HomeMy WebLinkAboutFiscal Years 2010 and 2009 Single Audit Wannacomet Water
WANNACOMET WATER COMPANY
REPORT ON EXAMINATION OF
FINANCIAL STATEMENTS
FISCAL YEARS ENDED JUNE 30, 2010 AND 2009
WANNACOMET WATER COMPANY
REPORT ON EXAMINATION OF FINANCIAL STATEMENTS
JUNE 30, 2010 AND 2009
TABLE OF CONTENTS
Page
Independent Auditors’ Report..........................................................................................................................................1
Management’s Discussion and Analysis.........................................................................................................................3
Financial Statements.......................................................................................................................................................8
Statement of Net Assets..............................................................................................................................................9
Statement of Revenues, Expenses and Changes in Fund Net Assets .....................................................................10
Statement of Cash Flows...........................................................................................................................................11
Notes to Financial Statements...................................................................................................................................12
Required Supplementary Information............................................................................................................................28
Retirement System Schedules...................................................................................................................................29
Retirement System Schedule of Funding Progress...............................................................................................30
Retirement System Schedule of Employer Contributions......................................................................................31
Other Postemployment Schedules ............................................................................................................................32
Other Postemployment Benefit Plan Funding Progress and Employer Contributions...........................................33
Other Postemployment Benefit Plan Actuarial Methods and Assumptions...........................................................34
Notes to Required Supplementary Information..........................................................................................................35
1
Independent Auditors’ Report
Board of Water Commissioners
Wannacomet Water Company
Nantucket, Massachusetts
We have audited the accompanying financial statements of the Wannacomet Water Company, an enterprise fund
of the Town of Nantucket, Massachusetts, as of and for the fiscal years ended June 30, 2010 and 2009, as listed
in the table of contents. These financial statements are the responsibility of the Town of Nantucket
Massachusetts’ 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 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.
These financial statements, as noted in note 1, present only the Wannacomet Water Company and do not purport
to, and do not present fairly the financial position of the Town of Nantucket, Massachusetts, as of June 30, 2010
and 2009, and the changes in its financial position or, where applicable, its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of America.
In our opinion, based on our audit, the financial statements referred to above present fairly, in all material
respects, the respective financial position of the Wannacomet Water Company of the Town of Nantucket,
Massachusetts, as of June 30, 2010 and 2009, and the respective changes in financial position and cash flows,
thereof for the fiscal years 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 February 28, 2011 on
our consideration of the Town of Nantucket, Massachusetts’ internal control over financial reporting and our tests
of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. That
report was issued in conjunction with our audit of the Wannacomet Water Company, which is an enterprise fund
of the Town of Nantucket, Massachusetts. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be read in conjunction with this report
in considering the results of our audit.
Management’s discussion and analysis, located on the following pages, retirement system schedule of funding
progress, retirement system schedule of employer contributions, other postemployment benefit plan schedule of
funding progress and employer contributions and other postemployment benefit plan actuarial methods and
2
assumptions located after the notes to the financial statements, are not a required part of the financial statements
but are supplementary information required by accounting principles generally accepted in the United States of
America. We have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary information. However,
we did not audit the information and express no opinion on it.
February 28, 2011
Wannacomet Water Company 3 Basic Financial Statements
Management’s Discussion and Analysis
Wannacomet Water Company 4 Basic Financial Statements
Management’s Discussion and Analysis
As management of the Wannacomet Water Company (the Water Company), we offer readers of these financial
statements this narrative overview and analysis of the financial activities for the fiscal years ended June 30, 2010
and 2009. The Water Company complies with financial reporting requirements issued by the Governmental
Accounting Standards Board (GASB), and Management’s Discussion and Analysis are part of these
requirements. The GASB is the authoritative standards-setting body that provides guidance on the preparation of
financial statements in conformity with Generally Accepted Accounting Principles (GAAP). The Water Company’s
performance is discussed and analyzed within the context of the accompanying financial statements and
disclosures following this section.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Wannacomet Water Company’s
financial statements. The financial statements include the Statement of Net Assets, the Statement of Revenue,
Expenses and Change in Fund Net Assets, the Statement of Cash Flows, and notes to the financial statements.
The Statement of Net Assets presents information on all assets and liabilities, with the difference between the
two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of
whether the financial position is improving or deteriorating.
The Statement of Revenue, Expense and Change in Fund Net Assets presents information showing how the
Water Company’s net assets changed during the most recent fiscal years. All changes in net assets are reported
as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in
future fiscal periods (e.g., uncollected fees and earned but unused vacation leave).
The Statement of Cashflows presents information showing the cash inflows and outflows for the Water
Company.
Notes to the financial statements. The notes provide additional information that is essential to a full
understanding of the data provided in the financial statements.
Financial Highlights as of the Close of Fiscal 2010 and 2009
• The total of assets exceeded liabilities (i.e., net assets) by $14.6 million and $14.5 million respectively.
• Undesignated net assets for Wannacomet Water fund totaled $3 million and ($1.2) million respectively..
• Total debt totaled $21 million and $22 million respectively.
Wannacomet Water Company 5 Basic Financial Statements
Financial Analysis
The following chart provides a summary of the Water Company’s financial data for fiscal year 2010, with
comparative fiscal 2009 information.
2010 2009
Assets:
Current assets……………………………………………$ 7,703,659 $ 11,849,744
Capital assets, not being depreciated………………… 12,034,616 9,355,935
Capital assets, net of accumulated depreciation…… 17,392,177 17,977,395
Total assets………………………………………… 37,130,452 39,183,074
Liabilities:
Current liabilities (excluding debt)……………………… 880,938 2,193,098
Noncurrent liabilities (excluding debt)………………… 390,457 260,413
Current debt……………………………………………… 1,623,779 3,015,000
Noncurrent debt………………………………………… 19,640,000 19,220,000
Total liabilities……………………………………… 22,535,174 24,688,511
Net Assets:
Invested in capital assets net of related debt………… 11,570,419 11,726,133
Undesignated…………………………………………… 3,024,859 2,768,430
Total net assets……………………………………$14,595,278 $14,494,563
Program revenues:
Charges for services……………………………………$ 3,529,897 $ 4,087,641
Operating grants and contributions…………………… 173,706 365,736
Total revenues……………………………………… 3,703,603 4,453,377
Expenses:
Depreciation……………………………………………… 699,894 710,027
Supply and pumping…………………………………… 157,533 576,929
Water treatment………………………………………… 32,958 25,274
Distribution……………………………………………… 138,952 127,715
Meter reading…………………………………………… 14,051 13,369
Maintenance……………………………………………… 152,628 229,095
Insurance………………………………………………… 56,820 60,172
Administrative and general…………………………… 1,199,359 1,209,586
Pension benefits………………………………………… 173,899 146,051
Interest expense………………………………………… 826,680 775,136
Employee benefits……………………………………… 129,323 149,109
Total expenses…………………………………… 3,582,097 4,022,463
Transfers…………………………………………………… (20,791) -
Change in net assets…………………………………… $ 100,715 $ 430,914
There was a net increase of $101,000 in net assets related with the Wannacomet Water Company’s activities.
Noncurrent liabilities include an accrued liability for other postemployment benefits in the amount of $267,000 in
fiscal year 2010. The Water Company initially implemented GASB Statement No. 45, Accounting and Financial
Reporting by Employers for Postemployment Benefits Other Than Pension (OPEB) in fiscal year 2009.
Wannacomet Water Company 6 Basic Financial Statements
Capital Asset and Debt Administration
Capital Assets
Wannacomet Water Company’s year end capital assets totaled $29.4 million which represents a net increase of
$2.1 million from the prior year. Major current additions included various building and improvement projects,
infrastructure additions, and furniture and fixtures all totaling approximately $2.8 million. Depreciation of
approximately $699,900 was recorded in fiscal year 2010.
Long-term Debt
At the end of the fiscal years 2010 and 2009, the Wannacomet Water Company had total bonded debt
outstanding of $21 million and $22 million, respectively. Of this amount, $21 million and $20.4 million are
outstanding long-term debt. During fiscal year 2009 Wannacomet Water had $1.8 million in short-term notes
which were paid off in fiscal year 2010. Wannacomet Water did not issue any short-term notes in during fiscal
year 2010. This amount is fully supported by the revenue of the Wannacomet Water Company, and does not rely
upon a general fund subsidy.
2010 2009
Current portion of long-term…………$ 1,380,000 $ 1,215,000
Noncurrent portion of long-term…… 19,640,000 19,220,000
Total…………………………………$ 21,020,000 $ 20,435,000
Please refer to the notes to the financial statements for further discussion of the major capital assets and debt
activity.
Requests for Information
This financial report is designed to provide a general overview of the Wannacomet Water Company’s finances for
all those with an interest in the Water Company’s finances. Questions concerning any of the information provided
in this report or requests for additional financial information should be addressed to the Wannacomet Water
Company, 1 Milestone Road, Nantucket, Massachusetts 02554, or to the Finance Department of the Town of
Nantucket, 16 Broad Street, Nantucket, Massachusetts 02554.
Wannacomet Water Company 7 Basic Financial Statements
This page intentionally left blank.
Wannacomet Water Company 8 Basic Financial Statements
Financial Statements
2010 2009
ASSETS
CURRENT:
Cash and cash equivalents………………………………$ 6,558,082 $ 11,239,545
Receivables, net of allowance for uncollectibles:
User fees……………………………………………… 732,486 509,962
Inventory…………………………………………………… 99,965 99,819
Other assets……………………………………………… 5,273 -
Due from other funds……………………………………… 307,853 418
Total current assets……………………………… 7,703,659 11,849,744
NONCURRENT:
Capital assets, not being depreciated…………………… 12,034,616 9,355,935
Capital assets, net of accumulated depreciation……… 17,392,177 17,977,395
Total noncurrent assets…………………………… 29,426,793 27,333,330
TOTAL ASSETS……………………………………………… 37,130,452 39,183,074
LIABILITIES
CURRENT:
Warrants payable………………………………………… 411,284 1,678,479
Accrued liabilities………………………………………… 10,996 9,609
Accrued payroll…………………………………………… 30,096 25,191
Accrued interest…………………………………………… 302,805 293,628
Due to other funds………………………………………… 94,893 153,679
Compensated absences………………………………… 30,864 32,512
Notes payable……………………………………………… - 1,800,000
Bonds payable……………………………………………… 1,623,779 1,215,000
Total current liabilities……………………………… 2,504,717 5,208,098
NONCURRENT:
Compensated absences………………………………… 123,455 130,047
Other postemployment benefit…………………………… 267,002 130,366
Bonds payable……………………………………………… 19,640,000 19,220,000
Total noncurrent liabilities………………………… 20,030,457 19,480,413
TOTAL LIABILITIES…………………………………………… 22,535,174 24,688,511
NET ASSETS
Invested in capital assets, net of related debt……………… 11,570,419 11,726,133
Unrestricted:
Undesignated……………………………………………… 3,024,859 2,768,430
TOTAL NET ASSETS…………………………………………$ 14,595,278 $ 14,494,563
See notes to financial statements.
JUNE 30, 2010 AND 2009
STATEMENT OF NET ASSETS
WANNACOMET WATER COMPANY
Wannacomet Water Company 9 Basic Financial Statements
2010 2009
OPERATING REVENUES:
Sales of water…………………………………………………$ 3,371,877 $ 3,876,403
Reconnection fees…………………………………………… 14,906 12,000
Other………………………………………………………… 278,753 405,901
TOTAL OPERATING REVENUES …………………… 3,665,536 4,294,304
OPERATING EXPENSES:
Depreciation………………………………………………… 699,894 710,027
Supply and pumping………………………………………… 157,533 576,929
Water treatment……………………………………………… 32,958 25,274
Distribution…………………………………………………… 138,952 127,715
Meter reading………………………………………………… 14,051 13,369
Maintenance………………………………………………… 152,628 229,095
Insurance……………………………………………………… 56,820 60,172
Administrative and general………………………………… 1,199,359 1,209,586
Pension benefits……………………………………………… 173,899 146,051
Employee benefits…………………………………………… 129,323 149,109
TOTAL OPERATING EXPENSES……………………… 2,755,417 3,247,327
OPERATING INCOME (LOSS)………………………… 910,119 1,046,977
NONOPERATING REVENUES (EXPENSES):
Investment income…………………………………………… 38,067 159,073
Interest expense……………………………………………… (826,680) (775,136)
TOTAL NONOPERATING
REVENUES (EXPENSES), NET……………………… (788,613) (616,063)
INCOME (LOSS) BEFORE TRANSFERS AND
CAPITAL CONTRIBUTIONS………………...……… 121,506 430,914
Transfers in……………………………………………………… 64,074 -
Transfers out…………………………………………………… (84,865) -
TOTAL TRANSFERS……………………………………… (20,791) -
CHANGE IN NET ASSETS………………………………… 100,715 430,914
NET ASSETS AT BEGINNING OF YEAR…………………… 14,494,563 14,063,649
NET ASSETS AT END OF YEAR…………………………… $ 14,595,278 $ 14,494,563
See notes to financial statements.
FISCAL YEAR ENDED JUNE 30, 2010 AND 2009
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
WANNACOMET WATER COMPANY
Wannacomet Water Company 10 Basic Financial Statements
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers and users………………………………………………………… $ 3,443,012 $ 4,219,370
Payments to vendors…………………………………………………………………………… (709,168) (1,101,656)
Payments to employees………………………………………………………………………… (1,155,027) (1,088,117)
Payments for interfund services used………………………………………………………… (129,323) (149,109)
NET CASH FROM OPERATING ACTIVITIES………………………………………………… 1,449,494 1,880,488
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in……………………………………………………………………………………… 64,074 -
Transfers out…………………………………………………………………………………… (84,865) -
Advances to other funds……………………………………………………………………… (366,221) (1,030,308)
NET CASH FROM NONCAPITAL FINANCING ACTIVITIES………………………………… (387,012) (1,030,308)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Proceeds from the issuance of bonds and notes…………………………………………… 1,800,000 4,615,000
Premium from the issuance of bonds and notes…………………………………………… 243,779 -
Acquisition and construction of capital assets……………………………………………… (3,993,288) (2,782,514)
Principal payments on bonds and notes……………………………………………………… (3,015,000) (1,255,000)
Interest expense………………………………………………………………………………… (817,503) (742,430)
NET CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES…………………… (5,782,012) (164,944)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment income……………………………………………………………………………… 38,067 159,073
NET CASH FROM INVESTING ACTIVITIES…………………………………………………… 38,067 159,073
NET CHANGE IN CASH AND CASH EQUIVALENTS………………………………………… (4,681,463) 844,309
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR……………………………… 11,239,545 10,395,236
CASH AND CASH EQUIVALENTS AT END OF YEAR……………………………………… $ 6,558,082 $ 11,239,545
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
FROM OPERATING ACTIVITIES:
Operating income (loss)…………………………………………………………………………$ 910,119 $ 1,046,977
Adjustments to reconcile operating income (loss) to net
cash from operating activities:
Depreciation………………………………………………………………………………… 699,894 710,027
User fees………………………………………………………………………………… (222,524) (74,934)
Inventory………………………………………………………………………………… (146) 15,696
Other assets……………………………………………………………………………… (5,273) -
Warrants payable………………………………………………………………………… (67,264) 37,029
Accrued liabilities………………………………………………………………………… 1,387 294
Accrued payroll…………………………………………………………………………… 4,905 5,274
Accrued compensated absences……………………………………………………… (8,240) 9,759
Other postemployment benefit………………………………………………………… 136,636 130,366
Total adjustments…………………………………………………………………… 539,375 833,511
NET CASH FROM OPERATING ACTIVITIES………………………………………………… $ 1,449,494 $ 1,880,488
See notes to financial statements.
FISCAL YEAR ENDED JUNE 30, 2010 AND 2009
STATEMENT OF CASH FLOWS
WANNACOMET WATER COMPANY
Wannacomet Water Company 11 Basic Financial Statements
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 12 Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Notes to Financial Statements
The accompanying financial statements present the Wannacomet Water Company (the Water Company) an
enterprise fund of the Town of Nantucket, Massachusetts. These statements are not intended to and do not
present fairly the financial position of the Town of Nantucket, Massachusetts. These statements have been
prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
The Governmental Accounting Standards Board (GASB) is the recognized standard-setting body for establishing
governmental accounting and financial reporting principles. The significant accounting policies are described
herein.
A. Reporting Entity
The Wannacomet Water Company is an enterprise fund of the Town of Nantucket. Its operation is governed by
the Board of Water Commissioners.
The Water Company sells water to customers within its service area through its wholly-owned distribution system.
The Water Company was formerly a private corporation whose assets, primarily the water distribution system,
were purchased by the Town of Nantucket in 1998. Under the provisions of the agreement, the Town agreed to
accept and abide by certain operating practices of the former enterprise, particularly in the area of employee
contracts and benefits. Water Company employees are not covered by the Town’s personnel by-laws.
B. Measurement Focus. Basis of Accounting and Financial Statement Presentation
The Wannacomet Water Company’s financial statements reported using the flow of economic resources
measurement focus and the accrual basis of accounting. Under this method, revenues are recognized when
earned and expenditures are recorded when the liabilities are incurred.
The operation of the Water Company is accounted for as an enterprise fund, which is a proprietary fund type.
Proprietary funds distinguish operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with the proprietary funds principal ongoing operations. All
revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
For enterprise fund accounts, all applicable Financial Accounting Standards Board (FASB) pronouncements
issued on or prior to November 30, 1989, are applied, unless those pronouncements conflict with or contradict
GASB pronouncements.
C. Cash and Investments
Cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with
an original maturity of three months or less from the date of acquisition. Investments are carried at fair value.
D. Accounts Receivable
The recognition of revenue related to accounts receivable reported are reported under the accrual basis of
accounting.
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 13 Basic Financial Statements
User Fees
User Fees for Wannacomet Water Company are levied monthly based on individual meter readings and average
bills.
All water fees are subject to penalties and interest if they are not paid by the respective due date. Unbilled water
fees at year-end are accrued and are recorded as revenue in the current period.
E. Inventories
Inventories of the Wannacomet Water Company are priced at the lower of cost or market, with cost being
determined on the first-in, first-out method basis. Expendable supplies and small tools are not inventoried but
rather expensed when purchased.
F. Restricted Assets
Certain assets of the Wannacomet Water Company are classified as restricted because their use is restricted by
contract covenants.
G. Capital Assets
Capital assets, which include land, land improvements, buildings, machinery and equipment, and infrastructure
(e.g., roads, water mains, sewer mains, and similar items), are reported in the statements. Capital assets are
recorded at historical cost or at estimated historical cost when actual historical cost could not be determined.
Donated capital assets are recorded at the estimated fair market value at the date of donation. Construction
period interest is capitalized on constructed capital assets.
All purchases and construction costs in excess of $10,000 are capitalized at the date of acquisition or
construction, respectively, with expected useful lives of greater than one year.
Capital assets (excluding land) are depreciated on a straight-line basis. The estimated useful lives of capital
assets are as follows:
Estimated
Useful
Life
(in years)
Vehicles………………………………………… 5
Furniture,fixtures, computer equipment……… 5-10
Machinary and equipment……………………… 10-15
Water infrastructure…………………………… 40-70
Buildings and improvements………………… 33-50
Capital Asset Type
The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend asset
lives are not capitalized and are treated as expenses when incurred. Improvements are capitalized.
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 14 Basic Financial Statements
H. Net Assets
Net assets are reported as restricted when amounts are not available for appropriation or are legally restricted by
outside parties for a specific future use.
I. Long-term debt
Long-term debt is reported as liabilities in the statement of net assets. Material bond premiums and discounts are
deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported
net of the applicable bond premium or discount.
J. Advertising
The Water Company’s policy is to expense advertising costs the first time the advertising takes place. Advertising
expense for the years ended June 30, 2010 and 2009 was $3,933 and $17,693, respectively.
K. Compensated Absences
Employees are granted vacation and sick leave in varying amounts based on collective bargaining agreements,
state laws and executive policies.
Vested or accumulated vacation and sick leave, which will be liquidated with expendable available financial
resources, are reported as expenditures and fund liabilities.
L. Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure for contingent assets and
liabilities at the date of the financial statements and the reported amounts of the revenues and expenses during
the fiscal year. Actual results could vary from estimates that were used.
NOTE 2 – CASH AND INVESTMENTS
Cash of the Wannacomet Water Company is in control of the Town Treasurer as required by state law.
Statutes authorize the investment in obligations of the U.S. Treasury, agencies, and instrumentalities, certificates
of deposit, repurchase agreements, money market accounts, bank deposits and the State Treasurer's Investment
Pool (the Pool).
The Pool meets the criteria of an external investment pool. The Pool is administered by the Massachusetts
Municipal Depository Trust (MMDT), which was established by the Treasurer of the Commonwealth who serves
as Trustee. The fair value of the position in the Pool is the same as the value of the Pool shares.
Custodial Credit Risk – Deposits
The Town Treasurer, at times, commingles other Town cash accounts with those specifically related to the
Wannacomet Water Company. The Water Company portion of these funds is reported on the Statement of Net
Assets as cash and cash equivalents.
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 15 Basic Financial Statements
In the case of deposits, this is the risk that in the event of a bank failure, the Wannacomet Water Company’s
deposits may not be returned to it. The Wannacomet Water Company does not have a deposit policy for
custodial credit risk.
At fiscal year-end June 30, 2010 and 2009, the carrying amount of deposits totaled $5,700,287 and $8,853,855
and the bank balance totaled $5,620,208 and $11,279,315 respectively. Of the bank balance, $318,149 and
$533,400 were covered by the Federal Depositors Insurance Company (“FDIC”), $5,302,059 and $10,745,915
were collateralized, therefore Wannacomet Water Company did not have funds that were exposed to custodial
credit risk because of being uninsured or uncollateralized.
Investments
As of June 30, 2010, the Wannacomet Water Company had the following investments:
Fair Value
Other Investments:
MMDT…………………………………………………………$ 857,795
As of June 30, 2009, the Wannacomet Water Company had the following investments:
Maturity
Under
Fair Value 1 Year
Investment Type:
Repurchase Agreements………………………………… $ 1,531,643 $ 1,531,643
Other Investments:
MMDT………………………………………………………… 854,047
Total Investments.......................................................... $ 2,385,690
The Wannacomet Water Company participates in MMDT, which maintains a cash portfolio and a short-term bond
fund with combined average maturities of approximately 3 months. Credit ratings associated with the Water
Company’s investment in MMDT ranged from A1/P1 to unrated; with approximately 98% rated A1/P1 and
approximately 2% rated A2/P2.
Custodial Credit Risk – Investments
For an investment, this is the risk that, in the event of a failure by the counterparty, the Water Company will not be
able to recover the value of its investments or collateral security that are in the possession of an outside party.
The Water Company does not have an investment policy for custodial credit risk.
Interest Rate Risk
The Water Company does not have a formal investment policy that limits investment maturities as a means of
managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk
The Water Company has not adopted a formal policy related to Credit Risk.
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 16 Basic Financial Statements
Concentration of Credit Risk
There are no limits on the amount the Water Company may invest in any one issuer.
100% of the Water Company’s investments in fiscal year 2010 were in MMDT.
More than 5% of the Water Company’s investments are in the following securities for 2009:
Percentage of
Issuer
Repurchase Agreements…………………………………… 64%
MMDT………………………………………………………… 36%
Total Investments
NOTE 3 – RECEIVABLES
At June 30, 2010 and 2009, receivables for the Water Company consist of the following:
2010 Receivables:
Allowance
Gross for Net
Amount Uncollectibles Amount
Receivables:
Charges for services……………………………………$742,486 $ (10,000) $ 732,486
2009 Receivables:
Allowance
Gross for Net
Amount Uncollectibles Amount
Receivables:
Charges for services……………………………………$519,962 $ (10,000) $ 509,962
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 17 Basic Financial Statements
NOTE 4 – CAPITAL ASSETS
Capital asset activity for the Wannacomet Water Company for the fiscal year ended June 30, 2010, was as
follows:
2009 2010
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated:
Land…………………………………………………………$ 3,000,000 $ - $ - $ 3,000,000
Construction in progress………………………………… 6,355,935 2,703,231 (24,638) 9,034,528
Total capital assets not being depreciated………… 9,355,935 2,703,231 (24,638) 12,034,528
Capital assets being depreciated:
Infrastructure……………………………………………… 22,128,968 112,971 (1,656) 22,240,283
Buildings…………………………………………………… 846,186 - - 846,186
Vehicles…………………………………………………… 291,145 - (23,148) 267,997
Machinery and equipment………………………………… 332,967 - - 332,967
Furniture, fixtures and computer equipment…………… 422,002 1,793 - 423,795
Total capital assets being depreciated……………… 24,021,268 114,764 (24,804) 24,111,228
Less accumulated depreciation……………………………… (6,043,873) (699,894) 24,804 (6,718,963)
Total capital assets being depreciated, net………………… 17,977,395 (585,130) - 17,392,265
Total business-type activities, capital assets…………………$ 27,333,330 $ 2,118,101 $ (24,638) $ 29,426,793
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 18 Basic Financial Statements
Capital asset activity for the Wannacomet Water Company for the fiscal year ended June 30, 2009, was as
follows:
2008 2009
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated:
Land…………………………………………………………$ 3,000,000 $ - $ - $ 3,000,000
Construction in progress………………………………… 2,303,935 4,113,687 (61,687) 6,355,935
Total capital assets not being depreciated………… 5,303,935 4,113,687 (61,687) 9,355,935
Capital assets being depreciated:
Infrastructure……………………………………………… 21,979,905 149,063 - 22,128,968
Buildings…………………………………………………… 800,278 45,908 - 846,186
Vehicles…………………………………………………… 277,281 13,864 - 291,145
Machinery and equipment………………………………… 331,188 1,779 - 332,967
Furniture, fixtures and computer equipment…………… 391,223 30,779 - 422,002
Total capital assets being depreciated……………… 23,779,875 241,393 - 24,021,268
Less accumulated depreciation……………………………… (5,333,846) (710,027) - (6,043,873)
Total capital assets being depreciated, net………………… 18,446,029 (468,634) - 17,977,395
Total business-type activities, capital assets…………………$ 23,749,964 $ 3,645,053 $ (61,687) $ 27,333,330
NOTE 5 – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
Interfund receivables and payables at June 30, 2010 are summarized as follows:
Siasconset Sewer Wannacomet
Water Enterprise Water Internal Service
Company Fund Company Fund Total
Town General Fund……………… $ - $ - $ 307,853 $ - $ 307,853
Wannacomet Water Company…… 410 88,316 - 6,167 94,893
Total……………………………$ 410 $ 88,316 $ 307,853 $ 6,167 $ 402,746
Due To:
Due From:
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 19 Basic Financial Statements
Interfund receivables and payables at June 30, 2009 are summarized as follows:
Siasconset Sewer Wannacomet
Water Enterprise Water Internal Service
Company Fund Company Fund Total
Town General Fund……………… $ - $ - $ 418 $ - $ 418
Wannacomet Water Company………8,826 138,685 - 6,167 153,678
Total……………………………$ 8,826 $ 138,685 $ 418 $ 6,167 $ 154,096
Due To:
Due From:
Interfund transfers for the fiscal year ended June 20, 2010 are summarized as follows:
Wannacomet
General Water
Fund Company Total
General Fund…………………………$- $ 64,074 $ 64,074 (1)
Wannacomet Water Company……… 84,865 - 84,865 (2)
Total……………………………………$ 84,865 $ 64,074 $ 148,939
(1) A reserve fund transfer from the Town's General Fund to the Water Company.
(2) Transfer of indirect costs to the Town's General Fund.
Transfers In:
Transfers Out:
NOTE 6 – SHORT-TERM FINANCING
Short-term debt may be authorized and issued to fund the following:
• Current operating costs prior to the collection of revenues through issuance of revenue or tax anticipation
notes (RANS or TANS).
• Capital project costs and other approved expenditures incurred prior to obtaining permanent financing through
issuance of bond anticipation notes (BANS) or grant anticipation notes (GANS).
Short-term loans are general obligations and carry maturity dates that are limited by statute.
Details related to the short-term debt activity for the fiscal year ended June 30, 2010, are as follows:
Balance at Balance at
Rate June 30, Renewed/ Retired/ June 30,
Type Purpose (%) Due Date 2009 Issued Redeemed 2010
BAN Water……………………………………………… 1.50 2/26/2010 $ 1,800,000 $ - $ 1,800,000 $ -
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 20 Basic Financial Statements
Details related to the short-term debt activity for the fiscal year ended June 30, 2009, are as follows:
Balance at Balance at
Rate June 30, Renewed/ Retired/ June 30,
Type Purpose (%) Due Date 2008 Issued Redeemed 2009
BAN Water……………………………………………… 1.50 2/26/2010 $ - $ 1,800,000 $ - $ 1,800,000
NOTE 7 – LONG-TERM DEBT
Under the provisions of Chapter 44, Section 10, Municipal Law authorizes the Town of Nantucket indebtedness
up to a limit of 5% of the Town’s equalized valuation. Debt issued in accordance with this section of the law is
designated as being "inside the debt limit". In addition, however, debt may be authorized in excess of that limit for
specific purposes. Such debt, when issued, is designated as being "outside the debt limit".
Details related to the Water Company’s outstanding indebtedness at June 30, 2010, and the debt service
requirements are as follows:
Interest Outstanding Outstanding
Rate at June 30, at June 30,
Project (%) 2009 Issued Redeemed 2010
Water Projects…………………………………………… 4.00 - 5.00 $ 685,000 $ - $ 60,000 $ 625,000
Water Meters………………………………………………4.00 - 4.25 300,000 - 150,000 150,000
Water……...……………………………………………… 2.50 - 4.13 400,000 - 25,000 375,000
Water………………………………………………………2.50 - 4.13 400,000 - 25,000 375,000
Land Acquisition……………………………………………2.50 - 4.13 2,400,000 - 150,000 2,250,000
Water………………………………………………………3.75 - 5.00 2,685,000 - 105,000 2,580,000
Water………………………………………………………3.75 - 5.00 560,000 - 70,000 490,000
Water………………………………………………………3.75 - 5.00 455,000 - 20,000 435,000
Garage and Maintenance Facility………………………3.75 - 5.00 810,000 - 30,000 780,000
Rehab and Administration Building………………………3.00-5.00 710,000 - 40,000 670,000
Source Well and Pump……………………………………3.00-5.00 1,235,000 - 65,000 1,170,000
Water Storage Tank………………………………………3.00-5.00 4,750,000 - 250,000 4,500,000
Water Mains……………………………………………… 3.00-5.00 1,185,000 - 65,000 1,120,000
Water System Distribution Improvements………………3.00-5.00 950,000 - 50,000 900,000
Water Mains……………..…………………………………3.00-5.00 95,000 - 5,000 90,000
Water Tank…………………………………………………3.00-5.00 2,815,000 - 105,000 2,710,000
Water Meter Battery and Distribution System…………2.50-4.00 - 1,800,000 - 1,800,000
Total Bonds Payable…………………………………… $ 20,435,000 $ 1,800,000 $ 1,215,000 $ 21,020,000
Unamortized Premiums on Bonds and Notes………… - 243,779 - 243,779
Total……………………………………………………… 20,435,000 2,043,779 1,215,000 21,263,779
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 21 Basic Financial Statements
Debt service requirements for principal and interest for Water Company bonds payable in future fiscal years as of
June 30, 2010 are as follows:
Fiscal Year Principal Interest Total
2011………………$ 1,380,000 $ 824,001 $ 2,204,001
2012……………… 1,235,000 776,682 2,011,682
2013……………… 1,255,000 733,492 1,988,492
2014……………… 1,255,000 690,292 1,945,292
2015……………… 1,270,000 634,918 1,904,918
2016……………… 1,300,000 587,131 1,887,131
2017……………… 1,225,000 541,223 1,766,223
2018……………… 1,205,000 497,856 1,702,856
2019……………… 1,220,000 452,483 1,672,483
2020……………… 1,140,000 404,002 1,544,002
2021……………… 1,195,000 357,408 1,552,408
2022……………… 1,130,000 309,267 1,439,267
2023……………… 1,160,000 263,659 1,423,659
2024……………… 1,185,000 216,116 1,401,116
2025……………… 1,200,000 166,907 1,366,907
2026……………… 1,005,000 120,125 1,125,125
2027……………… 695,000 83,818 778,818
2028……………… 670,000 54,432 724,432
2029……………… 245,000 25,606 270,606
2030……………… 50,000 2,000 52,000
Total………………$ 21,020,000 $ 7,741,418 $ 28,761,418
Details related to the outstanding indebtedness at June 30, 2009, and the debt service requirements are as
follows:
Interest Outstanding Outstanding
Rate at June 30, at June 30,
Project (%) 2008 Issued Redeemed 2009
Water Projects…………………………………………… 4.00 - 5.00 $ 745,000 $ - $ 60,000 $ 685,000
Water Meters………………………………………………4.00 - 4.25 450,000 - 150,000 300,000
Current Refunding of Dec. 1991 Water…………………2.25 - 5.00 150,000 - 150,000 -
Water……...……………………………………………… 2.50 - 4.13 425,000 - 25,000 400,000
Water……...……………………………………………… 2.50 - 4.13 425,000 - 25,000 400,000
Land Acquisition……………………………………………2.50 - 4.13 2,550,000 - 150,000 2,400,000
Water……...……………………………………………… 3.75 - 5.00 2,795,000 - 110,000 2,685,000
Water……...……………………………………………… 3.75 - 5.00 625,000 - 65,000 560,000
Water……...……………………………………………… 3.75 - 5.00 470,000 - 15,000 455,000
Garage and Maintenance Facility………………………3.75 - 5.00 840,000 - 30,000 810,000
Rehab and Administration Building………………………3.00-5.00 750,000 - 40,000 710,000
Source Well and Pump……………………………………3.00-5.00 1,300,000 - 65,000 1,235,000
Water Storage Tank………………………………………3.00-5.00 5,000,000 - 250,000 4,750,000
Water Mains……………………………………………… 3.00-5.00 1,250,000 - 65,000 1,185,000
Water System Distribution Improvements………………3.00-5.00 1,000,000 - 50,000 950,000
Water Mains………………….……………………………3.00-5.00 100,000 - 5,000 95,000
Water Tank…………………………………………………3.00-5.00 - 2,815,000 - 2,815,000
Total Bonds Payable…………………………………… $ 18,875,000 $ 2,815,000 $ 1,255,000 $ 20,435,000
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 22 Basic Financial Statements
Debt service requirements for principal and interest for Water Company bonds and notes payable in future fiscal
years as of June 30, 2009 are as follows:
Fiscal Year Principal Interest Total
2010………………$ 1,215,000 $ 799,279 $ 2,014,279
2011……………… 1,240,000 748,495 1,988,495
2012……………… 1,095,000 704,676 1,799,676
2013……………… 1,115,000 665,686 1,780,686
2014……………… 1,115,000 626,686 1,741,686
2015……………… 1,130,000 575,512 1,705,512
2016……………… 1,160,000 531,925 1,691,925
2017……………… 1,085,000 491,617 1,576,617
2018……………… 1,070,000 453,850 1,523,850
2019……………… 1,085,000 413,877 1,498,877
2020……………… 1,090,000 370,796 1,460,796
2021……………… 1,145,000 325,702 1,470,702
2022……………… 1,080,000 279,561 1,359,561
2023……………… 1,110,000 235,453 1,345,453
2024……………… 1,135,000 189,910 1,324,910
2025……………… 1,150,000 142,327 1,292,327
2026……………… 955,000 97,545 1,052,545
2027……………… 645,000 63,238 708,238
2028……………… 620,000 35,602 655,602
2029……………… 195,000 8,776 203,776
Total………………$ 20,435,000 $ 7,760,513 $ 28,195,513
At June 30, 2010 and 2009, the Water Company had the following authorized and unissued debt:
Purpose Amount
Wannacomet Water Company………………………… $ 2,300,000
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 23 Basic Financial Statements
Changes in Long-term Liabilities
During the fiscal year ended June 30, 2010, the following changes occurred in long-term liabilities:
Balance at Balance at
June 30, June 30, Current
2009 Additions Reductions 2010 Portion
Long-Term Bonds and Notes………… $ 20,435,000 $ 1,800,000 $ (1,215,000) $ 21,020,000 $ 1,380,000
Compensated Absences……………… 162,559 24,272 (32,512) 154,319 30,864
Other Postemployment Benefits……… 130,366 177,662 (41,026) 267,002 -
Total Long Term Liabilities…………… $ 20,727,925 $ 2,001,934 $ (1,288,538) $ 21,441,321 $ 1,410,864
During the fiscal year ended June 30, 2009, the following changes occurred in long-term liabilities:
Balance at Balance at
June 30, June 30, Current
2008 Additions Reductions 2009 Portion
Long-Term Bonds and Notes………… $ 18,875,000 $ 2,815,000 $ (1,255,000) $ 20,435,000 $ 1,215,000
Compensated Absences……………… 115,053 150,992 (103,486) 162,559 32,512
Other Postemployment Benefits……… - 130,366 - 130,366 -
Total Long Term Liabilities…………… $ 18,990,053 $ 3,096,358 $ (1,358,486) $ 20,727,925 $ 1,247,512
NOTE 8 – RISK FINANCING
The Wannacomet Water Company is exposed to various risks of loss related to torts; theft of, damage to and
destruction of assets; errors and omissions; and natural disasters for which the Town carries commercial
insurance. The amount of claim settlements has not exceeded insurance coverage in any of the previous four
fiscal years.
The Town of Nantucket is self-insured for its health insurance and workers’ compensation activities, the
Wannacomet Water Company is included in the Town insurance plan. The Wannacomet Water Company pays
the Town’s health insurance fund for its proportionate share of coverage.
NOTE 9 – PENSION PLAN
Plan Description - The Wannacomet Water Company contributes to the Barnstable County Contributory
Retirement System (the System), a cost-sharing multiple-employer defined benefit pension plan administered by
the Barnstable County Retirement Board. Substantially all employees of the Water Company are members of the
System.
The System provides retirement, disability and death benefits to plan members and beneficiaries. Chapter 32 of
the MGL assigns authority to establish and amend benefit provisions of the plan. Cost-of-living adjustments
granted between 1981 and 1997 and any increase in other benefits imposed by the Commonwealth’s state law
during those years are borne by the Commonwealth and are deposited into the pension fund. Cost-of-living
adjustments granted after 1997 must be approved by the Barnstable County Retirement Board and are borne by
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 24 Basic Financial Statements
the System. The System issues a publicly available, unaudited, financial report in accordance with guidelines
established by the Commonwealth of Massachusetts’ Public Employee Retirement Administration Commission
(PERAC). That report may be obtained by contacting the System located at 99 Willow Street, Yarmouthport,
Massachusetts, 02675.
Funding Policy - Plan members are required to contribute to the System at rates ranging from 5% to 11% of
annual covered compensation. The Water Company is required to pay into the System their share of the system-
wide actuarial determined contribution that is apportioned among the employers based on active current payroll.
Administrative expenses are funded through investment earnings. Chapter 32 of the MGL governs the
contributions of plan members and the Water Company. The Water Company’s contributions to the System for
the fiscal year ended June 30, 2008, 2009 and 2010 totaled $118,681, $146,052, and $173,899 respectively,
which equaled its required contributions for each fiscal year.
The schedule of funding progress, presented as required supplementary information, following the notes to the
financial statements, presents multiyear trend information about whether the actuarial value of plan assets is
increasing or decreasing over time relative to the actuarial accrued liability for benefits. Additionally, the schedule
of employer contributions, presented as required supplementary information, following the notes to the financial
statements, presents multiyear trend information for required and actual contributions relating to the cost-sharing
plan as a whole, of which the Water Company is one participating employer, as well as the Water Company’s
proportionate share of the plan’s annual contributions. This information is designed to be helpful for
understanding the scale of the information presented relative to the Water Company.
NOTE 10 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Fiscal year 2009 was the initial year that the Wannacomet Water Company has implemented GASB Statement
45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (GASB
45). As allowed by GASB 45, the Water Company has established the net Other Postemployment Benefits
(OPEB) obligation at zero at the beginning of the transition year and has applied the measurement and
recognition requirements of GASB 45 on a prospective basis plan, which covers both active and retired members.
Chapter 32B of the MGL assigns authority to establish and amend benefit provisions of the plan. Benefit
provisions are negotiated between the Water Company and the unions representing the Water Company
employees and are renegotiated each bargaining period. The Retiree Health Plan does not issue a publicly
available financial report.
Funding Policy – Contribution requirements are also negotiated between the Water Company and union
representatives. The required contribution is based on a pay-as-you-go financing requirement. The Water
Company contributes 80% of the cost of current-year premiums for eligible retired plan members and their
spouses. Plan members receiving benefits contribute the remaining 20% of their premium costs. For fiscal year
2010, the Water Company contributed approximately $41,133 to the plan.
Annual OPEB Cost and Net OPEB Obligation – The Water Company’s annual other postemployment benefit
(OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount
actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of
funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 25 Basic Financial Statements
Annual Required Contribution $ 169,231
Interest on net OPEB obligation……………………………… 8,538
Annual OPEB cost (expense)……………………………… 177,769
Contributions made……………………………………………… (41,133)
Increase in net OPEB obligation……………………………… 136,636
Net OPEB obligation - beginning of year……………………… 130,366
Net OPEB obligation - end of year…………………………… $ 267,002
The Water Company’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the
net OPEB obligation for fiscal year 2010 was as follows:
Fiscal Year Annual Annual OPEB Net OPEB
Ended OPEB Cost Cost Contributed Obligation
6/30/2009 $ 170,657 24% $ 130,366
6/30/2010 177,769 23% 267,002
Funded Status and Funding Progress – As of July 1, 2009, the most recent actuarial valuation date, the actuarial
accrued liability for benefits totaled approximately $2,032,000, all of which was unfunded.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions
about the probability of occurrence of events far into the future. Examples include assumptions about future
employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the
plan and the annual required contributions of the employer are subject to continual revision as actual results are
compared with past expectations and new estimates are made about the future. The schedule of funding
progress, presented as required supplementary information following the notes to the financial statements,
presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions – Projections of benefits for financial reporting purposes are based on the
substantive plan (the plan as understood by the employer and the plan members) and include the types of
benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the
employer and plan members to that point. The actuarial methods and assumptions used include techniques that
are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspective of the calculations.
In the July 1, 2009, actuarial valuation, actuarial liabilities were determined using the projected unit credit cost
method. The actuarial assumptions included a 4% investment return assumption, which is based on the expected
yield on the assets of the Water Company, calculated based on the funded level of the plan at the valuation date,
and an annual medical/drug cost trend rate of 5-9%. The UAAL is being amortized over a 30 year period, with
amortization payments increasing at 4.50% per year. The remaining amortization period at June 30, 2010 is 28
years.
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 26 Basic Financial Statements
NOTE 11 – COMMITMENTS
The Wannacomet Water Company has contracts with C.B. &I. for the North Pasture Water Tank, and Siasconset
Water Tank. As of June 30, 2010, the open contract totaled approximately $621,480.
NOTE 12 – CONTINGENCIES
The Wannacomet Water Company participates in a number of federal award programs. Although the grant
programs have been audited in accordance with the provisions of the Single Audit Act Amendments of 1996
through June 30, 2010 and 2009, these programs are still subject to financial and compliance audits. The
amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this
time, although it is expected such amounts, if any, to be immaterial.
Various legal actions and claims are pending. Litigation is subject to many uncertainties, and the outcome of
individual litigated matters is not always predictable. Although the amount of liability, if any, at June 30, 2010 and
2009, cannot be ascertained, management believes any resulting liability should not materially affect the Water
Company’s financial position at June 30, 2010 and 2009.
NOTE 13 – IMPLEMENTATION OF NEW GASB PRONOUNCEMENTS
During fiscal year 2010, the Water Company has implemented the following GASB pronouncements:
• The GASB issued Statement #57, OPEB Measurements by Agent Employers and Agent Multiple-
Employer Plans. The standards in this statement permits an agent employer that has an individual
employer OPEB plan with fewer than 100 members to use an alternative measurement method to
produce actuarially based information for purposes of financial reporting, regardless of the number of total
plan members in the agent multiple-employer OPEB plan in which it participates. Management elected to
implement this standard early and this standard did not impact the basic financial statements.
• The GASB issued Statement #58, Accounting and Financial Reporting for Chapter 9 Bankruptcies. The
standards in this statement provide guidance for bankrupt state and local governments by establishing
requirements for recognizing and measuring the effects of the bankruptcy process on assets and liabilities
and for classifying changes in those items and related costs. Management elected to implement this
standard early and this standard did not impact the basic financial statements.
Future Implementation of GASB Pronouncements
• The GASB issued Statement #54, Fund Balance Reporting and Governmental Fund Type Definitions,
which is required to be implemented in fiscal year 2011. The implementation of this GASB will impact
Nantucket Memorial Airport’s financial statements, as it changes fund balance components into
Nonspendable; Restricted; Committed; Assigned; and Unassigned.
• The GASB issued Statement #59, Financial Instruments Omnibus, which is required to be implemented in
fiscal year 2011. Management is assessing the impact this pronouncement will have on the basic
financial statements.
• The GASB issued Statement #60, Accounting and Financial Reporting for Service Concession
Arrangements, which is required to be implemented in fiscal year 2013. Management is assessing the
impact this pronouncement will have on the basic financial statements.
Notes to Financial Statements Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 27 Basic Financial Statements
• The GASB issued Statement #61, The Financial Reporting Entity: Omnibus, which is required to be
implemented in fiscal year 2013. Management is assessing the impact this pronouncement will have on
the basic financial statements.
• The GASB issued Statement #62, Codification of Accounting and Financial Reporting Guidance
Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, which is required to be
implemented in fiscal year 2013. Management is assessing the impact this pronouncement will have on
the basic financial statements.
Wannacomet Water Company 28 Basic Financial Statements
Required Supplementary Information
Wannacomet Water Company 29 Required Supplementary Information
Retirement System
Schedules of Funding Progress and
Employer Contributions
The Retirement System Schedule of Funding Progress presents multiyear trend information about whether the
actuarial value of planned assets is increasing or decreasing over time relative to the actuarial accrued liability for
benefits.
The Retirement System Schedule of Employer Contributions presents multiyear trend information for required and
actual contributions relating to the cost-sharing plan as a whole, of which the Wannacomet Water Company is
one participating employer, as well as the Water Company’s proportionate share of the plan’s annual
contributions.
Retirement System Schedules
Actuarial UAAL as a
Actuarial Accrued Unfunded Percentage
Actuarial Value of Liability (AAL) AAL Funded Covered of Covered
Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Date (A) (B) (B-A) (A/B) (C) ((B-A)/C)
1/1/1993 $ 97,194,645 $ 226,430,792 $ 129,236,147 42.9% $ 97,074,725 133.1%
1/1/1996 157,044,089 276,107,221 119,063,132 56.9% 108,456,079 109.8%
1/1/1998 235,247,660 404,215,695 168,968,035 58.2% 121,161,677 139.5%
1/1/2000 300,396,700 462,462,500 162,065,800 65.0% 152,293,100 106.4%
1/1/2002 362,911,896 553,531,966 190,620,070 65.6% 173,610,557 109.8%
1/1/2004 378,317,300 647,655,411 269,338,111 58.4% 190,614,004 141.3%
1/2/2006 465,637,984 765,747,723 300,109,739 60.8% 215,474,180 139.3%
1/1/2007 517,396,087 825,863,068 308,466,981 62.6% 226,391,633 136.3%
1/1/2009 520,089,855 966,564,614 446,474,759 53.8% 249,971,296 178.6%
The Water Company's share of the UAAL, as of January 1, 2009, is approximately 1.02%.
See notes to required supplementary information.
BARNSTABLE COUNTY CONTRIBUTORY RETIREMENT SYSTEM
SCHEDULE OF FUNDING PROGRESS
Wannacomet Water Company 30 Required Supplementary Information
(B/A)
Plan Year Annual (A) (B) Water Company's
Ended Required Actual Percentage Actual Percentage of System Wide
December 31 Contributions Contributions Contributed Contributions Actual Contributions
2005 $ 27,846,430 $ 27,846,430 100% $ 121,102 0.43%
2006 31,044,132 31,044,132 100% 109,122 0.35%
2007 34,360,812 34,360,812 100% 115,903 0.34%
2008 39,899,322 39,899,322 100% 118,681 0.30%
2009 43,893,051 43,893,051 100% 146,052 0.33%
The Company's Actual Contributions equaled 100% of its Required Contributions for each year presented.
See notes to required supplementary information.
BARNSTABLE COUNTY CONTRIBUTORY RETIREMENT SYSTEM
SCHEDULE OF EMPLOYER CONTRIBUTIONS
System Wide Wannacomet Water Company
Wannacomet Water Company 31 Required Supplementary Information
Wannacomet Water Company 32 Required Supplementary Information
Other Postemployment Benefits Plan
Schedules
The Schedule of Funding progress compares, over time, the actuarial accrued liability for benefits with the
actuarial value of accumulated plan assets.
The Schedule of Actuarial Methods and Assumptions presents factors that significantly affect the identification of
trends in the amounts reported.
Other Postemployment Schedules
SCHEDULE OF FUNDING PROGRESS AND EMPLOYER CONTRIBUTIONS
Actuarial UAAL as a
Actuarial Accrued Unfunded Percentage
Actuarial Value of Liability (AAL) AAL Funded Covered of Covered
Valuation Assets Projected Unit Credit (UAAL) Ratio Payroll Payroll
Date (A) (B) (B-A) (A/B) (C) ((B-A)/C)
7/1/2007 $ - $ 823,700 $ 823,700 0% $ N/A N/A
7/1/2009 - 2,032,106 2,032,106 0% N/A N/A
Annual Actual
Year Required Contributions Percentage
Ended Contribution Made Contributed
6/30/2009 $ 170,657 $ 40,291 $ 24%
6/30/2010 169,231 41,133 23%
OTHER POSTEMPLOYMENT BENEFIT PLAN
Schedule of Funding Progress
Schedule of Employer Contributions
Wannacomet Water Company 33 Required Supplementary Information
ACTUARIAL METHODS AND ASSUMPTIONS
Actuarial Methods:
Valuation date…………………………………………… July 1, 2009
Actuarial cost method…………………………………… Projected Unit Credit Cost Method
Amortization method……………………………………… Amortization payments increasing at 4.50%
Remaining amortization period………………………… 28 years as of July 1, 2009, closed.
Actuarial Assumptions:
Investment rate of return………………………………… 4.00%, pay-as-you-go scenario
Medical/drug cost trend rate…………………………… 5-9%
Plan Membership, Town Wide:
Current retirees, beneficiaries, and dependents……… 228
Current active members………………………………… 682
Total 910
See notes to required supplementary information.
OTHER POSTEMPLOYMENT BENEFIT PLAN
Wannacomet Water Company 34 Required Supplementary Information
Notes to Required Supplementary Information Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 35 Required Supplementary Information
NOTE A – PENSION PLAN
Notes to Required Supplementary Information
The Wannacomet Water Company contributes to the Barnstable County Contributory Retirement System
(“Retirement System”), a cost-sharing, multiple-employer defined benefit pension plan (“Plan”) administered by
the Barnstable County Retirement Board. The Retirement System provides retirement, disability, and death
benefits to members and beneficiaries. Chapter 32 of the MGL assigns authority to establish and amend benefit
provisions of the Plan. Plan members are required to contribute to the Retirement System at rates ranging from
5% to 11% of annual covered compensation. The Water Company is required to pay into the Retirement System
its share of the systemwide actuarially determined contribution which is apportioned among the employers based
on active covered payroll.
The schedule of funding progress, presented as required supplementary information, following the notes to the
financial statements, presents multiyear trend information about whether the actuarial value of plan assets is
increasing or decreasing over time relative to the actuarial accrued liability for benefits. Additionally, the schedule
of employer contributions, presented as required supplementary information, following the notes to the financial
statements, presents multiyear trend information for required and actual contributions relating to the cost-sharing
plan as a whole, of which the Water Company is one participating employer, as well as the Water Company’s
proportionate share of the plans annual contributions. This information is designed to be helpful for
understanding the scale of the information presented relative to the Water Company.
The following actuarial methods and assumptions were used in the Retirement System’s most recent actuarial
valuation:
Actuarial Methods and Assumptions:
Valuation Date…………………………………………………January 1, 2009
Actuarial Cost Method…………………………………………Entry Age Normal Cost Method
Amortization Method…………………………………………Increasing at 4.50% per year after fiscal 2013.
Early Retirement Incentives and remaining
unfunded liability
Asset Valuation Method………………………………………5-year smoothing of investment returns greater (less)
than expected.
Actuarial Assumptions:
Investment rate of return……………………………………4%, pay-as-you-go scenario
Projected salary increases…………………………………5.00%
Cost of living adjustments………………………………… 3.0% for the first $12,000 of retirement income
Plan Membership:
Retired participants and beneficiaries receiving benefits…………………………………… 2,368
Terminated participants entitled to a return of their employee contributions……………… 635
Terminated participants with a vested right to a deferred or immediate benefit………… 113
Active participants……………………………………………………………………………… 5,290
Total……………………………………………………………………………………………… 8,406
Remaining Amortization Period………………………………19 years from July 1, 2009 for 2002 and 2003
Notes to Required Supplementary Information Fiscal Years Ended June 30, 2010 and 2009
Wannacomet Water Company 36 Required Supplementary Information
NOTE B – OTHER POSTEMPLOYMENT BENEFITS
The Wannacomet Water Company participates in the Town’s healthcare plan. The Town administers a single-
employer defined benefit healthcare plan (“the Retiree Health plan”). The plan provides lifetime healthcare for
eligible retirees and their spouses through the Town’s health insurance plan, which covers both active and retired
members, including teachers.
The Town currently finances its other postemployment benefits (OPEB) on a pay-as-you-go basis. As a result,
the funded ratio (actual value of assets expressed as a percentage of the actuarial accrued liability) is 0%. In
accordance with Governmental Accounting Standards, the Town has recorded its OPEB cost equal to the
actuarial determined annual required contribution (ARC) which includes the normal cost of providing benefits for
the year and a component for the amortization of the total unfunded actuarial accrued liability of the plan.
The Schedule of Funding Progress presents multiyear trend information which compares, over time, the actuarial
accrued liability for benefits with the actuarial value of accumulated plan assets
Projections of benefits for financial reporting purposes are based on the substantive plan and included the types
of benefits provided at the time of each valuation and the historical pattern of sharing of benefit cost between the
employer and plan members to that point. The actuarial methods and assumptions used include techniques that
are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspective of the calculations.
The Schedule of Actuarial Methods and Assumptions presents factors that significantly affect the identification of
trends in the amounts reported.