Education Law, § 1950( 4)(b)(7). In addition, component districts pay tuition or a service fee for programs in which its students participate.
During the year, the District was billed $1,558,252 for BOCES administrative and program costs.
The District's share of BOCES aid amounted to $252,338.
The basic financial statements for the BOCES are available from the BOCES administrative office.
C. Basis of Presentation:
I. District-Wide Statements:
The Statement of Net Assets and the Statement of Activities present [mancial information about the District's governrnental activities. These statements include the financial activities of the overall governrnent in its entirety, except those that are fiduciary. Eliminations have been made to minimize the double counting of internal transactions. Governrnental activities generally are financed through taxes, State aid, intergovernrnental revenues, and other exchange and non-exchange transactions. Operating grants include operating-specific and discretionary (either operating or capital) grants, while the capital grants coluum reflects capital-specific grants.
See independent auditors' report.
- 2 1 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the District's goverumental activities. Direct expenses are those that are specifically associated with and are clearly identifiable to a particular function. Program revenues include charges paid by the recipients of goods or services offered by the programs, and grants and contributions that are resirlcted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
II. Fund Financial Statements:
The fund statements provide information about the District's funds, including fiduciary funds. Separate statements for each fund category (govel1unental and fiduciary) are presented. The emphasis offund financial statements is on major goverumental funds. All remaining governmental funds are aggregated and reported as non-major funds.
The District reports the following major goverumental funds:
a. General Fund:
This is the District's primary operating fund. It accounts for all financial transactions that are not required to be accounted for in another fund.
b. Special Aid Fund:
These funds account for the proceeds of specific revenue sources, such as Federal and State grants, that are legally restricted to expenditures for specified purposes. These legal restrictions may be imposed either by goveruments that provide the funds, or by outside parties.
c . Debt Service Fund:
This fund accounts for the accumulation of resources and the payment of principal and interest on long-term general obligation debt of goverumental activities.
d. Capital Projects Funds:
These funds are used to account for the fmancial resources used for acquisition, construction, or major repair of capital facilities. For these funds, each capital project is assessed to determine whether it is a major or non-major fund. Those capital projects that are determined to be major are reported in separate columns in the financial statements. Those that are determined to be non-major are reported in the supplemental schedules either separately or in the aggregate.
See independent auditors' report.
- 22 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 - SUMMARY OF CERTAIN SIGNlFICANT ACCOUNTING POLICIES (CONTINUED):
The District reports the following non-major governmental funds:
School Lunch Fund:
This fund is used to account for transactions of the District's lunch and breakfast . programs and related Federal and State grants for child nutrition.
The District reports the following fiduciary fund:
FiduciaJY Fund:
Fiduciary activities are those in which the District acts as trustee or agent for resources that belong to others. These activities are not included in the Districtwide financial statements, because their resources do not belong to the District, and are not available to be used. There are two classes of fiduciary funds:
I . Private purpose trust funds:
These funds are used to account for trust arrangements in which principal and income benefits annual third party awards and scholarships for students. Established criteria govern the use ofthe funds and members ofthe District or representatives of the donors may serve on committees to detennine who benefits.
2 . Agency funds:
These funds are strictly custodial in nature and do not involve the measurement of results of operations. Assets are held by the District as agent for various student groups or extraclassroom activity funds and for payroll or employee withholding.
D. Measurement Focus and Basis of Accounting:
The District-wide and fiduciary fund fmancial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash transaction takes place. Non-exchange transactions, in which the District gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
See independent auditors' report.
- 23 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 - SUMlVIARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
The governmental fund statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The District considers all revenues repOlted in the governmental funds to be available if the revenues are collected
. .'Vit!Jin 60 days after the end of the fiscal year, including real property taxes.
Expenditnres are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditnres to the extent they have matnred. General capital asset acquisitions are reported as expenditnres in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources.
E. Cash and Investments:
The District's cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments with original matnrities ofthree months or less from date of acquisition. New York State law governs the District's investment policies. Resources must be deposited in FDIC-insured commercial banks or trust companies located within the State. Permissible investments include obligations of the United States Treasury, United States Agencies, repurchase agreements and obligations of New York State or its localities. Collateral is required for demand and time deposits and certificates of deposit not covered by FDIC insurance. Investments are stated at fair value.
F. Property Taxes:
Real property taxes are levied annually by the Board of Education no later than September 1 , and became a lien on August 16. Taxes are collected during the period September 7 to November 5.
Uncollected real property taxes are subsequently enforced by the Counties in which the District is located. The Counties pay an amount representing uncollected real property taxes transmitted to the Counties for enforcement to the District no later than the following April ! .
G . Accounts Receivable:
Receivables (accounts receivable) are shown gross, with uncollectible amounts recognized under the direct write-off method. No allowance for uncollectible accounts has been provided since it is believed that such allowance would not be material.
See independent auditors' report.
- 24 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
H. Inventories and Prepaid Items:
Inventories of food in the School Lunch Fund and items for resale in the School Store are recorded at cost on a first-in, first-out basis, or in the case of surplus food, at stated value that approximates market. Purchases of inventoriable items in other funds are recorded as expenditures at the time of purchase, and are considered immaterial in amount. Prepaid items represent payments made by the District for which benefits extend beyond year end.
A reserve for these non-liquid assets (inventories and prepaid items) has been recognized to signifY that a portion of fund balance is not available for other subsequent expenditures.
1. Interfund Transactions:
The operations of the District include transactions between funds. These transactions may be temporary in nature, such as with interfund borrowings. The District typically loans resources between funds for the purpose of providing cash flow. These interfund receivables and payables are expected to be repaid with in one year. Permanent transfers of funds include the transfer of expenditure and revenues to provide financing or other services.
In the District-wide statements, the amounts reported on the Statement of Net Assets for interfund receivables and payables represent amounts due between different fund types (governmental activities and fiduciary funds). Eliminations have been made for all interfund receivables and payables between the funds, with the exception of those due from or to the fiduciary funds.
The governmental funds report all interfund transactions as originally recorded. Interfund receivables and payables may be netted on the accompanying governmental funds balance sheet when it is the District's practice to settle these amounts at a net balance based upon the right of legal offset.
Refer to Note 8 for a detailed disclosure by individual fund for interfund receivables, payables, expenditures and revenues activity.
J. Other AssetslRestricted Assets:
Certain proceeds from serial bonds and bond anticipation notes, as well as resources set aside for their repayment are classified as restricted assets in the District-wide financial statements and their use is limited by applicable bond covenants.
In the District-wide financial statements, bond issuance costs are capitalized and amortized over the life of the debt issue. In the funds statements these same costs are netted against bond proceeds and recognized in the period of issuance.
See independent auditors' report.
- 25 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRlCT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 20 I I
NOTE 1 - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
K. Capital Assets:
, Capital assets are reported at actual cost for acquisitions. Donated assets are reported at estimated fair market value at the time received.
Capitalization thresholds (the dollar value above which asset acquisitions are added to the capital asset accounts), depreciation methods, and estimated useful lives of capital assets reported in the District-wide statements are as follows:
Building & Outdoor improvements
Furniture and equipment
Vehicles
L. Vested Employee Benefits:
Capitalization Depreciation Estimated Threshold Method Useful Life
$1,000
$1,000
$1,000
Straight-Line 15-25 Years
Straight-Line 3-20 Years
Straight-Line 5 Years
The District employees are granted vacation in varying amounts, based primarily on length of service and service position. Some earned benefits may be forfeited if not taken within varying time periods.
Sick leave eligibility and accumulation is specified in negotiated labor contracts, and in individual employment contracts. Sick leave use is based on a last-in first-out (LIFO) basis.
Upon retirement or death, employees may receive a payment based on unused accumulated sick leave, based on contractual provisions.
Consistent with GASB Statement 16, Accounting for Compensated Absences, an accrual for accumulated sick leave is included in the compensated absences liability at year-end. The compensated absences liability is calculated based on the rates in effect at year-end as defined in the contractual bargaining agreement.
In the fund statements only the amount of matured liabilities is accrued within the General Fund based upon expendable and available resources.
District employees participate in the New York State Employees' Retirement System and the New York State Teachers' Retirement System.
See independent auditors' report.
- 26 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRlCT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE I - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
In addition to providing pension benefits, the District provides health insurance coverage and survivor benefits for retired employees and their survivors. Substantially all of the District's employees may become eligible for these benefits if they reach normal retirement age while working for the District and have completed f ° years of continuous service. Health care benefits are provided through plans whose premiums are based on the benefits paid during the year. Some costs of providing post-retirement benefits are shared between the District and the retired employee. The District recognizes the cost of providing health insurance by recording its share of insurance premiums as expenditure or operating transfer to other funds in the General fund, in the year paid.
M. Budgetary Procedures and Budgetary Accounting:
The District administration prepares a proposed budget for approval by the Board of Education for the following governmental funds for which legal (appropriated) budgets are adopted:
- General Fund
The voters of the District approved the proposed appropriation budget for the General Fund.
Appropriations are adopted at the program line item level.
Appropriations established by the adoption of the budget constitute a limitation on expenditures (and encumbrances) that may be incurred. Appropriations lapse at the end of the fiscal year unless expended or encumbered. Encumbrances wiII lapse if not expended in the subsequent year. Supplemental appropriations may occur subject to legal restrictions, if the Board approves them because of a need that exists, which was not determined at the time the budget was adopted.
Supplemental appropriations occurred during the year and are detailed below:
Adopted Budget $ 19,780,957
Reserve Disbursements 38,936
Insurance Recoveries 35,687
Donations for Specific Purposes 2,363
Prior Year's Encumbrances 29,630
Revised Budget $ 19.887,573
Budgets are adopted annually on a basis consistent with GAAP. Appropriations authorized for the year are increased by the amount of encumbrances carried forward from the prior year.
Special Revenue Funds have not been included in the comparison because they do not have legally authorized (appropriated) budgets.
See independent auditors' report.
- 27 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRlCT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
N. Deferred Revenue:
Deferred revenues are reported when potential revenues do not meet both the measurable and available criteria for recognition in the current period. Deferred revenues also arise when resources are received by the District before it has legal claim to them, as when grant monies are received prior to the incidence of qualifying expeilditnres. In subsequent periods, when both recognition criteria are met, or when the District has legal claim to the resources, the liability for deferred revenues is removed and revenues are recorded.
Statnte provides the authority for the District to levy taxes to be used to finance expenditures within the first 120 days of the succeeding fiscal year. Consequently, such amounts are recognized as revenue in the subsequent fiscal year, rather than when measurable and available.
Deferred revenues recorded in governmental funds may or may not be recorded in the District-wide statements, dependent on the completion of the earnings process and may comprise part of the reconciliation in Note 2.
O. Restricted Resources:
When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, the District's policy concerning which to apply first varies with the intended use, and with associated legal requirements, many of which are described elsewhere in these Notes.
P. Estimates:
The preparation of financial statements in confonnity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting period. Actnal results could differ from those estimates. Estimates and assumptions are made in a variety of areas, including computation of encumbrances, compensated absences, potential contingent liabilities, and useful lives of long-lived assets.
Q. Short-Tenn Debt:
The District may issue Revenue Anticipation Notes and Tax Anticipation Notes in anticipation of the receipt of revenues. These notes are recorded as a liability of the fund that will actnally receive the proceeds from the issuance of the notes. The RANs and TANs represent a liability that will be extinguished by the use of expendable, available resources of the fund.
See independent auditors' report.
- 28 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE I - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
The District may issue budget notes up to an amount not to exceed 5% of the amount of the annual budget during any fiscal year for expenditures for which an insufficient or no provision is made in the annual budget. The budget note must be repaid no later than the close of the second fiscal year succeeding the year in which the note was issued.
The District may issue Bond Anticipation Notes in anticipation of proceeds from the subsequent sale of bonds. These notes are recorded as current liabilities of the funds that will actually receive the proceeds from the issuance of bonds. State law requires that BANs issued for capital purposes be converted to long-term financing within five years after the original issue date.
R. Accrued Liabilities and Long-Term Obligations:
Payables, accrued liabilities, and long-term obligations are reported in the District-wide financial statements. In the governmental funds, payables and accrued liabilities are paid in a timely manner and in full from current financial resources. Claims and judgments, and compensated absences that will be paid from governmental funds, are reported as a liability in the funds financial statements only to the extent that they are due for payment in the current year. Bonds and other long-term obligations that will be paid from governmental funds are recognized as a liability in the fund financial statements when due.
Long-term obligations represent the District's future obligations or future economic outflows. The liabilities are reported as due in one year or due within more than one year in the Statement of Net Assets.
S. Equity Classifications:
I. District-Wide Statements:
In the District-wide statements there are three classes of net assets:
a. Invested in capital assets, net of related debt - consists of net capital assets (cost less accumulated depreciation) reduced by outstanding balances of related debt obligations from the acquisition, construction or improvements of those assets.
b. Restricted net assets - reports net assets when constraints placed on the assets are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislation.
c. Unrestricted net assets - reports all other net assets that do not meet the defmition of the above two classifications and are deemed to be available for general use by the District.
See independent auditors' report.
- 29 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE I - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
II. Funds Statements:
In the fund basis statements there are five classifications of fund balance:
a. Non-spendable fund balance - Includes amounts that cannot be spent because they are not in spendable form or legally or contractually required to be maintained intact.
b. Restricted - includes amounts with constraints place on the use of resources either externally imposed by creditors, grantors, contributors or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. All encumbrances of funds other than the General fund are classified as restricted fund balance. The District has established the following restricted fund balances:
I. CapitallTechnology:
According to Education Law §365 I, must be used to pay the cost of any object or purpose for which bonds may be issued. The creation of a capital reserve fund requires authorization by a majority of the voters establishing the purpose of the reserve, the ultimate amount, its probable term and the source ofthe funds. Expenditure may be made from the reserve only for a specific purpose further authorized by the voters. The form for the required legal notice for the vote on establishing and funding the reserve and the form of the proposition to be placed on the ballot are set forth in §3651 of the Education Law. This reserve is accounted for in the General Fund under Restricted Fund Balance.
2. Debt Service:
According to General Municipal Law §6-l , the Mandatory Reserve for Debt Service must be established for the purpose of retiring the outstanding obligations upon the sale of District property or capital improvement that was financed by obligations that remain outstanding at the time of sale. The funding of the reserve is from the proceeds of the sale of School District property or capital improvement.
See independent auditors' report.
- 30 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 20 1 1
NOTE 1 - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
3 . Employee Benefit Accrued Liability:
According to General Municipal Law §6-p, must be used for the payment of accrued employee benefits due an employee upon termination of the employee's service. This reserve may be established by a majority vote of the Board and is funded by budgetary appropriations and such other reserves and funds that may be legally appropriated.
4. Insurance (not currently utilized):
According to General Municipal Law §6-n, must be used to pay liability, casualty and other types of losses, except losses incurred for which the following types of insurance may be purchased: life, accident, health, annuities, fidelity and surety, credit, title residual value and mortgage guarantee. In addition, this reserve may not be used for any purpose for which a special reserve may be established pursuant to law (for example, for unemployment compensation insurance). The reserve may be established by Board action and funded by budgetalY appropriations or such other funds as may be legally appropriated. There is no limit on the amount that may be accumulated in the Insurance Reserve; however, the annual contribution to this reserve may not exceed the greater of$33,000 or 5% of the budget. Settled or compromised claims up to $25,000 may be paid from the reserve without judicial approval.
5 . Liability Claims and Property Loss (not currently utilized):
According to Education Law § 1709(8) (c), must be used to pay for liability claims and property loss incurred. Separate funds for liability claims and property loss are required and these reserves may not in total exceed 3% of the annual budget or $1 5,000, whichever is greater. This type of reserve fund may be utilized only by school districts, except city school districts with a popUlation greater than 125,000.
6. Repairs (not currently utilized):
According to General Municipal Law §6-d, must be used to pay the cost of repairs to capital improvements or equipment, which repairs are of a type not recurrin g annually. The Board of Education without voter approval may establish a repair reserve fund by a majority vote of its members. Voter approval is required to fund this reserve (Opinion of the New York State Comptroller 81-401). Expenditures from this reserve may be made only after a public hearing has been held, except in emergency situations. If no hearing is held, the amount expended must be repaid to the reserve fund over the next two subsequent fiscal years.
See independent auditors' report.
- 3 1 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
7. Retirement Contributions:
According to General Municipal Law §6-r, must be used for fmancing retirement contributions. The reserve must be accounted for separate and apart from all other funds and a detailed report of the operation and condition of the fund must be provided to the Board.
8. Tax Certiorari:
According to Education Law §365 I. I-a, must be used to establish a reserve fund for tax certiorari and to expend from the fund without voter approval. The monies held in the reserve shall not exceed the amount that might reasonably be deemed necessary to meet anticipated judgments and claims arising out of tax certiorari proceedings. Any resources deposited to the reserve which are not expended for tax certiorari proceedings in the year such monies are deposited must be returned to the General Fund on or before the ftrst day of the fourth ftscal year after deposit ofthese monies.
9. Unemployment Insurance:
According to General Municipal Law §6-m, must be used to pay the cost of reimbursement to the State Unemployment Insurance Fund for payments made to claimants where the employer has elected to use the benefit reimbursement method. The reserve may be established by Board action and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within sixty days after the end of any fiscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding fiscal year's budget. If the School District elects to convert to tax (contribution) basis, excess resources in the fund over the sum sufficient to pay pending claims may be transferred to any other reserve fund.
10. Workers' Compensation:
According to General Municipal Law §6-j, must be used to pay for compensation benefits and other expenses authorized by Article 2 of the Workers' Compensation Law and for payment of expenses of administering this self-insurance program. The reserve may be established by Board action, and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within sixty days after the end of any ftscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding ftscal year's budget.
See independent auditors' report.
- 32 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE I - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
II. Encumbrances:
Encumbrance accounting, under which purchase orders, contracts and other commitments of expenditures are recorded for budgetary control purposes in order to reserve applicable appropriations, is employed as a control in preventing over-expenditure of established appropriations. Open encumbrances are reported as assigned fund balance in all funds other than the General Fund, since they do not constitute expenditures or liabilities and will be honored through budget appropriations in the subsequent year.
Restricted fund balance includes the following:
General Fund: Capital Employee Benefit Accrued Liability Workers' Compensation Tax Certiorari Unemployment Insurance Retirement Contribution
Debt Service Fund Debt Service
Total Restricted Funds
$ 330,241 220,920
65,657 500,625 143,871 140,490
177,777
$1.579.581
c. Committed - Includes amounts that can only be used for the specific purposes pursuant to constraints imposed by formal action of the School District's highest level of decision making authority, i.e., the Board of Education. The School District has no committed fund balances as of June 30, 20 I I .
d . Assigned - Includes amounts that are constrained by the school district's intent to be used for specific purposes, but are neither restricted nor committed. All encumbrances of the General Fund are classified as Assigned Fund Balance in the General Fund. Encumbrances reported in the General Fund amounted to $33,604. The District also has a Reserve for Insurance Recovery which is included as an assigned fund balance in the amount of $274, 149. Additionally, $2.1 million has been assigned for the 2011-2012 tax levy.
e. Unassigned - Includes all other General Fund net assets that do not meet the defmition of the above four classifications and are deemed to be available for general use by the School District.
See independent auditors' report.
- 33 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE I - SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
NYS Real Property Tax Law 1 3 1 8 limits the amount of unexpended surplus funds a school district can retain to no more than 4% ofthe School Dish'ict's budget for the General Fund for the ensuing fiscal year. Nonspendable and restricted fund balance of the General Fund are excluded from the 4% limitation. Amounts appropriated for the subsequent year and encumbrances are also excluded from the 4% limitation.
III. Order of Use of Fund Balance:
The District's policy is to apply expendihlres against nonspendable fund balance, restricted fund balance, committed fund balance, assigned fund balance and unassigned fund balance at the end of the fiscal year. For all funds, nonspendable fund balances are determined first and then restricted fund balances for specific purposes are determined. Any remaining fund balance amounts for funds other than the General Fund are classified as restricted fund balance. In the General Fund, committed fund balance is determined next and then assigned. The remaining amounts are reported as unassigned. Assignments of fund balance cannot cause a negative unassigned fund balance.
T. New Accounting Standards:
The District has adopted all current Statements of the Governmental Accounting Standards Board (GASB) that are applicable. At June 30, 201 1 , the District implemented the following new standards issued by GASB:
-GASB Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions,
-GASB Statement 59, Financial Instruments Omnibus.
GASB has issued Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions, which enhances the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. In accordance with this Statement, Fund Balance is presented in five (5) components as previously described in Note 1 . In previous years Fund Balance was presented in primarily two (2) components, Reserved and Unreserved (Appropriated and Unappropriated). The adoption of this GASB Statement required combining the School Store with the General Fund for the opening fund balances and current operating activity.
GASB has issued Statement 59, Financial Instruments Omnibus, the objective of this Statement is to update and improve existing standards regarding fmancial reporting and disclosure requirements of certain financial instruments and external investment pools for which significant issues have been identified in practice.
See independent auditors' report.
- 34 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 - SUlvIMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
. . - ------��U.-l<'uture Changes in Accounting Standards
GASB has issued Statement 57, OP EB Measurements by Agent Employers and Agent Multiple-Employer Plans, which addresses issues related to the use of the altemative measurement method and the frequency and timing of measurements by employers that participate in agent multiple-employer other post-employment benefit (OPEB) plans (that is, agent employers). The District is currently studying the Statement and plans on adoption if and when required for the provisions related to the frequency and timing of measurements -for actuarial valuations first used to repOlt funded status information in financial statements of other post-employment benefit plans for the June 30, 2012, financial statements.
GASB has issued Statement 60 - Accounting and Financial Reportingfor Service Concession Arrangements, the objective of this Statement is to improve financial reporting by addressing issues related to service concession arrangements, which are a type of pUblic-private or public-public partnership. The District is currently studying the Statement and plans on adoption if and when required, which will be for the June 30, 2013, financial statements.
GASB has issued Statement 6 1 - The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34, the Statement modifies certain requirements for inclusion of component units in the [mancial reporting entity. The District is currently studying the Statement and plans on adoption if and when required, which will be for the June 30, 2013, financial statements.
GASB has issued Statement 62 - Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICP A Pronouncements, The objective of this Statement is to incorporate into the GASB authoritative literature cmtain accounting and financial repOiting guidance that is included in the following pronouncements issued on or before November 30, 1989, which does not conflict with or contradict GASB pronouncements. The District is currently studying the Statement and plans on adoption ifand when required, which will be for the June 30, 2013, financial statements.
GASB has issued Statement 63 - Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, this Statement provides financial reporting guidance for deferred outflows of resources and deferred inflows of resources. The District is currently studying the Statement and plans on adoption if and when required, which will be for the June 30, 2013 , financial statements.
GASB has issued Statement 64 - Derivative Instruments: Application of Hedge Accounting Termination Provisions -- an amendment of GASB Statement No. 53, the objective of this Statement is to clarify whether an effective hedging relationship continues after the replacement of a swap counterparty or a swap counterpatty's credit support provider. This Statement sets forth criteria that establishes when the effective hedging relationship continues and hedge accounting should continue to be applied. The District is currently studying the Statement and plans on adoption if and when required, which will be for the June 30, 2012, financial statements.
See independent auditors' report.
- 35 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 2 - EXPLANATION OF CERTAIN DIFFERENCES BETWEEN GOVERNMENTAL FUNDS STATEMENTS AND DISTRICT-WIDE STATEMENTS:
-- ._._-_.-.
Due to the differences in the measurement focus and basis of accounting used in the governmental fund statements and the District-wide statements, certain financial transactions are treated differently. The basic financial statements contain a full reconciliation ofthese items. The differences result primarily from the economic focus of the Statement of Activities, compared with the current financial resources focus of the governmental funds.
A. Total Fund Balances of Governmental Funds vs. Net Assets of Governmental Activities:
Total fund balances oHhe District's governmental funds differ from "net assets" of governmental activities reported in the Statement of Net Assets. This difference primarily results from the additional long-term economic focus of the Statement of Net Assets versus the solely current financial resources focus of the governmental fund Balance Sheets.
See the Reconciliation on Pages 1 4 and 17 of the financial statement.
The costs of building and acquiring capital assets (lands, buildings and equipment) financed from the governmental funds are reported as expenditures in the year they are incurred, and the assets do not appear on the Balance Sheet. However, the Statement of Net Assets includes those capital assets among the assets of the District as a whole, and their original costs are expensed annually over their useful lives. See Note 6 - Capital Assets in these notes to the financial statements for information on the net capital assets of $13,020,791 .
Long-term liabilities are reported in the Statement of Net Assets, but not in the governmental funds, because they are not due and payable in the current period. Balances at year end were:
Bonds and notes payable
Compensated Absences Payable Other Post-Employment Benefits Payable
$ 12,780,000
5 1 7,445 24,361,700
$ 37,659,145
Accrued interest on long-term debt is reported in the Statement of Net Assets, regardless of when due. In the Governmental Funds, interest is not reported until it is due.
See independent auditors' repOli.
Bond Interest Payable $ 21,415
- 36 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRlCT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 2 - EXPLANATION OF CERTAIN DIFFERENCES BETWEEN GOVERNMENTAL FUNDS STATEMENTS AND DISTRlCT-WIDE STATEMENTS (CONTINUED):
B. Statement of Revenues, Expenditures, and Changes in Fund Balance vs. Statement of Activities:
Differences between the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balance and the Statement of Activities fall into one ofthree broad categories:
I. Long-Term Revenue Differences:
Long-term revenue differences arise because governmental funds report revenues only when they are considered "available", whereas the Statement of Activities repmts revenues when earned. Differences in long-tenn expenses arise because governmental funds repmt on a modified accrual basis, whereas the accrual basis of accounting is used on the Statement of Activities.
II. Capital Related Differences:
Capital related differences include the difference between proceeds for the sale of capital assets repmted on governmental fund statements and the gain or loss on the sale of assets as reported on the Statement of Activities, and the difference between recording an expenditure for the purchase of capital items in the governmental fi.md statements and depreciation expense on those items as recorded in the Statement of Activities.
III. Long-Term Debt Transaction Differences:
Long-term debt transaction differences occur because both interest and principal payments are recorded as expenditures in the governmental fund statements, whereas interest payments are recorded in the Statement of Activities as incurred, and principal payments are recorded as a reduction of liabilities in the Statement of Net Assets. These reconciliations can be found on Pages 16 and 1 8 of the financial statements.
See independent auditors' report.
- 37 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 3 - STEW ARDSHfP, COMPLIANCE AND ACCOUNTABILITY:
-------�-8apitaI_Fund---The Capital Fund had a deficit fund balance at June 30, 201 1 . This will be alleviated in future years as short term borrowings in the Capital Fund are funded through budgetmy appropriations.
NOTE 4 - CASH AND CASH EQUIVALENTS - CUSTODIAL CREDIT, CONCENTRATION OF CREDIT, INTEREST RATE, AND FOREIGN CURRENCY RISKS:
A. Cash:
Custodial credit risk is the risk that in the event of a bank failure, the District's deposits . may not be returned to it. While the District does not have a specific policy far custodial credit risk, New Yark State statutes govern the District's investment policies, as discussed previously in these Notes.
As of June 30, 201 1, $-0- ofthe District's bank balance of$3,830,290 was exposed to custodial credit risk as follows:
Uncollateralized
Collateralized with securities held by the pledging [mancial institution, or its trust department or agent, but not in the District's name
$
$
Restricted cash represents cash and cash equivalents where use is limited by legal requirements. These assets represent amounts required by statute to be reserved for various purposes. The District had no restricted cash as of year-end within the governmental funds and in the fiduciary funds.
B. Investment Pool:
The District participates in a multi-municipal cooperative investment pool agreement pursuant to New York State General Municipal Law Article 5-G, § 1 19-0, whereby it holds a portion of the investments in cooperation with other participants. The investments are highly liquid and are considered to be cash equivalents.
Total investments in the cooperative as of year end are $3,336,203 which consisted of $3,336,203 in U.S. Treasury Securities, with various interest rates and due dates.
See independent auditors' report.
- 38 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATElvlENTS (CONTINUED)
JUNE 30, 201 1
NOTE 5 - INVESTlvlENTS:
--------''Fhe-Histriet-holds an investment in the private purpose trust fund for Scholarships. - Theinvestment is recorded at market value which was $9,548 at June 30, 201 1 .
-
The District's investment policy is governed by the New York State Statutes. The investments are categorized as either:
A. Insured or registered, or investments held by the District or by the District's agent in the District's name, or
B . Uninsured and unregistered, with the investments held by the fmancial institution's tmst department in the District's name, or
C. Uninsured and unregistered, with investments held by the financial institution or its tl1lst department, but not in the District's name.
Investment Fund
Carrying Amount (Fair Value) Type of Investment
Category
See independent auditors' report.
- 39 -
Tri Continental Corporation Private Purpose Trust $9,548 Common Stock A
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 6 - CAPITAL ASSETS:
----------l;Capita�asset-balances and activity for· the yeaHnded June 30, 201 1 , were as follows:
Beginning Retirements! Ending Balance * Additions Reclassifications Balance
Ck>vemmental activities:
Capital assets that are not depreciated:
Land $ 85,000 $ $ $ 85,000 Construction in progress 136,408 136,408
Total nondepreciable historical cost $ 221,408 $ $ 136,408 $ 85,000
Capital assets that are depreciated:
Buildings & Outdoor Improvements $ 23,037,748 $ 167,059 $ 1,622,166 $ 21,582,641
Furniture & Equipment 1,971,429 40,160 53,620 1,957,969 Vehicles 1,924,168 79,476 104,267 1,899,377
Total depreciable historical cost 26,933,345 286,695 1,780,053 25,439,987
Less accumulated depreciation:
Buildings & Outdoor Improvements 9,666,983 1,066,660 767,777 9,965,866
Furniture & Equipment 1,254,640 102,800 53,318 1,304,122 Vehicles 1,204,065 134,411 104,267 1,234,209
Total accumulated depreciation 12,125,688 1,303,871 925,362 12,504,197
Total depreciable historical cost, net $ 14,807,657 $ (1,017,176) $ 854,691 $ 12,935,790
Total Capital Assets $ 15,029,065 $ (1,017,176) $ 991,099 $ 13,020,790
'Restated - See Note 13
Depreciation expense was charged to governmental functions as follows:
General Support $ 23,585 Instruction 1,151,232 Transportation 126,161 School Lunch Fund 2,893
Total $ 1,303,871
See independent auditors' report.
- 40 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 7 - LONG-TERtYf DEBT:
--------ffiterest-Gll-IGng-term debt fGr-the-year-was composed· of:-
Interest paid
Accrued interest, June 30, 2010 Accrued interest, June 30, 2011
$ 550,414
(23,107) 21,415
$ 548,722
Long-term liability balances and activity for the year are summarized below:
Beginning Ending Belance Is sued Redeerred Balance
Cbvemm:nt activities:
Bonds and notes payable:
BANS $ 1,123,243 $ 988,993 $ 1,123,243 $ 988,993 Serial Bonds 13,795,000 1,015,000 12,780,000
Total bonds payable 14,918,243 988,993 2,138,243 13,768,993
Other liabilities:
ColllJensated Absences 696,434 35,894 732,328
Other Post-Enployrrent Benefits 24,439,883 1,508,441 25,948,324
Due to Teachers' Retirerrent 523,909 674,425 523,909 674,425 Due to Errployees' Retirerrent 53,881 53,580 53,881 53,580
Total other liabilities 25,714,107 2,272,340 577,790 27,408,657
Total longMtennliabilities $ 40,632,350 $ 3,261,333 $ 2,716,033 $ 41,177,650
Almunts
rAle Within Ole Year
$ 280,621 1,065,000
1,345,621
595,089
674,425 53,580
1,323,094
$ 2,668,715
The change in compensated absences and other post-employment benefits are shown net since it is impractical to determine these amounts separately. The current portion of other post-employment benefits is an estimate based on the expense for the year ended June 30, 201 1 .
The following is a summary of the maturity of long-term indebtedness:
Description of Issue Final Interest Outstanding
Issue Date Maturity Rate at 6130/11
Bus BAN - 2007 03-13-11 03-13-12 1.95% $ 47,362
Bus BAN - 2008 03-I3-l i 03-13-12 1.95% 83,878
Bus BAN - 2009 03-13-11 03-13-12 1.95% 148,278
Bus BAN - 2011 01-13-11 01-13-12 1.32% 79,475
Excel Project 03-13-1 1 03-13-12 1.95% 630,000 Serial Bond 12-15-05 12-15-05 3,75-4,125% 12,780,000
$ 13,768,993
See independent auditors' report.
- 41 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 7 - LONG-TERM DEBT (CONTINUED):
________ ,T"h"'e"'fi"o"'lI""o';"w"'in"'g?-"is'-'ao..,sum.m_ary. of II)a.tming debt selYic_e_ requirements for generaLQbligation. ___ �� .
bonds and notes:
BANlBonds Interest Total
2012 $ 1,345,621 $ 506,322 $ 1,851,943 2M3 1,338,260 458,688 1,796,948 2014 1,346,321 410,185 1,756,506 2015 1,351,321 360,408 1,711,729
2016 1,406,895 309,089 1,715,984 2017-2021 5,895,000 804,834 6,699,834 2022 1,085,000 22,378 1,107,378
$ 13,768,418 $ 2,871,904 $ 16,640,322
A. Debt Limit:
At June 30, 201 1 , the total outstanding indebtedness represented approximately 14% of the District's debt limit.
B. Operating Leases:
The District, as lessee, leases equipment under various operating leases. Total payments for these leases for the year ended June 30, 201 1 approximated $ 1 8,193 . The leases expire at various times through 2012. Minimum annual rentals for each ofthe remaining years ofthe leases are:
Fiscal year ended June 30, 2012 $ 4,863
NOTE 8 - INTERFUND BALANCES AND ACTIVITY:
lnterfund lnterfund
Receivable Payable Revenues Expenditures
General Fund $ 642,866 $ 20,715 $ $ 1,360,258
Special Aid Fund 34,699 426,018 9,000
Debt Service Fund 39,493 1,321,258
Capital fund 89,634
Non-Major Funds 1,821 96,402 30,000
Total Government Activities 679,386 672,262 1,360,258 1,360,258 Fiduciary Agency Fund 7,124
Totals $ 679,386 $ 679,386 $ 1,360,258 $ 1,360,258
See independent auditors' report.
- 42 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 8 - INTERFUND BALANCES AND ACTIVITY (CONTINUED):
-------�----;;c----o-__;____;_;� -Interfund receivables and payables, other than between governmental activities and fiduciary funds, are eliminated on the Statement of Net Assets.
In the normal course of its operations, the District budgets for and transfers monies between funds for these budgeted purposes. From the General Fund these represent transferring the Districts 20% share of the Special Aid Fund's Summer Handicapped Program and transfers to the Capital Fund for voter authorized capital items such as construction and bus purchases.
Additional loans will occur between funds to mitigate the effects of cash flow, such as in the Special Aid Fund where-in project advances generally do not keep pace with costs and the General Fund has to "loan" cash dollars to run the programs. In the case ofthe Capital Fund, loans will occur in advance of obtaining the final funding through bond proceeds. In addition, in the case of the Capital Fund, interest earned on bonowed funds becomes payable to the Debt Service Fund for the future reduction of debt service payments. In the case of the Agency Fund, most if not all, fringe benefits are advanced from the General Fund and result in the need to reflect a due from both the Special Aid Fund and the School Lunch Fund for the applicable payroll.
All interfund payables are expected to be repaid within one year.
NOTE 9 - PENSION PLANS:
A. General Information:
The District participates in the New York State Employees' Retirement System (NYSERS) and the New York State Teachers' Retirement System (NYSTRS). These are cost-sharing, mUltiple-employer, public employee retirement systems. The Systems offer a wide range of plans and benefits, which are related to years of service and final average salary, vesting of retirement benefits, death, and disability.
B. Provisions and Administration:
The New York State Teachers' Retirement Board administers NYSTRS. The System provides benefits to plan members and beneficiaries as authorized by the Education Law and the Retirement and Social Security Law of the State of New York. NYSTRS issues a publicly available financial report that contains financial statements and required supplementary infOlmation for the System. The report may be obtained by writing to NYSTRS, 1 0 Corporate Woods Drive, Albany, New York 1221 1-2395.
NYSERS provides retirement benefits as well as death and disability benefits. New York State Retirement and Social Security Laws govern obligations of employers and employees to contribute, and benefits to employees. The System issues a publicly available financial report that includes financial statements and reqnired supplementary information. That report may be obtained by writing to NYSERS, Governor Alfred E. Smith State Office Building, Albany, New York 12244.
See independent auditors' report.
- 43 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 9 - PENSION PLANS (CONTINUED):
C. Funding Policies:
The Systems are noncontributory, except for employees who joined the Systems after July 27, 1 976, who contribute 3% of their salary, except that employees in the Systems more than ten years are no longer required to contribute. For employees who joined after January 1 , 2010, employees in NYSERS contribute 3% of their salary throughout their active membership and those in NYSTRS contribute 3.5% throughout their membership. For NYSERS, the Comptroller certifies the rates expressed as proportions of members' payroll annually, which are used in computing the contributions required to be made by employers to the pension accumulation fund. Pursuant to Article 1 1 ofthe Education Law, the New York State Teachers' Retirement Board establishes rates annually for NYSTRS.
The District is required to contribute at an actuarially deteJmined rate. The District contributions made to the Systems were equal to 100% of the contributions required for each year. The required contributions for the current year and two preceding years were:
NYSTRS NYSERS
2010·20l l $ 594,041 $ 191,934
2009·2010 $ 442,159 $ 155,208
2008·2009 $ 517,688 $ 144,758
NOTE 10 - POST-EMPLOYMENT (HEALTH INSURANCE) BENEFITS:
The District implemented GASB Statement 45, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other than Pensions, prospectively, in the school year ended June 30, 2009. This required the District to calculate and record a net other postemployment benefit obligation at year end. The net other post-employment benefit obligation is basically the cumulative difference between the actuarially required contributions and the actual contributions made.
A. Plan Description:
The District provides post-employment health insurance (life insurance, etc.) coverage to retired employees in accordance with the provisions of various employment contracts.
The District recognizes the cost of providing health insurance annually as expenditures in the General Fund of the funds financial statements as payments are made. For the year ended June 30, 201 1, the District recognized $595,089 for its share of insurance premiums for 85 currently enrolled retirees.
See independent auditors' report.
- 44 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 0 - POST-EMPLOYMENT (HEALTH INSURANCE) BENEFITS (CONTINUED):
B. Funding Policy:
The contribution requirements of Plan members and the District are established by the Board of Education. The required contribution is based on projected pay-as-you-go financing requirements, with an additional amount to prefund benefits as may be determined annually by the Board. For ·fiscal year 201 1, the District contributed $595,089 to the plan, representing 100% of the current premiums.
C. Annual OPEB Cost and Net OPEB Obligation:
The District's annual other post-employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover nonnal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The following table shows the components of the District's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the District's net OPEB obligation to the plan:
Annual required contribution $ 2,175,239
Interest on net apm obligation 79,982 Adjustment to annual required contribution (136,021)
Annual OPEB cost (expense) 2,119,200 Contributions made (595,089)
Increase in OPES obligation 1,524,111 Net OPEB obligation, beginning afyear 2,666,078
Net OPEB obligation, end cfyear $ 4,190,189
See independent auditors' report.
- 45 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 0 - POST-ElYJPLOYMENT (HEALTH INSURANCE) BENEFITS (CONTINUED):
--------+h�];)istriGt's annual OPEB cost; the pefGentage of annual OPEB cost contributed to the -_ . .
plan, and the net OPEB obligation for 201 1 and the two preceding years were as follows:
Percentage
of
Annual Annual Ne!OPEB
Fiscal Year Ended OPEB Cos! OPEB Obligation
6/30/2009 $ 1,883,976 28% $ 1,350,306
613012010 $ 1,904,519 31% $ 2,666,078
6130/2011 $ 2,119,200 28% $ 4,190,189
As of July 1 , 201 1, the most recent actuarial valuation date, the plan was 0% funded. The actuarial accrued liability for benefits was $25,948,324 and the actuarial value of assets was $-0-, resulting in an unfunded actuarial accrued liability (UAAL) of$25,948,324. The District has designated $1,586,624 of assets toward this obligation. The covered payroll (annual payroll of active employees covered by the plan) was $9, 1 14.224, and the ratio of the UAAL to the covered payroll was 284.70%. 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 infOlmation following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
D. 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 patteru 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 ofthe calculations.
See independent auditors' report.
- 46 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRlCT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 1 0 - POST-EMPLOYMENT (HEALTH INSURANCE) BENEFITS (CONTINUED): . . - _ . . .. _ - - -- .. -
��������-In-tlle-July 1 , 201 0, actuarial valuation, the l'rojected Unit Credit method was used. The actuarial assumptions included a 3% investment rate of return (net of administrative expenses), which is a blended rate of the expected long-term investment returns on plan assets and on the employer's own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 10.5% initially, reduced by decrements to an ultimate rate of 5% after 8 years. Both rates included a 3% inflation assumption. The UAAL is being amortized as a level percentage of projected payrolls on an open basis. The amortization is calculated annually over a period of 30 years.
NOTE 1 1 - RlSK MANAGEMENT:
The District is exposed to various risks of loss related to torts, theft, damage, injuries, errors and omissions, natural disasters, and other risks. These risks are covered by commercial insurance purchased from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage for the past two years.
The District pmiicipates in the Dutchess Educational Health Insurance Consortium, a nonrisk-retained public entity risk pool for its employee health and accident insurance coverage. The pool is operated for the benefit of individual governmental units located within the pool's geographic area, and is considered a self-sustaining risk pool that will provide coverage for its members. The pool obtains independent coverage for insured events and the District has essentially transferred all related risk to the pool.
NOTE 12 - CONTINGENT LIABILITIES:
A. Litigation:
There are currently pending certiorari proceedings, the results of which could require the payment of future tax refunds by the District if existing assessment rolls are modified based on the outcome of the litigation proceedings. However, the amount of these possible refunds cannot be determined at the present time. Any payments resulting from adverse decisions will be funded in the year the payment is made.
Additionally, the District is a party to a special education impartial hearing regarding the Individuals with Disabilities Education Act. A parent sought to recover from the District tuition reimbursement in the amount of $28,000 for the parent's placement of her son at a private school for the 2010-20 1 1 school year. By Decision and Order dated May 20, 201 1 , the Impartial Hearing Officer ruled in favor of the parent and awarded the requested tuition reimbursement. The District has filed an appeal of the May 20, 201 1, Decision and Order with the New York State Review Officer, which appeal remains pending. District counsel reports the likelihood of the District prevailing on the appeal is estimated as fair to good. In the event that the appeal in nnsuccessful and the May 20, 201 1 , Decision and Order is affirmed, the District will be liable for the $28,000 in tuition reimbursement awarded, plus the parent's reasonable attorneys' fees in an amount presently unknown but estimated as between $1 5,000 and $25,000.
See independent auditors' report.
- 47 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 201 1
NOTE 12 - CONTINGENT LIABILITIES (CONTINUED):
The District received grants, which are subject to audit by agencies of the State and Federal govemments. Such audits may result in disallowances and a request for a return offunds. Based on prior audits, the District's administration believes disallowances, if any, will be immaterial.
NOTE 13 - RESTATEMENT:
The net capital assets and the investment in net capital assets, net of related debt repOlied on the GASB 3 4 entity-wide Statement of Net Assets at June 30, 2010, were restated to reflect a correction in the amounts reported. An increase in both of these balances in the amount of $60,286 resulted from changes in the fixed asset appraisal values for original cost and accumulated depreciation.
See independent auditors' report.
- 48 -
SUPPLEMENTARY INFORMATION
Supplemental Schedule #1
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET (NON-GAAP) BASIS AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2011
Final Budget Variance With
Original Final Actnal Budgetary Budget Budget (Budgetary Basis) Actual
REVENUES
Local Sources: Real property taxes $ 1 1,888,243 $ 1 1,888,243 $ 10,954,406 (933,837) Other tax items 17,620 17,620 946,333 928,713 Non-property taxes Charges for services Use of money and property 80,000 80,000 37,421 (42,579) Sale of property and compensation for loss 200 35,887 45,527 9,640 Miscellaneous 1 15,442 1 17,805 302,908 185,103
Interfund revenues
Total Local Sources 12,101,505 12,139,555 12,286,595 147,040
State Sources 5,579,452 5,579,452 4,945,777 (633,675)
Medicaid Reimbursement
. Federal Stabilization Grant 344,580 344,580
Retirement System Credits
Total Revenues 17,680,957 17,719,007 17,576,952 (142,055)
OTHER FINANCING SOURCES
Transfers from Other Funds Appropriated Reserves 38,936 (38,936)
Designated Fund Balance and Encumbrances Carried Forward From Prior Year 2,100,000 2,129,630 (2,129,630)
Total Revenues and Other Financing Sources $ 19,780,957 $ 19,887,573 $ 17,576,952 $ (2,310,621 )
See independent auditors' report and notes to the financial statements.
-49 -
Supplemental Schedule #1 (Continued)
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET (NON-GAAP) BASIS AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2011
Final Budget Variance With
Budgetary Original Final Actual Year-End Actual Budget Budget (Budgeta'2' Basis) Encumbrances and EnCUmOHl-RCeS
EXPENDITURES
General Support: Board of Education $ 27,788 $ 27,788 $ 20,413 $ 595 $ 6,780 Central administration 229,633 229,634 208,253 21,381 Finance 394,738 389,916 333,277 6,653 49,986 Staff 59,604 58,582 51,152 7,430 Central services 1,361,506 1,378,750 1,033,130 345,620 Special items 161,528 276,705 214,511 62,194
Total General Support 2,234,797 2,361,375 1,860,736 7,248 493,391
Instruction: Instruction, administration and improvement 606,499 608,866 505,433 103,433 Teaching - regular school 5,177,270 5,182,204 5,023,469 2,162 156,573 Programs for children with handicapping conditions 2,386,556 2,366,870 2,084,631 10,700 271,539 Occupational education 213,000 212,442 195,251 17,191 Teaching - special school 2,265 2,265 Instructional media 540,128 541,706 495,506 11,144 35,056 Pupil services 870,720 899,433 718,998 180,435
Total Instruction 9,794,173 9,813,786 9,025,553 24,006 764,227
Pupil Transportation 1,081,844 1,118,510 1,042,992 2,350 73,168
Community Services
Employee Benefits 5,077,190 5,000,949 4,247,729 753,220
Debt Service: Principal 218,726 218,726 213,726 2,471 Interest 13,969 13,969 16,145 353
Total Debt Service 232,695 232,695 229,871 2,824
Total Expenditures 18,420,699 18,527,315 16,406,881 33,604 2,086,830
OTHER USES
Operating transfers out 1,360,258 1,360,258 1,360,258
Total Expenditures and Other Uses $ 19,780,957 $ 19,887,573 $ 17,767,139 $ 33,604 $ 2,086,830
Net change in fund balances (190,187)
Fund balance - beginning 4,628,762
Fund balance · ending $ 4,438,575
See independent auditors' report and notes to the financial statements.
-50 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT Supplemental Schedule #2
SCHEDULE OF FUNDING PROGRESS FOR OTHER POST EMPLOYMENT BENEFITS FOR THE YEAR ENDED JUNE 30, 201 1
Actuarial Actuarial Accrued UAAL as a
Actuarial Value of Liability (AAL) Entry Unfunded AAL Covered Percentage of
---------valuation Ass-ets Age (UAAL) Fund Ratio Payroll Covered Payroll
Date (a) (b) (b-a) (alb) (c) «b-a)lc)
July 1, 2008 $ $ 19,195,799 $ 19,195,799 0% $ 9,409,871 204%
July 1, 2009 $ $ 24,439,883 $ 24,439,883 0% $ 9,485,992 258%
July 1, 2010 $ $ 25,948,324 $ 25,948,324 0% $ 9,1 14,224 285%
See independent auditors' report and notes to the financial statements.
-51 -
------ -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT Supplemental Schedule #3
SCHEDULE OF CHANGE FROM ADOPTED TO FINAL BUDGET AND SCHEDULE OF USE OF UNRESERVED FUND BALANCE - GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2011
CHANGE FROM ADOPTED BUDGET TO FINAL BUDGET
Adopted Budget $ 19,780,957
Prior Year's Encumbrances 29,630
Original Budget 19,810,587
Revisions:
Insurance Recoveries 35,687 Expenditures from Reserve Funds:
Tax Certiorari 38,936 Reserve for Tax Certiorari Grant Support for Specific Purposes Donations Accepted for Specific Purposes 2,363
Final Budget $ 19,887,573
Next year's budget is a voter-approved budget of $ 20,227,770
USE OF UNRESERVED FUND BALANCE
Unreserved Fund Balance - As of the beginning of the year $ 2,890,379
Less: Designated fund balance used for the levy of taxes - Original budget (2,100,000)
Undesignated Fund Balance - As of the beginning of the year $ 790,379
See independent auditors' report and notes to the fmaneial statements.
-52 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT I Supplemental Schedule #4 SCHEDULE OF PROJECT EXPENDITURES - CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 201 1
Exeenditures Methods of Firiancing Original Revised Prior Current Unexpended Proceeds of J Local
Budget Budget Years Year Total Balance Obligation State Aid Sources Total PROJECT TITLE I
Major capital projects: 0004012 $ 251,800 $ 331 ,927 $ 331,927 $ 760 $ 332,687 $ (760) $ 332,687 $ $ $ 332,687 0002013 162,000 213,788 21 1,277 4,717 215,994 (2,206) 215,994 215,994 0002014 181,400 254,182 226,042 25,174 251,216 2,966 251,216 251,216
Buses 2011 80,000 80,000 79,476 79,476 524 79,476 79,476
675,200 879,897 769,246 1 10,127 879,373 524 879,373 879,373
Totals $ 675,200 $ 879,897 $ 769,246 $ 1 10.127 $ 879,373 $ 524 $ 879,373 $ $ $ 879,373
See independent auditors' report and notes to the financial statements.
-53 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT Supplemental Schedule #5
SCHEDULE OF CERTAIN REVENUES AND EXPENDITURES COMPARED WITH ST-3 DATA
FOR THE YEAR ENDED JUNE 30, 20 I I
Real Property Taxes Non-Property Taxes State Aid Federal Aid Total Revenues
REVENUES
EXPENDITURES General Support Pupil Transportation Debt Service - Prineipal Debt Service - Interest Total Expenditures
Code
A -1001 . AT-1 l99 AT-3999 AT-4999 AT-5999
AT-1999 AT-5599 AT-9798.6 AT-9798.7 AT-9999
ST-3 Amount *
$ 10,954,406
4,945,777 344,580
17,576,952
1,860,735 1 ,042,993
2 13,726 16,145
17,767,139
* These are the ST-3 amounts as last reported (i.e. amended amounts, if applicable)
$
Audited
AmOlmt §
10,954,406
4,945,777 344,580
17,576,952
1,860,736 1 ,042,992
213,726 16,145
1 7,767, 139
§ These amounts must agree to comparable amounts on the Statement of Revenues, Expenditures and Changes in Fund Equity. Explain all differences between ST-3 and audited amounts shown in this schedule. If there are differences, the school district must submit an amended ST-3 as soon as possible.
" Rounding
See independent auditor's report and notes to the fmaneial statements.
-54 -
"
"
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT Supplemental Schedule #6 SCHEDULE OF COMBINED BALANCE SHEET - NON-MAJOR GOVERNMENTAL FUNDS
JUNE 30, 201 1
School Total Lunch Non�Major
ASSETS
--Cash: :Yruestr-ietea�� $ 73,907 $ 73,907 Restricted
Investments: Unrestricted Restricted
Receivables: Taxes Due from other funds 1 ,821 1,821 State and Federal aid 12,207 12,207 Due from other govenunents Other 436 436
Inventories 14,771 14,771
Deferred expenditures Capital assets, net
Total Assets $ 1 03,142 $ 103,142
LIABILI TIES
Payables: Accounts payable $ $ Accrued liabilities Due to other funds 96,402 96,402
Due to other governments 1,636 1,636
Other liabilities 1,682 1,682 Bond interest and matured bonds
Notes payable: Tax anticipation Revenue anticipation Bond anticipation
Deferred credits: Overpayments and collections in advance Deferred revenues Planned balance
Long-tenn liabilities: Due to teachers' retirement system Due to employees' retirement system Compensated absences payable Other post employment benefits payable Judgments & claims payable Other liabilities
Total Liabilities 99,720 99,720
FUND BALANCES
Non Spendable 14,771 14,771
Restricted Committed Assigned Unassigned ( 1 1 ,349) (1 1,349)
Total Fund Balances 3,422 3,422
Total Liabilities and Fund Balances $ 103,142 $ 103,142
See independent auditors' report and notes to the financial statements.
-55 -
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT Supplemental Schedule #7 SCHEDULE OF COMBINED REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 201 1
REVENUES Real property taxes Other tax items Non-property taxes Charges for services Use of money and property Sale of property and
compensation for loss Miscellaneous Interfund revenue State sources Medicaid reimbursement Federal sources Surplus food Sales - school lunch
Total Revenues
EXPENDITURES General support Instruction Pupil transportation Community service Employee benefits Debt service:
Principal Interest
Cost of sales Other expenditures Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues Over Expenditures
OTHER FINANCING SOURCES AND USES Proceeds from debt Operating transfers in Operating transfers (out) Payment to refunded bond escrow agent
Total Other Sources (Uses)
Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses
Fund Balances - Beginning of Year
Fund Balances - End of Year
See independent auditors' report and notes to the financial statements.
-56 -
$
School Lunch
7,702
8,186
155,146 20,439 95,999
287,472
46,494
260,536
307,030
(19,558)
30,000
30,000
$
Total Non-Major
7,702
8,186
155,146 20,439 95,999
287,472
46,494
260,536
307,030
(19,558)
30,000
30,000
10,442 1 0,442
__ (",7,=02=0) __ -"(7'2.,0",,2,,,,0)
3,422 ",,$ ��3;;J.,4,;,;;2;;;;,2 $
Supplemental Schedule #8
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT SCHEDULE OF INVESTMENT IN CAPITAL ASSETS, NET OF RELATED DEBT
FOR THE YEAR ENDED JUNE 30, 2011
Capital Assets, Net
Add: Unamortized Bond Issuance Costs Other (List):
Cash Investments
Receivables
Total Additions
Deduct: Short-Term Portion of Bonds Payable Long-Term Portion of Bonds Payable
Other (List): Accounts Payable
Retainage Payable
Total Deductions
Investment in Capital Assets, Net of Related Debt
See independent auditors' report and notes to the fmancial statements.
-57 -
$
1,065,000 11,715,000
$ 13,020,791
12,780,000
$ 240,791
S ICKLER . TORCHIA ALLEN & CHURCHILL CERTIFIED PUBLIC ACCOUNTANTS, PC
Robert J. Allen, CPA
Lindley H. Churchill, CPA
Victor V Churchill, CPA
Craig R . Sickler, CPA
Michael A. Torchia, Jr., CPA, eVA
Edward J. Gower II, CPA
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Education Webutuck (Northeast) Central School District Amenia, New York
We have audited the accompanying financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Webutuck (Northeast) Central School District as of and for the year ended June 3 0, 201 1, which collectively comprise the District's basic financial statements and have issued our report thereon dated September 27, 201 1 . 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.
Internal Control Over Financial Reporting:
In planning and performing our audit, we considered the District's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the basic financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of District's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis, A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over [mancial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
- 58 -
4071 Route 9 • Stop 1 • Hudson, NY 12534 • Phone: 518.828.4616 • Fax: 518.828.0235
2215 Route 9W • PO. Box 757 • Lake Katrine, NY 12449 • Phone: 845.336.7183 • Fax: 845.336.7186
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED IN
. . . _ _ __ __ . __ _____ ACCORDANCE WITH GOVERNMENT A UDITING STANDARDS (CONTINUED)
Compliance and Other Matters:
As part of obtaining reasonable assurance about whether the District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, non-compliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of non-compliance that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to the management of the District in a separate letter dated September 27, 201 1 .
This report is intended solely for the information and use of the audit committee, Board of Educatiou, management, others within the organization, and the federal awarding agencies and pass-though entities. However, this report is a matter of public record and its distribution is not limited.
�-/t..« d .. L..,I t£f£. r-C'.e:.4�/IfS� t! Hudson, New ork September 27, 20 1 1
- 59 -
S ICKLER + TORCHIA ALLEN & CHURCHILL CERTIFIED PUBLIC ACCOUNTANTS, PC
INDEPENDENT AUDITORS' REPORT
To the Board of Education Webutuck (Northeast) Central School District Amenia, New York
Robert J. Allen. CPA
Lindley H. Churchill. CPA Victor V. Churchill. CPA
Craig R. Sickler, CPA
Michael A. Torchia. Jr . • CPA. CVA
Edward J. Gower II, CPA
We have audited the accompanying financial statements ofthe Extraclassroom Activity Funds ofthe Webutuck (Northeast) Central School District as of June 30, 201 1 , and for the year then ended, as listed in the table of contents. These financial statements are the responsibility of the Webutuck (Northeast) Central School District's management. Our responsibility is to express an opinion 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 the 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in Note I , these financial statements are prepared on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting, other than accounting principles generally accepted in the United States of America.
In our opinion, the financial statements referred to above present fairly in all material respects, the cash and unencumbered cash balances of the Extraclassroom Activity Funds of the Webutuck (Northeast) Central School District for the year ended June 30, 20 1 1, and the revenues it received and expenditures it paid for the year then ended, on the basis of accounting described in Note I .
_Ld� �4£�, � ��d�/.(', Hudson, New York September 27, 20 I I
-60-
4071 Route 9 • Stop 1 • Hudson. NY 12534 • Phone: 518.828.4616 • Fax: 518.828.0235
2215 Route 9W • PO. Box 757 • Lake Katrine. NY 12449 • Phone: 845.336.7183 • Fax: 845.336.7186
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
EXTRACLASSROOM ACTIVITY FUNDS STATEMENT OF ASSETS, LIABILITIES AND FUND BALANCE - CASH BASIS
JUNE 30, 2011
ASSETS
Cash
LIABILITIES AND FUND BALANCE
Fund Balance, Unencumbered
See independent auditors' report and note to the fmaneial statements. (Pages 60 and 63, respectively).
-61 -
$
$
39,458
39,458
. - .. _-. - - ---_.- -- ... -"----- - - - ---_ .
lYEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRICT
EXTRACLASSROOM ACTIVITY FUNDS STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
FOR THE YEAR ENDED JUNE 30, 201 1
Cash Balance June 30, 2010 Receipts Disbursements
Class of2006 $ Class of 2007 Class of 2008
Class of 2009 Class of 20 10 Class of 20 1 1 Class of2012 Class of2013 Class of2014 Class of 20 1 5 Class of2016 Class of 20 17 Webutuck Athletic Club
Webutuck Indoor Track Band · WES Bank Charges Cheer leading
Drama Future Farmers of America Football Club French & American Club Gennan Club Happy Warrior Club
Yearbook · High School Interest Earned on Bank Account Jason Club LEO Club Yearbook · Eugene Brooks MS National Honor Society · High School National Honor Society - Junior High
Webutuck Rising Stars Sales Tax Holding Account Spanish Club Student Council · High School T.E.A.M. Technology Yearbook · lYES
$
See independent auditors' report and note to the financial statements. (Pages 60 and 63, respectively)
·62 ·
16 25
1,5 1 1
537 3,589 9,875 3,660 5,022 4,015 2,440
2,627 78 20
177 3,553 1,789
8 83 66
4,689
104 3
1,395 520 302
5 397 140
3,010 424 338
63
50,482
$ $
5
375 1,912 5,378 6,153 15,184
92 490 4,465 1,539 1,223 1,740
577 327 1,206 1
9
10,225 9,429 6
680 2,056 734
5,632 9,888 162 162
5 629 298
994 659
203 995 1,099 1,164
I
$ 37,339 $ 48,363
Cash Balance June 30, 201 1
$ 16 25
1,516
163 123 844
3,262 7,948 3,498 2,690 1,205 2,636
78 21
177 4,349 1,795
8 763
1,388 1
433
105 3
1,400 851 303
5 732 141
2,2 1 8 359 339
63
$ 39,458
WEBUTUCK (NORTHEAST) CENTRAL SCHOOL DISTRlCT
EXTRACLASSROOM ACTIVITY FUNDS NOTE TO THE FINANCIAL STATEMENTS
JUNE 30, 201 1
NOTE 1 - SUMMARY OF SIGNlFICANT ACCOUNTING POLICIES:
As the Webutuck (Northeast) Central School District, through its Board of Education, has oversight responsibility over the Extraclassroom Activity Funds, such funds are considered a
component unit of the District. Accordingly, such transactions are blended with the other Trust Funds of the District in its basic financial statements under the Trust and Agency Fund.
The books and records of the WebuhlCk (Northeast) Central School District's Extraclassroom Activity Funds are maintained on the cash basis of accounting. Under this basis of accounting, revenues are recognized when cash is received and expendihlres are recognized when cash is disbursed. Therefore, receivables and payables, inventories, long-lived assets, and accrued income and expenses, which would be recognized under generally accepted accounting principles and which may be material in amount, are not recognized in the accompanying financial statements.
See independent auditors' report (Page 60).
- 63 -
S ICKLER + TORCHIA ALLEN & CHURCHILL C E RTIFIED PUBLIC ACCOUNTANTS, PC
September 27, 201 1
Webutuck (Northeast) Central School District Amenia, New York
Robert J. Allen. CPA
Lindley H. Churchill. CPA
Victor V Churchill, CPA
Craig R. Sickler, CPA
MichaelA Torchia, Jr., CPA, eVA
Edward J. Gower II, CPA
In planning and perfonning our audit of the basic financial statements ofWebutuck (Northeast) Central School District for the year ended June 30, 201 1 , we considered the District's internal control structure to detennine our auditing procedures for the purpose of expressing an opinion on the basic financial statements and not to provide assurance on the internal control structure.
However, during our audit we became aware of several matters that are opportunities for strengthening internal controls and operating efficiency. The memorandum that accompanies this letter summarizes our comments and suggestions regarding those matters. We previously reported on the District's internal control in our report dated September 27, 201 1 . This letter does not affect our report dated September 27, 201 1 , on the basic financial statements ofWebutuck (Northeast) Central School District.
We will review the status of these comments during our next audit engagement. We have already discussed many of these comments and suggestions with various District personnel, and we will be pleased to discuss them in fmiher detail at your convenience, to perfonn any additional study of these matters, or to assist you in implementing the recommendations.
�-�,/-L( Hudson, New York
-64-
4071 Route 9 • Stop 1 • Hudson. NY 12534 • Phone: 518.828.4616 • Fax: 518.828.0235
2215 Route 9W • p.o. Box 757 • Lake Katrine. NY 12449 • Phone: 845.336.7183 • Fax: 845.336.7186
M E M O R A N D U M
C URRENT (PRIOR) YEAR MEMORANDUM ITEMS
Purchasing:
During our testing for the year ended June 30, 2009, we noted one instance in which a purchase order was prepared after receipt of goods/services. In some instances, instead of a purchase order, payment was approved by an authorized claim fOim prepared after the District had received the goods/services.
Purchase orders are intended to commit funds for goods/services prior to when they are received by the District. By not preparing a purchase order, or issuing a claim fonn after goods/services have been received, the District is perceived to be obligated to the third party vendor before the District funds are committed. As a result, the District bears the risk of overspending the budget.
We suggested the District issue a purchase order prior to the ordering of goods/services with only minimal exceptions. In addition, if multiple purchases are made from one purchase order, we recommend that a mnning balance of payments be kept with the purchase order and that a copy be kept with each disbursement packet, as each packet needs to stand on its own.
In 2010, we again found an instance of a purchase order prepared after the receipt of the good/service and reiterate our concern with this issue as noted above.
In 2011, we again found an instance of a purchase order prepared after the receipt of the good/service and reiterate our concern with this issue as noted above.
In 20 I 0, we noted claim fonns that were not signed by the purchasing agent. We did note that this occurred during a change over in District and business office administration and may have been unavoidable in an effort to keep operations from stalling during these transitions. We understand that new administration is in place and will monitor compliance with this requirement in subsequent audits. We did not find any exceptions in this area in 20 I I and consider this matter closed.
Payroll Testing:
During our payroll testing for the year ended June 30, 2009, we noted instances of incomplete or missing documentation. There was one instance where the 1-9 Employee Eligibility Verification Form was not completed.
There was one fonn for staff direct deposit of payroll that could not be located. While we understand that the originals may have been given directly to the payroll company, we would advise the District to maintain copies to be certain that staff requests are met and to mitigate any misunderstandings that could arise in this area.
This type of testing is performed each year and we indicated we would follow up accordingly during the next year's audit procedures.
-65-
M E M O R A N D U M (CONTINUED)
In 2010, we noted that one 1-9 was missing a second form of identification and that one conditional clearance for finger printing had expired without a second one being performed. We understand that the District has restructured positions within the business office to focus more time on required tasks. The "account clerkper[orming human resource duties went from part time to full time status in November 2009. We trust this will allow greater time to be invested in being cel1ain that required forms are completed and requirements for staffing are kept current.
In 2011, we noted again that one 1-9 was missing a second form of identification.
Extraclassroom:
During our audit procedures for 2010 and 201 1 we noted activities that should no longer be open, i.e. Class of2006 --> Class of2010. There are also other clubs for which there has been no activity in numerous years. We recommend that the District review the list of clubs in the Extraclassroom Account and determine which ones are still active clubs and transfer the balances of inactive clubs into the Student Council accouut in the applicable schoo!.
-66-
