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Home My WebLink AboutNantucket CAFR Final 2018TOWN OF NANTUCKET, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year July 1, 2017 – June 30, 2018 On the cover: Although Nantucket is famous for its great beaches and harbor, this picturesque scene that could be on a postcard is very commonplace throughout the island. Backyard America at its finest. (photo credit: William DeSousa-Mauk) Above: Nantucket lightship baskets were originally designed as multi-purpose baskets to carry and store shopping, vegetables, and stray items about the home. Crewmen aboard the Nantucket lightships made these for their sweethearts and spouses at home in Nantucket. Most baskets were sold to islanders, although a tourist trade quickly developed. Lightship baskets began being used as purses in the 1900s and still are today. Genuine Nantucket lightship baskets currently start at about $500 and can cost up to hundreds of thousands of dollars. After José Reyes invented the “Friendship Basket” lightship basket purses were given as gifts as signs of long-term friendship. After the development of the “Friendship Basket”, it became common for girls to receive a lightship basket purse as a gift after graduating from Nantucket High School. (photo credit: Nantucket Lightship Basket museum) TOWN OF NANTUCKET, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2018 C. Elizabeth Gibson, Town Manager Prepared by the Finance Department Brian E. Turbitt, Director of Municipal Finance This page intentionally left blank. INTRODUCTORY SECTION The African Meeting House on Nantucket is the island’s most vivid reminder of a thriving 19th-century African American community. Erected in the 1820s by the African Baptist Society, it is the only public building still in existence that was constructed and occupied by the island’s African Americans during the nineteenth century. Today, the Museum of African American History presents cultural programs and interpretive exhibits on the history of African Americans on Nantucket and makes the African Meeting House available for ceremonies and special events. (photo credit: William DeSousa-Mauk) This page intentionally left blank. TOWN OF NANTUCKET, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS Page(s) INTRODUCTORY SECTION Letter of Transmittal ....................................................................................................................... 1-15 Certificate of Achievement For Excellence in Financial Reporting…………………………….....16 Organizational Chart ........................................................................................................................ 17 Principal Town Officials .................................................................................................................. 18 FINANCIAL SECTION Independent Auditor’s Report ....................................................................................................... 21-23 Management’s Discussion and Analysis ....................................................................................... 25-37 Basic Financial Statements: Statement of Net Position .......................................................................................................... 40 Statement of Activities ............................................................................................................... 41 Balance Sheet – Governmental Funds ....................................................................................... 42 Reconciliation of the Governmental Funds Balance Sheet Total Fund Balances to the Statement of Net Position ............................................................................................ 43 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ........................................................................................................... 44 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ..................................... 45 Statement of Net Position – Proprietary Funds .......................................................................... 46 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds.............. 47 Statement of Cash Flows – Proprietary Funds ........................................................................... 48 Statement of Fiduciary Net Position .......................................................................................... 49 Statement of Changes in Fiduciary Net Position ....................................................................... 50 Notes to Basic Financial Statements ...................................................................................... 51-101 Required Supplementary Information: Schedule of Town’s Proportionate Share of Net Pension Liability…………………………..104 Schedule of Town’s Contributions to Pension Plan…………………………………………. 104 Schedule of County’s Proportionate Share of Net Pension Liability…………………………105 Liabbbbb…………………………………….88 Liability……………………………87Schedule of County’s Contributions to Pension Plan…………………………………………105 Plan…………………………………………....87Schedule of Landbank’s Proportionate Share of Net Pension Liability………………………106 Pension…………………………………..89 Liability……………………………87Schedule of Landbank’s Contributions to Pension Plan……………………………………...106 PPlanPlan…………………………………………....87Schedule of Commonwealth’s Collective Share of Net Pension Liability – Massachusetts Teacher’s Retirement System…………………………………………….107 Schedule of Changes in Net OPEB Liability and Related Ratios…………………………….108 Schedule of Contributions to OPEB Plan……………………………………………………..109 Schedule of Investment returns – OPEB Plan………………………………………………...109 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund ………………………………………………. …..………….110-115 Notes to Required Supplementary Information……………………………………….…….116-117 . TOWN OF NANTUCKET, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS Page(s) .. Combining Statements: Nonmajor Governmental Funds…………………………………………………………………. 120-121 Combining Balance Sheet – Nonmajor Governmental Funds………………………..122-124 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds…………………………………….126-128 Internal Service Funds ............................................................................................................ 130 Combining Statement of Net Position – Internal Service Funds ..................................... 131 Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds ............................................................................................. 132 Combining Statement of Cash Flows – Internal Service Funds ....................................... 133 Fiduciary Funds ...................................................................................................................... 134 Statement of Changes in Assets and Liabilities – Agency Fund ..................................... 135 STATISTICAL SECTION Narrative ..................................................................................................................................... .139 Net Position by Component – Last Ten Fiscal Years ...................................................................... 140 Changes in Net Position – Last Ten Fiscal Years ....................................................................... 141-142 Fund Balances, Governmental Funds – Last Ten Fiscal Years ....................................................... 143 Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years .................................... 144 Assessed Value and Estimated Actual Value of Taxable Property By Classification and Tax Rates – Last Ten Fiscal Years ............................................................................ 145 Principal Taxpayers – Current Year and Nine Years Ago .............................................................. 146 Property Tax Levies and Collections – Last Ten Fiscal Years ........................................................ 147 Ratios of Outstanding Debt and General Obligation Debt – Last Ten Fiscal Years ....................... 148 Computation of Legal Debt Margin – Last Ten Fiscal Years ......................................................... 149 Direct and Overlapping Governmental Activities Debt .................................................................. 150 Demographic and Economic Statistics – Last Ten Fiscal Years ..................................................... 151 Principal Employers (Excluding Town) – Current Year and Nine Years Ago ............................... 152 Full-time Equivalent Town Employees by Functions – Last Ten Fiscal Years .............................. 153 Operating Indicators by Function/Program – Last Ten Fiscal Years .............................................. 154 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years .......................................... 155 Jason Bridges, Chair Dawn E. Hill Holdgate, Vice Chair Matthew Fee Rita Higgins James Kelly 16 Broad Street Nantucket, Massachusetts 02554 _________________ Telephone (508) 228-7255 Facimile (508) 228-7272 www.nantucket-ma.gov _________________ C. Elizabeth GibsonTown & County Manager Letter of Transmittal October 9, 2018 Honorable Select Board and Citizens of the Town of Nantucket, Massachusetts: We are pleased to present the Town of Nantucket's fifth annual Comprehensive Annual Financial Report (CAFR). The report, which was prepared by the Town’s Department of Munici-pal Finance, is for the fiscal year ended June 30, 2018. This transmission is the continuation of what is becoming an annual endeavor. The Town is responsible for the accuracy, completeness and fairness of the data presented in the CAFR. This letter of transmittal and the management’s discussion and analysis, located in the financial section of the CAFR, provide a comprehensive financial overview of the Town and ensure that the financial and general operations of Town government remain transparent, and therefore open for easy viewing. The CAFR represents a complete set of financial statements prepared in conformity with generally ac-cepted accounting principles (GAAP) in the United States of America, that are audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. This CAFR meets and exceeds those requirements and presents itself as an informative resource for all those inter-ested in the financial activities of the Town. The report is designed to be used by the elected and appointed officials of the Town and others who are concerned with its management and progress such as bond analysts, banking institutions and rating agen-cies as well as its citizens and taxpayers. Since the report consists of management’s representations concerning the finances of the Town, manage-ment assumes full responsibility for the completeness and reliability of all of the information presented. In addition, management of the Town is responsible for establishing and maintaining an internal control structure designed to ensure the assets of the Town are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conform-ity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Town of Nantucket’s comprehensive framework of internal controls has been designed to provide reasonable ra-ther than absolute assurance that the financial statements will be free from material misstatement. Town of Nantucket, Massachusetts Page 1 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 1 of 157 Comprehensive Annual Financial Report The Town of Nantucket’s financial statements have been audited by Roselli, Clark and Associates, a firm of licensed certified public accountants. The goal of the independent audit is to provide reasonable assur- ance that the financial statements of the Town are free of material misstatement. The independent audit involves examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the Town’s financial statements for the fiscal year ended June 30, 2018 are fairly presented in conformity with GAAP. The in-dependent auditor’s report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the Town is part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administra-tion of federal awards. These reports are available in the Town’s separately issued Single Audit Reports Pursuant to the Uniform Guidance. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement that analysis and should be read in conjunction with it. The MD&A can be found immediately following the report of the independent auditors. Profile of the Town The Town is located on Nantucket Island and the adjacent islets of Tuckernuck and Muskeget. It is situ-ated in the Atlantic Ocean and lies approximately 25 miles south of Cape Cod. It is bound by Nantucket Sound on the north and west, and by the Atlantic Ocean on the south and east. The Town has a total area of 304 square miles of which 45 square miles is land and 259 square miles is water. The island comprises the County of Nantucket, the smallest county in Massachusetts by land area. Town of Nantucket, Massachusetts Page 2 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 2 of 157 Comprehensive Annual Financial Report Nantucket was deeded in 1641 by the English to merchants from Watertown, Massachusetts and Martha’s Vineyard. In 1659 these merchants sold their interest in Nantucket to a group of investors led by Tristram Coffin for 30 pounds and two beaver hats. These investors began to populate Nantucket and in the 1670s the Nantucket whaling industry began. It was part of Dukes County, New York until 1691 when it was transferred to the Province of Massachusetts Bay and became Nantucket County. Nantucket’s whaling industry boomed until around the mid 1800’s when it was surpassed by New Bedford. This coupled with the great fire of 1846 sent the Town into an economic decline from which it took the better part of a cen-tury to recover. In the 1950’s speculative developers began buying large parts of the island and restoring or developing them to eventually create a high-end market destination in the Northeast United States which is what it has evolved into in the present day. Nantucket is often credited as having home values amongst the highest in the United States, and presently, the Town’s equalized valuation (market value) ranks fourth in Massachusetts behind Boston, Cambridge and Newton. In addition, according to the US Department of Commerce, Bureau of Economic Analysis, out of 3,144 county and county equivalents it is the 8th wealthiest county in the United States and the wealthiest in the Commonwealth of Massachusetts as of calendar year 2017. Nantucket is a tourist destination and summer colony. The population of the island increases from just over 10,000 (per 2010 Federal census) year round to approximately 50,000 in the summer. It is approximately 90 air miles from Boston and 170 air miles from New York City. The island is accessible year-round via ferry service served by the Woods Hole, Martha’s Vineyard and Nantucket Steamship Authority (Steamship Authority) and Hy-line Cruises (the Hy-line) from the port of Hyannis. In calendar year 2017, the Steamship Authority transported about 593,000 passengers, 66,000 passenger vehicles and 52,000 commercial vehicles to Nantucket Island. Hy-line had about 668,000 embarkations in calendar year 2017; up 16.2% from 2016 and is very popular with professional daily commuters and contractors due to the speed of the transport, large capacity and frequency of travel. Town of Nantucket, Massachusetts Page 3 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 3 of 157 Comprehensive Annual Financial Report The Hy-line launched a newer larger vessel during calendar 2017 which led to the increased embarkations as detailed above. There are a number of seasonal ferry services to the is-land. The Freedom Cruise Line has been transporting passengers from Harwich, Massachusetts to Nantucket since 1994. The SeaStreak began operating two ferry routes in recent years, one originating from New Bed-ford, Massachusetts and the other, from New York City. Together, these seasonal services transported over 51,000 passengers during the summer of 2017. The Nantucket Regional Transit Authority ("NRTA") provides seasonal fixed route shuttle service and year- round advance reservation van service (“Your Island Ride”) for elders and persons with disabilities in Nantucket. The fixed route service operates daily mid-May through early October with complemen-tary para-transit service; and a less frequent schedule operates before Memorial Day and after Labor Day. The Your Island Ride van service operates year-round Monday through Friday. The Town owns and operates its own municipal air-port, Nantucket Memorial Airport, which provides daily service to Boston, New York, Hyannis, Martha’s Vineyard and New Bedford, in addition to less fre-quent travel to Philadelphia and Washington D.C. The airport is serviced by 5 airlines, some of which are seasonal. Governed by the Nantucket Airport Commission, the airport is a self-supporting enterprise fund. It is located 3 miles southeast of the center of town and in calendar 2017 with approximately 121,000 enplanements it was the second busiest airport in the Commonwealth trailing only Logan Inter-national Airport in Boston. Town of Nantucket, Massachusetts Page 4 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 4 of 157 Comprehensive Annual Financial Report The Town provides a full range of other traditional municipal services including police and fire protec- tion, education, maintenance of streets, a sanitary landfill with materials recovery and composting facili-ties, water and sewer services, parks and recreational facilities and a town-owned pier. In addition, Nan-tucket also owns and operates Our Island Home, a nursing facility that provides long-term skilled nursing, short-term rehabilitation, palliative care and respite care for elderly island residents. It is a 45-bed smoke-free facility dually licensed in Medicaid and Medicare. Nantucket prides itself on the quality of its school system. During fiscal year 2018 the Town adminis- tered four schools in Nantucket: 1.Nantucket High School (grades 9 – 12)2.Cyrus Pierce Middle School (grades 6 – 8)3.Nantucket Intermediate School (grades 3 – 5)4.Nantucket Elementary School (grades PK – 2) Construction on the Intermediate School was completed in May 2017 and the school opened in September 2017. The Intermediate School is part of a planned $50 million improvement to the entire District which also includes the addition of classrooms to certain of the existing schools. It was constructed to enroll ap-proximately 400 students and alleviate the space challenges of a growing student population. The Nantucket Public Schools are set up campus style and are all within walking distance of each other. The new facility is located adjacent to the existing elementary school which has been converted to pre-k through 2. The Intermediate School is in the shaded area on the right hand side of the sketch below along with the entrance to the new facility: The executive branch of the public schools consists of a five-member School Committee elected to three-year terms on a staggered basis. The School Committee is the policy setting board. The Superintendent of Schools acts as the Chief Executive Officer responsible for enforcing the policies of the School Com- mittee, and the School Business Manager acts as the Chief Financial Officer. School enrollment for fiscal year 2018 was 1,627 (up 30% since 2007) and funding for schools is pro-vided via taxation and governmental revenues based on a minimum net school spending formula estab-lished by the Massachusetts Department of Elementary and Secondary Education (ESE). The Town cur- rently spends almost double the minimum legal requirement on each student. The mission of the Nantucket Public Schools, in partnership with the community, is a “commitment to providing a challenging curriculum, skilled instruction, and a learning environment that responds to Town of Nantucket, Massachusetts Page 5 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 5 of 157 Comprehensive Annual Financial Report individual student academic needs. Work is guided by research and the belief that every student is capable of attaining high levels of educational achievement in preparation for meeting the rigorous demands of the twenty-first century.” The Town operates under the select board, town manager and open town meeting form of government. The five elected Select Board members make policy decisions and the Town Manager is responsible for carrying out and enforcing the policies of the Select Board and for managing the day to day operations of the Town. An annual operating budget is approved by Town Meeting in April. This annual budget serves as the foundation for the Town’s financial planning and control. The budget is prepared by fund, function (e.g. general government), department (e.g. finance) and category (e.g. Personnel Services, Purchase of Ser-vices, Supplies, Other Charges & Expenses) allowing the department heads to allocate resources within the department. Transfers between categories need approval from Town Meeting unless specifically ex-empted by state statute. Factors Affecting Economic Condition Property Taxes The growth of the Town’s main source of revenues, property taxes, is capped by Proposition 2 ½ and can only be overridden through a vote of Town Meeting and a ballot vote by the voters. While revenue in-creases have been limited in recent years, fixed costs, including health insurance and pension costs, have increased more proportionally. As a result, balancing the annual budget can be a challenge. Given its geographical location and the limitations of being an island, the Town does not have a large commercial and industrial property tax-base so it relies heavily on residential property taxes. Approxi-mately 89% of the Town’s property taxes are derived from residential taxes therefore new growth is es-sential to revenue growth and the ability to sustain the Town’s annual costs. Table 1 summarizes the Town’s building activity and new growth over the prior 5 calendar years: The Town’s strong growth as summarized in Table 1 has allowed the Town’s taxpayers the benefit of re-duced property taxes through an unused levy capacity. In fact as a result of the strong unused levy ca-pacity, the taxpayers benefitted from an average real estate tax savings of approximately 3.1% over the past 5 years. Calendar # of Residential Non-Residential Total Year Permits Value Value Value 2017 1,997 231,373,761$ 106,242,699$ 337,616,460$ 2016 780 188,525,945 80,796,833 269,322,778 2015 966 206,697,965 21,942,351 228,640,316 2014 924 192,783,729 20,912,023 213,695,752 2013 1,384 155,601,701 18,099,456 173,701,157 Total 6,051 974,983,101$ 247,993,362$ 1,222,976,463$ Table 1 Town of Nantucket, Massachusetts Page 6 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 6 of 157 Comprehensive Annual Financial Report This is summarized in Table 2 below: Industry Tourism represents a significant portion of the Town’s private employment on the Island, and thus is an important component of the Town’s economy. The management of Nantucket's tourism industry is aided by the Town’s Culture and Tourism department, which is supported through revenues from local option room occupancy excise collections. The table and graph illustrate revenues from this source in each of the last five fiscal years. In addition, robust construction over the past seven years which is expected to continue had a dramatic impact on these local revenues as workers are often on the island for weeks at a time and stay at guest houses and other available lodging. Throughout the year, the Island hosts numerous events, the major ones being summarized in the table to the right. This has in effect lengthened the tourist season and had a positive impact on the local economy. Fiscal Levy Unused Year Limit Levy Levy Capacity Tax savings 2018 79,723,200$ 78,168,480$ 1,554,720$ 1.95% 2017 75,399,121 74,553,652 845,469 1.12% 2016 72,429,696 69,636,374 2,793,322 3.86% 2015 69,792,303 66,329,953 3,462,350 4.96% 2014 67,372,224 64,647,039 2,725,185 4.04% 364,716,544$ 353,335,498$ 11,381,046$ 3.12% Table 2 Fiscal Year Amount 2018 3,622,242$ 2017 3,498,400 2016 3,428,604 2015 3,041,496 2014 2,582,944 Room Occupancy Event Month Daffodil Festival April Wine Festival May Book Festival June Dance Festival June Film Festival June Independence Day Fireworks July Independence Day Downtown Celebration July July July August August October October October Comedy Festival Nantucket Triathlon Race Week Boston Pops Nantucket Half-Marathon Cranberry Festival Arts Festival Holiday Stroll Weekend December Town of Nantucket, Massachusetts Page 7 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 7 of 157 Comprehensive Annual Financial Report Nantucket Triathlon Boston Pops Independence Day Fireworks Cranberry Festival Nantucket Half-Marathon Daffodil Festival Town of Nantucket, Massachusetts Page 8 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 8 of 157 Comprehensive Annual Financial Report Economic Development Harbor Place - The Town’s downtown center remains a vibrant hub for small retail establishments, hos-pitality/resorts and restaurants. The Nantucket Island Chamber of Commerce, founded in 1937 and incor-porated in 1954, has a diverse membership comprised of more than 650 businesses. The Town, including the Nantucket Planning and Eco-nomic Develop-ment Commission and Visitor Ser-vices department, has an on-going re-lationship with the Chamber involving the Town's eco-nomic issues. In 2008 at the an-nual town meeting, the town approved a study of an area called Harbor Place; previously referred to as the Wilkes Square Re-development site, which includes Na-tional Grid, Re-Main Nantucket, Winthrop Manage- ment LLP, and Nantucket Island Resorts properties. To that end, the Select Board established a Downtown Revitaliza-tion Committee and charged it with identifying goals for the Nantucket downtown area that balance eco-nomic strength with community preservation, and encourage greater venues for social activity while rec-ognizing the importance of planning. The focus of the study was to: •Attract a wide range of individuals through a multifunctional environment including: housing,work, shopping, culture, entertainment, government, and tourist attractions. •Balance the human, social, and economic needs with the infrastructure requirements of parking,public transportation, bike racks, road access, traffic flow, sidewalks, and water front walkways. •Attract commercial business to locate downtown by providing guidance on financing, zoning, and preliminary site design. •Protect the unique qualities, historical significance, and feel of the Town. •Incorporate attractive space for civic gatherings. The study area is approximately a 5.65-acre areabounded by Main Street, Commercial Street, Washington Street, and New Whale Street. The siteis currently owned by multiple land owners. The site’s close proximity to downtown and its Town of Nantucket, Massachusetts Page 9 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 9 of 157 Comprehensive Annual Financial Report waterfront location, present an extraordinary opportunity for the Town to develop its waterfront into a mixed-use gateway that will be a common ground for year-round residents as well as sea- sonal residents and visitors. The vision for the site offers strategic opportunities to resolve or clarify long-standing infrastructure and transportation issues in Town, affords a strong vision for the program including a hotel, residential development, retail, dining and social venues. Recently, the land owners, who consist of National Grid, Winthrop Management LLP, ReMain Nantucket and Nantucket Island Resorts collaborated to roll out a conceptual framework for the plan that includes 3 phases; (1) a transportation center, (2) relocation of the grocery store, and (3) a facelift of the area closest to the waterfront with a mixed use component in the center of the new layout. The current roadways would be realigned after the relocation/reconfiguration of the existing parking lot. Key to the plan is the removal of the fuel tank farm behind Stop and Shop. In 2016, the Town executed a purchase and sale agreement with Harbor Fund Corporation to relocate the fuel tank farm to an area out- side the downtown. It is estimated that completion of the relocation will take several years but the first major step is now underway with the purchase and sale agreement. Another major step is the transporta-tion center which is intended to include a bus station, a multi-story paid parking garage and pedestrian services. This is expected to accommodate the increase in activity of fast-boat traffic and make space available for parking with the ultimate goal to attract year-round activity to the down-town area and thus boosting the future, local economy even further. As part of the preliminary plan, the Town would ulti-mately own the transportation facility as part of a 99 year lease. Nantucket Cottage Hospital (NCH) – One of the largest construction projects currently underway on the island is the new Nantucket Cottage Hospital. NCH is the only medical facility on the island providing primary, urgent, emergency and surgical care, as well as outpatient services and appointments with medi-cal and surgical specialists. In recent years, the community had outgrown the 104-year-old facility as studies have shown it is in need of costly major maintenance and repairs; and despite its affiliation with Massachusetts General Hospital MGH, arguably one of the finest facilities in the world, it is in danger of losing its accreditation with the Massachusetts Department of Public Health. In order to address this dire need, NCH has undergone a fund-raising campaign; and as of August 1, 2018, has raised $108 million of a planned $120 million total cost. This project was expanded to complete the hospital campus with new housing for medical staff. MGH has committed to donating $20 million and 65 other benefactors each donated at least $250,000. No taxpayer dollars have been solicited as part of this project. The new building will be roughly 106,000 square feet and will be de-signed to maximize privacy, safety, and efficiency in the way modern health care is delivered. (An artist rendition of the proposed com-pleted facility is on the right) The plan also calls for improve-ments to the entire grounds. Town of Nantucket, Massachusetts Page 10 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 10 of 157 Comprehensive Annual Financial Report Below is an update of the construction as of August 2018. The next phase in completing the hospital campus includes plans to build flexible-design housing units that will be capable of serving a range of hospital employees. The building will be located across the street from the hospital on land NCH already owns, enabling employees to simply walk to work. The building will feature the latest in apartment amenities and a flexible design by using the model of ex- tended stay hotels. Once the construction of the new hospital is complete, the next building phase will follow immediately and focus on the housing initiative depicted below in an artist rendition. Town of Nantucket, Massachusetts Page 11 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 11 of 157 Comprehensive Annual Financial Report Old South Road Properties Richmond Great Point Development LLC (RGPD) has recently begun con-struction of a planned mixed market rate/affordable rate 3 phase complex along Old South Road near Nantucket Memorial Airport. The goal of RGPD is to make the best and most appropriate use of the company’s land portfolio through the development of a thoughtful mixed-use plan; and thus providing a solution to the critical lack of diverse housing stock on the island. One of the largest housing developments in Island history, the project moved a major step forward in March 2017 when both Phase 2 and Phase 3 were approved by the Planning Board. The vote was unani-mous with no public comment. The three phases of the development are summarized as follows: Phase 1 (Meadows I) consists of rental apartments that include 28 market rate apartment units. These are studio, one and two bedroom options. See design and rendition below: Phase 2 (Meadows II) sits on 14.5 acres that include 225 apartment units that include both market and af- fordable rate units. These are also studio, one and two-bedroom. Phase 3 (Sandpiper Place) consists of 94 single family homes for 2, 3 and 4 bedroom homes which are both mixed and affordable rate housing. Town of Nantucket, Massachusetts Page 12 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 12 of 157 Comprehensive Annual Financial Report Unassigned Fund Balances One of the methods the Town uses to maintain reserves from year to year is to conservatively forecast revenues. This allows the Town to use free cash (surplus) for reserves, capital projects or other non-oper-ating one-time expenses. Since the Town has a significant level of unused levy capacity as previously dis-cussed, the challenge of conservatively forecasting revenue is diminished and as a result, the Town has been able to maintain and/or increase reserves from year to year. The Town’s unassigned fund balance trend since 2010 is illustrated below: Long-term Financial Planning The Town prepares rolling five-year operating budget projections. The Town believes this will (1) pro-vide better insight when preparing annual budgets; (2) alert the Town to any potential budget issues far ahead of when these situations become real; and (3) allow the Town to determine when available financ-ing for its capital needs can be provided or if a need for borrowing to finance projects is required. The following represents the Town’s five-year revenue projections: The Town expects that annual budget sources as forecasted will be sufficient to fund annual appropria-tions. The above projections do not include those of the solid waste or our island home activities. Those are included in the GAAP presentation in the financials as governmental activities but are treated as enter-prise funds by the Town. -1.01.03.05.07.09.011.013.015.017.019.021.023.025.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Unassigned Fund Balances (Millions) Fiscal Real and Personal Motor Vehicle Rooms and Year Property Taxes Excise Meals Excise Permits State Aid Miscellaneous Total 2019 82,178,589 2,350,000 3,350,000 1,677,065 3,809,322 3,398,071 96,763,047 2020 85,796,025 2,500,000 3,425,000 1,450,000 3,809,322 2,847,540 99,827,887 2021 88,913,598 2,568,000 3,500,000 1,440,400 3,809,322 2,502,263 102,733,583 2022 93,718,918 2,597,350 3,400,000 1,476,500 3,809,322 2,526,760 107,528,850 2023 98,505,772 2,610,205 3,375,000 1,506,100 3,809,322 2,551,502 112,357,901 Town of Nantucket, Massachusetts Page 13 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 13 of 157 Comprehensive Annual Financial Report Capital Improvements The Town continues to invest aggressively in capital improvements. In the past several years the Town has invested almost $300 million in improving facilities and adding much needed infrastructure, and reno-vations to the Island. The following were key capital initiatives: •Improvement to Nantucket Memorial Airport, much of which was funded from Federal grants,over $70 million. •A new Public Safety (Police) building approximately $15.5 million. •Renovation of the Town Pier. (Financed most with storm assistance from FEMA) •Improvements to municipal water infrastructure: almost $25 million. •Improvements to Siasconset water infrastructure: almost $9 million. •Improvements to municipal sewer infrastructure: almost $100 million; (over $21 million duringfiscal 2018), some of this funded through the State subsidized, low interest loan program. •Improvements to Schools: Over $40 million. •Improvements to roads, sidewalks, curbs and catch basins: almost $15 million of which almosthalf was funded through the State Chapter 90 Road Funding Program. •In process construction on a new Fire Station; ($4.5 million during fiscal 2018.) In addition, the Town has prepared a capital improvement plan that includes proposed significant addi-tions over the next five to ten years. These are still in the discovery and approval process and there are no guarantees they will ultimately be approved. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awards a Certifi-cate of Achievement for Excellence in Financial Reporting. This is a very prestigious award and in order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted ac-counting principles and applicable legal requirements. The GFOA awarded this Certificate of Achievement for Excellence in Financial Reporting to the Town of Nantucket for its comprehensive annual financial report for the fiscal year ended June 30, 2017. This was the fourth year that the Town has received this prestigious award. A Certificate of Achievement is valid for a period of one year only. We believe that our current compre-hensive annual financial report will meet the Certificate of Achievement Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for this certificate. The publication of this CAFR represents an important achievement in the ability of the Town of Nan-tucket to provide enhanced financial information and accountability to its citizens, elected and appointed Town of Nantucket, Massachusetts Page 14 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 14 of 157 Comprehensive Annual Financial Report officials, and investors. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff in the Finance Office. Special thanks also go to the certified public accounting firm of Roselli, Clark and Associates for their advice and assistance in the preparation of this report. Respectfully submitted, C. Elizabeth Gibson Town Manager Brian E. Turbitt Director of Municipal Finance Town of Nantucket, Massachusetts Page 15 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 15 of 157 Comprehensive Annual Financial Report Certificate of Presented to Town of Nantucket For its Comprehensive Annual June 30, 2017 Executive Director/CEO Financial Report for the Fiscal Year Ended Reporting in Financial for Excellence Achievement Text38:Massachusetts Government Finance Officers Association Town of Nantucket, Massachusetts Page 16 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 16 of 157 Comprehensive Annual Financial Report Nantucket Voters Elected Boards & Officials Moderator Town Clerk School Committee Superintendent School Business Manager Elementary School Pierce Middle High School Community School Nantucket Water Commission Siasconset Water Commission Harbor & Shellfish Advisory Historic District Commission Select Board Town Manager Public Safety Fire Police Marine Emergency Management Public Works & Parks Engineering Central Fleet Maintenance Operations Public Facilities Solid Waste Management Human Services Our Island Home Senior Services Council on Aging Veterans' Services Commission on Disability General Admin Licenses & Permits Human Resources IT & GIS Visitor Services Energy Office Finance & Budget Accounting Assessor Budgeting Collector Treasurer Natural Resources Conservation Commission Endangered Species Resource Management Water Quality Planning & Land Use Services Building Health HDC Staff Planning Zoning Real Estate Register of Deeds Land Bank Commission Community Preservation Committee Planning Board NP&EDC Nantucket Housing Authority Town of Nantucket, Massachusetts Page 17 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 17 of 157 Comprehensive Annual Financial Report PRINCIPAL TOWN OFFICIALS As of June 30, 2018 Elected Officials Select Board Jason Bridges, Chairman Dawn E. Hill Holdgate, Vice Chairman James Kelly Matthew Fee Rita Higgins Town Moderator Sarah Alger, Esquire Town Clerk Nancy L. Holmes (Acting) School Committee Dr. Timothy Lepore, Chairman Jennifer Iller, Vice Chairman Zona Tanna- Butler, Secretary Steven Zortevik Pauline Proch Appointed Financial Committees Audit Committee Jason Bridges, Chairman James Kelly David D. Worth Finance Committee David D. Worth, Chairman Stephen Maury, Vice Chairman Clifford J. Williams Peter A. McEachern Henry Sanford Joseph T. Grause, Jr. Peter N. Schaeffer Joanna Roche Denice Kronau Principal Executive Officers Town Manager C.Elizabeth Gibson Superintendent of Schools W. Michael Cozort Director of Finance Brian E. Turbitt Town of Nantucket, Massachusetts Page 18 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 18 of 157 Comprehensive Annual Financial Report FINANCIAL SECTION Brant Point Light Station is located at the water's edge, off Easton Street on the north side of Nantucket Island. The lighthouse rests at the end of a spit of sand which forms the west side of the entrance to Nantucket Harbor. Owned by the U.S. Coast Guard, Brant Point Light is an active aid to navigation and is closed to the public. The station was established in 1746, automated in 1965, and is still in operation. The current brick tower, constructed in 1856 was added to the National Register of Historic Places on October 28, 1987; it has the distinction of being the tenth light on the point, in addition to several range lights. Four of the others burned or blew down, two were condemned, two were unsatisfactory, and the remaining one stands unused. (photo credit: Mike Galvin) Town of Nantucket, Massachusetts Page 19 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 19 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 20 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 20 of 157 Comprehensive Annual Financial Report INDEPENDENT AUDITOR’S REPORT Honorable Select Board Town of Nantucket, Massachusetts Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the Town of Nantucket, Massachusetts, (the “Town”) as of and for the year ended June 30, 2018 which collectively comprise the Town’s basic financial statements as listed in the table of contents. We did not audit the financial statements of the Nantucket Islands Land Bank, a discretely presented component unit that represents 100% of the Nantucket Islands Land Bank Component unit column as presented in the financial statements. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for this discretely presented component unit, is based solely on the report of the other auditors. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Town of Nantucket, Massachusetts Page 21 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 21 of 157 Comprehensive Annual Financial Report Town of Nantucket Page Two Opinions In our opinion, based on our audit and the report of the other auditor, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund and the aggregate remaining fund information of the Town, as of June 30, 2018, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Restatement of Prior Year Ending Balances As more fully described in Note IV, a restatement of prior year ending net position balances was made to the Town’s governmental activities, business-type activities and each Enterprise Fund. Our opinion was not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, and the schedules listed under the required supplementary information section in the accompanying table of contents be presented to supplement the basic financial statements. Such information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town’s basic financial statements. The introductory section, combining statements, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance Town of Nantucket, Massachusetts Page 22 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 22 of 157 Comprehensive Annual Financial Report Town of Nantucket Page Three with auditing standards generally accepted in the United States of America. In our opinion, the combining statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required By Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report October 9, 2018 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. 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 considered in assessing the results of our audit. Roselli, Clark and Associates Certified Public Accountants Woburn, Massachusetts 01801 October 9, 2018 Town of Nantucket, Massachusetts Page 23 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 23 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 24 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 24 of 157 Comprehensive Annual Financial Report Management’s Discussion and Analysis Town of Nantucket, Massachusetts Page 25 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 25 of 157 Comprehensive Annual Financial Report MANAGEMENT’S DISCUSSION AND ANALYSIS As the management of the Town, we offer readers of the accompanying financial statements this narrative overview and analysis of the financial activities of the Town and its component units for the fiscal year ended June 30, 2018. Financial Highlights During the year ended June 30, 2018 The Town adopted GASB Statement No. 75, Accounting andFinancial Reporting for Postemployment Benefits Other Than Pensions. Previously, OPEB wasaccounted for under GASB Statement No. 45, Accounting and Financial Reporting by Employers forPostemployment Benefits Other Than Pensions. The result of the adoption of GASB Statement No.75 was to record a prior period restatement to eliminate the net OPEB obligation recorded in the prioryear Town financial statements and record the net OPEB liability at June 30, 2017. All changes in net position discussions that follow have removed the impact of these adjustmentsfrom their analysis. The adjustments can be reviewed in more detail in Note IV to the financialstatements. The assets and deferred outflows of resources of the Town exceeded its liabilities and deferredinflows of resources at the close of the most recent fiscal year by approximately $2 million (totalnet position). The government’s total net position increased by almost $20.2 million (over 8.1% of total netposition) over the prior year. This consisted of an increase in governmental activities’ net position by over $16.7 million (almost 14.3% of total governmental activities’ net position) and an increase inbusiness-type activities’ net position of over $3.4 million (over 2.6% of business-type activities’ netposition). Detail of these changes is provided in the Government-wide financial analysis section of the Management Discussion and Analysis. The Town’s unassigned fund balance reported in the General Fund was almost $21.6 million (21.4%of General Fund expenditures). Total fund balance in the General Fund was just under $40.0 million(39.7% of General Fund expenditures). The Town reported a fund balance of almost $5.9 million inits Town Capital Projects Fund and reported total fund balances of over $13.4 million in theCombined Nonmajor Governmental Funds. Detail of these balances and changes is provided underthe Governmental Funds section of the Management Discussion and Analysis. The Town’s total debt increased by almost $2.7 million during the fiscal year. Detail of this netincrease is provided under the capital and debt administration section of the Management Discussion and Analysis. The Town’s bond rating increased from Aa1 to Aa1 positive during fiscal 2018. The rating was provided by Moody’s Investor Services. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the Town’s basic financial statements. The Town’s basic financial statements are comprised of three components: 1) government- wide financial statements, 2) fund financial statements, 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Town of Nantucket, Massachusetts Page 26 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 26 of 157 Comprehensive Annual Financial Report The layout and relationship of the financial statements and supplementary information is visually illustrated as follows: Government-wide Financial Statements – The government-wide financial statements are designed to provide readers with a broad overview of the Town’s finances, in a manner similar to a private-sector business. The statement of position presents information on all of the Town’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference between these reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating. The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position 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 taxes and earned but unused vacation leave.) The government-wide financial statements consist of three classifications; (1) those whose activities are principally supported by taxes and intergovernmental revenue (governmental activities); (2) those whose activities are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities), and (3) component units. Required Supplementary Information Management Discussion and Analysis Basic Financial Statements Government-wide Financial Statements Governmental Fund Financial Statements Proprietary Fund Financial Statements Fiduciary Fund Financial Statements Notes to the Basic Financial Statements Required Supplementary Information – Other than MD&A Budgetary Reporting with Notes, Pension Schedules And Other Postemployment Benefit Schedules Other Supplementary Information Combining Fund Financial Statements/Schedules Town of Nantucket, Massachusetts Page 27 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 27 of 157 Comprehensive Annual Financial Report The Town’s governmental activities consist of: 1.General government;2. Public safety;3. Education;4. Public works;5. Health and human services;6. Culture and recreation; and,7. Interest expense. The Town’s business-type activities consist of: 1.Siasconset Water District; 2.Wannacomet Water District;3. Sewer; and4.Nantucket Memorial Airport. The Town’s component units consist of: 1.Nantucket County; and2.Nantucket Islands Land Bank. Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Town can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Accounting guidelines distinguish fund balance between amounts that are considered nonspendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative strength of the constraints that control the purposes for which specific amounts can be spent. Beginning with the most binding constraints, fund balance amounts will be reported in the following classifications: • Restricted—amounts constrained by external parties, constitutional provision, or enablinglegislation • Committed—amounts constrained by a government using its highest level of decision-makingauthority • Assigned—amounts a government intends to use for a particular purpose • Unassigned—amounts that are not constrained at all will be reported in the general fund or in other major funds if negative Governmental funds – Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Town of Nantucket, Massachusetts Page 28 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 28 of 157 Comprehensive Annual Financial Report Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. The Town maintains numerous individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, and Town Capital Projects Fund which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these Nonmajor governmental funds is provided in the form of combining statements. The Town adopts an annual appropriated budget for its general fund and its enterprise funds. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with this budget. Proprietary funds – The Town maintains two types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Town uses enterprise funds to account for all the business-type activities previously discussed. Internal service funds are used to report activities that service all other Town Departments. The Town uses an internal service fund to account for self-insured health insurance claims. Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the Town’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Notes to the Financial Statements - The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other Information - In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the Town’s proportionate share of net pension liability, contributions to pension plan, information regarding the Town’s special funding situation for teacher contributions to pensions and funding and contribution progress of the Town’s other postemployment benefits to its employees as well as the Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund. Town of Nantucket, Massachusetts Page 29 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 29 of 157 Comprehensive Annual Financial Report Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the Town, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by approximately $270.8 million at the close of the most recent fiscal year. The condensed Statement of Net Position is as follows: By far, the largest portion (approximately $344.6 million) of the Town’s net position reflects its investment in capital assets (e.g. land, buildings, infrastructure, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Town’s investment in its capital assets is reported net of related debt the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion, almost $24.7 million, of the Town’s net position represents resources that are subject to external restrictions on how they may be used. Unrestricted net position reflects the remainder of net position; a deficit of over $98.5 million. This consisted of Governmental activities unrestricted net position which is in a deficit position of over $110.3 million offset by unrestricted net position in the Business-type funds of almost $11.8 million. This is due to the recognition of other postemployment benefits (net OPEB liability) of over $87.5 million and $65.9 million in net pension liability in Governmental activities and a net OPEB liability of over $5.5 million and a net pension liability of almost $10.9 million in the Business-type activities. Governmental Activities Business-Type Activities Total June 30, June 30, June 30, June 30, June 30, June 30, 2018 2017 2018 2017 2018 2017 Assets Currrent and other assets 89,728,469$ 86,638,521$ 46,274,282$ 42,956,027$ 136,002,751$ 129,594,548$ Capital assets, net 312,540,117 291,294,903 225,187,440 201,323,626 537,727,557 492,618,529 Total assets 402,268,586 377,933,424 271,461,722 244,279,653 673,730,308 622,213,077 Deferred outflows of resources 11,537,348 8,559,406 2,319,885 2,424,182 13,857,233 10,983,588 Liabilities Long-term liabilities 241,913,097 193,019,363 88,572,243 92,037,701 330,485,340 285,057,064 Other liabilities 21,104,666 25,947,225 50,140,658 23,113,521 71,245,324 49,060,746 Total liabilities 263,017,763 218,966,588 138,712,901 115,151,222 401,730,664 334,117,810 Deferred inflows of resources 13,522,436 744,362 1,554,582 146,984 15,077,018 891,346 Net Position Net investment in capital assets 222,919,137 203,168,454 121,715,832 105,477,803 344,634,969 308,646,257 Restricted 24,663,139 23,523,901 - - 24,663,139 23,523,901 Unrestricted (110,316,541) (59,910,475) 11,798,292 25,927,826 (98,518,249) (33,982,649) Total Net Position 137,265,735$ 166,781,880$ 133,514,124$ 131,405,629$ 270,779,859$ 298,187,509$ Town of Nantucket, Massachusetts Page 30 of 157 Comprehensive Annual Financial Report Condensed changes in net position data is presented as follows: Governmental Activities – The governmental activities experienced a net increase in net position by over $16.7 million (12.5 % of governmental activities’ net position) as compared to a net decrease of almost $1.3 million in the prior year. This was due mainly to land valued at $13.7 million transferred to the Town by the United States Coast Guard combined with aggregate minor increases in other revenue classifications as described below, while total expenses remained consistent year over year. Governmental Activities Business-Type Activities Total June 30, June 30, June 30, June 30, June 30, June 30, 2018 2017 2018 2017 2018 2017 Revenues Program revenues: Charges for services 16,302,750$ 17,095,061$ 28,655,420$ 27,063,403$ 44,958,170$ 44,158,464$ Operating grants and contributions 11,348,091 10,995,900 123,647 70,458 11,471,738 11,066,358 Capital grants and contributions 14,502,773 508,050 3,186,264 2,680,075 17,689,037 3,188,125 General revenues: Property taxes 77,739,238 74,061,321 - - 77,739,238 74,061,321 Hotel and meals excise 4,743,787 4,535,824 - - 4,743,787 4,535,824 Intergovernmental 193,824 190,963 - - 193,824 190,963 Other 6,415,944 5,956,843 95,529 71,855 6,511,473 6,028,698 Total Revenues 131,246,407 113,343,962 32,060,860 29,885,791 163,307,267 143,229,753 Expenses General government 13,660,766 15,652,032 - - 13,660,766 15,652,032 Public safety 19,236,351 17,548,899 - - 19,236,351 17,548,899 Education 47,854,776 46,524,011 - - 47,854,776 46,524,011 Public works 19,697,228 20,248,200 - - 19,697,228 20,248,200 Health and human services 7,817,065 7,705,797 - - 7,817,065 7,705,797 Culture and recreation 4,034,143 4,770,808 - - 4,034,143 4,770,808 Debt service 2,486,810 2,147,432 - - 2,486,810 2,147,432 Siasconset water - - 617,825 749,495 617,825 749,495 Wannacomet water - - 4,428,396 4,345,647 4,428,396 4,345,647 Sewer - - 7,912,679 6,110,762 7,912,679 6,110,762 Nantucket Memorial Airport - - 15,379,560 15,087,914 15,379,560 15,087,914 Total Expenses 114,787,139 114,597,179 28,338,460 26,293,818 143,125,599 140,890,997 Change in net position before transfers 16,459,268 (1,253,217) 3,722,400 3,591,973 20,181,668 2,338,756 Transfers 285,264 - (285,264) - - - Change in net position 16,744,532 (1,253,217) 3,437,136 3,591,973 20,181,668 2,338,756 Net position, beginning of year 166,781,880 168,898,429 131,405,629 127,021,179 298,187,509 295,919,608 Restatement for net OPEB liability (46,260,677) - (1,328,641) - (47,589,318) - Restatement for Our Island Home - (1,737,063) - 1,737,063 - - Restatement for Solid Waste - 214,483 - (214,483) - - Restatement for capital assets - 659,248 - (538,126) - 121,122 Restatement for 'look-back'- -- (191,977) - (191,977) Net position, beginning of year, as restated 120,521,203 168,035,097 130,076,988 127,813,656 250,598,191 295,848,753 Net position, end of year 137,265,735$ 166,781,880$ 133,514,124$ 131,405,629$ 270,779,859$ 298,187,509$ Town of Nantucket, Massachusetts Page 31 of 157 Comprehensive Annual Financial Report Revenues Total revenue increases were $17.9 million. Specifically, property taxes, which made up 59.2% of total revenues increased by approximately $3.7 million; this was in line with the amount budgeted by the Town during its rate setting process and was within the permissible amount allowable by a Massachusetts statute that limits the increase in taxes to 2.5% of the prior year plus any new growth. The Town still manages to maintain a healthy unused levy capacity despite the increase. Operating grants increased modestly, only $350,000 as these were consistent with the prior year. Capital grants increased by almost $14.0 million; this was due to the transfer of land from the United States Coast Guard as previously discussed. The Town’s Other Revenue category consists of local receipts such as motor vehicle excise, departmental receipts and other revenues not specifically classified. These were consistent with the prior year. Expenses While some individual expense classifications fluctuated as compared to the prior year, total expenses were consistent. General government expenses which represent 11.9% of total expenses were almost $2.0 million lower than the prior year. This was due to the prior year including numerous minor capital items that were not capitalized and are not recurring costs. Education which is the Town’s largest expense and represents almost 41.7% of total expenses, increased by approximately $1.3 million; this was primarily due to the opening of a new $24 million intermediate school and general increases in salary consistent with collective bargaining agreements. Public safety which represents almost 16.8% of total expenses increased by about $1.7 million due to annual negotiated salary increases, greater depreciation expense and a larger number of minor capital items not capitalized in the current year. Remaining expenses were either consistent with the prior year or the changes year over year were not individually material. Town of Nantucket, Massachusetts Page 32 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 32 of 157 Comprehensive Annual Financial Report Fiscal Year 2018 Expenses and Program Revenues – governmental activities are graphically presented as follows: Net position of the business-type activities increased by almost $3.4 million from the prior year balances. Change in net position for each business-type fund is broken down individually as follows: In its Business-type activities, the Town’s user charges are not designed to cover depreciation which is a component of the “change in net position” but does budget for principal payback of debt which is not a component of the “change in net position”. The difference in these two items impacts the “change in net position” on a GAAP basis. With respect to Siasconset and Wannacomet principal payback of debt is larger than depreciation, therefore the positive results are expected; also, seasonal weather patterns contributed to increased usage and positive operations of these two operations to explain the additional difference. In the instance of Sewer, depreciation and principal payback approximate one another however, over $1.4 million of numerous small capital items incurred but not capitalized were classified as maintenance. These were subsidized by only about $860,000 in other operating revenues and therefore caused the net loss above. The Airport experienced its 5th straight year of positive operations as travel to the island continues to grow at a very rapid pace. Siasconset Water District 383,283$ Wannacomet Water District 1,766,614 Sewer (571,290) Nantucket Memorial Airport 1,777,149 Total Change 3,355,756$ Town of Nantucket, Massachusetts Page 33 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 33 of 157 Comprehensive Annual Financial Report Fund-wide Financial Analysis of the Government’s Funds As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds – The focus of the Town’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the close of the current fiscal year, the Town’s governmental funds balance sheet reported a combined ending fund balance of almost $59.3 million, an increase of almost $7.0 million over the prior year. Unassigned fund balance in the general fund was approximately $21.6 million or 21.4% of general fund expenditures. This is available for spending at the government’s discretion. Assigned fund balance of almost $7.3 million; committed fund balance of approximately $10.9 million and restricted fund balance of approximately $0.3 million bring total general fund balance to almost $40.0 million or 39.7% of general fund expenditures. Favorable budget results (see budget discussion) led to this increase of almost $1.3 million as the Town’s revenue continue to outpace forecast due to the ongoing strength in the economy. The timing of capital costs verses bond proceeds was primarily responsible for an increase in capital projects of almost $6.6 million. The entire fund balance was restricted. The Combined Nonmajor Funds ended the year with a balance of $13.4 million which was lower than the prior year due to excess transfers from special revenue funds into the capital projects fund. The majority of this was restricted. Proprietary funds – The Town’s proprietary funds are made up of the same type of information found in the government-wide financial statements under business-type activities, but in more detail; and (2) the Town's Internal Service Fund which accounts for the Town's Health Claims Trust Fund. The Health Claims Fund has a Net Position balance of almost $4.3 million. This represents an increase of over $0.9 million over the prior year. Reinsurance proceeds of approximately $0.8 million and positive claims experience were primarily responsible for these positive operating results. Fiduciary Fund – The Town’s fiduciary fund is comprised primarily of the Town’s Private Purpose Trust Funds and its Other Postemployment Benefits Trust. Total Net Position of these two funds is almost $6.0 million. The Private Purpose Trust Funds make up almost $3.6 million; These assets are used strictly for purposes outside of the public domain such as scholarships and public assistance. Contributions to these funds exceeded expenses that led to almost a $0.2 million increase year over year. Town of Nantucket, Massachusetts Page 34 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 34 of 157 Comprehensive Annual Financial Report In addition, the Town has elected to establish a trust under Chapter 32B Section 20 of the MGL whose sole purpose will be to accumulate funds to reduce the Town’s unfunded Other Postemployment Benefits. This fund increased by approximately $0.5 million to almost $2.4 million due to a contribution made by the Town in excess of premiums paid for retirees. The Town anticipates the use of an annual dedicated budget source to fund a portion of the actuarially determined contribution. General Fund Budgetary Highlights Differences between the original budget and the final amended budget were for the most part not significant (less than 1%). The total budget ended the year with a favorable variance of almost $8.7 million. For the sixth consecutive year revenues exceeded forecast (over $2.5 million). This was due to (1) the Town continuing its philosophy of conservatively forecasting revenue, and (2) the results of the continuation in the expanding economy felt mostly in motor vehicle excise and room occupancy. Favorable expenditure variances contributed over $5.6 million to this positive result and were mainly spread over many expenditure categories and due to effective cost controls put in place mid-way through the year. Specifically, almost $3.0 million in insurance savings (medical and liability) were realized due to plan changes. Further detail of budget to actual comparisons may be reviewed as part of the Required Supplementary Information following the footnotes to the report. Capital Asset and Debt Administration Capital Assets – The Town’s investment in capital assets for its governmental and business type activities as of June 30, 2018 amounts to approximately $537.7 million (net of accumulated depreciation) an increase from the previous year’s balance of approximately $45.1million. This investment in capital assets includes land, buildings and improvements, infrastructure, machinery, equipment, and software. The total increase is due to capital investments exceeding depreciation for the year. The two largest capital assets added to this year’s roll’s, were land transferred to the Town by the United States Coast Guard for almost $13.8M recorded in Governmental Activities and Sewer construction of about $26.0 million. Additional information on the Town’s capital assets can be found in Note II subsection D. Additional information on the Town’s short-term and long-term debt can be found in Note II under subsections F and G. Long-term Debt – State statutes limit the amount of general obligation debt a governmental entity may issue to 5.0 % of its total assessed valuation. The current debt limitation for the Town is approximately $1.1 billion, which is significantly in excess of the Town’s outstanding general obligation debt classified as inside the debt limit. The Town is assigned an Aa1 positive credit rating from Moodys’ Investor Services and an AA+ credit rating from Standard and Poors’. Both are one notch below the top credit rating for each of the respective credit agencies. Town of Nantucket, Massachusetts Page 35 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 35 of 157 Comprehensive Annual Financial Report At the end of the current fiscal year, the Town had total debt outstanding of almost $151.3 million. Over $82.1 million is related to the Town’s Governmental activities and almost $69.2 million is related to the Town’s Business-type activities. The entire amount comprises debt backed by the full faith and credit of the government. In addition, the Town issues bond anticipation notes prior to permanent financing to fund the initial stages of capital projects. At June 30, 2018 the bond anticipation notes payable balances approximated $59.5 million. The Town also carries unamortized bond premiums of over $2.8 million and almost $2.1 million in the governmental and business-type activities respectively. The Town’s total debt increased by approximately $2.7 million during the fiscal year due to following: . Regular scheduled maturities: Governmental Activities (5,651,238)$ Business-Type Activities (5,360,239) Issuance of debt: Governmental Activities 11,730,000 Business-Type Activities 1,560,000 Originating premiums Governmental Activities 895,909 Business-Type Activities 147,350 Amortization of premiums Governmental Activities (301,656) Business-Type Activities (360,609) $ 2,659,517 Town of Nantucket, Massachusetts Page 36 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 36 of 157 Comprehensive Annual Financial Report Economic Factors and Next Year’s Budgets and Rates Consistent with both State and National work force trends, the Town’s unemployment rates havetrended near historically low levels in recent years. The Town’s employment is seasonal however andsubject to fluctuations during any given year. Anticipated economic expansion on the Island willsmooth this out more over the next several years. The Town’s real estate tax base is made up predominantly of residential taxes, which comprise nearly87.8% of the Town’s real estate tax base. The Town also relies heavily on its commercial andindustrial real estate tax base, which in aggregate comprise 10.2 % of the Town’s real estate tax base.In addition, Chapter 580 of the Acts of 1980, more commonly referred to as Proposition 2 ½, limitsthe Town’s ability to increase taxes in any one year by more than two and one-half percent (2 ½%) ofthe previous year tax levy plus new growth. The Town’s housing market continues to be vibrant and consistently outpaces the state and nationalindexes. Average home prices approximate $1.5 million and the average residential tax rate is 3.67per $1,000. The Town has typically approximated $1 billion in property sales each year since 2014. All of the above items were considered when the Town developed its budget for fiscal year 2019.The budget was adopted in April 2018 and the Town is expected to set its tax rate in December 2018. Requests for Information This financial report is designed to provide a general overview of the Town’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or request for additional financial information should be addressed to the Office of the Director of Finance, 37 Washington Street, Nantucket, Massachusetts 02554. Complete stand-alone financial statements for Nantucket County may be obtained from the Office of the Director of Finance 37 Washington Street, Nantucket, Massachusetts 02554. Complete stand-alone financial statements for Nantucket Islands Land Bank may be obtained by contacting Nantucket Islands Land Bank, 22 Broad Street, Nantucket, Massachusetts 02554. Complete stand-alone financial statements for Nantucket Memorial Airport may be obtained from the Office of the Director of Finance 37 Washington Street, Nantucket, Massachusetts 02554 Town of Nantucket, Massachusetts Page 37 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 37 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 38 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 38 of 157 Comprehensive Annual Financial Report Basic Financial Statements Town of Nantucket, Massachusetts Page 39 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 39 of 157 Comprehensive Annual Financial Report Nantucket Governmental Business-Type Nantucket IslandsActivitiesActivitiesTotalCountyLand Bank Assets Cash and cash equivalents 69,810,772$ 23,391,864$ 93,202,636$ 5,042,913$ 17,514,288$ Investments 10,995,822 673,610 11,669,432 - 4,830,888 Investments, designated - - - - 2,890,876 Receivables, net: Property taxes 1,855,213 - 1,855,213 - - User fees 868,200 1,873,363 2,741,563 - - Departmental and other 1,860,659 677,760 2,538,419 - 371,568 Tax liens 2,846,107 - 2,846,107 - - Intergovernmental 447,531 18,850,194 19,297,725 120,798 - Grants - - - - 922,117 Inventory - 445,399 445,399 - 265,679 Prepaid items 1,403,527 - 1,403,527 - 70,724 Other assets 2,730 - 2,730 - - Internal balances (362,092) 362,092 - - - Restricted cash and cash equivalents - - - - 2,084,903 Restricted investments - - - - 2,711,637 Cash surrender value of life insurance - - - - 967,150 Land conservation rights - - - - 30,000 Capital assets not being depreciated 243,282,663 61,059,493 304,342,156 3,283,842 320,726,743 Capital assets, net of depreciation 69,257,454 164,127,947 233,385,401 650 16,653,260 Total Assets 402,268,586 271,461,722 673,730,308 8,448,203 370,039,833 Deferred Outflows of Resources Related to losses on refunding 169,644 703,294 872,938 - 177,683 Related to net other postemployment benefits liability 3,180,832 - 3,180,832 - - Related to net pension liability 8,186,872 1,616,591 9,803,463 141,219 395,877 Total Deferred Outflows of Resources 11,537,348 2,319,885 13,857,233 141,219 573,560 Liabilities Warrants and accounts payable 4,104,326 786,666 4,890,992 2,185 351,552 Accrued payroll and withholdings 3,105,776 253,727 3,359,503 62,305 - Accrued expenses - - - - 326,706 Health claims incurred but not reported 1,138,217 - 1,138,217 - - Accrued interest 761,714 631,170 1,392,884 - - Other liabilities 577,633 424,177 1,001,810 - - Unearned revenue - - - - 62,550 Unearned grant revenue - - - - 1,383,175 Bond anticipation notes payable 11,417,000 48,044,918 59,461,918 - - Noncurrent liabilities: Due within one year 6,211,044 6,215,420 12,426,464 - 6,631,243 Due in more than one year 235,702,053 82,356,823 318,058,876 974,393 21,735,652 Total Liabilities 263,017,763 138,712,901 401,730,664 1,038,883 30,490,878 Deferred Inflows of Resources Related to net pension liability 5,291,788 1,044,923 6,336,711 205,238 293,305 Related to net other postemployment benefits liability 8,230,648 509,659 8,740,307 - - 13,522,436 1,554,582 15,077,018 205,238 293,305 Net Position Net investment in capital assets 222,919,137 121,715,832 344,634,969 3,284,492 312,008,616 Restricted: Nonexpendable permanent funds 44,805 - 44,805 - - Federal and State grants 1,203,892 - 1,203,892 - - Community preservation 3,992,818 - 3,992,818 - - Capital outlay 11,089,172 - 11,089,172 - - Revolving funds 4,299,280 - 4,299,280 - - Gift funds 1,020,396 - 1,020,396 - - Other purposes 3,012,776 - 3,012,776 3,806,223 4,796,540 Unrestricted (110,316,541) 11,798,292 (98,518,249) 254,586 23,024,054 Total Net Position 137,265,735$ 133,514,124$ 270,779,859$ 7,345,301$ 339,829,210$ TOWN OF NANTUCKET, MASSACHUSETTS STATEMENT OF NET POSITION JUNE 30, 2018 See accompanying notes to basic financial statements. Primary Government Component Units Town of Nantucket, Massachusetts Page 40 of 157 Comprehensive Annual Financial Report Program Revenues Net (Expenses) Revenues and Changes in Net Position Operating Capital NantucketCharges for Grants and Grants and Governmental Business-Type Nantucket Islands Functions/Programs Expenses Services Contributions Contributions Activities Activities Total County Land Bank Primary government: Governmental activities: General government 13,660,766$ 1,414,603$ 674,880$ 13,728,160$ 2,156,877$ 2,156,877$ Public safety 19,236,351 4,006,734 173,060 - (15,056,557) (15,056,557) Education 47,854,776 1,710,119 10,085,579 - (36,059,078) (36,059,078) Public works 19,697,228 3,469,380 73,998 392,481 (15,761,369) (15,761,369) Health and human services 7,817,065 5,246,151 53,019 - (2,517,895) (2,517,895) Culture and recreation 4,034,143 455,763 37,555 382,132 (3,158,693) (3,158,693) Interest expense 2,486,810 - 250,000 - (2,236,810) (2,236,810) Total governmental activities 114,787,139 16,302,750 11,348,091 14,502,773 (72,633,525) (72,633,525) Business-type activities: Siasconset water 617,825 1,003,619 - - 385,794$ 385,794 Wannacomet water 4,428,396 6,182,989 - - 1,754,593 1,754,593 Sewer 7,912,679 7,354,317 - - (558,362) (558,362) Nantucket Memorial Airport 15,379,560 14,114,495 123,647 3,186,264 2,044,846 2,044,846 Total business-type activities 28,338,460 28,655,420 123,647 3,186,264 3,626,871 3,626,871 Total Primary Government 143,125,599$ 44,958,170$ 11,471,738$ 17,689,037$ (72,633,525) 3,626,871 (69,006,654) Component units: Nantucket County 893,653$ 1,120,898$ 228,534$ -$ 455,779 - Nantucket Islands Land Bank 8,553,598 27,443,996 528,200 1,822,950 - 21,241,548 Total Component units 9,447,251$ 28,564,894$ 756,734$ 1,822,950$ 455,779 21,241,548 General Revenues: Property taxes 77,739,238 - 77,739,238 - - Motor vehicle and boat excise 3,154,909 - 3,154,909 - - Hotel and meals excise 4,743,787 - 4,743,787 - - Community Preservation Fund surcharges 2,190,884 - 2,190,884 - - Grants and contributions not restricted to specific programs 193,824 - 193,824 - - Penalties and interest on taxes 584,164 - 584,164 - - Unrestricted investment income 284,739 95,529 380,268 11,383 197,636 Gain on sale of capital assets 201,248 - 201,248 - - Miscellaneous - - - - 585,817 Transfers (net)285,264 (285,264) - - - Total general revenues and transfers 89,378,057 (189,735) 89,188,322 11,383 783,453 Change in Net Position 16,744,532 3,437,136 20,181,668 467,162 22,025,001 Net Position: Beginning of year, as restated (see Note IV)120,521,203 130,076,988 250,598,191 6,878,139 317,804,209 End of year 137,265,735$ 133,514,124$ 270,779,859$ 7,345,301$ 339,829,210$ See accompanying notes to basic financial statements. TOWN OF NANTUCKET, MASSACHUSETTS STATEMENT OF ACTIVITIESYEAR ENDED JUNE 30, 2018 Component Units Town of Nantucket, Massachusetts Page 41 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS GOVERNMENTAL FUNDS BALANCE SHEET JUNE 30, 2018 Town Nonmajor Total General Capital Governmental Governmental Fund Projects Funds Funds Assets Cash and cash equivalents 33,027,201$ 17,397,554$ 15,650,842$ 66,075,597$ Investments 10,576,464 - 174,788 10,751,252 Receivables, net of allowance for uncollectibles: Property taxes 1,676,881 - 178,332 1,855,213 User charges 868,200 - -868,200 Departmental and other 1,294,922 - 372,325 1,667,247 Tax liens 2,846,107 - -2,846,107 Intergovernmental - - 447,531 447,531 Other assets 2,730 - - 2,730 Due from other funds - - - - Total Assets 50,292,505 17,397,554 16,823,818 84,513,877 Total Deferred Outflows of Resources - - - - Total Assets and Deferred Outflows of Resources 50,292,505$ 17,397,554$ 16,823,818$ 84,513,877$ Liabilities: Warrants and accounts payable 1,406,627$ 1,688,254$ 931,836$ 4,026,717$ Accrued payroll and withholdings 2,981,201 - 124,575 3,105,776 Other liabilities 383,005 - 194,628 577,633 Due to other funds - - - - Bond anticipation notes payable - 9,825,000 1,592,000 11,417,000 Total Liabilities 4,770,833 11,513,254 2,843,039 19,127,126 Deferred Inflows of Resources Unavailable revenue - property taxes 3,931,275 - 178,332 4,109,607 Unavailable revenue - user charges 868,200 - -868,200 Unavailable revenue - other 743,064 - 372,325 1,115,389 Total Deferred Inflows of Resources 5,542,539 - 550,657 6,093,196 Fund Balances: Nonspendable - - 44,805 44,805 Restricted 285,872 10,682,360 13,600,114 24,568,346 Committed 10,884,444 - - 10,884,444 Assigned 7,257,920 - - 7,257,920 Unassigned 21,550,897 (4,798,060) (214,797) 16,538,040 Total Fund Balances 39,979,133 5,884,300 13,430,122 59,293,555 Total Liabilities , Deferred Inflows of Resources and Fund Balances 50,292,505$ 17,397,554$ 16,823,818$ 84,513,877$ See accompanying notes to basic financial statements. Town of Nantucket, Massachusetts Page 42 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 42 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION JUNE 30, 2018 Total Governmental Fund Balances 59,293,555$ Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds.312,540,117 Other long-term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the funds 6,093,196 Deferred outflows and inflows of resources to be recognized in the future are not available resources and, therefore, are not reported in the funds: Deferred outflows related to charges on refunding 169,644 Deferred outflows related to net pension liability 8,186,872 Deferred outflows related to net other postemployment benefits liability 3,180,832 Deferred inflows related to net pension liability (5,291,788) Deferred inflows related to net other postemployment benefits liability (8,230,648) Assets and liabilities of the Town's internal service funds are included in the Statement of Net Position, but are not reported in the governmental funds.3,902,961 In the Statement of Activities, interest is accrued on outstanding long-term debt whereas in the governmental funds, interest is not reported until due.(761,714) Long-term liabilities are not due and payable in the current period and therefore are not reported in the government funds: Bonds and notes payable (82,143,426) Unamortized premiums on bonds (2,828,828) Landfill closure liability (12,000,000) Compensated absences (2,241,122) Net other postemployment benefits liability (87,516,130) Net pension liability (55,087,786) Net Position of Governmental Activities 137,265,735$ See accompanying notes to basic financial statements. Town of Nantucket, Massachusetts Page 43 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2018 Town Nonmajor Total General Capital Governmental Governmental Fund Projects Funds Funds Revenues: Property taxes 78,224,629$ -$ -$ 78,224,629$ Intergovernmental 8,854,944 13,728,160 3,084,381 25,667,485 Motor vehicle and other excises 2,989,763 - 37,188 3,026,951 User charges 8,345,708 - -8,345,708 Hotel and meals taxes 4,743,787 - -4,743,787 Community preservation surcharges - - 2,188,658 2,188,658 Licenses and permits 1,613,059 - - 1,613,059 Penalties and interest on taxes 584,164 - - 584,164 Fines and forfeitures 367,483 - - 367,483 Investment income 268,183 - 18,269 286,452 Departmental and other revenue 2,096,490 - 3,815,582 5,912,072 Contributions and donations 1,230 - 375,973 377,203 Total Revenues 108,089,440 13,728,160 9,520,051 131,337,651 Expenditures: Current: General government 9,331,176 13,826,074 662,687 23,819,937 Public safety 10,232,484 6,039,950 1,450,634 17,723,068 Education 28,106,094 1,685,931 3,289,323 33,081,348 Public works 12,960,300 5,461,674 86,135 18,508,109 Health and human services 6,743,089 847,684 391,558 7,982,331 Culture and recreation 1,159,769 - 2,562,588 3,722,357 Pension and fringe benefits 23,225,437 - -23,225,437 State and county assessments 632,692 - -632,692 Debt service: Principal 5,221,357 - 429,881 5,651,238 Interest 3,100,178 - 31,393 3,131,571 Total Expenditures 100,712,576 27,861,313 8,904,199 137,478,088 Excess (Deficiency) of Revenues Over (Under) Expenditures 7,376,864 (14,133,153) 615,852 (6,140,437) Other Financing Sources (Uses): Issuance of bonds and notes - 11,730,000 - 11,730,000 Premiums from bonds and notes 185,909 710,000 - 895,909 Sale of capital assets - - 201,248 201,248 Transfers in 521,017 8,308,687 465,000 9,294,704 Transfers out (6,829,687) (65,000) (2,114,753) (9,009,440) Total Other Financing Sources (Uses)(6,122,761) 20,683,687 (1,448,505) 13,112,421 Net Change in Fund Balances 1,254,103 6,550,534 (832,653) 6,971,984 Fund Balances - Beginning 38,725,030 (666,234) 14,262,775 52,321,571 Fund Balances - Ending 39,979,133$ 5,884,300$ 13,430,122$ 59,293,555$ See acompanying notes to basic financial statements. Town of Nantucket, Massachusetts Page 44 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 44 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIESYEAR ENDED JUNE 30, 2018 Net Change in Fund Balances - Total Governmental Fund Balances 6,971,984$ Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. In addition, when a capital asset is disposed of, a gain or loss is calculated and reported in the Statement of Activities whereas the in the governmental funds, proceeds are reported as revenues. The net amounts are reflected here as reconciling items: Capital outlays 27,044,203 Depreciation expense (5,798,989) Net effect of reporting capital assets 21,245,214 In the Statement of Activities, Internal Service Funds established to administer the Town's health insurance and worker's compensation activities are included within the Statement of activities whereas these activities are not presented in the Statement of Revenues, Expenditures and Changes in Fund Balances.839,659 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the financial resources of governmental funds. Neither has any effect on net position. Also governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are amortized in the Statement of Activities. The net amounts are reflected here as reconciling items: Issuance of bonds and notes (11,730,000) Premiums from general obligation bonds and notes (895,909) Repayments of debt 5,651,238 Net effect of reporting long-term debt (6,974,671) Revenues in the Statement of Activities that do not provide current financial resources are unavailable in the Statement of Revenues, Expenditures and Changes in Fund Balances. Therefore, the recognition of revenue for various types of accounts receivable differ between the two statements. The amount presented represents the following differences derived . from unavailable revenue.(290,779) Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds: Accrued interest expense 360,069 Amortization of premiums on bonds and notes payable 301,656 Amortization of deferred charges on refunding'(16,964) Landfill closure (1,869,000) Compensated absences (9,951) Pension benefits (1,726,825) Other postemployment benefits (2,085,860) Net effect of reporting long-term liabilities (5,046,875) Change in Net Position of Governmental Activities 16,744,532$ See accompanying notes to basic financial statements. Town of Nantucket, Massachusetts Page 45 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 45 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30, 2018 GovernmentalActivitiesNantucketInternalSiasconsetWannacometMemorialServiceWaterWaterSewerAirportTotalFundAssets:Current assets: Cash and cash equivalents 1,688,238$ 5,570,705$ 8,362,762$ 7,770,159$ 23,391,864$ 3,735,175$ Investments - - - 673,610 673,610 244,570 Receivables (net): User charges 109,101 592,937 748,435 422,890 1,873,363 - Privilege fees - - 677,760 - 677,760 - Intergovernmental - - 17,452,192 405,298 17,857,490 - Inventory - 84,433 - 360,966 445,399 - Reinsured claims receivable - - - - - 193,412 Prepaid items - - - - - 1,403,527 Total current assets 1,797,339 6,248,075 27,241,149 9,632,923 44,919,486 5,576,684 Noncurrent assets: Receivables (net): Intergovernmental - - 992,704 - 992,704 - Nondepreciable capital assets 2,950,063 13,551,983 37,951,932 6,605,515 61,059,493 - Capital assets (net of depreciation)9,056,525 30,055,301 65,274,299 59,741,822 164,127,947 - Total noncurrent assets 12,006,588 43,607,284 104,218,935 66,347,337 226,180,144 - Total Assets 13,803,927 49,855,359 131,460,084 75,980,260 271,099,630 5,576,684 Deferred Outflows of Resources Related to losses on refunding 301,735 312,822 88,737 - 703,294 - Related to net pension liability 19,607 404,883 247,047 945,054 1,616,591 - Total Deferred Outflows of Resources 321,342 717,705 335,784 945,054 2,319,885 - Total Assets and Deferred Outflows of Resources 14,125,269$ 50,573,064$ 131,795,868$ 76,925,314$ 273,419,515$ 5,576,684$ Liabilities: Current liabilities: Warrants and accounts payable 58,783$ 132,739$ 248,960$ 346,184$ 786,666$ 77,609$ Accrued payroll and withholdings 1,356 50,466 52,284 149,621 253,727 - Health claims incurred but not reported - - - - - 1,138,217 Accrued interest 24,057 118,761 407,932 80,420 631,170 - Other liabilities - - - 424,177 424,177 - Bond anticipation notes payable 250,000 3,812,000 41,807,471 2,175,447 48,044,918 - Compensated absences - 117,814 44,113 301,616 463,543 - Workers' compensation claims - -- - - 95,805 Bonds and notes payable 470,171 1,945,621 2,514,858 821,227 5,751,877 - Total current liabilities 804,367 6,177,401 45,075,618 4,298,692 56,356,078 1,311,631 Noncurrent liabilities: Compensated absences - 117,814 44,114 301,615 463,543 - Net other postemployment benefit liability 543,748 1,162,646 254,157 3,589,904 5,550,455 - Net pension liability 131,931 2,724,375 1,662,331 6,359,074 10,877,711 - Bonds and notes payable 5,178,190 16,853,812 34,947,087 8,486,025 65,465,114 - Total noncurrent liabilities 5,853,869 20,858,647 36,907,689 18,736,618 82,356,823 - Total Liabilities 6,658,236 27,036,048 81,983,307 23,035,310 138,712,901 1,311,631 Deferred Inflows of Resources Related to net pension liability 12,673 261,706 159,685 610,859 1,044,923 - Related to net other postemployment benefit liability 49,931 106,756 23,336 329,636 509,659 - 62,604 368,462 183,021 940,495 1,554,582 - Total Liabilities and Deferred Inflows of Resources 6,720,840 27,404,510 82,166,328 23,975,805 140,267,483 1,311,631 Net Position: Net investment in capital assets 6,409,962 21,308,673 41,308,006 52,689,191 121,715,832 - Unrestricted 994,467 1,859,881 8,321,534 260,318 11,436,200 4,265,053 Total Net Position 7,404,429$ 23,168,554$ 49,629,540$ 52,949,509$ 133,152,032 4,265,053$ Adjustment to report the cumulative internal balance for the net effect of the activity between the internal service funds and the enterprise funds over time 362,092 Net position of business-type activities (page 40)133,514,124$ See accompanying notes to basic financial statements. Business-Type Activities Town of Nantucket, Massachusetts Page 46 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITIONYEAR ENDED JUNE 30, 2018 Governmental Activities Nantucket Internal Siasconset Wannacomet Memorial Service Water Water Sewer Airport Total Fund Operating Revenues: Charges for services 1,003,619$ 5,857,078$ 6,495,532$ 13,805,593$ 27,161,822$ -$ Employee contributions - - - - - 1,849,827 Employer contributions - - - - - 13,980,468 Other - 325,911 858,785 308,902 1,493,598 395,057 Total Operating Revenues 1,003,619 6,182,989 7,354,317 14,114,495 28,655,420 16,225,352 Operating Expenses: Operating costs 223,578 2,739,500 2,878,349 12,007,925 17,849,352 - Depreciation 248,254 1,182,888 2,295,511 2,652,536 6,379,189 - Maintenance - - 1,496,985 308,902 1,805,887 - Employee benefits - - - - - 15,302,600 Total Operating Expenses 471,832 3,922,388 6,670,845 14,969,363 26,034,428 15,302,600 Total Operating Income (loss)531,787 2,260,601 683,472 (854,868) 2,620,992 922,752 Nonoperating Revenues (Expenses): Intergovernmental - - - 123,647 123,647 - Investment income - 28,390 - 67,139 95,529 (1,713) Interest expense (148,504) (522,377) (1,254,762) (459,769) (2,385,412) - Total Nonoperating Revenues (Expenses)(148,504) (493,987) (1,254,762) (268,983) (2,166,236) (1,713) Income (Loss) Before Capital Contributions and Transfers 383,283 1,766,614 (571,290) (1,123,851) 454,756 921,039 Capital Contributions Intergovernmental - - - 3,186,264 3,186,264 - - - - 3,186,264 3,186,264 - Transfers Transfers out - - - (285,264) (285,264) - Transfers - - - (285,264) (285,264) - Change in Net Position 383,283 1,766,614 (571,290) 1,777,149 3,355,756 921,039 Net Position at Beginning of Year, as restated (See note IV)7,021,146 21,401,940 50,200,830 51,172,360 3,344,014 Net Position at End of Year 7,404,429$ 23,168,554$ 49,629,540$ 52,949,509$ 4,265,053$ Adjustment for the net effect of the current year activity between the internal service funds and the enterprise funds 81,380 Changes in net position of business-type activities (page 36)3,437,136$ See accompanying notes to basic financial statements. Business-Type Activities Town of Nantucket, Massachusetts Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 47 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS STATEMENT OF CASH FLOWSPROPRIETARY FUNDSYEAR ENDED JUNE 30, 2018 Governmental ActivitiesNantucketInternalSiasconsetWannacometMemorialService Water Water Sewer Airport Total Fund Cash Flows from Operating Activities: Receipts from users 1,017,920$ 5,868,818$ 6,555,487$ 13,762,755$ 27,204,980$ -$ Employee contributions - - - - - 1,849,827 Employer contributions - - - - - 13,980,468 Receipts from other operating revenues - 325,911 858,785 308,902 1,493,598 290,566 Payments to employees - (1,503,859) (1,021,738) (4,886,804) (7,412,401) - Payments to vendors (176,826) (965,870) (3,250,466) (6,782,168) (11,175,330) - Payments for interfund services used - - - - - (17,054,132) Net Cash Provided by (Used in) Operating Activities 841,094 3,725,000 3,142,068 2,402,685 10,110,847 (933,271) Cash Flows from Noncapital Financing Activities: Operating grants - - - 123,647 123,647 - Net Cash Used in Noncapital Financing Activities - - - (161,617) (161,617) - Cash Flows from Capital and Related Financing Activities: Proceeds from the issuance of bonds and notes - 1,426,000 134,000 - 1,560,000 - Sewer privilege fees - -234,885 - 234,885 - Proceeds from capital grants - -(177,285) 3,176,138 2,998,853 - Acquisition and construction of capital assets (185,429) (4,607,890) (21,072,861) (4,376,823) (30,243,003) - Premiums on general obligation bonds - 147,350 - - 147,350 - Proceeds from bond anticipation notes 250,000 1,000,000 22,673,848 292,000 24,215,848 - Repayments of bond anticipation notes - (1,546,000) (9,048,831) (4,224,766) (14,819,597) - Principal payments on bonds and notes (380,000) (1,675,000) (2,303,186) (818,000) (5,176,186) - Interest payments on bonds and notes (200,361) (708,774) (1,143,664) (489,102) (2,541,901) - Net Cash Used in Capital and Related Financing Activities (515,790) (5,964,314) (10,703,094) (6,440,553) (23,623,751) - Cash Flows from Investing Activities: Investment income - 28,390 - 67,139 95,529 (1,713) Investment of operating cash - -- (473,488) (473,488) (244,570) Net Cash Provided by (Used in) Investing Activities - 28,390 - (406,349) (377,959) (246,283) Net Change in Cash and Cash Equivalents 325,304 (2,210,924) (7,561,026) (4,605,834) (14,052,480) (1,179,554) Cash and Cash Equivalents: Beginning of the year 1,362,934 7,781,629 15,923,788 12,375,993 37,444,344 4,914,729 End of the year 1,688,238$ 5,570,705$ 8,362,762$ 7,770,159$ 23,391,864$ 3,735,175$ Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Operating Income (Loss)531,787$ 2,260,601$ 683,472$ (854,868)$ 2,620,992$ 922,752$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation 248,254 1,182,888 2,295,511 2,652,536 6,379,189 - Changes in assets, deferred outflows, liabilities and deferred inflows Receivables 14,301 11,740 59,955 (48,221) 37,775 (104,491) Prepaid items - - - - - (1,403,527) Accounts payable and accrued expenses 53,643 88,978 39,612 221,566 403,799 (222,018) Accrued benefits payable (6,891) 180,793 63,518 426,289 663,709 (125,987) Other liabilities - - - 5,383 5,383 - Net Cash Provided by (Used in) Operating Activities 841,094$ 3,725,000$ 3,142,068$ 2,402,685$ 10,110,847$ (933,271)$ Noncash investing capital and financing activities: Intergovernmental subsidies of debt service -$ -$ 361,338$ -$ 361,338$ -$ Amortization of bond premiums 75,171 206,852 55,265 23,321 360,609 - Amortization of deferred charge on refunding 27,430 31,281 8,874 - 67,585 - See accompanying notes to basic financial statements. Business-Type Activities Town of Nantucket, Massachusetts Page 48 of 157 Comprehensive Annual Financial Report TOWN OF NANUCKET, MASSACHUSETTS FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2018 Other Postemployment Private Benefits Purpose Agency Trust Fund Trust Funds Funds Assets: Cash and cash equivalents 31,608$ 1,487,421$ 1,316,729$ Investments: Equities 1,219,210 - - Corporate fixed income 456,604 2,090,417 - Government securities 552,919 - - Certificates of deposit 130,217 - - Receivables, net of allowance for uncollectibles - - 83,385 Total Assets 2,390,558 3,577,838 1,400,114 Liabilities: Warrants payable - 4,034 37,000 Accrued payroll and withholdings - -32,933 Agency liabilities - -402,206 Planning board deposits - -927,975 Total Liabilities - 4,034 1,400,114 Net Position: Restricted for other postemployment benefits 2,390,558 - - Restricted for private purposes - 3,573,804 - Total Net Position 2,390,558$ 3,573,804$ -$ See accompanying notes to basic financial statements. Town of Nantucket, Massachusetts Page 49 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 49 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2018 Other Postemployment Private Benefits Purpose Trust Fund Trust Funds Additions Contributions: Employer 3,695,050$ -$ Other -768,932 Total contributions 3,695,050 768,932 Investment income: Interest and dividends 59,321 4,340 Unrealized gain (loss) on investments (72,588)- Net investment earnings (13,267)4,340 Total Additions (net)3,681,783 773,272 Deductions Life and health insurance premiums paid for retirees 3,195,050 - Education - scholarships -120,975 Health and human services - public assistance -497,690 Total Deductions 3,195,050 618,665 CHANGE IN NET POSITION 486,733 154,607 NET POSITION AT BEGINNING OF YEAR 1,903,825 3,419,197 NET POSITION AT END OF YEAR 2,390,558$ 3,573,804$ See accompanying notes to basic financial statements. Town of Nantucket, Massachusetts Page 50 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 50 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTSNOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDED JUNE 30, 2018 I.Summary of Significant Accounting Policies The accompanying basic financial statements of the Town have been prepared in conformity withgenerally accepted accounting principles (GAAP) as applied to state and local governments. GAAPis prescribed by the Governmental Accounting Standards Board (GASB), which is the primary standard-setting body for state and local government entities. The following is a summary of the moresignificant policies and practices used by the Town: A.Reporting Entity The Town is located in Nantucket County, twenty-five miles south of Cape Cod and was incorporated as a Town in 1671. An elected five-member Select Board governs the Town and an appointed Town Manager oversees the Town’s daily executive and administrative duties. The Town provides governmental services for the territory within its boundaries, including police and fire protection, public education in grades K-12, water and sewer services, solid waste disposal, street maintenance, elderly housing, parks and recreational facilities and an airport. Discretely Presented Component Units – The Town includes two entities as component units in the Town's reporting entity because of the significance of their operations or financial relationships with the Town are such that exclusion would cause the basic financial statements to be misleading. Unless otherwise indicated, the notes to the basic financial statements pertain only to the primary government. A description of the discretely presented component units is as follows: Nantucket County – The County of Nantucket (“the County”) is presented in a separate column to emphasize that it is legally separate from the Town but included because the County shares the same geographical boundaries as the Town and (1) the economic resources received or held are entirely for the benefit of the Town and its constituents, (2) the Town has the ability to access the economic resources of the County, and (3) those economic resources are significant to the Town therefore exclusion would cause the financial statements to be misleading. The County Commissioners consist of a five-member elected board which operates a Registry of Deeds and Corrections Office. Complete stand-alone financial statements as of June 30, 2018 may be obtained at the County of Nantucket, 16 Broad Street Nantucket, Massachusetts 02554. Nantucket Islands Land Bank – The Nantucket Islands Land Bank (“the Land Bank”) was created by Chapter 669 of the Acts of 1983 of the Commonwealth of Massachusetts to acquire and manage open space and protect natural resources in Nantucket County. The Land Bank is administered by the Nantucket Islands Land Bank Commission, which is comprised of five elected members. It is legally separate from the Town but presented as a discrete component unit due to (1) the economic resources received or held are entirely for the benefit of the Town and its constituents, (2) the Town has the ability to access those economic resources, and (3) those economic resources are significant to the Town therefore exclusion would cause the financial statements to be misleading. Complete stand-alone financial statements as of June 30, 2018 may be obtained at Nantucket Islands Land Bank, 22 Broad Street, Nantucket, Massachusetts 02554. Availability of Financial Information of Certain Town Enterprise Funds – The Nantucket Memorial Airport issues separate stand-alone financial statements which may be obtained by contacting the Airport Commission at 14 Airport Road, Nantucket, MA 02554. Town of Nantucket, Massachusetts Page 51 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 51 of 157 Comprehensive Annual Financial Report B.Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement ofactivities) report information on all of the non-fiduciary activities of the primary government andits component units. For the most part, the effect of interfund activity has been removed fromthese statements, except interfund services provided and used are not eliminated in the process ofconsolidation. Governmental activities, which normally are supported by taxes andintergovernmental revenues, are reported separately from business-type activities, which rely to asignificant extent on fees and charges for support. Likewise the primary government is reportedseparately from the legally separate component units for which the primary government isfinancially accountable. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the fiduciary funds are excluded from the government-widefinancial statements. Major individual government funds and major individual enterprise fundsare reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column. Major Fund Criteria – Major funds must be reported if both of the following criteria are met: 1)The total assets and deferred outflows of resources, liabilities and deferred inflows ofresources, revenues, or expenditures/expenses of an individual governmental orenterprise fund are at least ten percent of the corresponding total for all funds of thatcategory or type, and 2)The total assets and deferred outflows of resources, liabilities and deferred inflows ofresources, revenues, or expenditures/expenses of the individual governmental fund orenterprise fund are at least five percent of the corresponding element for all governmentaland enterprise funds combined. Additionally, any other governmental or enterprise fund that management believes is particularly significant to the basic financial statements may be reported as a major fund. C.Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under this method, revenues arerecorded when earned and expenses are recorded when a liability is incurred, regardless of thetiming of related cash flows. Property taxes are recognized as revenues in the fiscal year forwhich they are levied. Grants and similar items are recognized as revenue as soon as alleligibility requirements imposed by the provider are met. The statement of activities demonstrates the degree to which the direct expenses of a givenfunction or segment is offset by program revenues. Direct expenses are those that are clearlyidentifiable with a specific function or segment. Program revenues include: 1) charges tocustomers or applicants who purchase, use, or directly benefit from goods, services, or privilegesprovided by a given function or segment and 2) grants and contributions that are restricted tomeeting the operational or capital requirements of a particular function or segment. Taxes andother items not properly included among program revenues are reported instead as generalrevenues. Town of Nantucket, Massachusetts Page 52 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 52 of 157 Comprehensive Annual Financial Report The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when susceptible to accrual (i.e. measurable and available). Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, certain compensated absences, claims and judgments which are recognized when the obligations are due and payable. The Town applies the susceptible to accrual criteria to intergovernmental revenues. In applying the susceptible to accrual concept, there are two types of revenues. In one, moneys must be expended for a specific purpose or project before any amounts will be paid to the; therefore, revenues are recognized as expenditures are incurred. In the other, moneys are virtually unrestricted and are usually revocable only for failure to comply with prescribed requirements. These resources are reflected as revenues when cash is received, or earlier if the susceptible to accrual criteria are met. State aid is accrued as revenue in the year that the funds are appropriated by the Commonwealth. The Town considers property tax revenues to be available if they are collected within 60 days after the end of the fiscal year and are material. Investment income associated with the current fiscal period is susceptible to accrual and has been recognized as revenue of the current fiscal period. All other revenue items are considered to be measurable and available only when the cash is received and are recognized as revenue at that time. The government reports the following major Governmental Funds: General Fund – is the government’s primary operating fund. It accounts for all financial resources of the general government except those required to be accounted for in another fund. Town Capital Projects Fund – is used to account for all financial resources that are restricted, committed or assigned for the acquisition or construction of capital facilities and other capital assets of the governmental funds. Nonmajor Governmental Funds – consist of other special revenue and permanent funds that are aggregated and presented in the Nonmajor Governmental Funds column on the Governmental Funds financial statements. The following describes the general use of these fund types: The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. The Permanent Funds are used to account for financial resources that are restricted to the extent that only earnings, not principal, may be used for purposes that support the governmental programs. The proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under this method, revenues are recognized when earned and expenses are recorded when the liabilities are incurred. Town of Nantucket, Massachusetts Page 53 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 53 of 157 Comprehensive Annual Financial Report Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues are user charges and fees, while operating expenses consist of salaries, ordinary maintenance, assessments and depreciation. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The government reports the following major proprietary funds: Siasconset Water Enterprise Fund – is used to account for the operations of the Town’s water activities in the Siasconset service area of the Town. Wannacomet Water Enterprise Fund – is used to account for the operations of the Town’s water activities in the remaining service areas of the Town. Sewer Enterprise Fund – is used to account for the operations of the Town’s sewer activities. Nantucket Memorial Airport Enterprise Fund – is used to account for the operations of the Town’s airport. Additionally, the following proprietary fund type is reported: Internal Service Fund – is used to account for the Town’s self-insured health insurance and workers’ compensation activities. Because these services primarily benefit governmental rather than business-type activities, they have been included within governmental activities in the government-wide financial statements. Fiduciary fund financial statements are reported using the economic resources measurement focus and use the accrual basis of accounting. Fiduciary funds are used to account for assets held in a trustee capacity and cannot be used to support the governmental programs. The government reports the following fiduciary funds: Other Postemployment Benefits Trust Fund – is used to accumulate funds for future payments of other postemployment benefits for retirees, such as health and life insurance. Private Purpose Trust Fund – is used to account for trust arrangements under which the principal and income benefit individuals, private organizations or other governments. This fund is used for scholarships and affordable housing programs. Agency Fund – is used to account for assets held in a purely custodial capacity. The Town’s agency funds consist primarily of student activities, off-duty work details, escrow and other deposits. D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Equity Deposits and Investments – The Town’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. Investments of the Town and its component units are recorded at fair value. Town of Nantucket, Massachusetts Page 54 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 54 of 157 Comprehensive Annual Financial Report Receivables – Real estate and personal property taxes are assessed on January 1 every year. Bills are sent quarterly and are due on August 1, November 1, February 1, and May 1, or thirty days subsequent to the mailing date. Interest accrues on delinquent taxes at the rate of 14% per annum. Property taxes levied are recorded as receivables in the fiscal year of the levy. The Town is allowed to take delinquent taxes into tax title fourteen days subsequent to the mailing of a demand for payment of the delinquent taxes. User charges receivables represent amounts billed for water, sewer, monthly landfill tipping fees, annual commercial landfill user fees, airport travel and fuel sales and nursing home fees. Water and sewer charges are billed monthly and are subject to penalties and interest if not paid by the respective due date. The Town is authorized to take water and sewer fees into tax title fourteen days subsequent to the mailing of a demand for payment of the delinquent taxes. Real estate taxes, water user fees and sewer user fees that are secured through a lien process are considered 100% collectible. Accordingly, an allowance for uncollectible balances for these receivables is not reported. All personal property tax and excise tax receivables are shown net of an allowance for uncollectible balances comprised of those outstanding amounts greater than five years old. Departmental, landfill, airport and nursing home receivables are shown net of an allowance for uncollectible balances based on historical trends and specific account analysis. Sewer privilege fees represent betterments assessed to property owners related to upgrades to the Surfside Wastewater Treatment Plant. These are considered 100% collectible since they are secured through a lien on the owner’s property. Inventories and Prepaid Items – Inventories of the Wannacomet Water Enterprise Fund and Nantucket Memorial Airport Enterprise Fund are valued at the lower of cost or market, with cost determined on a first-in, first out basis. Certain supplies and small tools are expensed when purchased. All other inventories, which are not material to the basic financial statements, are considered to be expenditures at the time of purchase. Restricted Assets – Certain assets of the component units are classified as restricted because their use is restricted by contract covenants. Capital Assets – Capital assets, which include land, land improvements, buildings and improvements, machinery and equipment, vehicles and infrastructure (e.g. roads, water and sewer mains, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value rather than fair value. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. All purchases and construction costs in excess of $10,000 are capitalized at the date of acquisition or construction, respectively, with expected lives of greater than one year. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Town of Nantucket, Massachusetts Page 55 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 55 of 157 Comprehensive Annual Financial Report Capital assets (excluding land and construction-in-process) are depreciated on a straight-line-basis. The estimated useful lives of capital assets being depreciated are as follows: Buildings and improvements 33-50 years Machinery and equipment 5-7 years Vehicles 5-10 years Infrastructure 40-70 years Interfund Balances – Activity between funds that are representative of lending arrangements outstanding at the end of the fiscal year are referred to as either due to/from other funds or advances to/from other funds. All other outstanding balances between funds are reported as due to/from other funds. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances. Interfund Transfers – During the course of its operations, resources are permanently reallocated between and within funds. These transactions are reported as transfers in and transfers out in the individual fund statements. Transfers between and within governmental and fiduciary funds are eliminated from the governmental activities in the statement of activities. Any residual balances outstanding between the governmental activities and the business –type activities are reported in the statement of activities as transfers, net. Investment Income – Excluding the permanent funds, investment income derived from major and nonmajor governmental funds is legally assigned to the general fund unless otherwise directed by state law. Investment income of the proprietary funds is assigned to the fund within which it applies. Compensated Absences – It is the Town’s policy to permit employees to accumulate earned but unused sick pay benefits. Vacation time may be carried for a period of 6 months subsequent to year-end and if not used during this period is lost. Compensated absence liabilities related to both governmental and business-type activities are normally paid from the funds reporting payroll and related expenditures. Amounts related to these benefits are accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in Governmental Funds only if they have matured. Long-term Obligations – Long-term debt is reported as a liability in the government-wide and proprietary fund statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bond anticipation notes payable are reported net of the applicable bond premium or discount. In the governmental fund financial statements, the face amount of long-term debt issued is reported as other financing sources. Premiums received on a debt issuance are reported as other financing sources while discounts are reported as other financing uses. Issuance costs are exclusively reported as general government expenditures regardless of whether they are withheld from the actual proceeds. Deferred Outflows/Inflows of Resources – In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources Town of Nantucket, Massachusetts Page 56 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 56 of 157 Comprehensive Annual Financial Report (expense/expenditure) until then. The Town has two types of items that are reported on the government-wide statement of net position which relate to deferred losses on refunding transactions and outflows from changes in the net pension liability. The deferred losses on refunding will be recognized in interest expense over the life of the refunding bonds issued or the remaining life of the bonds refunded, whichever is shorter. The deferred pensions will be recognized in pension expense in future years as more fully described in Note III, subsection A. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and thus will not be recognized as an inflow of resources (revenue) until that time. The Town has two types of items that are reported on the government-wide statement of net position which relate to outflows from changes in the net pension liability and the other postemployment benefit liability. The deferred pensions will be recognized in pension expense in future years as more fully described in Note III, subsection A. The deferred postemployment benefits will be recognized in employee benefits expense in future years as more fully described in Note III, subsection C. The Town also one type of item that arises under a modified accrual basis of accounting which qualifies for reporting in this category. Accordingly, the item unavailable revenue is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenue from three sources: property taxes, user charges and other. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. Net Position – In the government-wide financial statements, net position reported as “Net investment in capital assets” includes capital assets, net of accumulated depreciation, less the principal balance of outstanding debt used to acquire capital assets. Unspent proceeds of capital related debt are not considered to be capital related debt. Net position is reported as restricted when amounts are not available for appropriation or are legally restricted by outside parties for a specific use. Net position has been restricted for the following: Nonexpendable permanent funds represent the endowment portion of donor restricted trusts that support governmental programs. Federal and State grants represent assets that have restrictions placed on them from federal and state granting agencies. Community preservation represents assets that are restricted by state law for the purposes of acquiring or developing open space and recreational facilities, historic resources and affordable housing. Capital outlay represents assets that are restricted for the purposes of funding capital projects. Public safety revolving funds represent assets that have accumulated from user charges assessed to support specific public safety programs. These amounts are restricted by state law for the purpose of funding those programs for which the user charges were assessed. Gift funds represent assets that are restricted by donors for specific purposes. Other purposes represent assets that are restricted for numerous various minor specific governmental programs and uses. Town of Nantucket, Massachusetts Page 57 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 57 of 157 Comprehensive Annual Financial Report Fund Equity – In the fund financial statements, fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent in which the Town is required to honor constraints on the specific purpose for which amounts in the funds can be spent. Fund balance is reported in five components – nonspendable, restricted, committed, assigned, and unassigned as described below: Nonspendable represents amounts that cannot be spent because they are either (a) not in spendable form (i.e. inventory or prepaid) or (b) legally or contractually required to be maintained intact such as the corpus of an endowment. Restricted represents amounts that have constraints placed either externally by third-parties (creditors, grantors, contributors, or laws or regulations of other governments) or by law through constitutional provisions or enabling legislation. Enabling legislation authorizes the Town to assess, levy, charge or otherwise mandate payment of resources (from external resource providers) and includes a legally enforceable requirement (compelled by external parties) that those resources be used only for the specific purposes stipulated in the legislation. Committed represents amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the Town Meeting through Town Meeting Articles, which represent the most binding constraint that give rise to committed fund balance. Those committed amounts cannot be used for any other purpose unless the Town Meeting removes or changes the specified use by taking the same type of action (through Town Meeting Articles) it employed previously to commit those amounts. Assigned represents amounts that are constrained by the Town’s intent to be used for specific purposes, but are neither restricted nor committed. The Town has by ordinance authorized the Director of Municipal Finance to assign fund balance. The Town Meeting may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s appropriated budget. Unassigned represents amounts that have not been restricted, committed or assigned to specific purposes within the general fund. The general fund is the only fund that reports a positive unassigned fund balance amount. Other governmental funds besides the general fund can only report a negative unassigned fund balance amount. When both restricted and unrestricted resources are available for use, it is the Town’s policy to use restricted resources first, then unrestricted resources (committed, assigned and unassigned) as they are needed. When unrestricted resources (committed, assigned and unassigned) are available for use it is the Town’s policy to use committed resources first, then assigned, and then unassigned as they are needed. The Town has not established financial policies with respect to maintaining minimum fund balance amounts. Stabilization Fund – The Town maintains a general stabilization fund which may be used for any municipal purpose upon a two-thirds vote of the Town Meeting. The balance of the fund totals $5,059,489 at June 30, 2018 and is reported as unassigned fund balance in the General Fund. Town of Nantucket, Massachusetts Page 58 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 58 of 157 Comprehensive Annual Financial Report The Town maintains a capital stabilization fund which may be used for any municipal capital purpose upon a two-thirds vote of the Town Meeting. The balance of the fund totals $1,250,000 at June 30, 2018 and is reported as unassigned fund balance in the General Fund. The following table reflects the Town’s fund equity categorizations: Encumbrances – The Town’s encumbrance policy regarding the general fund is to (1) classify encumbrances that arise from the issuance of purchase orders resulting from normal purchasing activity approved by the Director of Finance as assigned, and (2) classify encumbrances that result from an action of the Town Meeting as committed. Encumbrances of funds already restricted, or committed are included within the classification of those fund balances and not reported separately. The Town reports $1,726,604 of encumbrances from normal purchasing activity in the general fund as assigned and $1,639,399 of encumbrances from Town Meeting Articles in the general fund as committed. There are no encumbrances reported in any other fund. Town Nonmajor Capital Governmental General Projects Funds Total Nonspendable: Nonexpendable trust funds -$ -$ 44,805$ 44,805$ Restricted: School grants - - 452,762 452,762 Town grants - - 965,927 965,927 School revolving - - 1,265,466 1,265,466 Ambulance - - 1,046,739 1,046,739 Beach improvements - - 1,258,294 1,258,294 Waterway improvements - - 986,568 986,568 Other Town revolving - - 2,382,664 2,382,664 Capital outlay - 10,682,360 406,812 11,089,172 Community preservation -- 3,814,486 3,814,486 Gift funds -- 890,413 890,413 Expendable trust funds -- 129,983 129,983 Debt service 285,872 - - 285,872 Committed: Nursing home 6,215,835 - - 6,215,835 Solid waste landfill 3,017,898 - - 3,017,898 Capital outlay 1,631,790 - - 1,631,790 Other purposes 18,921 - - 18,921 Assigned: Town administration 318,467 - - 318,467 Public buildings 171,086 - - 171,086 Education 642,265 - - 642,265 Public safety 168,007 - - 168,007 Other purposes 426,779 - - 426,779 Subsequent years' budget 5,531,316 - - 5,531,316 Unassigned 21,550,897 (4,798,060) (214,797) 16,538,040 39,979,133$ 5,884,300$ 13,430,122$ 59,293,555$ Town of Nantucket, Massachusetts Page 59 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 59 of 157 Comprehensive Annual Financial Report E.Excess of Expenditures Over Appropriations During the fiscal year ended, the Town overspent its appropriation for snow and ice removal costsby $124,450. This will be raised through subsequent tax assessments when the Town sets its taxrate for fiscal year 2019. The Town incurred deficits of $4,798,060 for capital outlays which is reported in the TownCapital Projects major fund and $214,797 for a septic program which is reported in the NonmajorGovernmental Funds. These deficits will be funded through available revenues, grant funds orbond proceeds in future fiscal years. F.Use of Estimates The preparation of basic financial statements in conformity with GAAP requires management tomake estimates and assumptions that affect the reported amounts of assets, deferred outflows,liabilities, deferred inflows, disclosure for contingent assets and liabilities at the date of the basic financial statements and the reported amounts of revenues and expenditures/expenses during thefiscal year. Actual results could vary from estimates that were used. II.Detailed Notes to All Funds A.Deposits and Investments A cash and investment pool is maintained that is available for use by all funds. Each fund type’sportion of this pool is displayed on the balance sheet as “cash and cash equivalents”. Thedeposits and investments of trust funds are held separately from those of other funds. State laws and regulations require the Town to invest funds only in pre-approved investmentinstruments which include but are not necessarily limited to bank deposits, money markets,certificates of deposit, U.S. obligations, repurchase agreements, and State Treasurer’s investmentpool (the Pool). In addition, the statutes impose various limitations on the amount and length ofinvestments and deposits. Repurchase agreements cannot be for a period of over ninety days, and the underlying security must be a United States obligation. The Pool meets the criteria of an external investment pool. The Pool is administered by the Massachusetts Municipal Depository Trust (the MMDT), which was established by the Treasurerof the Commonwealth who serves as Trustee. The fair value of the position in the Pool is thesame as the value of the Pool shares. Primary Government (Town) Custodial Credit Risk: Deposits - In the case of deposits, this is the risk that in the event of a bankfailure, the government’s deposits may not be returned to it. The Town has adopted a depositpolicy which requires that the Treasurer review each bank doing business with the Town on aquarterly basis. The policy does not restrict the value of uninsured or uncollateralizedinvestments held at any time. Town of Nantucket, Massachusetts Page 60 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 60 of 157 Comprehensive Annual Financial Report At year-end, the carrying amount of the Town's deposits was $96,038,394 and the bank balance was $96,894,203. Of the Town's bank balance, $73,732,526 was covered by federal depository insurance or the Depositors Insurance Fund, $15,457,514 was collateralized and the remainder was uninsured. Custodial Credit Risk: Investments – In the case of investments, this is the risk that in the event of the invested party not being able to provide required payments to investors, ceasing to exist, or filing of bankruptcy, the Town may not be able to recover the full amount of its principal investment and/or investment earnings. The Town has adopted an investment policy regarding custodial credit risk that requires all securities not held directly by the Treasurer must be held by a third party custodian approved by the Treasurer in the Town’s name and tax identification number. The Town’s investments in U.S. government obligations, corporate debt securities and equity securities are held by a broker-dealer where the Town’s assets are segregated from the broker-dealer firm assets and are protected up to $500,000 under coverage through the Securities Investor Protection Corporation (“SIPC”). Additionally, the broker-dealer carries excess insurance to cover claims over the SIPC limit through Lloyd’s with a firm cap of $1 billion with no individual client limit. The Town’s investments in certificates of deposit are fully insured by federal depository insurance or the Depositors Insurance Fund. Fair Value of Investments – The Town reports its investments at fair value. When actively quoted observable prices are not available, the Town generally uses either implied pricing from similar investments or valuation models based on net present values of estimated future cash flows (adjusted as appropriate for liquidity, credit, market and/or other risk factors). The Town categorizes its fair value measurements within the fair value hierarchy established by GAAP. This hierarchy is based on valuation inputs used to measure the fair value of the asset or liability. The three levels of the hierarchy are as follows: •Level 1 – Inputs are quoted prices in active markets for identical investments at themeasurement date. •Level 2 – Inputs (other than quoted prices included in Level 1) are either directly orindirectly observable for the investment through correlation with market data at themeasurement date and for the duration of the instrument’s anticipated life. •Level 3 – Inputs reflect the Town’s best estimate of what market participants would usein pricing the investment at the measurement date. Town of Nantucket, Massachusetts Page 61 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 61 of 157 Comprehensive Annual Financial Report The following table presents the Town’s investments carried at fair value on a recurring basis in the statement of net position at June 30, 2018: Equity securities classified in Level 1 are valued using prices quoted in active markets for those securities. Debt securities classified in Level 2 are valued using prices for similar securities in active markets. Certificates of deposit classified in Level 2 are valued using matrix pricing based on the securities’ relationship to benchmark quoted prices. Interest Rate Risk – The Town limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The policy limits investments of operating funds to one year or less and limits investment maturities of trust funds and other special funds to periods no longer that seven years, maintaining an average maturity no greater than three years for the investment portfolio. At June 30, 2018, the Town’s investments had the following maturities: Concentration of Credit Risk – The Town does not place a limit on the amount that may be invested in any one issuer. The Town has 19% of its investments in the MMDT and 23% of its investments in United States government backed securities. No other issuer was greater than 5% of the Town’s investments. 6/30/18 Level 1 Level 2 Level 3 Investments by fair value level Debt securities: U.S. Government obligations 3,636,144$ -$ 3,636,144$ -$ Corporate bonds 3,622,148 - 3,622,148 - Total debt securities 7,258,292 - 7,258,292 - Equity securities: Common stock 3,208,517 3,208,517 - - Total equity securities 3,208,517 3,208,517 - - Certificates of deposit 2,607,175 2,607,175 Total investments by fair value level 13,073,984$ 3,208,517$ 9,865,467$ -$ Investments measured at amortized cost MMDT 3,044,815 Total investments 16,118,799$ Fair Value Measurements Using Time Until Maturity (Years) Less Investment Type 6/30/18 Than 1 1-5 6-10 Corporate fixed income securities 3,622,148$ 830,651$ 2,791,497$ -$ U.S. government obligations 3,636,144 - 3,636,144 - Certificates of deposit 2,607,175 1,779,817 675,619 151,739 State investment pool (MMDT)3,044,815 3,044,815 - - Total Town investments with maturities 12,910,282$ 5,655,283$ 7,103,260$ 151,739$ Town of Nantucket, Massachusetts Page 62 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 62 of 157 Comprehensive Annual Financial Report Credit Risk – The Town restricts the investment of operating funds to U.S. Treasury or Agency securities which carry “AAA” ratings. Trust and other special funds which are longer-term investments may invest in fixed-income securities which are held principally for capital preservation and income potential and corporate debt that carries a rating of “A” or better by either Standard and Poor’s or Moody’s rating services. If a security falls below the “A” rating, the security will be monitored by the Treasurer and advisor and will be noted as an exception to the policy if held in the investment portfolio. The Treasurer will sell the securities if a decline in value is expected. At June 30, 2018, the credit quality ratings of investments were as follows: Discretely Presented Component Unit – Nantucket County Custodial Credit Risk: Deposits- The County has adopted a deposit policy which requires that the Treasurer review each bank doing business with the County on a quarterly basis. The policy does not restrict the value of uninsured or uncollateralized investments held at any time. At year-end, the carrying amount of the County's deposits was $5,042,913 and the bank balance was $5,054,995. Of the County's bank balance, $4,910,480 was covered by either federal depository insurance or by the Depositors’ Insurance Fund (DIF) and the remaining balance was uninsured. Custodial Credit Risk: Investments- The County has adopted an investment policy regarding custodial credit risk that requires all securities not held directly by the Treasurer must be held by a third party custodian approved by the Treasurer in the Town/County’s name and tax identification number At year-end, the County’s investments consisted of Certificates of Deposit totaling $42,993 which were covered by federal depository insurance and were not subject to custodial credit risk. These are recorded as cash equivalents at June 30, 2018. Interest Rate Risk - The County limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The policy limits investments of operating funds to one year or less and limits investment maturities of trust funds and other Corporate U.S. Government State Fixed Income Agencies &Certificates Investment Securities Treasuries Of Deposit Pool Total AAA 98,722$ -$ -$ -$ 98,722$ AA+- 3,636,144 - - 3,636,144 AA 449,744 - - - 449,744 A+ 1,148,225 - - - 1,148,225 A 558,078 - - - 558,078 A-728,723 - - - 728,723 BBB+390,828 - - - 390,828 BBB 247,828 - - - 247,828 Not Rated - - 2,607,175 3,044,815 5,651,990 Total - All 3,622,148$ 3,636,144$ 2,607,175$ 3,044,815$ 12,910,282$ Town of Nantucket, Massachusetts Page 63 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 63 of 157 Comprehensive Annual Financial Report special funds to periods no longer that seven years, maintaining an average maturity no greater than three years for the investment portfolio Credit Risk - The County restricts the investment of operating funds to U.S. Treasury or Agency securities which carry “AAA” ratings. Trust and other special funds which are longer-term investments may invest in fixed-income securities which are held principally for capital preservation and income potential and corporate debt that carries a rating of “A” or better by either Standard and Poor’s or Moody’s rating services. If a security falls below the “A” rating, the security will be monitored by the Treasurer and advisor and will be noted as an exception to the policy if held in the investment portfolio. The Treasurer will sell the securities if a decline in value is expected. Concentration of Credit Risk – The County does not place a limit on the amount that may be invested in any one issuer. Discretely Presented Component Unit – Nantucket Islands Land Bank Custodial Credit Risk: Deposits -The Land Bank does not have a policy regarding custodial credit risk for deposits. At year-end, the carrying amount of the Land Bank’s deposits was approximately $19,600,000, of which approximately $1,241,000 was exposed to custodial credit risk. The Land Bank is required to hold monies in reserve in accordance with certain land acquisitions and debt service requirements of bond issuances. These reserve funds are included as restricted cash in the financial statements. Restricted Cash consist of the following as of June 30, 2018: Series A Debt Reserve $1,373,942 Park construction 461,158 Mitigation agreements 32,741 Life insurance premium 217,162 $2,084,903 Custodial Credit Risk: Investments -The Land Bank does not have a policy regarding custodial credit risk for investments. At year-end, the Land Bank’s investments include Certificates of Deposit totaling $4,830,888 which were covered by federal depository insurance or DIF and were not subject to custodial credit risk, mature in less than one year, are stated at fair market value and are unrated in terms of credit risk quality ratings. The Land Bank also maintains investments in U.S Treasury bonds totaling $2,711,637 which mature in May 2022 and have a Moody’s quality rating of AAA. At June 30, 2018, all investments are categorized in Level 1 of the fair value hierarchy based on quoted market prices. The Land Bank has entered into an agreement with the Town, which requires the Land Bank to establish a working capital reserve fund. This fund, along with the guarantee of the Town of its full faith and credit, secures the Series 2009A, 2012A and 2016A bonds outstanding at year-end. In addition, the Land Bank is prohibited from acquiring additional real estate at any time that an amount equal to one year’s debt service relating to the bonds in the reserve fund is not on deposit. Interest Rate Risk -The Land Bank does not have a formal policy regarding interest rate risk. Town of Nantucket, Massachusetts Page 64 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 64 of 157 Comprehensive Annual Financial Report B.Receivables Receivables as of year-end for the Town’s individual major and non-major governmental funds inthe aggregate, including the applicable allowances for uncollectible accounts, are as follows: Receivables as of year-end for the Town’s proprietary funds are as follows: Gross Allowance for Net Amount Uncollectibles Amount Receivables: Real estate and personal property taxes 2,010,867$ (333,986)$ 1,676,881$ Tax liens 2,846,107 - 2,846,107 Motor vehicle and other excise taxes 1,301,367 (25,569) 1,275,798 Community preservation surcharges 178,332 - 178,332 Nursing home user charges 389,499 - 389,499 Landfill user charges 563,178 (84,477) 478,701 Ambulance user charges 732,325 (360,000) 372,325 Departmental and other 19,124 - 19,124 Intergovernmental 447,531 - 447,531 Total 8,488,330$ (804,032)$ 7,684,298$ Gross Allowance for Net Amount Uncollectibles Amount Receivables: Water user charges 702,038$ -$ 702,038$ Sewer user charges 748,435 - 748,435 Sewer privilege fees 677,760 - 677,760 Airport user charges 422,890 - 422,890 Stop loss receivable 193,412 - 193,412 Intergovernmental 18,850,194 - 18,850,194 Total 21,594,729$ -$ 21,594,729$ Town of Nantucket, Massachusetts Page 65 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 65 of 157 Comprehensive Annual Financial Report Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquate liabilities of the current period. The following identifies the components of deferred inflows of resources in the governmental funds: Massachusetts Clean Water Trust – The Town has entered into numerous loan agreements with the Massachusetts Clean Water Trust (“MCWT”). It is expected that the Town will be subsidized by MCWT on a periodic basis for principal in the amount of $1,182,442 and interest in the amount of $530,728 until the maturity of these agreements. GAAP requires the recognition of gross debt relative to these agreements; therefore, a receivable totaling $1,182,442 has been reported in the Sewer Enterprise Fund. Discretely Presented Component Unit – Nantucket Islands Land Bank In November of 2017, the Land Bank received a private pledge in the form of a grant for the purpose of the construction of a landscaped park. In accordance with the agreement, the donor will pay $1,383,175 in three equal installments, the first of which was received thirty days after the receipt of the signed agreement totaling $461,058. The remaining installments will be paid upon the achievement of certain design and building phases of the park. At June 30, 2018, no expenses have been incurred that are allowable to be funded out of the grant. The remaining installments, totaling $922,117 are included in grant receivables and the total amount of $1,383,175 will remain in unearned grant revenue until the proper expenses have been incurred. Other General Governmental Fund Funds Total Receivable type: Real estate and personal property taxes 1,085,168$ -$ 1,085,168$ Tax liens 2,846,107 - 2,846,107 Motor vehicle and other excise taxes 723,940 - 723,940 Community preservation surcharges - 178,332 178,332 Nursing home user charges 389,499 - 389,499 Landfill user charges 478,701 - 478,701 Ambulance user charges - 372,325 372,325 Departmental and other 19,124 - 19,124 Total 5,542,539$ 550,657$ 6,093,196$ Town of Nantucket, Massachusetts Page 66 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 66 of 157 Comprehensive Annual Financial Report C. Capital Assets Capital asset activity for the year ended June 30, 2018, was as follows: . Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital assets not being depreciated: Land 165,161,211$ 13,708,000$ -$ 178,869,211$ Construction in process 61,493,441 11,459,261 (8,539,250) 64,413,452 Total capital assets not being depreciated 226,654,652 25,167,261 (8,539,250) 243,282,663 Capital assets being depreciated: Buildings and improvements 67,438,289 2,241,875 (26,136) 69,654,028 Infrastructure * 42,453,397 5,154,674 (10,346,304) 37,261,767 Machinery and equipment * 11,262,220 1,848,076 (2,411,751) 10,698,545 Vehicles * 8,705,904 1,171,567 (540,887) 9,336,584 Total capital assets being depreciated 129,859,810 10,416,192 (13,325,078) 126,950,924 Less accumulated depreciation for: Buildings and improvements * (30,558,605) (1,820,400) 26,136 (32,352,869) Infrastructure * (23,261,617) (1,595,564) 10,346,304 (14,510,877) Machinery and equipment * (5,403,449) (1,677,702) 2,411,751 (4,669,400) Vehicles * (5,995,888) (705,323) 540,887 (6,160,324) Total accumulated depreciation (65,219,559) (5,798,989) 13,325,078 (57,693,470) Total capital assets being depreciated, net 64,640,251 4,617,203 - 69,257,454 Total governmental activities capital assets, net 291,294,903$ 29,784,464$ (8,539,250)$ 312,540,117$ Business-Type Activities: Capital assets not being depreciated: Land 16,816,429$ -$ (11,044)$ 16,805,385$ Construction in process 18,310,931 29,084,668 (3,141,491) 44,254,108 Total capital assets not being depreciated 35,127,360 29,084,668 (3,152,535) 61,059,493 Capital assets being depreciated: Buildings and improvements 55,716,326 40,250 (735,044) 55,021,532 Infrastructure 166,681,386 2,612,174 - 169,293,560 Machinery and equipment 20,970,085 269,452 (616,307) 20,623,230 Vehicles 6,098,477 1,388,994 (62,605) 7,424,866 Total capital assets being depreciated 249,466,274 4,310,870 (1,413,956) 252,363,188 Less accumulated depreciation for: Buildings and improvements (9,518,375) (1,507,595) 735,044 (10,290,926) Infrastructure (55,119,778) (3,664,225) - (58,784,003) Machinery and equipment (14,446,544) (803,181) 616,307 (14,633,418) Vehicles (4,185,311) (404,188) 62,605 (4,526,894) Total accumulated depreciation (83,270,008) (6,379,189) 1,413,956 (88,235,241) Total capital assets being depreciated, net 166,196,266 (2,068,319) - 164,127,947 Total business-type activities capital assets, net 201,323,626$ 27,016,349$ (3,152,535)$ 225,187,440$ * As reclassified Town of Nantucket, Massachusetts Page 67 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 67 of 157 Comprehensive Annual Financial Report Beginning Ending Balance Increases Decreases Balance Business-type Activities: Siasconset Water Capital assets not being depreciated: Land 2,615,578$ -$ -$ 2,615,578$ Construction in process 149,056 185,429 - 334,485 Total capital assets not being depreciated 2,764,634 185,429 - 2,950,063 Capital assets being depreciated: Buildings and improvements 808,299 - - 808,299 Infrastructure 9,858,124 - - 9,858,124 Machinery and equipment 525,161 - - 525,161 Total capital assets being depreciated 11,191,584 - - 11,191,584 Less accumulated depreciation for: Buildings and improvements (137,339) (29,935) - (167,274) Infrastructure (1,685,445) (193,393) - (1,878,838) Machinery and equipment (64,021) (24,926) - (88,947) Total accumulated depreciation (1,886,805) (248,254) - (2,135,059) Total capital assets being depreciated, net 9,304,779 (248,254) - 9,056,525 Total Siasconset Water capital assets, net 12,069,413$ (62,825)$ -$ 12,006,588$ Business-type Activities: Wannacomet Water Capital assets not being depreciated: Land * 5,434,455$ -$ -$ 5,434,455$ Construction in process 3,559,850 4,557,678 - 8,117,528 Total capital assets not being depreciated 8,994,305 4,557,678 - 13,551,983 Capital assets being depreciated: Buildings and improvements * 2,268,018 - (735,044) 1,532,974 Infrastructure * 37,717,269 - - 37,717,269 Machinery and equipment * 1,831,682 9,579 (332,285) 1,508,976 Vehicles 313,541 40,633 (62,605) 291,569 Total capital assets being depreciated 42,130,510 50,212 (1,129,934) 41,050,788 Less accumulated depreciation for: Buildings and improvements (902,493) (213,289) 735,044 (380,738) Infrastructure (9,111,609) (784,955) - (9,896,564) Machinery and equipment (666,294) (165,797) 332,285 (499,806) Vehicles (262,137) (18,847) 62,605 (218,379) Total accumulated depreciation (10,942,533) (1,182,888) 1,129,934 (10,995,487) Total capital assets being depreciated, net 31,187,977 (1,132,676) - 30,055,301 Total Wannacomet Water capital assets, net 40,182,282$ 3,425,002$ -$ 43,607,284$ * As reclassified Town of Nantucket, Massachusetts Page 68 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 68 of 157 Comprehensive Annual Financial Report Beginning Ending Business-type Activities: Sewer Balance Increases Decreases Balance Capital assets not being depreciated: Land 6,375,583$ -$ -$ 6,375,583$ Construction in process 11,203,279 21,251,410 (878,340) 31,576,349 Total capital assets not being depreciated 17,578,862 21,251,410 (878,340) 37,951,932 Capital assets being depreciated: Buildings and improvements 368,790 - - 368,790 Infrastructure 83,124,990 193,118 - 83,318,108 Machinery and equipment * 16,376,438 74,077 (8,457) 16,442,058 Vehicles * 1,349,992 432,596 - 1,782,588 Total capital assets being depreciated 101,220,210 699,791 (8,457) 101,911,544 Less accumulated depreciation for: Buildings and improvements (180,006) (13,260) - (193,266) Infrastructure (20,910,189) (1,691,259) - (22,601,448) Machinery and equipment * (12,620,836) (445,211) 8,457 (13,057,590) Vehicles * (639,160) (145,781) - (784,941) Total accumulated depreciation (34,350,191) (2,295,511) 8,457 (36,637,245) Total capital assets being depreciated, net 66,870,019 (1,595,720) - 65,274,299 Total Sewer capital assets, net 84,448,881$ 19,655,690$ (878,340)$ 103,226,231$ Capital assets not being depreciated: Land * 2,390,813$ -$ (11,044)$ 2,379,769$ Construction in process * 3,398,746 3,090,151 (2,263,151) 4,225,746 Total capital assets not being depreciated 5,789,559 3,090,151 (2,274,195) 6,605,515 Capital assets being depreciated: Infrastructure * 35,981,003 2,419,056 - 38,400,059 Buildings and improvements 52,271,219 40,250 - 52,311,469 Machinery and equipment * 2,236,804 185,796 (275,565) 2,147,035 Vehicles * 4,434,944 915,765 - 5,350,709 Total capital assets being depreciated 94,923,970 3,560,867 (275,565) 98,209,272 Less accumulated depreciation for: Infrastructure * (23,412,535) (994,618) - (24,407,153) Buildings and improvements (8,298,537) (1,251,111) - (9,549,648) Machinery and equipment * (1,095,393) (167,247) 275,565 (987,075) Vehicles * (3,284,014) (239,560) - (3,523,574) Total accumulated depreciation (36,090,479) (2,652,536) 275,565 (38,467,450) Total capital assets being depreciated, net 58,833,491 908,331 - 59,741,822 Total Nantucket Memorial Airport capital assets, net 64,623,050$ 3,998,482$ (2,274,195)$ 66,347,337$ * As reclassified Business-type Activities: Nantucket Memorial Airport Town of Nantucket, Massachusetts Page 69 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 69 of 157 Comprehensive Annual Financial Report Depreciation expense was charged to functions/programs as follows: Governmental Activities:Business-Type Activities: General government 262,883$ Water 1,431,142$ Public safety 1,669,258 Sewer 2,295,511 Education 1,764,593 Airport 2,652,536 Public works 1,965,607 6,379,189$ Health and human services 136,648 5,798,989$ Discretely Presented Component Unit - Nantucket County Beginning Ending Balance Increases Decreases Balance Capital assets not being depreciated: Land 3,283,842$ -$ -$ 3,283,842$ Capital assets being depreciated: Machinery and equipment 79,962 - (58,891) 21,071 Less accumulated depreciation for: Machinery and equipment (78,011) (1,301) 58,891 (20,421) Total capital assets being depreciated, net 1,951 (1,301) - 650 Total Nantucket County capital assets, net 3,285,793$ (1,301)$ -$ 3,284,492$ Discretely Presented Component Unit - Nantucket Islands Land Bank Beginning Ending Balance Increases Decreases Balance Capital assets not being depreciated: Land 300,699,215$ 20,027,528$ -$ 320,726,743$ Capital assets being depreciated: Buildings, improvements and equipment 27,899,734 1,384,864 (737,115) 28,547,483 Less: accumulated depreciation (11,241,122) (1,035,630) 382,529 (11,894,223) Total capital assets being depreciated, net 16,658,612 349,234 (354,586) 16,653,260 Total Nantucket Islands Land Bank capital assets, net 317,357,827$ 20,376,762$ (354,586)$ 337,380,003$ Town of Nantucket, Massachusetts Page 70 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 70 of 157 Comprehensive Annual Financial Report D.Interfund Receivables, Payables and Transfers The composition of interfund transfers for the fiscal year ended June 30, 2018, was as follows: E.Temporary Debt The Town is authorized to borrow on a temporary basis to fund the following: Current Operating Costs – Prior to collection of revenues, expenditures may be financed throughthe issuance of revenue or tax anticipation notes (RANS or TANS). Capital Projects and Other Approved Costs – Projects may be temporarily funded through the issuance of bond anticipation notes (BANS) or grant anticipation notes (GANS). In certain cases,prior to the issuance of these temporary notes, the governing body must take the necessary legalsteps to authorize the issuance of the general obligation bonds. Temporary notes may not exceed the aggregate amount of bonds authorized or the grant award amount and carry maturity datesthat are limited by state law. Interest expenditures and expenses for temporary borrowings areaccounted for in the general fund and enterprise funds, respectively. Short-term (BANs) issued for nonmajor governmental funds were used for septic betterments($1,000,000), roadways and sidewalks ($2,000,000), school construction ($1,000,000), town pier($400,000), affordable housing ($592,000), nursing home construction ($925,000) and fire stationconstruction ($5,500,000). Those issued for business-type funds were issued for water projects($4,062,000), sewer projects ($41,807,471) and airport projects ($2,175,447). The Town is eligible for interim loan financing from the MCWT in anticipation of permanentfinancing through MCWT for costs related to the Town’s septic management program and sewerimprovements. The interim loans must be converted to permanent long-term debt no later thanDecember 31, 2019. Short-term MCWT loans totaling $1,000,000 and $30,036,302 are reportedin the non-major governmental funds and business-type funds, respectively. Town Nonmajor General Capital Governmental Fund Projects Funds Total General Fund -$ 6,429,687$ 400,000$ 6,829,687$ (1) Town Capital Projects - - 65,000 65,000 (2) Nonmajor Governmental Funds 235,753 1,879,000 - 2,114,753 (3) Nantucket Memorial Airport 285,264 - - 285,264 (4) Total 521,017$ 8,308,687$ 465,000$ 9,294,704$ (1) Transfer to town capital projects for various capital outlays; transfer to nonmajor funds to fundcommunity school programs.(2) Transfers to general fund to close out a project. (3) Transfers to general fund to close out stagnant funds and transfers to town capital projects for various capital outlays. (4) Transfers to general fund for reimbursement of prior year costs Transfers In Transfers Out Town of Nantucket, Massachusetts Page 71 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 71 of 157 Comprehensive Annual Financial Report Temporary notes outstanding at June 30, 2018, are payable as follows: F.Long–Term Obligations The Town issues general obligation bonds and notes to provide funds for the acquisition andconstruction of major capital facilities. General obligation bonds and notes have been issued forboth governmental and business-type activities. Additionally, the Town incurs various otherlong-term obligations relative to associated personnel costs. State law permits a Town, under the provisions of Chapter 44, Section 10, to authorizeindebtedness up to a limit of 5.0 percent of its equalized valuation. Debt issued in accordancewith this section of the law is designated as being “inside the debt limit.” In addition, a Town may authorize debt in excess of that limit for specific purposes. Such debt, when issued, isdesignated as being “outside the debt limit”. Interest Maturity July 1,June 30, Type Rate Date 2017 Additions Retirements 2018 MCWT 0.00% 12/31/18 1,000,000$ -$ -$1,000,000$ BAN 2.00% Matured 12,240,000 - (12,240,000) - BAN 2.00% Matured 2,550,000 - (2,550,000) - BAN 2.00% Matured - 1,000,000 (1,000,000) - BAN 2.50% 11/16/18 - 7,417,000 - 7,417,000 BAN 2.75% 11/16/18 - 3,000,000 - 3,000,000 Total Governmental Notes 15,790,000 11,417,000 (15,790,000) 11,417,000 BAN 1.50% Matured 2,575,090 - (2,575,090) - BAN 2.00% Matured 11,828,123 - (11,828,123) - BAN 1.25% Matured 771,000 - (771,000)- BAN 2.00% Matured 6,212,000 - (6,212,000) - BAN 2.50% Matured - 2,575,090 (2,575,090) - BAN 2.00% Matured - 10,884,458 (10,884,458) - BAN 2.50% 11/16/18 - 13,333,169 - 13,333,169 BAN 2.75% 11/16/18 - 2,500,000 - 2,500,000 BAN 3.00% 05/24/19 - 1,883,447 - 1,883,447 BAN 2.20% 05/24/19 - 292,000 - 292,000 MCWT 2.00% 12/31/19 - 8,472,975 - 8,472,975 MCWT 2.00% 12/31/19 - 5,873,812 - 5,873,812 MCWT 2.00% 12/31/19 - 14,101,765 - 14,101,765 MCWT 2.00% 12/31/19 - 1,587,750 - 1,587,750 Total Business-Type Notes 21,386,213 61,504,466 (34,845,761) 48,044,918 Total Notes Payable 37,176,213$ 72,921,466$ (50,635,761)$ 59,461,918$ Town of Nantucket, Massachusetts Page 72 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 72 of 157 Comprehensive Annual Financial Report The following reflects the current year activity in the long-term liability accounts: The Town’s governmental activities liabilities will be liquidated by the general fund. The business-type liabilities will be liquidated by the respective business-type funds. Beginning Ending Due within Balance Additions Deletions Balance one year Governmental Activities: Bond and note indebtedness 76,064,664$ 11,730,000$ (5,651,238)$ 82,143,426$ 4,694,769$ Unamortized bond premium 2,234,575 895,909 (301,656) 2,828,828 299,909 Workers' compensation 44,231 95,805 (44,231) 95,805 95,805 Landfill closure 10,131,000 1,869,000 - 12,000,000 - Compensated absences 2,231,171 1,125,536 (1,115,585) 2,241,122 1,120,561 Net other postemployment benefits liability *93,641,015 5,766,724 (11,891,609) 87,516,130 - Net pension liability 58,094,313 6,558,237 (9,564,764) 55,087,786 - Total Governmental Activities 242,440,969$ 28,041,211$ (28,569,083)$ 241,913,097$ 6,211,044$ Business-Type Activities - Siasconset Water: Bond and note debt 5,589,900$ -$ (380,000)$ 5,209,900$ 395,000$ Unamortized bond premium 513,632 - (75,171) 438,461 75,171 Net other postemployment benefits liability *604,705 19,058 (80,015) 543,748 - Net pension liability 139,131 15,706 (22,906) 131,931 - Total Siasconset Water 6,847,368 34,764 (558,092) 6,324,040 470,171 Business-Type Activities - Wannacomet Water: Bond and note debt 17,846,400 1,426,000 (1,675,000) 17,597,400 1,738,000 Unamortized bond premium 1,261,535 147,350 (206,852) 1,202,033 207,621 Compensated absences 209,148 131,054 (104,574) 235,628 117,814 Net other postemployment benefits liability *1,200,489 77,627 (115,470) 1,162,646 - Net pension liability 2,873,063 324,338 (473,026) 2,724,375 - Total Wannacomet Water 23,390,635 2,106,369 (2,574,922) 22,922,082 2,063,435 Business-Type Activities - Sewer: Bond and note debt 39,527,894 134,000 (2,487,239) 37,174,655 2,463,274 Unamortized bond premium 342,555 - (55,265) 287,290 51,584 Compensated absences 86,898 44,778 (43,449) 88,227 44,113 Net other postemployment benefits liability *267,412 10,308 (23,563) 254,157 - Net pension liability 1,753,056 197,901 (288,626) 1,662,331 - Total Sewer 41,977,815 386,987 (2,898,142) 39,466,660 2,558,971 Business-Type Activities - Nantucket Memorial Airport: Bond and note debt 9,988,000 - (818,000) 9,170,000 800,000 Unamortized bond premium 160,573 - (23,321) 137,252 21,227 Compensated absences 642,960 281,751 (321,480) 603,231 301,616 Net other postemployment benefits liability *3,652,858 276,914 (339,868) 3,589,904 - Net pension liability 6,706,133 757,052 (1,104,111) 6,359,074 - Total Nantucket Memorial Airport 21,150,524 1,315,717 (2,606,780) 19,859,461 1,122,843 Total Business-Type Activities 93,366,342$ 3,843,837$ (8,637,936)$ 88,572,243$ 6,215,420$ * As restated (see Note IV) Town of Nantucket, Massachusetts Page 73 of 157 Comprehensive Annual Financial Report The following is a summary of outstanding long-term debt obligations as of June 30, 2018: On November 29, 2017, the Town issued $1,355,000 in general obligation bonds that mature on July 15, 2029 and pay interest at 2.125% – 4% per annum. The proceeds were used for landfill purposes and are subject to federal and state income taxation. On November 29, 2017, the Town issued $11,935,000 in general obligation bonds that mature on July 15, 2037 and pay interest at 2.5% – 5.0% per annum. The proceeds were used to retire a like amount of BANS maturing on November 30, 2017. The bonds were issued for water projects ($1,426,000), sewer construction ($134,000), landfill ($845,000), fire station construction ($931,000) and school construction ($8,599,000). Prior Year Refunding – In prior years, the Town defeased general obligation bonds by placing the proceeds of the new bonds in an irrevocable trust account to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the government’s financial statements. At June 30, 2018, $2,815,000 of defeased bonds remains outstanding. Interest Beginning Ending Description of Issue Rate Balance Additions Maturities Balance Governmental Activities: General Obligation Bonds 2.00 - 5.00%48,116,634$ 11,730,000$ (1,756,657)$ 58,089,977$ Refunding Bonds 1.50 - 5.00%13,506,450 - (3,195,000) 10,311,450 Massachusetts Clean Water Trust 0.00 - 2.42%14,441,580 - (699,581) 13,741,999 Total Governmental Activities 76,064,664 11,730,000 (5,651,238) 82,143,426 Add: Unamortized bond premium 2,234,575 895,909 (301,656) 2,828,828 Total Governmental Activities, net 78,299,239$ 12,625,909$ (5,952,894)$ 84,972,254$ Business-Type Activities - Siasconset Water: General Obligation Bonds 2.00 - 5.00%1,960,000$ -$ (380,000)$ 1,580,000$ Refunding Bonds 2.00 - 4.00%3,629,900 - - 3,629,900 Total Siasconset Water 5,589,900 - (380,000) 5,209,900 Business-Type Activities - Wannacomet Water: General Obligation Bonds 2.00 - 5.00%7,760,000 1,426,000 (1,205,000) 7,981,000 Refunding Bonds 1.50 - 5.00%10,086,400 - (470,000) 9,616,400 Total Wannacomet Water 17,846,400 1,426,000 (1,675,000) 17,597,400 Business-Type Activities - Sewer: General Obligation Bonds 2.00 - 5.00%1,718,200 134,000 (318,200) 1,534,000 Refunding Bonds 2.00 - 5.00%1,797,250 - (95,000) 1,702,250 Massachusetts Clean Water Trust 0.00 - 5.50%36,012,444 - (2,074,039) 33,938,405 Total Sewer 39,527,894 134,000 (2,487,239) 37,174,655 Business-Type Activities - Nantucket Memorial Airport: General Obligation Bonds 2.00 - 5.00%9,988,000 - (818,000) 9,170,000 Total Nantucket Memorial Airport 9,988,000 - (818,000) 9,170,000 Total Business-Type Activities 72,952,194 1,560,000 (5,360,239) 69,151,955 Add: Unamortized bond premium 2,278,295 147,350 (360,609) 2,065,036 Total Business-Type Activities, net 75,230,489$ 1,707,350$ $ (5,720,848)$ 71,216,991 Town of Nantucket, Massachusetts Page 74 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 74 of 157 Comprehensive Annual Financial Report Payments on general long-term debt obligation bonds and notes due in future years consist of the following: Year Ending Principal Interest June 30 Balance Subsidy Net of Subsidy Balance Subsidy Net of Subsidy Total Governmental Activities 2019 4,694,769$ -$ 4,694,769$ 2,676,708$ (96)$ 2,676,612$ 7,371,381$ 2020 4,747,448 - 4,747,448 2,472,453 (32) 2,472,421 7,219,869 2021 4,782,337 - 4,782,337 2,325,314 - 2,325,314 7,107,651 2022 4,811,741 - 4,811,741 2,156,713 - 2,156,713 6,968,454 2023 4,784,520 - 4,784,520 1,983,460 - 1,983,460 6,767,980 2024-2028 19,625,739 - 19,625,739 7,465,753 - 7,465,753 27,091,492 2029-2033 15,159,289 - 15,159,289 4,504,480 - 4,504,480 19,663,769 2034-2038 15,627,583 - 15,627,583 2,349,845 - 2,349,845 17,977,428 2039-2043 7,910,000 - 7,910,000 498,924 - 498,924 8,408,924 Total 82,143,426$ -$ 82,143,426$ 26,433,650$ (128)$ 26,433,522$ 108,576,948$ Business-Type Activities: Siasconset Water 2019 395,000$ -$ 395,000$ 186,836$ -$ 186,836$ 581,836$ 2020 400,000 - 400,000 162,186 - 162,186 562,186 2021 410,000 - 410,000 147,061 - 147,061 557,061 2022 420,000 - 420,000 130,961 - 130,961 550,961 2023 435,000 - 435,000 114,935 - 114,935 549,935 2024-2028 2,394,900 - 2,394,900 307,782 - 307,782 2,702,682 2029-2033 690,000 - 690,000 31,495 - 31,495 721,495 2034-2036 65,000 - 65,000 2,775 - 2,775 67,775 5,209,900$ -$ 5,209,900$ 1,084,031$ -$ 1,084,031$ 6,293,931$ Business-Type Activities: Wannacomet Water 2019 1,738,000$ -$ 1,738,000$ 609,526$ -$ 609,526$ 2,347,526$ 2020 1,650,000 - 1,650,000 536,064 - 536,064 2,186,064 2021 1,690,000 - 1,690,000 476,950 - 476,950 2,166,950 2022 1,533,000 - 1,533,000 416,089 - 416,089 1,949,089 2023 1,517,000 - 1,517,000 357,940 - 357,940 1,874,940 2024-2028 6,480,400 - 6,480,400 965,546 - 965,546 7,445,946 2029-2033 2,089,000 - 2,089,000 271,790 - 271,790 2,360,790 2034-2037 900,000 - 900,000 56,100 - 56,100 956,100 17,597,400$ -$ 17,597,400$ 3,690,005$ -$ 3,690,005$ 21,287,405$ Business-Type Activities: Sewer 2019 2,463,274$ (189,738)$ 2,273,536$ 984,704$ (162,957)$ 821,747$ 3,095,283$ 2020 2,520,251 (205,829) 2,314,422 890,235 (118,631) 771,604 3,086,026 2021 2,574,457 (213,650) 2,360,807 811,109 (100,705) 710,404 3,071,211 2022 2,480,031 (188,761) 2,291,270 735,114 (84,576) 650,538 2,941,808 2023 2,534,869 (200,596) 2,334,273 651,624 (41,736) 609,888 2,944,161 2024-2028 10,193,473 (183,868) 10,009,605 2,274,921 (21,995) 2,252,926 12,262,531 2029-2033 7,830,494 - 7,830,494 1,242,204 - 1,242,204 9,072,698 2034-2038 6,577,806 - 6,577,806 385,726 - 385,726 6,963,532 37,174,655$ (1,182,442)$ 35,992,213$ 7,975,637$ (530,600)$ 7,445,037$ 43,437,250$ Business-Type Activities: Nantucket Memorial Airport 2019 800,000$ -$ 800,000$ 341,087$ -$ 341,087$ 1,141,087$ 2020 680,000 - 680,000 316,338 - 316,338 996,338 2021 605,000 - 605,000 294,362 - 294,362 899,362 2022 610,000 - 610,000 270,938 - 270,938 880,938 2023 625,000 - 625,000 247,187 - 247,187 872,187 2024-2028 2,475,000 - 2,475,000 941,562 - 941,562 3,416,562 2029-2033 2,405,000 - 2,405,000 492,971 - 492,971 2,897,971 2034-2036 970,000 - 970,000 85,181 - 85,181 1,055,181 9,170,000$ -$ 9,170,000$ 2,989,626$ -$ 2,989,626$ 12,159,626$ Town of Nantucket, Massachusetts Page 75 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 75 of 157 Comprehensive Annual Financial Report MCWT Loan Subsidies – As previously noted in Note I. B., the Town has entered into loan agreements with the MCWT. It is expected that the Town will be subsidized by MCWT on a periodic basis for principal in the amount of $1,182,442, and interest in the amount of $530,728 until the maturity of these agreements. The following represents authorized and unissued debt as of June 30, 2018: Discretely Presented Component Unit – Nantucket Islands Land Bank Project Amount Governmental: Title V septic 3,000,000$ Fire station 18,780,394 School building 5,920,319 Public works 9,380,000 Marine building 3,450,000 Our Island Home 1,715,000 Solid waste - landfill 1,133,000 Miscellaneous 992,000 Business-type: Water projects 12,619,115 Sewer projects 86,490,113 Nantucket Memorial Airport 13,535,225 Total Authorized and Unissued 157,015,166$ The following reflects the activity in the long-term liability accounts for the Land Bank for the year ended June 30, 2018: Beginning Ending Due within Balance Additions Deletions Balance one year Bond and note indebtedness 22,244,349$ 5,370,694$ (2,195,703)$ 25,419,340$ 6,575,955$ Capital leases 186,459 - (56,729) 129,730 55,288 Net OPEB liability 1,033,248 110,204 (45) 1,143,407 - Net pension liability 1,383,584 406,374 (115,540) 1,674,418 - Total Land Bank 24,847,640$ 5,887,272$ (2,368,017)$ 28,366,895$ 6,631,243$ Town of Nantucket, Massachusetts Page 76 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 76 of 157 Comprehensive Annual Financial Report The general obligation bonds are secured by a second priority security interest in the Land Bank’s present and future transfer fees and unrestricted revenue. The bonds are additionally secured by a guarantee of the Town. Payments on bonds and notes due in future years consist of the following: III. Other Information A.Retirement System Plan Description – The Town, County and Land Bank contribute to the Barnstable CountySystem (the System), a cost-sharing multiple-employer defined benefit pension plan establishedunder MGL Chapter 32 and is administered by the Barnstable County Retirement Board (BCRB).Standalone audited financial statements for the year ended December 31, 2017 were issued andmay be obtained by writing to the Barnstable County Retirement System, 750 Attucks Lane, Hyannis, Massachusetts 02601. The following is a summary of outstanding long-term debt obligations as of June 30, 2018: Interest Beginning Ending Description of Issue Rate Balance Additions Maturities Balance Notes payable 3.00 - 6.06%1,700,000$ 5,750,000$ -$ 7,450,000$ General obligation bonds 2.00 - 5.00%19,740,000 - (2,205,000) 17,535,000 Total bonds and notes 21,440,000 5,750,000 (2,205,000) 24,985,000 Add: Unamortized bond premium 804,349 - (72,053) 732,296 Less: Discounts on notes payable - (379,306) 81,350 (297,956) Total Land Bank 22,244,349$ 5,370,694$ (2,195,703)$ 25,419,340$ Payments on bonds and notes due in future years are as follows: Year Ending June 30 Principal Interest Total 2019 6,787,098$ 781,047$ 7,568,145$ 2020 5,317,902 484,592 5,802,494 2021 1,592,902 339,989 1,932,891 2022 1,652,902 303,830 1,956,732 2023 1,527,902 258,608 1,786,510 2024-2028 7,193,750 696,950 7,890,700 2029-2032 1,644,840 104,780 1,749,620 Total 25,717,296$ 2,969,796$ 28,687,092$ Town of Nantucket, Massachusetts Page 77 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 77 of 157 Comprehensive Annual Financial Report Membership – Membership in the System as of January 1, 2018, was as follows: Retirees and beneficiaries currently receiving benefits 3,117 Active plan members 4,633 Inactive plan members 694 Total 8,258 Benefit Terms – Membership in the System is mandatory for all full-time employees and non-seasonal, part-time employees who, in general, regularly work more than twenty hours per week. Teachers and certain administrative personnel employed by the Town’s school department participate in a separate pension plan administered by the Massachusetts Teachers’ Retirement System, which is the legal responsibility of the Commonwealth of Massachusetts. Members of the System do not participate in the federal Social Security retirement system. Massachusetts contributory retirement system benefits are uniform from retirement system to system. The System provides for retirement allowance benefits up to a maximum of 80% of a participant’s highest three-year or five-year average annual rate of regular compensation, depending on the participant’s date of hire. Benefit payments are based upon a participant’s age, length of creditable service, level of compensation and job classification. The most common benefits paid by the System include normal retirement, disability retirement and survivor benefits. Normal retirement generally occurs at age 65. However, participants may retire after twenty years of service or at any time after attaining age 55, if hired prior to April 2, 2012 or at any time after attaining age 60 if hired on or after April 2, 2012. Participants with hire dates subsequent to January 1, 1978 must have a minimum of ten years’ creditable service in order to retire at age 55. Participants become vested after ten years of service. Benefits commencing before age 65 are provided at a reduced rate. Members working in certain occupations may retire with full benefits earlier than age 65. Ordinary disability retirement is where a participant is permanently incapacitated from a cause unrelated to employment. Accidental disability retirement is where the disability is the result of an injury or illness received or aggravated in the performance of duty. The amount of benefits to be received in such cases is dependent upon several factors, including the age at which the disability retirement occurs, the years of service, average compensation and veteran status. Survivor benefits are extended to eligible beneficiaries of participants whose death occurs prior to or following retirement. Cost-of-living adjustments granted to members of Massachusetts retirement systems granted between 1981 and 1997 and any increases in other benefits imposed by the Commonwealth during those years have been the financial responsibility of the Commonwealth. Beginning in 1998, the funding of cost-of-living amounts became the responsibility of the participating units like the System. The System may be amended or terminated in whole or in part at any time by the Massachusetts Legislature, provided that no such modification, amendment or termination shall be made that would deprive a current member of superannuation pension rights or benefits provided under Town of Nantucket, Massachusetts Page 78 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 78 of 157 Comprehensive Annual Financial Report applicable laws of Massachusetts, if such member has paid the stipulated contributions specified in sections or provisions of such laws. Contributions Requirements – The Town has elected provisions of Chapter 32, Section 22D (as amended) of Massachusetts General Laws, which require that a funding schedule be established to fully fund the pension plan by June 30, 2040. Under provisions of this law, participating employers are assessed their share of the total retirement cost based on the entry age, normal actuarial cost method. The Town, County and Land Bank contributed $5,785,432, $52,386, and $146,853, respectively, to the System in fiscal year 2018, which equaled the actuarially-determined contribution requirements for the fiscal year. The Town, County and Land Bank contributions as a percentage of covered payroll were 21%, 21% and 21%, respectively, in fiscal year 2018. Net Pension Liability – At June 30, 2018, the Town, County and Land Bank reported liabilities of $65,965,497, $597,305 and $1,674,418, respectively, for the proportionate shares of the net pension liability. The net pension liability was measured as of January 1, 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. These figures were updated by the independent actuary to December 31, 2017. There were no material changes to the System’s benefit terms since the actuarial valuation; however, since the last actuarial valuation the System decreased the investment return assumption from 7.625% to 7.375% and changed mortality tables (see below). The Town, County and Land Bank’s proportions of the net pension liability are based on a projection of their long-term share of contributions to the System relative to the projected contributions of all employers. The Town, County and Land Bank’s proportions were approximately 9.694%, 0.088% and 0.246%, respectively, at December 31, 2017, which was consistent with the proportions measured at January 1, 2018. Pension Expense – The Town, County and Land Bank recognized $7,853,236, $66,216 and $185,626, respectively, in pension expense in the statement of activities in fiscal year 2018. Deferred Outflows of Resources and Deferred Inflows of Resources – At June 30, 2018, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Town of Nantucket, Massachusetts Page 79 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 79 of 157 Comprehensive Annual Financial Report The deferred outflows of resources and deferred inflows of resources are expected to be recognized in the Town’s pension expense as follows: Deferred Outflows Deferred Inflows of Resources of Resources Net differences between projected and actual earnings on pension plan investments -$ 4,305,169$ Differences between expected and actual experience - 945,020 Changes in assumptions 8,220,457 - Changes in proportion and differences between Town contributions and proportionate share of contributions 1,583,006 1,086,522 Total 9,803,463$ 6,336,711$ Year ended June 30, 2019 1,317,209$ 2020 1,293,775 2021 100,355 2022 18,238 2023 737,175 Total 3,466,752$ Town of Nantucket, Massachusetts Page 80 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 80 of 157 Comprehensive Annual Financial Report At June 30, 2018, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: The deferred outflows of resources and deferred inflows of resources are expected to be recognized in the County’s pension expense as follows: Deferred Outflows Deferred Inflows of Resources of Resources Net differences between projected and actual earnings on pension plan investments -$ 38,983$ Differences between expected and actual experience - 8,557 Changes in assumptions 74,435 - Changes in proportion and differences between County contributions and proportionate share of contributions 66,784 157,698 Total 141,219$ 205,238$ Year ended June 30, 2019 (13,087)$ 2020 (13,300) 2021 (24,106) 2022 (15,273) 2023 1,747 Total (64,019)$ Town of Nantucket, Massachusetts Page 81 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 81 of 157 Comprehensive Annual Financial Report At June 30, 2018, the Land Bank reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: The deferred outflows of resources and deferred inflows of resources are expected to be recognized in the Land Bank’s pension expense as follows: Actuarial Valuation – The measurement of the System’s total pension liability is developed by an independent actuary. The latest actuarial valuation was performed as of January 1, 2018. The significant actuarial assumptions used in the January 1, 2018 actuarial valuation included: Actuarial cost method: Entry age normal Amortization method: Appropriations increase at 5.28% per year through 2035 and 3.34% in 2036 Remaining amortization period: 20 years from July 1, 2016 for 2002 and 2003 Early Retirement Incentives, retiree sheriffs liability and remaining unfunded liability; and 6 years from July 1, 2016 for 2010 Early Retirement Inventive Investment rate of return: 7.375%, net of pension plan investment expenses, including inflation Cost of living adjustments: 3% on the first $18,000 Asset valuation method: Sum of actuarial value at the beginning of the year, contributions and investment earnings based on the actuarial interest assumption less benefit payments Deferred Outflows Deferred Inflows of Resources of Resources Net differences between projected and actual earnings on pension plan investments -$ 109,279$ Differences between expected and actual experience - 23,989 Changes in assumptions 208,661 - Changes in proportion and differences between Landbank contributions and proportionate share of contributions 187,216 160,037 Total 395,877$ 293,305$ Year ended June 30, 2019 19,720$ 2020 19,125 2021 (11,168) 2022 13,592 2023 61,303 Total 102,572$ Town of Nantucket, Massachusetts Page 82 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 82 of 157 Comprehensive Annual Financial Report and operating expenses plus 20% of the market value at the end of the year in excess of that sum, plus additional adjustment toward market value as necessary so that the final actuarial value is within 20% of market value. Projected salary increases: Varied by length of service with ultimate ranges of 4.00%, 4.25% and 4.50% for groups 1, 2 and 4, respectively Inflation Rates of retirement: 3.25% Varies based upon age for general, police and fire employees Rates of disability: For general employees, it was assumed that 45% of all disabilities are ordinary (55% are service connected); for police and fire employees, 10% of all disabilities are assumed to be ordinary (90% are service connected) Mortality rates: Pre-retirement rates reflect the RP-2014 Blue Collar Employee Mortality Table projected generationally with Scale MP-2017 Healthy retiree rates reflect the RP-2014 Blue Collar Healthy Annuitant Mortality Table projected generationally with Scale MP-2017 Disabled retiree rates reflect the RP-2014 Blue Collar Healthy Annuitant Table set forward one year and projected generationally with Scale MP-2017 The System’s investment policy in regard to the allocation of its invested assets is established by the Commonwealth’s Pension Reserves Investment Management Board. System assets are managed on a total return basis with a long-term objective of achieving a fully-funded status for the benefits provided through the pension plan. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of January 1, 2018 are summarized in the following table: Town of Nantucket, Massachusetts Page 83 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 83 of 157 Comprehensive Annual Financial Report Discount Rate – The discount rate used to measure the total pension was 7.375%, which represents a decrease from the 7.625% in the previous actuarial valuation. The projection of cash flows used to determine the discount rate assumed plan member contributions were made at the current contribution rate and that employer contributions will be made at rates equal to the actuarially-determined contribution rates and the member rate. Based on those assumptions, the System’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity Analysis – The following presents the proportionate shares of the net pension liability calculated using the discount rate of 7.375% as well as the proportionate shares of the net pension liability using a discount rate that is one percentage point lower (6.375%) or one percentage point higher (8.375%) than the current rate: 1% Decrease (6.375%) Current Discount (7.375%) 1% Increase (8.375%) Town’s proportionate share of the net pension liability $ 86,524,883 $ 65,965,497 $ 48,679,090 County’s proportionate share of the net pension liability $ 2,979,747 $ 2,271,723 $ 1,676,412 Land Bank’s proportionate share of the net pension liability $ 2,196,281 $ 1,674,418 $ 1,235,632 B.Massachusetts Teachers’ Retirement System Teachers and certain administrative employees of the Town’s school department participate in theMassachusetts Teachers’ Retirement System (“MTRS”), a cost-sharing multiple employerdefined benefit pension plan. MTRS is managed by the Commonwealth on behalf of municipalteachers and municipal teacher retirees. Like the Retirement System, MTRS was establishedunder Chapter 32 of Massachusetts General Laws. The Commonwealth’s legislature has theauthority to amend or modify the MTRS’s funding policies. The Commonwealth is a nonemployer contributor to the MTRS and is legally responsible by statute for all actuarially determined employer contributions and future benefit requirements of Long-Term Target Expected Real Asset Class Allocation Rate of Return Domestic equity 17.5%6.15% International developed markets equity 15.5%7.11% International emerging markets equity 6.0%9.41% Core fixed income 12.0%1.68% High-yield fixed income 10.0%4.13% Real estate 10.0%4.90% Commodities 4.0%4.71% Hedge fund, GTAA, risk parity 13.0%3.94% Private equity 12.0%10.28% Town of Nantucket, Massachusetts Page 84 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 84 of 157 Comprehensive Annual Financial Report the MTRS. Therefore, the Town is considered to be in a special funding situation as defined by GASB Statement No. 68, Accounting and Financial Reporting for Pensions. For the year ended June 30, 2018, the Commonwealth contributed $2,828,672 to the MTRS on behalf of the Town. The Town’s proportionate share of the collective MTRS net pension liability at this reporting date was 0.228947%, which was based on the actual, actuarially determined contribution made by the Commonwealth on behalf of the Town as a percentage of the total annual contribution made by the Commonwealth on behalf of all employers. The table below presents the Town’s proportionate share of the following: Commonwealth Portion Paid (or assumed) On Behalf of the Town Town Portion Net pension liability $ 52,395,369 $ (52,395,369) $ — Pension expense 5,468,657 (5,468,657) — The Town has recognized intergovernmental revenue and pension expense of $5,468,657 associated with this arrangement. C. Other Postemployment Benefits (OPEB) The Town administers a single-employer defined benefit healthcare plan (the “OPEB Plan”). The OPEB Plan provides health, dental and life insurance benefits (other postemployment benefits) to current and future retirees, their dependents and beneficiaries in accordance with Section 20 of Massachusetts General Law Chapter 32B. Specific benefit provisions and contribution rates are established by collective bargaining agreements, state law and Town ordinance. All benefits are provided through the Town’s premium-based insurance program. The OPEB Plan does not issue a stand-alone financial report and is presented as a fiduciary fund in the Town’s financial statements. With respect to OPEB plan reporting, GASB issued GASB Statement No.’s 74, Financial Reporting for Postemployment Benefit Plans Other Than Pensions, and Statement No, 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, and 75. Reporting requirements for governments who administer an OPEB plan as defined under the accounting standard are required to present disclosures under both GASB 74 and GASB 75. GASB 74 requires specific disclosures and required supplementary information that relate directly to the fiduciary fund in which the OPEB Plan is recorded. GASB 75 address disclosures related to the net OPEB liability required to be recorded by the government in its applicable financial statements. A number of these disclosures are identical, especially if the measurement date used under GASB 75 and plan year-end date used under GASB 74 are the same date. When a year earlier measurement date is used under GASB 75, differences in assumptions and calculations will result. This footnote disclosure separately presents the required disclosures into two sections as a year earlier measurement date was used in the Town’s fiscal 2018 reporting. Town of Nantucket, Massachusetts Page 85 of 157 Comprehensive Annual Financial Report GASB Statement No. 75 OPEB Plan disclosures that impact the Town’s net OPEB liability using a measurement date of July 1, 2017 are summarized as follows: Employees Covered by Benefit Terms – The following employees were covered by the benefit terms as of June 30, 2018: Contributions – The contribution requirements of OPEB Plan members and the Town are established and may be amended by the Town. Retirees contribute 20% of the set premium for master medical and 10% for other medical plans; 100% for dental, and 55% for life insurance. The remainder of the cost is funded by general revenues of the Town. The Town currently contributes enough money to the Plan to satisfy current obligations on a pay-as-you-go basis. The costs of administering the OPEB Plan are paid by the Town. For the year ended June 30, 2018, the Town’s average contribution rate was less than 14.1% of covered-employee payroll. Net OPEB Liability – The Town’s net OPEB liability was measured as of July 1, 2017 using an actuarial valuation as of July 1, 2016. The components of the net OPEB liability of the Town at June 30, 2018 were as follows: Active employees 531 Inactive employees 371 Total 902 Total OPEB Liability 94,970,410$ Plan fiduciary net position (1,903,825) Net OPEB liability 93,066,585$ Plan fiduciary net position as a percentage of the total OPEB liability 2.0% Town of Nantucket, Massachusetts Page 86 of 157 Comprehensive Annual Financial Report The total OPEB liability in the most recent actuarial valuation was determined using the following key actuarial assumptions applied to all periods included in the measurement, unless otherwise specified: Discount Rate – The discount rate used to measure the total OPEB liability was 4.25%. The only key change in assumptions from the prior year was the increase of this discount rate from 4%. Long Term Expected Rate of Return – The long-term expected rate of return on OPEB Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB Plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Investment rate of return 5.51%, net of OPEB plan investment expense, including inflation. Muncipal bond rate 3.13% as of July 1, 2017 Discount Rate 4.25%, net of OPEB plan investment expense including inflation. Using a blend of the Municipal Bond Index Rate for unfunded periods and the Investment Rate of Return. Inflation 2.75% annually as of July 1, 2017 and for future periods Health Care Trend Rate 5% Salary Increases 3.00% annually as of July 1, 2017 and for future periods Cost of Living Adjustment Not applicable. Pre-Retirement Mortality RP-2000 Employees Mortality Table projected with scale BB and a base year 2009 for males and females Post-Retirement Mortality RP-2000 Healthy Annuitant Table projected generationally with scale BB and a base year 2009 for males and females Disabled Mortality RP-2000 Healthy Annuitant Table projected generationally with scale BB and a base year 2012 for males and females Actuarial Cost Method Individual entry age normal Town of Nantucket, Massachusetts Page 87 of 157 Comprehensive Annual Financial Report The target allocation and best estimates of arithmetic real rates of return were as reflected in the following table: Sensitivity Analyses – The following presents the Town’s net OPEB liability as well as what the Town’s net OPEB liability would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current discount rate as well as if the healthcare cost trend rates are 1% lower or higher than the current healthcare cost trend rates: Expected Target Investment Rate Asset Class Allocation of Return Domestic Equity - Large Cap 48.75% 4.00% Interntional Equity - Developed Market 2.50% 4.50% Domestic Fixed Income 47.50% 2.00% Cash 1.25% 0.00% 100.00% Real rate of return 3.01% Inflation assumption 2.75% Total nominal rate of return 5.76% Investment expense -0.25% Net investment return 5.51% Discount Rate 1% Decrease (3.25%)Trend Rate (4.25%) 1% Increase (5.25%) Net OPEB Liability 108,470,064$ 93,066,585$ 82,708,251$ Service Cost 4,691,465 3,632,339 2,846,371 1% Decrease (4%)Current (5%)1% Increase (6%) Net OPEB Liability 77,623,480$ 93,066,585$ 115,872,021$ Service Cost 2,758,811 3,632,339 4,834,958 Health Care Rate Town of Nantucket, Massachusetts Page 88 of 157 Comprehensive Annual Financial Report Changes in the Net OPEB Liability – The following table summarizes the changes in the net OPEB liability for the year ended June 30, 2018: OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB – For the year ended June 30, 3018, the Town recognized OPEB expense of $6,150,631. Deferred outflows of resources and deferred inflows of resources related to OPEB at June 30, 2018 were reported as follows: Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense (benefit) as follows: Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a)(b)(a) - (b) Balances at June 30, 2017 100,707,692$ 99,366,479$ 1,341,213$ Changes for the year: Service cost 3,632,339 - 3,632,339 Interest 4,366,525 - 4,366,525 Difference between expected and actual experience (10,506,025) - (10,506,025) Net investment income - 62,612 (62,612) Employer contributions - 3,730,121 (3,730,121) Benefit payments withdrawn - (3,230,121) 3,230,121 Benefit payments (3,230,121) - (3,230,121) Net changes (5,737,282) 562,612 (6,299,894) Balances at June 30, 2018 94,970,410$ 1,903,825$ 93,066,585$ Deferred Outflows Deferred Inflows of Resources of Resources Contributions made subsequent to the measurement date 3,160,929$ -$ Differences between expected and actual earnings 19,903 - Differences between actual and expected experience - 8,740,307 3,180,832$ 8,740,307$ June 30 2019 1,400,187$ 2020 (1,760,742) 2021 (1,760,742) 2022 (1,760,742) 2023 (1,677,436) (5,559,475)$ Town of Nantucket, Massachusetts Page 89 of 157 Comprehensive Annual Financial Report GASB Statement No. 74 OPEB Plan disclosures that impact the Town’s net OPEB liability using a plan year-end date of June 30, 2018 are summarized in this section except disclosures under GASB 74 that are identical to GASB 75 are not repeated. Investment Custody – In accordance with Massachusetts General Laws, the Town Treasurer is the custodian of the OPEB Plan and since the Town has not designated a Board of Trustees, the Town Treasurer is also the Trustee and as such is responsible for the general supervision of the management, investment and reinvestment of the OPEB Plan assets. OPEB Plan assets may be invested and reinvested by the custodian consistent with the prudent investor rule established in Chapter 203C and may, with the approval of the State Retiree Benefits Trust Fund Board of Trustees, be invested in the State Retiree Benefits Trust Fund established in Section 24 of Chapter 32A. OPEB Plan assets must be segregated from other funds and not be subject to the claims of any general creditor of the Town. Investment Policy – The OPEB Plan has a formal investment policy to invest in Domestic Equity, Domestic Fixed Income, International Equity, and Cash Equivalents with target allocations of 48.75%, 47.50%, 2.50% and 1.25% respectively. Investment Rate of Return – For the year ended June 30, 2018 the annual money-weighted rate of return on investments, net of investment expense, was -0.47%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Sensitivity Analyses – The following presents the Town’s net OPEB liability as well as what the Town’s net OPEB liability would be if it were calculated using a discount rate that is 1% lower or 1% higher than the current discount rate as well as if the healthcare cost trend rates are 1% lower or higher than the current healthcare cost trend rates: Actuarial Assumptions – Actuarial assumptions are identical to those under GASB 75 except the Municipal Bond Rate is 3.45% and the Discount Rate is 4.00%. Discount Rate 1% Decrease (3.50%)Trend Rate (4.50%) 1% Increase (5.50%) Net OPEB Liability 108,925,328$ 93,677,687$ 81,490,322$ Service Cost 4,212,062 3,270,431 2,569,390 1% Decrease (4%)Current (5%)1% Increase (6%) Net OPEB Liability 78,363,426$ 93,677,687$ 113,319,368$ Service Cost 2,491,919 3,270,431 4,331,594 Health Care Rate Town of Nantucket, Massachusetts Page 90 of 157 Comprehensive Annual Financial Report Net OPEB Liability – The Town’s net OPEB liability was measured as of June 30, 2018 using an actuarial valuation as of July 1, 2016. The components of the net OPEB liability of the Town at June 30, 2018 were as follows: Discretely Presented Component Unit – Nantucket County The County administers a single-employer defined benefit healthcare plan (the “OPEB Plan”). The OPEB Plan provides health care, dental and life insurance benefits (other postemployment benefits) to current and future retirees, and their dependents/beneficiaries in accordance with Massachusetts General Law Chapter 32B. The County, however, has not adopted Section 20 of this Massachusetts General Law, therefore any assets accumulated for purposes of paying benefit claims are revocable. Thus, this arrangement does not qualify as a plan under generally accepted accounting principles and therefore GASB 74 does not apply. The following disclosures include only those disclosures required under GASB 75. This is the initial year of implementation. An employee hired before April 2, 2012 shall become eligible to retire upon attainment of age 55 as an active member and completion of 10 years of creditable service or shall be eligible if able to retire with 20 years of creditable service regardless of age. Those hired on or after April 2, 2012 shall be eligible to retire upon attainment of age 60 with 10 years of creditable service. Specific benefit provisions and contribution rates are established by state law and the Commission. All benefits are provided through the County’s premium-based insurance programs, and these include comprehensive medical and dental insurance as well as group life insurance. Employees Covered by Benefit Terms – The following employees were covered by the benefit terms as of June 30, 2018: Contributions – The contribution requirements of OPEB Plan members and the County are established and may be amended by the County. Retirees contribute 20% of the set premium for master medical and 10% for other medical plans; 100% for dental, and 55% for life insurance. The remainder of the cost is funded by general revenues of the County. The County currently contributes enough money to the Plan to satisfy current obligations on a pay-as-you-go basis. The costs of administering the OPEB Plan are paid by the County. For the year ended June 30, 2018, the County’s average contribution rate was 1.98% of covered-employee payroll. Total OPEB Liability 96,068,245$ Plan fiduciary net position (2,390,558) Net OPEB liability 93,677,687$ Inactive employees/retirees 1 Active employees 3 Total 4 Town of Nantucket, Massachusetts Page 91 of 157 Comprehensive Annual Financial Report Net OPEB Liability – The County’s net OPEB liability was measured as of June 30, 2018 using an actuarial valuation as of July 1, 2016. The total OPEB liability in the most recent actuarial valuation was determined using the following key actuarial assumptions applied to all periods included in the measurement, unless otherwise specified: There were no changes to key assumptions. The long-term expected rate of return on OPEB Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB Plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Investment rate of return 2.75%, net of OPEB plan investment expense, including inflation. Muncipal bond rate 3.45% as of June 30, 2018 Discount Rate 3.25%, net of OPEB plan investment expense including inflation. Using a blend of the Municipal Bond Index Rate for unfunded periods and the Investment Rate of Return. Inflation 2.75% annually as of June 30, 2018 and for future periods Health Care Trend Rate 5% Salary Increases 3.00% annually as of June 30, 2018 and for future periods Cost of Living Adjustment Not applicable. Pre-Retirement Mortality RP-2000 Employees Mortality Table projected with scale BB and a base year 2009 for males and females Post-Retirement Mortality RP-2000 Healthy Annuitant Table projected generationally with scale BB and a base year 2009 for males and females Disabled Mortality RP-2000 Healthy Annuitant Table projected generationally with scale BB and a base year 2012 for males and females Actuarial Cost Method Individual entry age normal Town of Nantucket, Massachusetts Page 92 of 157 Comprehensive Annual Financial Report The target allocation and best estimates of arithmetic real rates of return were as reflected in the following table: Sensitivity Analyses – The following presents the County’s net OPEB liability as well as what the County’s net OPEB liability would be if it were calculated using a discount rate that is 1.0% lower or 1.0% higher than the current discount rate as well as if the healthcare cost trend rates are 1% lower or higher than the current healthcare cost trend rates: Changes in the Net OPEB Liability – The following table summarizes the changes in the net OPEB liability for the year ended June 30, 2018: Target Target Rate Asset Class Allocation of Return Cash 100.00% 0.00% 100.00% Real rate of return 0.00% Inflation assumption 2.75% Total nominal rate of return 2.75% Investment expense 0.00% Net investment return 2.75% Discount Rate 1% Decrease (2.25%)Current Rate (3.25%) 1% Increase (4.25%) Net OPEB Liability 289,497$ 377,088$ 496,725$ Service Cost 13,451 18,766 26,390 1% Decrease (4%) Trend Rate (5%)1% Increase (6%) Net OPEB Liability 289,497$ 377,088$ 496,725$ Service Cost 13,451 18,766 26,390 Health Care Rate Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a)(b)(a) - (b) Balances at June 30, 2017 349,378$ -$ 349,378$ Changes for the year: Service cost 18,766 - 18,766 Interest 11,917 - 11,917 Employer contributions - - - Benefit payments withdrawn from trust - - - Net investment income - - - Benefit payments (2,973) - (2,973) Net changes 27,710 - 27,710 Balances at June 30, 2018 377,088$ -$ 377,088$ Town of Nantucket, Massachusetts Page 93 of 157 Comprehensive Annual Financial Report OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB – For the year ended June 30, 2018 there were no deferred inflows or outflows. OPEB expense equaled $30,683. Net OPEB Liability – The components of the net OPEB liability of the County at June 30, 2018 were as follows: Discretely Presented Component Unit – Nantucket Islands Land Bank The Land Bank administers a single-employer defined benefit healthcare plan (the “OPEB Plan”). The OPEB Plan provides health care, dental and life insurance benefits (other postemployment benefits) to current and future retirees, and their dependents/beneficiaries in accordance with Massachusetts General Law Chapter 32B. The Land Bank, however, has not adopted Section 20 of this Massachusetts General Law, therefore any assets accumulated for purposes of paying benefit claims are revocable. Thus, this arrangement does not qualify as a plan under generally accepted accounting principles and therefore GASB 74 does not apply. The following disclosures include only those disclosures required under GASB 75. This is the initial year of implementation. An employee hired before April 2, 2012 shall become eligible to retire upon attainment of age 55 as an active member and completion of 10 years of creditable service or shall be eligible if able to retire with 20 years of creditable service regardless of age. Those hired on or after April 2, 2012 shall be eligible to retire upon attainment of age 60 with 10 years of creditable service. Specific benefit provisions and contribution rates are established by state law and the Commission. All benefits are provided through the Land Bank’s premium-based insurance programs, and these include comprehensive medical and dental insurance as well as group life insurance. Employees Covered by Benefit Terms – The following employees were covered by the benefit terms as of June 30, 2018: Contributions – The contribution requirements of OPEB Plan members and the Land Bank are established and may be amended by the Land Bank. Retirees contribute 20% of the set premium for master medical and 10% for other medical plans; 100% for dental, and 55% for life insurance. The remainder of the cost is funded by general revenues of the Land Bank. Total OPEB Liability 377,088$ Plan fiduciary net position - Net OPEB liability 377,088$ Plan fiduciary net position as a percentage of the total OPEB liability 0.0% Inactive employees/retirees 0 Active employees 8 Total 8 Town of Nantucket, Massachusetts Page 94 of 157 Comprehensive Annual Financial Report The Land Bank currently contributes enough money to the Plan to satisfy current obligations on a pay-as-you-go basis. The costs of administering the OPEB Plan are paid by the Land Bank. For the year ended June 30, 2018, the Land Bank’s average contribution rate was less than 1% of covered-employee payroll. Net OPEB Liability – The Land Bank’s net OPEB liability was measured as of July 1, 2017 using an actuarial valuation as of July 1, 2016. The total OPEB liability in the most recent actuarial valuation was determined using the following key actuarial assumptions applied to all periods included in the measurement, unless otherwise specified: There were no changes to key assumptions. Discount Rate – The discount rate used to measure the total OPEB liability was a compounded 3.25% which represented a blend of the yield or index rate of 3.13% at July 1, 2017 for twenty- year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher used for unfunded periods and the long-term expected rate of return of 2.75%. Investment rate of return 2.75% net of OPEB plan investment expense including inflation Muncipal bond rate 3.13% as of July 1, 2017 Single Equivalent Discount Rate 3.25% net of OPEB plan investment expense including inflation. Using a blend of the Municipal Bond Index Rate for unfunded periods and the Investment Rate of Return. Inflation 2.75% annually as of July 1, 2017 and for future periods. Health Care Trend Rate 5% Salary Increases 3.00% annually as of July 1, 2017 and for future periods. Cost of Living Adjustment Not applicable. Pre-Retirement Mortality RP-2000 Employees Mortality Table projected with scale BB and a base year 2009 for males and females Post-Retirement Mortality RP-2000 Healthy Annuitant Table projected generationally with scale BB and a base year 2009 for males and females Disabled Mortality RP-2000 Healthy Annuitant Table projected generationally with scale BB and a base year 2012 for males and females Town of Nantucket, Massachusetts Page 95 of 157 Comprehensive Annual Financial Report The long-term expected rate of return on OPEB Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB Plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return were as reflected in the following table: Sensitivity Analyses – The following presents the Land Bank’s net OPEB liability as well as what the Land Bank’s net OPEB liability would be if it were calculated using a discount rate that is 1.0% lower or 1.0% higher than the current discount rate as well as if the healthcare cost trend rates are 1% lower or higher than the current healthcare cost trend rates: Target Target Rate Asset Class Allocation of Return Cash 100.00% 0.00% 100.00% Real rate of return 0.00% Inflation assumption 2.75% Total nominal rate of return 2.75% Investment expense 0.00% Net investment return 2.75% Discount Rate 1% Decrease (2.25%)Current Rate (3.25%) 1% Increase (4.25%) Net OPEB Liability 1,387,450$ 1,143,407$ 952,167$ Service Cost 95,182 74,212 58,463 1% Decrease (4%) Trend Rate (5%)1% Increase (6%) Net OPEB Liability 876,710$ 1,143,407$ 1,499,086$ Service Cost 56,779 74,212 97,482 Health Care Rate Town of Nantucket, Massachusetts Page 96 of 157 Comprehensive Annual Financial Report Changes in the Net OPEB Liability – The following table summarizes the changes in the net OPEB liability for the year ended June 30, 2018: OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB – For the year ended June 30, 2018 there were no deferred inflows or outflows. OPEB expense equaled $110,204. Net OPEB Liability – The components of the net OPEB liability of the Land Bank at June 30, 2018 were as follows: D.Risk Financing The Town is exposed to various risks of loss related to torts: theft of, damage to and destructionof assets; errors and omissions; and natural disasters for which the Town carries commercialinsurance. The amount of claim settlements has not exceeded insurance coverage in any of theprevious three years. Health Insurance – The Town maintains a "reinsured cost reimbursement program" which covers the group health insurance requirements of a majority of Town employees. The Plan isessentially a self-insurance program and employee claims in excess of $150,000 are reinsured bythe Plan. The Town accrues an amount representing claims incurred but not reported (IBNR),which is based on a one month claims paid average. At June 30, 2018, the amount of the liabilityfor IBNR health insurance claims totaled $1,138,217. This liability is the best estimate based on Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a)(b)(a) - (b) Balances at June 30, 2017 1,033,248$ -$ 1,033,248$ Changes for the year: Service cost 74,212 - 74,212 Interest 35,992 - 35,992 Employer contributions - - - Benefit payments withdrawn from trust - - - Net investment income - - - Benefit payments (45) - (45) Net changes 110,159 - 110,159 Balances at June 30, 2018 1,143,407$ -$ 1,143,407$ Total OPEB Liability 1,143,407$ Plan fiduciary net position - Net OPEB liability 1,143,407$ Plan fiduciary net position as a percentage of the total OPEB liability 0.0% Town of Nantucket, Massachusetts Page 97 of 157 Comprehensive Annual Financial Report available information. In the fund-wide financial statements, the Town reports these self-insured activities in the Internal Service Fund where revenues are recorded when earned and expenses are recorded when the liability is incurred. Changes in the reported liability since July 1, 2016, are as follows: Balance at Beginning of Year Claims and Changes in Estimates Claims Payments Balance at End of Year Current Portion Fiscal Year 2018 $1,314,778 $13,284,427 $(13,460,988) $1,138,217 $1,138,217 Fiscal Year 2017 898,614 14,787,914 (14,371,750) 1,314,778 1,314,778 Workers’ Compensation – The Town is also self-insured for their workers’ compensation activities. Workers’ compensation claims are administered by a third-party and are funded on a pay-as-you-go basis from an Internal Service Fund, with annual appropriations being made to the fund. The estimated future workers’ compensation liability is based on history and injury type. At June 30, 2018, the amount of the liability for workers’ compensation claims totaled $95,805. This liability is the best estimate based on available information. Changes in the reported liability since July 1, 2016, are as follows: Balance at Beginning of Year Claims and Changes in Estimates Claims Payments Balance at End of Year Current Portion Fiscal Year 2018 $ 44,231 $345,947 $(294,373) $ 95,805 $ 95,805 Fiscal Year 2017 104,847 212,769 (273,385) 44,231 44,231 E.Commitments The Town is in the planning and construction stages of several major capital projects including afire station, school building, and sewer and waste water treatment plant improvements. TheTown has entered into contracts to expend approximately $15,000,000, $31,000,000, $41,000,000 and $10,000,000, respectively to complete the projects. F.Contingencies The Town is party to certain legal claims, which are subject to many uncertainties, and theoutcome of individual litigation matters in these situations cannot be reasonably estimated.Although the amount of liability, if any, in these situations at June 30, 2018, cannot beascertained, management believes that the resulting liability, if any, should not materially affectthe basic financial statements of the Town at June 30, 2018. Other amounts received orreceivable from grantor agencies are subject to audit and adjustment by grantor agencies,principally the federal and state governments. Any disallowed claims, including amounts alreadycollected, may constitute a liability of the applicable funds. The amount, if any, of expenditureswhich may be disallowed by the grantor cannot be determined at this time although the Townexpects such amounts, if any, to be immaterial. Town of Nantucket, Massachusetts Page 98 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 98 of 157 Comprehensive Annual Financial Report The Town is subject to certain Federal arbitrage laws in accordance with long-term borrowing agreements. Failure to comply with the rules could result in the payment of penalties. The Town does not believe it has failed to comply with any of these agreements. The Town is contingently liable for 35% of any deficit, including operating and debt service costs, which may be incurred by the Woods Hole, Martha’s Vineyard and Nantucket Steamship Authority (the “Authority”). As of December 31, 2017, the Authority’s reserve fund balance totaled $3,562,986 and bonds outstanding totaled $79,388,671, net of unamortized premiums of $7,823,671. For the fiscal year ended December 31, 2017, the Authority’s revenues exceeded its cost of services by $7,893,620. The Town is not required to make payments to the Authority unless the amount in the Authority’s reserve fund is insufficient. Since 1962, the Town has not made any payments to the Authority. G.Landfill Closure and Post-Closure Care Costs The Town operates a landfill under an Administrative Consent Order (ACO) with the Massachusetts Department of Environmental Protection (DEP). The current ACO allows the Town to mine the current landfill for useable materials through fiscal year 2019. The landfill consists of five cells, two lined and three unlined. The largest cell is unlined and has been closed for several years with sections scheduled for excavation under the mining program. Two cells, which are no longer accepting waste, are uncapped and unlined and have been previously excavated under the mining program. Another cell is inactive, lined but uncapped. There is one lined cell that is currently accepting waste. The final capping and closure of the unclosed cells are dependent on construction of new cells and a modified design for the closure will be submitted to the DEP after the conclusion of the mining program. The Town has recognized a closure liability of $12,000,000 in the Governmental Activities. This liability is based on estimates of the cost of all closure and post-closure care for 30 years. Actual costs may change due to inflation, changes in technology, or changes in regulations. H.Implementation of GASB pronouncements Current Year Implementations – In June 2015, the GASB issued GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pension Plans. GASB 75 established new accounting and financial reporting requirements for governments whose employees are provided with OPEB, as well as for certain nonemployer governments that have a legal obligation to provide financial support for OPEB provided to the employees of other entities. The provisions of this Statement became effective in fiscal year 2018. The adoption of GASB No. 75 resulted in a reduction in beginning net position of approximately $46.3 million and $4.4 million in the Town’s governmental and business-type activities, respectively. Refer to Note V. In March 2016, the GASB issued GASB Statement No. 81, Irrevocable Split-Interest Agreements. The objective of the Statement was to improve accounting and financial reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. The provisions of this Statement became effective in fiscal year 2018 and did not have a material impact on the Town’s financial statements. In May 2017, the GASB issued GASB Statement No. 86, Certain Debt Extinguishment Issues. The objective of the Statement was to improve consistency in accounting and financial reporting for in-substance defeasance of debt. The provisions of this Statement became effective in fiscal year 2018 and did not have a material impact on the Town’s financial statements. Town of Nantucket, Massachusetts Page 99 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 99 of 157 Comprehensive Annual Financial Report Future Implementations – In November 2016, the GASB issued GASB Statement No. 83, Certain Asset Retirement Obligations. The objective of the Statement is to address accounting and financial reporting for certain asset retirement obligations that have legally enforceable liability associated with the retirement of a tangible capital asset. The provisions of this Statement are effective for financial reporting periods beginning after June 15, 2018 (fiscal year 2019). The Town is currently evaluating whether adoption will have a material impact on the financial statements. In January 2017, the GASB issued GASB Statement No. 84, Fiduciary Activities. The objective of the Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how these activities should be reported. The provisions of this Statement are effective for financial reporting periods beginning after December 15, 2018 (fiscal year 2020). The Town is currently evaluating whether adoption will have a material impact on the financial statements. In June 2017, the GASB issued GASB Statement No. 87, Leases. This Statement redefines the manner in which long-term leases are accounted and reported. The provisions of this Statement are effective for financial reporting periods beginning after December 15, 2019 (fiscal year 2021). The Town is currently evaluating whether adoption will have a material impact on the financial statements. In April 2018, the GASB issued GASB Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements. The objective of this Statement is to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt. The provisions of this Statement are effective for financial reporting periods beginning after June 15, 2018 (fiscal year 2019). The Town is currently evaluating whether adoption will have a material impact on the financial statements. In June 2018, the GASB issued GASB Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period. This statement establishes accounting requirements for interest costs incurred before the end of a construction period. The provisions of this Statement are effective for financial reporting periods beginning after December 15, 2019 (fiscal year 2021). The Town is currently evaluating whether adoption will have a material impact on the financial statements. In August 2018, the GASB issued GASB Statement No. 90, Majority Equity Interest – An Amendment of GASB Statements No. 14 and No. 61. The objective of this Statement is to improve the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. The provisions of this Statement are effective for financial reporting periods beginning after December 15, 2018 (fiscal year 2020). The Town is currently evaluating whether adoption will have a material impact on the financial statements. IV. Prior Period Restatements The Town adopted GASB Statement No. 75, Accounting and Financial Reporting forPostemployment Benefits Other Than Pensions, in fiscal year 2018. Previously, OPEB was accounted for under GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The result of the adoption of GASB Town of Nantucket, Massachusetts Page 100 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 100 of 157 Comprehensive Annual Financial Report Statement No. 75 was to eliminate the net OPEB obligation recorded in the Town financial statements and record the net OPEB liability at June 30, 2017. The impact is illustrated in the table below: Discretely Presented Component Unit – Nantucket County The County adopted GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, in fiscal year 2018. Previously, OPEB was accounted for under GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The result of the adoption of GASB Statement No. 75 was to eliminate the net OPEB obligation recorded in the County financial statements and record the net OPEB liability at June 30, 2017. The impact is illustrated in the table below: Discretely Presented Component Unit – Nantucket Islands Land Bank The Land Bank adopted GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, in fiscal year 2018. Previously, OPEB was accounted for under GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The result of the adoption of GASB Statement No. 75 was to eliminate the net OPEB obligation recorded in the Land Bank financial statements and record the net OPEB liability at June 30, 2017. The impact is illustrated in the table below: Nantucket Memorial Governmental Business Type Siasconset Wannacomet Sewer Airport Net position at June 30, 2017, as reported 166,781,880$ 131,405,629$ 7,314,351$ 21,915,469$ 50,037,945$ 51,857,152$ 44,219,409 4,396,823 311,500 686,960 430,297 2,968,066 3,160,929 - - - - - Eliminate previously recorded OPEB obligation Contributions made subsequent to measurement date Record net OPEB liability (93,641,015) (5,725,464) (604,705) (1,200,489) (267,412) (3,652,858) Net position at June 30, 2017, as restated 130,076,988$ 120,521,203 $ 7,021,146$ 21,401,940$ 50,200,830$ 51,172,360$ Proprietary Funds Net position at June 30, 2017, as reported 7,069,202$ Eliminate previously recorded OPEB obligation 158,315 Record net OPEB liability (349,378) Net position at June 30, 2017, as restated 6,878,139$ Net position at June 30, 2017, as reported 318,446,540$ Eliminate previously recorded OPEB obligation 390,917 Record net OPEB liability (1,033,248) Net position at June 30, 2017, as restated 317,804,209$ Town of Nantucket, Massachusetts Page 101 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 101 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 102 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 102 of 157 Comprehensive Annual Financial Report Required Supplementary Information Town of Nantucket, Massachusetts Page 103 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 103 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION - PENSIONS YEAR ENDED JUNE 30, 2018 SCHEDULE OF THE TOWN'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY 2018 2015 Town's proportion of the net pension liability (asset)9.69%9.90%9.52%9.51% Town's proportionate share of the net pension liability (asset)65,965$ 69,566$ 59,964$ 53,675$ Town's covered payroll 27,015$ 27,426$ 25,827$ 24,938$ Town's proportionate share of the net pension liability (asset) as a percentage of its covered payroll 244.18%253.65%232.18%215.23% Plan fiduciary net position as a percentage of the total pension liability 61.86%57.28%58.10%60.43% SCHEDULE OF THE TOWN CONTRIBUTIONS TO PENSION PLAN 2018 2015 Actuarially determined contribution 5,785$ 5,612$ 5,143$ 4,959$ Contributions in relation to the actuarially determined contribution 5,785 5,612 5,143 4,959 Contribution deficiency (excess)-$ -$ -$ -$ Town's covered payroll 27,015$ 27,426$ 25,827$ 24,938$ Contributions as a percentage of covered payroll 21.4%20.5%19.9%19.9% This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, information is presented for those years in which information is available. See accompanying independent auditor's report. Year Ended June 30, 2017 2016 (dollar amounts are in thousands) (dollar amounts are in thousands) Year Ended June 30, 2017 2016 Town of Nantucket, Massachusetts Page 104 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 104 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION - PENSIONS YEAR ENDED JUNE 30, 2018 SCHEDULE OF THE COUNTY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY 2018 2015 County's proportion of the net pension liability (asset)0.09%0.09%0.09%0.09% County's proportionate share of the net pension liability (asset)597$ 625$ 551$ 519$ County's covered payroll 250$ 252$ 243$ 241$ County's proportionate share of the net pension liability (asset) as a percentage of its covered payroll 238.80%248.02%226.75%215.35% Plan fiduciary net position as a percentage of the total pension liability 61.86%57.28%58.10%60.43% SCHEDULE OF THE COUNTY CONTRIBUTIONS TO PENSION PLAN 2018 2015 Actuarially determined contribution 52$ 50$ 47$ 48$ Contributions in relation to the actuarially determined contribution 52 50 47 48 Contribution deficiency (excess)-$ -$ -$ -$ County's covered payroll 250$ 252$ 243$ 241$ Contributions as a percentage of covered payroll 20.8%19.8%19.3%19.9% This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, information is presented for those years in which information is available. See accompanying independent auditor's report. Year Ended June 30, 2017 2016 (dollar amounts are in thousands) (dollar amounts are in thousands) Year Ended June 30, 2017 2016 Town of Nantucket, Massachusetts Page 105 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 105 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION - PENSIONS YEAR ENDED JUNE 30, 2018 SCHEDULE OF THE LAND BANK'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY 2018 2015 Land Bank's proportion of the net pension liability (asset)0.25%0.20%0.23%0.26% Land Bank's proportionate share of the net pension liability (asset)1,674$ 1,384$ 1,428$ 1,471$ Land Bank's covered payroll 700$ 557$ 629$ 683$ Land Bank's proportionate share of the net pension liability (asset) as a percentage of its covered payroll 239.14%248.47%227.03%215.37% Plan fiduciary net position as a percentage of the total pension liability 61.86%57.28%58.10%60.43% SCHEDULE OF THE LAND BANK CONTRIBUTIONS TO PENSION PLAN 2018 2015 Actuarially determined contribution 147$ 112$ 122$ 136$ Contributions in relation to the actuarially determined contribution 147 112 122 136 Contribution deficiency (excess)-$ -$ -$ -$ Land Bank's covered payroll 700$ 557$ 629$ 683$ Contributions as a percentage of covered payroll 21.0%20.1%19.4%19.9% This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, information is presented for those years in which information is available. See accompanying independent auditor's report. Year Ended June 30, 2017 2016 (dollar amounts are in thousands) (dollar amounts are in thousands) Year Ended June 30, 2017 2016 Town of Nantucket, Massachusetts Page 106 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 106 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION - PENSIONS YEAR ENDED JUNE 30, 2018 Year Ended June 30, 2017 2016 2015 2014 Commonwealth's proportion of the collective net pension liability (asset)100.0%100.0%100.0%100.0% Town's proportion of the collective net pension liability (asset)0.0%0.0%0.0%0.0% Commonwealth's proportionate share of the net pension liability (asset)22,885,391$ 22,357,928$ 20,489,643$ 15,896,354$ Commonwealth's actuarially determined contribution 1,235,515$ 1,124,583$ 1,021,930$ 937,379$ Contributions to MTRS are the responsibility of the Commonwealth of Massachusetts. This schedule is presented to illustrate the requirement to show information for ten years. However, until a full ten-year trend is compiled, information is presented for those years in which information is available. See accompanying independent auditor's report. (dollar amounts are in thousands) SCHEDULE OF THE COMMONWEALTH'S COLLECTIVE SHARE OF THE NET PENSION LIABILITY MASSACHUSETTS TEACHER'S RETIREMENT SYSTEM Town of Nantucket, Massachusetts Page 107 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 107 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION - OPEB YEAR ENDED JUNE 30, 2018 SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS 2018 2017 Total OPEB liability: Service cost 3,270,431$ 3,915,845$ Interest 3,879,622 4,305,825 Differences between expected and actual experience (18,207,317) - Benefit payments (3,195,050) (3,230,121) Net change in total OPEB liability (14,252,314) 4,991,549 Total OPEB liability - beginning of year 110,320,559 105,329,010 Total OPEB liability - end of year (a)96,068,245$ 110,320,559$ Plan fiduciary net position: Contributions - employer 3,695,050$ 3,730,121$ Net investment income (13,267) 62,612 Benefit payments (3,195,050) (3,230,121) Net change in Plan fiduciary net position 486,733 562,612 Plan fiduciary net position - beginning of year 1,903,825 1,341,213 Plan fiduciary net position - end of year (b)2,390,558$ 1,903,825$ Net OPEB liability - end of year (a) - (b)93,677,687$ 108,416,734$ Plan fiduciary net position as a percentage of the total OPEB liability 2.49%1.73% Covered payroll 26,400,000$ 26,950,000$ Net OPEB liability as a percentage of covered- employee payroll 354.84%402.29% Note: This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, information is presented for those years in which information is available. Note: This schedule is presented using the optional format of combining the required schedules in paragraph 36a and 36b of GASB 74. See accompanying independent auditor's report. Year Ended June 30, Town of Nantucket, Massachusetts Page 108 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 108 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS REQUIRED SUPPLEMENTARY INFORMATION - OPEB YEAR ENDED JUNE 30, 2018 SCHEDULE OF CONTRIBUTIONS 2018 2017 Actuarially-determined contribution 9,639,685$ 9,698,176$ Contributions in relation to the actuarially- determined contribution (3,695,050) (3,730,121) Contribution deficiency (excess)5,944,635$ 5,968,055$ Covered payroll 26,400,000$ 26,950,000$ Contribution as a percentage of covered payroll 14.0%13.8% Valuation date July 1, 2016 July 1, 2016 Amortization period 30 years 30 years Investment rate of return 5.51%5.74% Municipal bond rate 3.45%3.16% Single equivalent bond rate 4.00%4.50% Inflation 2.75%2.75% Healthcare cost trend rates 5.00%5.00% Salary increases 3.00%3.00% Actuarial cost method Individual Entry Age Normal (for all years presented) Asset valuation method Market Value of Assets as of Reporting Date (for all years presented) SCHEDULE OF INVESTMENT RETURNS 2018 2017 -0.47%4.53% Note: These schedules are presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, information is presented for those years in which information is available. See accompanying independent auditor's report. Annual money-weighted rate of return, net of investment expense Year Ended June 30, Year Ended June 30, Town of Nantucket, Massachusetts Page 109 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 109 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND YEAR ENDED JUNE 30, 2018 Budgeted Amounts Actual Actual Variance Original Final Budgetary Budgetary Positive Budget Budget Amounts Encumbrances Adjusted (Negative) Revenues: Taxes: Real estate taxes 76,188,826$ 76,188,826$ 76,297,158$ -$ 76,297,158 108,332 Personal property taxes 1,556,216 1,556,216 1,572,345 - 1,572,345 16,129 Tax title - - 206,606 - 206,606 206,606 Motor vehicle excise 2,350,000 2,350,000 2,952,628 - 2,952,628 602,628 Boat excise 50,000 50,000 37,135 - 37,135 (12,865) Meals taxes 961,000 961,000 1,102,316 - 1,102,316 141,316 Room occupancy taxes 3,373,400 3,373,400 3,622,242 - 3,622,242 248,842 84,479,442 84,479,442 85,790,430 - 85,790,430 1,310,988 Intergovernmental: State aid - chapter 70 3,114,564 3,114,564 3,114,564 - 3,114,564 - State aid - unrestricted 79,153 79,153 79,153 - 79,153 - State aid - state owned land 114,671 114,671 114,671 - 114,671 - State aid - other 3,447 3,447 77,899 - 77,899 74,452 3,311,835 3,311,835 3,386,287 - 3,386,287 74,452 Departmental fees, charges, and other: 12,635 12,635 8,794 - 8,794 (3,841) 292,000 292,000 494,960 - 494,960 202,960 100,000 100,000 98,908 - 98,908 (1,092) 117,000 117,000 138,766 - 138,766 21,766 35,000 35,000 68,164 - 68,164 33,164 47,850 47,850 51,075 - 51,075 3,225 346,700 346,700 392,512 - 392,512 45,812 132,305 132,305 230,317 - 230,317 98,012 238,850 238,850 279,865 - 279,865 41,015 42,000 42,000 65,142 - 65,142 23,142 Payments in lieu of taxes Select Board rentals Planning office filing and inspection fees Police department fees Public safety detail charges Fire department fees Inspection fees Harbormaster fees Historic district fees Town gas Other miscellaneous 166,350 166,350 262,570 - 262,570 96,220 1,530,690 1,530,690 2,091,073 - 2,091,073 560,383 Licenses and permits: Liquor licenses 180,000 180,000 226,300 - 226,300 46,300 Building permits 1,100,000 1,100,000 1,166,167 - 1,166,167 66,167 Other licenses and permits 177,226 177,226 220,592 - 220,592 43,366 1,457,226 1,457,226 1,613,059 - 1,613,059 155,833 Fines and forfeitures: Parking and court fines 145,000 145,000 307,717 - 307,717 162,717 Other fines 5,000 5,000 59,766 - 59,766 54,766 150,000 150,000 367,483 - 367,483 217,483 Penalties and interest on taxes 500,000 500,000 584,164 - 584,164 84,164 Interest and investment income 125,000 125,000 261,751 - 261,751 136,751 Total Revenues 91,554,193 91,554,193 94,094,247 - 94,094,247 2,540,054 Town of Nantucket, Massachusetts Page 110 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 110 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND YEAR ENDED JUNE 30, 2018 Budgeted Amounts Actual Actual Variance Original Final Budgetary Budgetary Positive Budget Budget Amounts Encumbrances Adjusted (Negative) Expenditures: General Government: Moderator: Salary 180 180 180 - 180 - Operating 1,500 1,500 - - - 1,500 1,680 1,680 180 - 180 1,500 Town Administration: Salary 711,400 741,400 728,359 - 728,359 13,041 Operating 713,533 763,533 328,284 318,467 646,751 116,782 Articles 1,182,157 1,182,157 62,811 1,119,346 1,182,157 - 2,607,090 2,687,090 1,119,454 1,437,813 2,557,267 129,823 Finance Committee: Operating 18,680 18,417 10,002 - 10,002 8,415 Articles 500,000 139,450 - - - 139,450 518,680 157,867 10,002 - 10,002 147,865 Finance and Operations: Salary 795,580 795,580 634,673 - 634,673 160,907 Operating 249,642 249,942 160,493 87,824 248,317 1,625 Articles 7,609 10,086 2,477 7,609 10,086 - 1,052,831 1,055,608 797,643 95,433 893,076 162,532 Assessor: Salary 421,924 421,924 407,909 - 407,909 14,015 Operating 344,700 344,700 146,054 173,300 319,354 25,346 766,624 766,624 553,963 173,300 727,263 39,361 Collector: Salary 312,135 312,135 311,288 - 311,288 847 Operating 108,014 108,014 77,152 12,377 89,529 18,485 420,149 420,149 388,440 12,377 400,817 19,332 Treasurer: Salary 296,541 296,541 241,471 - 241,471 55,070 Operating 147,310 147,310 49,338 30,000 79,338 67,972 443,851 443,851 290,809 30,000 320,809 123,042 Information Systems/GIS: Salary 513,840 563,840 517,781 - 517,781 46,059 Operating 467,752 467,752 437,944 10,530 448,474 19,278 981,592 1,031,592 955,725 10,530 966,255 65,337 Legal: Operating 431,923 431,923 412,170 - 412,170 19,753 431,923 431,923 412,170 - 412,170 19,753 Human Resources: Salary 247,520 247,520 247,520 - 247,520 - Operating 147,915 147,915 100,498 17,604 118,102 29,813 395,435 395,435 348,018 17,604 365,622 29,813 Town Clerk: Salary 260,070 260,070 260,070 - 260,070 - Operating 67,055 67,055 64,949 235 65,184 1,871 327,125 327,125 325,019 235 325,254 1,871 (continued) Town of Nantucket, Massachusetts Page 111 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 111 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND YEAR ENDED JUNE 30, 2018 Budgeted Amounts Actual Actual Variance Original Final Budgetary Budgetary Positive Budget Budget Amounts Encumbrances Adjusted (Negative) Nantucket Planning Office: Salary 942,663 942,663 952,539 - 952,539 (9,876) Operating 377,326 377,326 257,048 5,991 263,039 114,287 1,319,989 1,319,989 1,209,587 5,991 1,215,578 104,411 Public Buildings: Operating 1,267,290 1,192,291 910,981 171,086 1,082,067 110,224 1,267,290 1,192,291 910,981 171,086 1,082,067 110,224 Natural Resources: Salary 573,888 573,888 528,375 - 528,375 45,513 Operating 226,960 226,960 134,293 18,535 152,828 74,132 800,848 800,848 662,668 18,535 681,203 119,645 Insurances: Auto casualty 145,824 145,824 154,822 - 154,822 (8,998) Blanket liability 1,693,989 1,693,989 850,326 15,497 865,823 828,166 Claims deductible 112,011 112,011 36,241 - 36,241 75,770 Insurance consulting 57,245 57,245 28,219 15,345 43,564 13,681 2,009,069 2,009,069 1,069,608 30,842 1,100,450 908,619 Total General Government 13,344,176 13,041,141 9,054,267 2,003,746 11,058,013 1,983,128 Public Safety: Police: Salary 4,549,240 4,584,240 4,536,546 - 4,536,546 47,694 Operating 879,793 893,890 764,586 82,785 847,371 46,519 5,429,033 5,478,130 5,301,132 82,785 5,383,917 94,213 Centralized Dispatch: Salary 762,100 762,100 742,080 - 742,080 20,020 762,100 762,100 742,080 - 742,080 20,020 Fire: Salary 2,607,850 2,592,850 2,366,916 50,000 2,416,916 175,934 Operating 302,944 317,944 285,291 1,029 286,320 31,624 2,910,794 2,910,794 2,652,207 51,029 2,703,236 207,558 Inspectors: Salary 619,616 619,616 582,719 - 582,719 36,897 Operating 21,475 21,475 20,632 2,426 23,058 (1,583) 641,091 641,091 603,351 2,426 605,777 35,314 Emergency Management: Operating 8,000 8,000 7,934 - 7,934 66 8,000 8,000 7,934 - 7,934 66 Marine: Salary 767,900 767,900 767,900 - 767,900 - Operating 106,053 106,053 70,091 31,767 101,858 4,195 Articles 332,318 332,318 87,789 244,529 332,318 - 1,206,271 1,206,271 925,780 276,296 1,202,076 4,195 Total Public Safety 10,957,289 11,006,386 10,232,484 412,536 10,645,020 361,366 Town of Nantucket, Massachusetts Page 112 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 112 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND YEAR ENDED JUNE 30, 2018 Budgeted Amounts Actual Actual Variance Original Final Budgetary Budgetary Positive Budget Budget Amounts Encumbrances Adjusted (Negative) Education: Salary and operating 28,804,258 28,804,258 28,068,729 587,551 28,656,280 147,978 Articles 740,931 740,931 458,926 282,005 740,931 - Total Education 29,545,189 29,545,189 28,527,655 869,556 29,397,211 147,978 Public Works: Public Works: Salary 2,395,990 2,365,990 2,260,106 - 2,260,106 105,884 Operating 615,878 702,293 535,935 26,033 561,968 140,325 Articles 157,330 157,330 112,256 45,074 157,330 - 3,169,198 3,225,613 2,908,297 71,107 2,979,404 246,209 Street Lighting: Operating 165,136 165,136 120,957 - 120,957 44,179 165,136 165,136 120,957 - 120,957 44,179 Mosquito Control: Operating 124,531 124,531 111,833 - 111,833 12,698 124,531 124,531 111,833 - 111,833 12,698 Snow and Ice Removal: Operating 82,600 82,600 207,050 - 207,050 (124,450) 82,600 82,600 207,050 - 207,050 (124,450) Gas/Town Vehicles: Operating 404,942 404,942 325,265 - 325,265 79,677 404,942 404,942 325,265 - 325,265 79,677 Total Public Works 3,946,407 4,002,822 3,673,402 71,107 3,744,509 258,313 Health and Human Services: Health: Salary 280,561 280,561 293,602 - 293,602 (13,041) Operating 79,217 79,217 44,530 2,769 47,299 31,918 359,778 359,778 338,132 2,769 340,901 18,877 Commision on Disability: Salary 10,100 10,100 6,157 - 6,157 3,943 Operating 2,166 2,166 2,125 - 2,125 41 12,266 12,266 8,282 - 8,282 3,984 Senior Services/Council on Aging: Salary 165,198 165,198 166,841 - 166,841 (1,643) Operating 29,335 29,335 12,890 757 13,647 15,688 194,533 194,533 179,731 757 180,488 14,045 Veterans Services: Salary 15,400 15,400 4,532 - 4,532 10,868 Operating 18,511 18,511 12,206 - 12,206 6,305 33,911 33,911 16,738 - 16,738 17,173 Human Services: Salary 74,373 74,373 76,907 - 76,907 (2,534) Operating 15,794 15,794 9,819 96 9,915 5,879 Articles 513,116 513,116 501,804 11,312 513,116 - 603,283 603,283 588,530 11,408 599,938 3,345 Total Health and Human Services 1,203,771 1,203,771 1,131,413 14,934 1,146,347 57,424 (Continued) Town of Nantucket, Massachusetts Page 113 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 113 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND YEAR ENDED JUNE 30, 2018 Budgeted Amounts Actual Actual Variance Original Final Budgetary Budgetary Positive Budget Budget Amounts Encumbrances Adjusted (Negative) Culture and Recreation: Atheneum (Library): Operating 719,719 719,719 719,719 - 719,719 - 719,719 719,719 719,719 - 719,719 - Visitor Services: Salary 347,400 297,633 273,729 - 273,729 23,904 Operating 179,086 178,853 162,857 2,518 165,375 13,478 526,486 476,486 436,586 2,518 439,104 37,382 Town Clock: Operating 4,752 4,752 3,464 38 3,502 1,250 4,752 4,752 3,464 38 3,502 1,250 Total Culture and Recreation 1,250,957 1,200,957 1,159,769 2,556 1,162,325 38,632 State and County Assessments: State assessments and charges 88,903 88,903 63,548 - 63,548 25,355 Transportation authorities assessments 398,943 398,943 398,943 - 398,943 - County assessments and charges 170,201 170,201 170,201 - 170,201 - Total State and County Assessments 658,047 658,047 632,692 - 632,692 25,355 Pension and Fringe Benefits: Medical Insurance: Salary 13,129,650 12,929,650 10,923,847 - 10,923,847 2,005,803 13,129,650 12,929,650 10,923,847 - 10,923,847 2,005,803 Unemployment: Salary 170,000 170,000 106,847 2,880 109,727 60,273 170,000 170,000 106,847 2,880 109,727 60,273 Workers' Compensation: Salary 246,250 246,250 246,250 - 246,250 - 246,250 246,250 246,250 - 246,250 - Laborer's Union Pension: Salary 49,035 49,035 57,108 - 57,108 (8,073) 49,035 49,035 57,108 - 57,108 (8,073) Pension Assessments: Barnstable Retirement 4,255,533 4,255,533 4,096,124 - 4,096,124 159,409 4,255,533 4,255,533 4,096,124 - 4,096,124 159,409 Other Employee Benefits: Salary 386,611 386,611 92,117 - 92,117 294,494 386,611 386,611 92,117 - 92,117 294,494 Total Pension and Fringe Benefits 18,237,079 18,037,079 15,522,293 2,880 15,525,173 2,511,906 Town of Nantucket, Massachusetts Page 114 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 114 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND YEAR ENDED JUNE 30, 2018 Budgeted Amounts Actual Actual Variance Original Final Budgetary Budgetary Positive Budget Budget Amounts Encumbrances Adjusted (Negative) Debt Service 8,522,421 8,522,421 8,268,434 - 8,268,434 253,987 Total Expenditures 87,665,336 87,217,813 78,202,409 3,377,315 81,579,724 5,638,089 Other Financing Sources (Uses) Transfers in 619,300 619,300 1,137,317 1,137,317 518,017 Transfers out (14,008,351) (14,458,351) (14,458,351) (14,458,351) - Total Other Financing Sources (Uses)(13,389,051) (13,839,051) (13,321,034) (13,321,034)$ 518,017 Excess (Deficiency) of Revenues and Other Financing Sources Over Expenditures/Uses Of Prior Year Budgetary Fund Balance (9,500,194) (9,502,671) 2,570,804$ 8,696,160$ Other Budgetary Items Use of unassigned fund balance (free cash)5,139,599$ 5,142,076$ Prior year encumbrances 2,531,782 2,531,782 Prior year articles 1,994,598 1,994,598 Prior year deficits (211,343) (211,343) Other 45,558 45,558 Total Other Budgetary Items 9,500,194 9,502,671 Net budget and actual -$ -$ (Concluded) The notes to the financial statements are an integral part of this statement. The notes to the required supplementary information are and integral part of this statement. Town of Nantucket, Massachusetts Page 115 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 115 of 157 Comprehensive Annual Financial Report TOWN OF NANTUCKET, MASSACHUSETTS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION YEAR ENDED JUNE 30, 2018 I.Budgetary Basis of Accounting Budgetary Information – An annual budget is legally adopted for the General Fund and the Enterprise Funds. The annual budgets are prepared by Town Administration, reviewed and approved by theSelect Board, recommended by the Finance Committee and voted by the taxpayers at the AnnualTown Meeting. Expenditures may not legally exceed appropriations at the department level, or in the categories of personnel and non-personnel expenses. Transfers between and within departmentsrequire approval at a Special Town Meeting, unless allowed under Massachusetts General Law. Atthe close of each fiscal year, unencumbered appropriation balances lapse and revert to unassignedfund balance. The Town Meeting adopts an annual budget for the general fund in conformity with the guidelinesdescribed above. During fiscal year 2018, Town Meeting approved various supplemental budgetaryappropriations between functions that did not materially increase the total original voted budget. The Finance Director’s Office has the responsibility to ensure that budgetary control is maintained in themanner in which the appropriations were voted by Town Meeting. Budgetary control is exercisedthrough the Town’s accounting system. Budgetary-to-GAAP Reconciliation – The Town’s general fund is prepared on a basis of accountingother than GAAP to conform to the Uniform Municipal Accounting System basis of accounting as prescribed by the Massachusetts Department of Revenue. A reconciliation of the budgetary-basis toGAAP-basis results for the General Fund for the fiscal year ended June 30, 2018, is as follows: Basis of Accounting Fund Perspective Differences Differences Total Revenues on a budgetary basis 94,094,247$ Stabilization revenue -$6,077$ 6,077 Nursing home revenues - 4,934,704 4,934,704 Landfill revenues - 3,418,006 3,418,006 Change in revenue accruals 167,749 -167,749 On behalf payments 5,468,657 -5,468,657 Revenues on a GAAP basis 5,636,406$ 8,358,787$ 108,089,440$ Expenditures on a budgetary basis 78,202,409$ Reclass indirect transfers against expenditures $ (223,091)$ Nursing home expenditures - 7,845,868 Landfill expenditures - 9,725,635 Change in expenditure accruals (806,902) On behalf payments 5,468,657 Reclass transfers to private purpose fund - 500,000 (223,091) 7,845,868 9,725,635 (806,902) 5,468,657 500,000 Expenditures on a GAAP basis $ 4,066,846 18,071,503$ $ 100,712,576 Town of Nantucket, Massachusetts Page 116 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 116 of 157 Comprehensive Annual Financial Report Excess of Expenditures Over Appropriations – During the fiscal year ended, the Town overspent its appropriation for snow and ice removal costs by $124,450. This will be raised through subsequent tax assessments when the Town sets its tax rate for fiscal year 2019. Basis of Accounting Fund Perspective Differences Differences Total Other financing (uses) on a budgetary basis (13,321,034)$ Reclass indirect transfers against expenditures $ (223,091)$ - ( 223,091) Nursing home transfers - 794,146 794,146 Landfill transfers - 6,127,218 6,127,218 Reclass transfers to private purpose fund - 500,000 500,000 Other financing (uses) on a GAAP basis $ (223,091)7,421,364$ $ (6,122,761) Town of Nantucket, Massachusetts Page 117 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 117 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 118 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 118 of 157 Comprehensive Annual Financial Report Combining Statements Town of Nantucket, Massachusetts Page 119 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 119 of 157 Comprehensive Annual Financial Report Nonmajor Governmental Funds Special Revenue Funds – Special revenue funds are used to account for certain revenue generating activities that are legally and/or programmatically restricted to expenditures for a specific purpose. From the Town’s financial ledgers, these activities can be distinctly categorized into the following groupings: School Lunch Fund – This segregated revolving fund accounts for the activities of the child nutrition programs; amounts collected from services include federal and state meal reimbursements and meal charges. School Federal Grants – This fund accounts for educational-based grant programs received either directly from federal agencies or indirectly through pass-through entities. School State Grants – This fund accounts for educational-based grant programs received directly from State agencies. Town Federal Grants – This fund accounts for non-school grant programs received either directly from federal or indirectly through pass-through entities. Town State Grants – This fund accounts for non-school grant programs received directly from State agencies. Community Preservation – This fund accounts for monies received by the Town through a tax surcharge to its taxpayers and a match from the State. The purpose of the fund is for the preservation of space in Nantucket. Road Improvements – This fund accounts for monies received from the State under MGL Chapter 90 for eligible road improvements. School Revolving Funds – This fund accounts for educational-based activities within revolving funds established in accordance with MGL Chapter 44, Section 53E ½ and Chapter 71. Town Revolving Funds – This fund accounts for the non-school related activity within revolving funds established in accordance with MGL Chapter 44, Section 53E ½ and other applicable statutes. Property Sale Proceeds – This fund accounts for receipts collected from the sale of Town owned real property. Gifts – This fund accounts for donated monies which relate to all Town activities. Town of Nantucket, Massachusetts Page 120 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 120 of 157 Comprehensive Annual Financial Report Permanent Funds – Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support governmental programs. Cemetery Trust Funds – This fund accounts for contributions earmarked for the perpetual care and maintenance of cemetery facilities and property. Other Trust Funds – This fund accounts for all contributions including: gifts, donations and bequests for which only earnings on the original trust corpus may be expended to benefit government approved programs, other than those associated with cemetery and library activities. Town of Nantucket, Massachusetts Page 121 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 121 of 157 Comprehensive Annual Financial Report School School Town Town School Federal State Federal State Lunch Grants Grants Grants Grants Assets: Cash and cash equivalents 146,917$ 158,113$ 330,812$ 74,469$ 1,241,815$ Investments - - - - - Receivables, net of allowance for uncollectibles: Property taxes - - - - - Departmental and other - - - - - Intergovernmental - - - 38,230 409,301 Total Assets 146,917 158,113 330,812 112,699 1,651,116 Total Deferred Outflows of Resources - - - - - Total Assets and Deferred Outflows of Resources 146,917$ 158,113$ 330,812$ 112,699$ 1,651,116$ Liabilities and Fund Balances: Liabilities: Warrants and accounts payable 80,580$ 30,911$ 4,781$ 3,894$ 3,316$ Accrued payroll and withholdings - - 471 5,475 - Other liabilities - - - - - Bond anticipation notes payable - - - - 1,000,000 Total Liabilities 80,580 30,911 5,252 9,369 1,003,316 Deferred Inflows of Resources Unavailable revenue - property taxes - - - - - Unavailable revenue - other - - - - - Total Deferred Inflows of Resources - - - - - Fund Balances: Nonspendable - - - - - Restricted 66,337 127,202 325,560 103,330 862,597 Unassigned - - - - (214,797) Total Fund Balances 66,337 127,202 325,560 103,330 647,800 Total Liabilities, Deferred Inflows of Resources and Fund Balances 146,917$ 158,113$ 330,812$ 112,699$ 1,651,116$ JUNE 30, 2018 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Town of Nantucket, Massachusetts Page 122 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 122 of 157 Comprehensive Annual Financial Report Sub-total Community Road School Town Property Sale Gift Special Preservation Improvements Revolving Revolving Proceeds Funds Revenue Funds 4,616,624$ -$ 1,474,149$ 6,296,325$ 406,812$ 904,806$ 15,650,842$ - - - - - - - 178,332 - - - - - 178,332 - - - 372,325 - - 372,325 - - - - - - 447,531 4,794,956 - 1,474,149 6,668,650 406,812 904,806 16,649,030 - - - - - - - 4,794,956$ -$ 1,474,149$ 6,668,650$ 406,812$ 904,806$ 16,649,030$ 207,496$ -$ 40,080$ 546,385$ -$ 14,393$ 931,836$ 2,642 - 40,312 75,675 - - 124,575 - - 194,628 - - - 194,628 592,000 - - - - - 1,592,000 802,138 - 275,020 622,060 - 14,393 2,843,039 178,332 - - - - - 178,332 - - - 372,325 - - 372,325 178,332 - - 372,325 - - 550,657 - - - - - - - 3,814,486 - 1,199,129 5,674,265 406,812 890,413 13,470,131 - - - - - - (214,797) 3,814,486 - 1,199,129 5,674,265 406,812 890,413 13,255,334 4,794,956$ -$ 1,474,149$ 6,668,650$ 406,812$ 904,806$ 16,649,030$ Town of Nantucket, Massachusetts Page 123 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 123 of 157 Comprehensive Annual Financial Report NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30, 2018 Permanent Funds Total Cemetery Other Sub-total Nonmajor Trust Trust Permanent Governmental Funds Funds Funds Funds Assets: Cash and cash equivalents -$ -$ -$ 15,650,842$ Investments 156,598 18,190 174,788 174,788 Receivables, net of allowance for uncollectibles: Property taxes - - - 178,332 Departmental and other - - - 372,325 Intergovernmental - - - 447,531 Total Assets 156,598 18,190 174,788 16,823,818 Total Deferred Outflows of Resources - - - - Total Assets and Deferred Outflows of Resources 156,598$ 18,190$ 174,788$ 16,823,818$ Liabilities and Fund Balances: Liabilities: Warrants and accounts payable -$ -$ -$ 931,836$ Accrued payroll and withholdings - - - 124,575 Other liabilities - - - 194,628 Bond anticipation notes payable - - - 1,592,000 Total Liabilities - - - 2,843,039 Deferred Inflows of Resources Unavailable revenue - property taxes - - - 178,332 Unavailable revenue - other - - - 372,325 Total Deferred Inflows of Resources - - - 550,657 Fund Balances: Nonspendable 44,305 500 44,805 44,805 Restricted 112,293 17,690 129,983 13,600,114 Unassigned - - - (214,797) Total Fund Balances 156,598 18,190 174,788 13,430,122 Total Liabilities, Deferred Inflows of Resources and Fund Balances 156,598$ 18,190$ 174,788$ 16,823,818$ (Concluded) Town of Nantucket, Massachusetts Page 124 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 124 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 125 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 125 of 157 Comprehensive Annual Financial Report School School Town Town School Federal State Federal State Lunch Grants Grants Grants Grants Revenues: Intergovernmental 254,268$ 629,566$ 419,639$ 245,097$ 612,014$ Motor vehicle and other excises - - - - - Community preservation surcharges - - - - - Investment income - - - 39 - Departmental and other revenue 348,970 - - - 85,566 Contributions and donations - - - - - Total Revenues 603,238 629,566 419,639 245,136 697,580 Expenditures: Current: General government - - - 243,833 30,409 Public safety - - - 35,989 10,643 Education 674,386 544,209 350,762 - - Public works - - - 32,263 17,461 Health and human services - - - - 306,138 Culture and recreation - - - - 11,269 Debt service: Principal - - - - 324,881 Interest - - - - 162 Total Expenditures 674,386 544,209 350,762 312,085 700,963 Excess (Deficiency) Of Revenues Over (Under) Expenditures (71,148) 85,357 68,877 (66,949) (3,383) Other Financing Sources (Uses): Sale of capital assets - - - - - Transfers in - - - - - Transfers out - (45,540) (153,813) (531) (9,278) Total Other Financing Sources (Uses)- (45,540) (153,813) (531) (9,278) Net Change in Fund Balances (71,148) 39,817 (84,936) (67,480) (12,661) Fund Balances - Beginning of Year 137,485 87,385 410,496 170,810 660,461 Fund Balances - End of Year 66,337$ 127,202$ 325,560$ 103,330$ 647,800$ Special Revenue Funds FISCAL YEAR ENDED JUNE 30, 2018 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Town of Nantucket, Massachusetts Page 126 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 126 of 157 Comprehensive Annual Financial Report Sub-total Community Road School Town Property Sale Gift Special Preservation Improvements Revolving Revolving Proceeds Funds Revenue Funds 382,132$ 322,481$ -$ 219,184$ -$ -$ 3,084,381$ - - - 37,188 - - 37,188 2,188,658 - - - - - 2,188,658 17,123 - - 949 - - 18,111 5,523 - 1,359,065 2,011,058 - - 3,810,182 - - - - - 375,973 375,973 2,593,436 322,481 1,359,065 2,268,379 - 375,973 9,514,493 - - - 296,459 - 91,986 662,687 - - - 1,374,196 - 29,806 1,450,634 - - 1,572,690 - - 147,276 3,289,323 - 16,124 - 11,231 - 9,056 86,135 - -- 85,420 - -391,558 2,461,617 - - 88,043 - 1,659 2,562,588 105,000 - - - - - 429,881 31,231 - - - - - 31,393 2,597,848 16,124 1,572,690 1,855,349 - 279,783 8,904,199 (4,412) 306,357 (213,625) 413,030 - 96,190 610,294 - - - - 201,248 - 201,248 - - 465,000 - - - 465,000 - - - (279,000) (1,600,000) (26,591) (2,114,753) - - 465,000 (279,000) (1,398,752) (26,591) (1,448,505) (4,412) 306,357 251,375 134,030 (1,398,752) 69,599 (838,211) 3,818,898 (306,357) 947,754 5,540,235 1,805,564 820,814 14,093,545 3,814,486$ -$ 1,199,129$ 5,674,265$ 406,812$ 890,413$ 13,255,334$ (Continued) Town of Nantucket, Massachusetts Page 127 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 127 of 157 Comprehensive Annual Financial Report NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEAR ENDED JUNE 30, 2018 Permanent Funds Total Cemetery Other Sub-total Nonmajor Trust Trust Permanent Governmental Funds Funds Funds Funds Revenues: Intergovernmental -$ -$ -$ 3,084,381$ Motor vehicle and other excises - - - 37,188 Community preservation surcharges - - - 2,188,658 Investment income 142 16 158 18,269 Departmental and other revenue 5,400 - 5,400 3,815,582 Contributions and donations - - - 375,973 Total Revenues 5,542 16 5,558 9,520,051 Expenditures: Current: General government - - - 662,687 Public safety - - - 1,450,634 Education - - - 3,289,323 Public works - - - 86,135 Health and human services - - - 391,558 Culture and recreation - - - 2,562,588 Debt service: Principal - - - 429,881 Interest - - - 31,393 Total Expenditures - - - 8,904,199 Excess (Deficiency) Of Revenues Over (Under) Expenditures 5,542 16 5,558 615,852 Other Financing Sources (Uses): Sale of capital assets - - - 201,248 Transfers in - - - 465,000 Transfers out - - - (2,114,753) Total Other Financing Sources (Uses)- - - (1,448,505) Net Change in Fund Balances 5,542 16 5,558 (832,653) Fund Balances - Beginning of Year 151,056 18,174 169,230 14,262,775 Fund Balances - End of Year 156,598$ 18,190$ 174,788$ 13,430,122$ (Concluded) Town of Nantucket, Massachusetts Page 128 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 128 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 129 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 129 of 157 Comprehensive Annual Financial Report Internal Service Funds Narrative Internal service funds are used to account for the financing of services provided by one department to other departments or governmental units. The Town’s risk financing activities accounts for in the internal service funds can be distinctly categorized into the following groupings: Health Claims – This fund accounts for the group health and dental insurance activity for active Town employees and retirees. Workers’ Compensation Claims – This fund accounts for workers’ compensation benefits, replacement wages and medical claims expenses of employees that qualify for such benefits. Town of Nantucket, Massachusetts Page 130 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 130 of 157 Comprehensive Annual Financial Report INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET POSITION JUNE 30, 2018 Total Health Workers'Internal Claims Compensation Service Funds Assets: Current assets: Cash and cash equivalents 3,735,117$ 58$ 3,735,175$ Investments - 244,570 244,570 Reinsured claims receivable 193,412 - 193,412 Prepaid items 1,403,527 - 1,403,527 Total Assets 5,332,056 244,628 5,576,684 Total Deferred Outflows of Resources - - - Total Assets and Deferred Outflows of Resources 5,332,056 244,628 5,576,684 Liabilities: Current liabilities: Warrants and accounts payable 71,560$ 6,049$ 77,609$ Health claims incurred but not reported 1,138,217 - 1,138,217 Workers' compensation claims - 95,805 95,805 Total Current Liabilities 1,209,777 101,854 1,311,631 Total Deferred Inflows of Resources - - - Total Liabilities and Deferred Inflows of Resources 1,209,777 101,854 1,311,631 Net Position: Unrestricted 4,122,279 142,774 4,265,053 TOTAL NET POSITION 4,122,279$ 142,774$ 4,265,053$ Town of Nantucket, Massachusetts Page 131 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 131 of 157 Comprehensive Annual Financial Report INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FISCAL YEAR ENDED JUNE 30, 2018 Total Health Workers'Internal Service Claims Compensation Funds Operating Revenues: Employee contributions 1,849,827$ -$ 1,849,827$ Employer contributions 13,641,817 338,651 13,980,468 Reinsured claims proceeds 395,057 - 395,057 Total Operating Revenues 15,886,701 338,651 16,225,352 Operating Expenditures: Employee benefits 14,956,653 345,947 15,302,600 Operating Income (loss)930,048 (7,296) 922,752 Nonoperating Revenues: Investment income - (1,713) (1,713) Income (loss) Before Transfers 930,048 (9,009) 921,039 Change in Net Position 930,048 (9,009) 921,039 Fund Balances - Beginning of Year 3,192,231 151,783 3,344,014 Fund Balances - End of Year 4,122,279$ 142,774$ 4,265,053$ Town of Nantucket, Massachusetts Page 132 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 132 of 157 Comprehensive Annual Financial Report INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS FISCAL YEAR ENDED JUNE 30, 2018 Total Health Workers'Internal Service Claims Compensation Funds Cash Flows From Operating Activities: Receipts from employees 1,849,827$ -$ 1,849,827$ Receipts from employer 13,641,817 338,651 13,980,468 Receipts from reinsured claims 290,566 - 290,566 Payments for interfund services used (16,765,728) (288,404) (17,054,132) Net Cash Provided by (Used in) Operating Activities (983,518) 50,247 (933,271) Cash Flows From Investing Activities: Investment income - (1,713) (1,713) Investment of operating cash - (244,570) (244,570) Net Cash Provided by (Used in) Investing Activities - (246,283) (246,283) Net Change in Cash and Cash Equivalents (983,518) (196,036) (1,179,554) Cash and Cash Equivalents: Beginning of the Year 4,718,635 196,094 4,914,729 End of the Year 3,735,117$ 58$ 3,735,175$ Reconciliation of Operating Income to Net Cash Provided by (Used in) Operating Activities: Operating income (loss)930,048$ (7,296)$ 922,752$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Changes in assets and liablities: Receivables (104,491) - (104,491) Prepaid items (1,403,527) - (1,403,527) Accounts payable and accrued expenses (227,987) 5,969 (222,018) Accrued benefits payable (177,561) 51,574 (125,987) Net Cash Provided by (Used in) Operating Activities (983,518)$ 50,247$ (933,271)$ Town of Nantucket, Massachusetts Page 133 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 133 of 157 Comprehensive Annual Financial Report Fiduciary Funds Agency Funds – Agency funds are used to account for assets maintained in a custodial capacity. Such activities primarily consist of performance bonds and school deposits held, as well as, monies due to Town personnel for certain services rendered that were collected from external parties on their behalf. Town of Nantucket, Massachusetts Page 134 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 134 of 157 Comprehensive Annual Financial Report AGENCY FUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FISCAL YEAR ENDED JUNE 30, 2018 Beginning End of Year Additions Deletions of Year Assets Current assets: Cash and cash equivalents 1,376,104$ 1,490,853$ (1,550,228)$ 1,316,729$ Receivables, net of allowance 146,000 257,753 (320,368) 83,385 Total Assets 1,522,104$ 1,748,606$ (1,870,596)$ 1,400,114$ Liabilities Current liabilities: Warrants and accounts payable 1,722$ 758,639$ (723,361)$ 37,000$ Accrued payroll and withholdings 34,312 754,209 (755,588) 32,933 Agency liabilities 446,667 975,424 (1,019,885) 402,206 Planning board deposits 1,039,403 218,470 (329,898) 927,975 Total Liabilities 1,522,104$ 2,706,742$ (2,828,732)$ 1,400,114$ Town of Nantucket, Massachusetts Page 135 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 135 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 136 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 136 of 157 Comprehensive Annual Financial Report STATISTICAL SECTION Old South Wharf located at the Boat Basin in Nantucket Harbor is the vacation destination for many tourists. Cottages line the entire wharf and reservations must be made months ahead of time due to the popular demand. Springtime provides amazing scenery and colors as the flowers are in bloom. (photo credit: William DeSousa-Mauk) Town of Nantucket, Massachusetts Page 137 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 137 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 138 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 138 of 157 Comprehensive Annual Financial Report Statistical Section This part of the comprehensive annual financial report presents information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the Town’s overall financial health. Financial Trends These schedules contain trend information to help the reader understand how the Town’s financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the Town’s most significant local revenue source, the property tax. Debt Capacity These schedules present information to help the reader assess the affordability of the Town’s current levels of outstanding debt, and the Town’s ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town’s financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Town’s financial report relates to the services the Town provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the financial statements for the relevant year. Town of Nantucket, Massachusetts Page 139 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 139 of 157 Comprehensive Annual Financial Report LAST TEN FISCAL YEARS 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Governmental activities:Invested in capital assets……….………………156,034,000$ 171,102,098$ 177,625,537$ 180,988,633$ 179,338,227$ 175,687,378$ 181,710,594$ 186,717,700$ 203,168,454$ 222,919,137$ Restricted………………………………………14,401,121 13,294,995 3,150,056 2,459,409 15,818,386 20,511,155 20,995,512 27,381,162 23,523,901 24,663,139 Unrestricted……………………………………3,072,293 (7,324,139) 2,459,785 1,293,781 (1,831,770) 1,501,847 (36,480,970) (45,200,433) (59,910,475) (110,316,541 Total governmental activities net position…………… 173,507,414$ 177,072,954$ 183,235,378$ 184,741,823$ 193,324,843$ 197,700,380$ 166,225,136$ 168,898,429$ 166,781,880$ $ 137,265,735 Business-type activities: Invested in capital assets……….………………109,858,055$ 114,762,981$ 119,408,316$ 118,502,610$ 116,596,172$ 112,541,419$ 119,242,898$ 120,659,914$ 105,477,803$ $ 121,715,832Restricted……………………………...………- - - - - - - - - - Unrestricted……………………………………7,313,124 7,264,425 3,199,868 9,865,892 11,287,299 15,914,047 (1,523,044) 6,361,265 25,927,826 11,798,292 Total business-type activities net position…………… 117,171,179$ 122,027,406$ 122,608,184$ 128,368,502$ 127,883,471$ 128,455,466$ 117,719,854$ 127,021,179$ 131,405,629$ 133,514,124$ Primary government: Invested in capital assets……….………………265,892,055$ 285,865,079$ 297,033,853$ 299,491,243$ 295,934,399$ 288,228,797$ 300,953,492$ 307,377,614$ 308,646,257$ $ 344,634,969Restricted………………………………………14,401,121 13,294,995 3,150,056 2,459,409 15,818,386 20,511,155 20,995,512 27,381,162 23,523,901 24,663,139 Unrestricted……………………………………10,385,417 (59,714) 5,659,653 11,159,673 9,455,529 17,415,894 (38,004,014) (38,839,168) (33,982,649) (98,518,249) Total primary government net position……………… 290,678,593$ 299,100,360$ 305,843,562$ 313,110,325$ 321,208,314$ 326,155,846$ 283,944,990$ 295,919,608$ 298,187,509$ $ 270,779,859 NET POSITION BY COMPONENT Town of Nantucket, Massachusetts Page 140 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 140 of 157 Comprehensive Annual Financial Report CHANGES IN NET POSITION LAST TEN FISCAL YEARS 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Expenses - Governmental activities: General government…...…………………………………………………10,730,618$ 10,319,800$ 10,940,662$ 10,015,072$ 9,765,641$ 10,068,331$ 11,574,757$ 13,375,694$ 15,652,032$ 13,660,766$ Public safety…..…………………………………………………………14,346,976 14,684,244 12,172,241 13,601,442 14,042,554 14,779,274 15,484,735 17,211,310 17,548,899 19,236,351 Education……..…………………………………………………………27,861,059 30,380,350 28,867,553 29,011,944 35,190,752 36,829,209 38,839,302 40,296,659 46,524,011 47,854,776 Public works……...……………………………………………………4,195,016 4,514,082 4,082,163 4,692,304 4,171,361 4,862,640 5,131,842 5,404,039 20,248,200 19,697,228 Health and human services………………………………………………9,699,805 9,714,459 2,765,497 3,741,941 2,301,279 1,641,325 1,528,171 1,544,941 7,705,797 7,817,065 Culture and recreation………...…………………………………………3,872,616 3,392,381 2,119,755 2,170,903 2,327,315 5,622,457 5,397,098 4,646,084 4,770,808 4,034,143 Interest expense…………………………………………………………3,189,350 2,351,987 2,354,427 2,082,337 2,368,538 2,075,324 1,616,600 1,478,749 2,147,432 2,486,810 Total government activities expenses…………………………………………73,895,440 75,357,303 63,302,298 65,315,943 70,167,440 75,878,560 79,572,505 83,957,476 114,597,179 114,787,139 Business-type activities:Siasconset Water…………………………………………………………577,851 602,507 719,668 682,682 712,820 724,927 738,719 811,237 749,495 617,825 Wannacomet Water……………………………………………………4,022,463 3,582,097 3,570,999 3,674,493 3,785,742 3,624,731 3,544,191 4,088,800 4,345,647 4,428,396 Sewer……………………………………………………………………5,527,480 5,491,001 5,613,007 5,760,776 6,149,616 6,002,582 6,255,624 6,338,700 6,110,762 7,912,679 Solid waste………………………………………………………………10,575,310 8,114,794 8,679,984 8,851,378 11,302,336 8,963,029 10,324,817 11,587,152 - - Nantucket Memorial Airport……………………………………………11,912,883 13,541,915 13,158,406 15,331,231 14,523,220 15,592,198 15,096,177 14,287,119 15,087,914 15,379,560 Our Island Home…………………………………………………………- - 8,808,654 6,923,716 7,079,676 7,670,514 7,945,959 8,358,350 - - Total business-type activities expenses……………………………………..32,615,987 31,332,314 40,550,718 41,224,276 43,553,410 42,577,981 43,905,487 45,471,358 26,293,818 28,338,460 Total primary government expenses……………………………………….106,511,427$ 106,689,617$ 103,853,016$ 106,540,219$ 113,720,850$ 118,456,541$ 123,477,992$ 129,428,834$ 140,890,997$ 143,125,599$ Program Revenues - Governmental activities: Charges for services: General government…...………………………………………………211,203$ 1,358,150$ 426,552$ 741,512$ 622,049$ 917,730$ 771,006$ 1,121,165$ 1,215,294$ 1,414,603$ Public safety…..………………………………………………………1,633,813 1,418,330 1,362,466 1,668,420 2,771,517 3,213,998 3,203,714 3,703,493 4,145,232 4,006,734 Education……..………………………………………………………515,790 498,985 501,915 780,977 1,488,121 1,490,713 1,433,969 1,500,573 1,817,891 1,710,119 Public works……...……………………………………………………66,298 55,092 59,430 276,502 300,317 340,272 376,600 278,408 3,505,449 3,469,380 Health and human services……………………………………………3,120,051 3,661,973 35,445 82,788 132,655 188,221 190,627 227,273 5,977,366 5,246,151 Culture and recreation………...………………………………………321,181 289,279 325,010 522,063 248,089 295,416 346,626 329,022 433,829 455,763 Operating grants and contributions……………………………………5,795,452 5,090,233 3,989,493 2,131,096 6,022,440 6,230,362 6,761,994 9,241,317 10,995,900 11,348,091 Capital grants and contributions…………………………………………1,270,878 1,230,625 1,067,782 1,030,215 1,874,830 289,066 1,886,943 1,881,938 508,050 14,502,773 Total government activities program revenues...…………………………….12,934,666 13,602,667 7,768,093 7,233,573 13,460,018 12,965,778 14,971,479 18,283,189 28,599,011 42,153,614 Business-type activities: Charges for services……………….………………………………….24,172,299 24,820,469 27,568,533 32,847,185 31,799,794 33,592,609 33,738,945 39,612,392 27,063,403 28,655,420 Operating grants and contributions……………………………………1,113,866 776,060 1,287,762 746,499 85,992 91,000 90,820 133,570 70,458 123,647 Capital grants and contributions…………………………………………15,208,679 7,057,702 3,307,275 2,146,931 1,989,292 2,479,717 6,078,185 3,175,470 2,680,075 3,186,264 Total business-type activities program revenues………………………………40,494,844 32,654,231 32,163,570 35,740,615 33,875,078 36,163,326 39,907,950 42,921,432 29,813,936 31,965,331 Total primary government program revenues…………………………………53,429,510$ 46,256,898$ 39,931,663$ 42,974,188$ 47,335,096$ 49,129,104$ 54,879,429$ 61,204,621$ 58,412,947$ 74,118,945$ Net (Expense)/Program RevenueGovernmental activities……………………....…………………………(60,960,774)$ (61,754,636)$ (55,534,205)$ (58,082,370)$ (56,707,422)$ (62,912,782)$ (64,601,026)$ (65,674,287)$ (85,998,168)$ (72,633,525)$ Business-type activities……………………....…………………………7,878,857 1,321,917 (8,387,148) (5,483,661) (9,678,332) (6,414,655) (3,997,537) (2,549,926) 3,520,118 3,626,871 Total primary government net (expense)/program revenue…………………(53,081,917)$ (60,432,719)$ (63,921,353)$ (63,566,031)$ (66,385,754)$ (69,327,437)$ (68,598,563)$ (68,224,213)$ (82,478,050)$ (69,006,654)$ Note: Beginning in 2017, Our Island Home and Solid Waste business-type activities have been reported as governmental activities; fiscal year 2009 - 2016 were not restated to reflect this.(continued) Town of Nantucket, Massachusetts Page 141 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 141 of 157 Comprehensive Annual Financial Report CHANGES IN NET POSITION LAST TEN FISCAL YEARS 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Revenues and other Changes in Net Position - Governmental activities:Real estate and personal property taxes, net of tax refunds payable……………………………………………… 57,830,875$ 60,956,838$ 61,948,050$ 61,863,287$ 63,594,267$ 64,160,459$ 65,895,498$ 68,978,062$ 74,061,321$ 77,739,238$ Motor vehicle and other excise taxes…………………………………… 2,201,004 1,852,563 1,867,286 2,066,878 2,338,423 2,314,472 2,607,277 2,801,463 2,949,704 3,154,909 Hotel and meals excise……………………………………………..1,237,233 1,035,291 2,726,360 2,745,571 3,092,446 3,558,082 4,026,389 4,486,662 4,535,824 4,743,787 Penalties and interest on taxes…………………………………………………473,701 659,062 633,008 687,221 677,906 598,411 882,916 657,303 687,316 584,164 Community Preservation Fund surcharges……………………………………1,616,989 1,669,975 1,666,540 1,724,556 1,745,927 1,782,598 1,835,287 1,944,202 2,088,375 2,190,884 Grants and contributions not restricted to specific programs…………………376,265 587,474 935,761 307,901 737,402 278,049 186,666 179,523 190,963 193,824 Unrestricted investment income………………………………………… 277,329 160,970 65,960 173,698 66,235 159,229 257,230 389,334 231,448 284,739 Gain on sale of capital assets……………………………………………-1,143,075 73,530 813,011 736,256 1,379,639 2,430,079 --201,248 Other revenue………………………………………………………………850,819 789,238 748,060 438,678 604,871 ----- Transfers………………………………………………………………(6,660,946) (3,534,310) (8,967,926) (11,231,986) (8,303,291) (6,942,620) (7,881,295) (8,659,384) -285,264 Total governmental activities…………………………………………………58,203,269 65,320,176 61,696,629 59,588,815 65,290,442 67,288,319 70,240,047 70,777,165 84,744,951 89,378,057 Business-type activities: Unrestricted investment income………………………………………… ---11,993 55,748 44,030 32,935 62,084 71,855 95,529 Gain on sale of capital assets……………………………………….------829,212 --- Transfers………………………………………………………………6,660,946 3,534,310 8,967,926 11,231,986 8,303,291 6,942,620 7,881,295 8,659,384 -(285,264) Total business-type activities….………..…………………………………..6,660,946 3,534,310 8,967,926 11,243,979 8,359,039 6,986,650 8,743,442 8,721,468 71,855 (189,735) Total primary government general revenues and otherchanges in net position………………………………………………….64,864,215$ 68,854,486$ 70,664,555$ 70,832,794$ 73,649,481$ 74,274,969$ 78,983,489$ 79,498,633$ 84,816,806$ 89,188,322$ Changes in Net Position Governmental activities……………………....……………………………..(2,757,505)$ 3,565,540$ 6,162,424$ 1,506,445$ 8,583,020$ 4,375,537$ 5,639,021$ 5,102,878$ (1,253,217)$ 16,744,532$ Business-type activities……………………....……………………………..14,539,803 4,856,227 580,778 5,760,318 (1,319,293) 571,995 4,745,905 6,171,542 3,591,973 3,437,136 Total primary government changes in net position……………………………11,782,298$ 8,421,767$ 6,743,202$ 7,266,763$ 7,263,727$ 4,947,532$ 10,384,926$ 11,274,420$ 2,338,756$ 20,181,668$ (concluded) Town of Nantucket, Massachusetts Page 142 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 142 of 157 Comprehensive Annual Financial Report 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Fund: Nonspendable……………………-$ -$ -$ -$ -$ -$ 11,406$ -$ -$ -$ Restricted………………………… - 250,000 - 1,485,147 1,577,323 650,518 488,344 414,514 346,780 285,872 Committed………………………… 3,236,873 2,471,550 2,136,060 1,941,738 2,114,218 8,061,318 4,013,474 2,267,807 13,140,419 10,884,444 Assigned…………………………2,906,103 3,136,435 4,488,570 2,182,323 5,146,635 2,047,757 6,323,207 3,028,651 7,295,378 7,257,920 Unassigned………………………7,963,323 11,047,142 12,186,769 14,373,770 13,881,601 14,745,606 15,470,669 17,571,873 17,942,453 21,550,897 Total general fund……………………14,106,299$ 16,905,127$ 18,811,399$ 19,982,978$ 22,719,777$ 25,505,199$ 26,307,100$ 23,282,845$ 38,725,030$ 39,979,133$ All Other Governmental Funds: Nonspendable…………………………308,153$ 308,153$ 288,280$ 44,305$ 44,305$ 114,762$ 44,805$ 44,805$ 44,805$ 44,805$ Restricted…………………………19,796,252 19,427,291 16,039,900 18,987,991 17,267,229 18,709,640 20,950,707 27,086,357 23,331,672 24,282,474 Unassigned………………………- - (138,806) (104,106) - - (1,109,351) (17,737,453) (9,779,936) (5,012,857) Total all other governmental funds……20,104,405$ 19,735,444$ 16,189,374$ 18,928,190$ 17,311,534$ 18,824,402$ 19,886,161$ 9,393,709$ 13,596,541$ 19,314,422$ Note: The Town implemented GASB 54 in fiscal year 2011. All previous years (2009 - 2010) data presented were restated to conform to GASB 54 presentation. Note: The Town consolidated Our Island Home and Solid Waste activities into the General Fund in fiscal year 2017; none of the previous years were restated for this change. FUND BALANCES - GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS Town of Nantucket, Massachusetts Page 143 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 143 of 157 Comprehensive Annual Financial Report 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenues: Real estate and personal property taxes, net of tax refunds…………………………………… 56,947,358$ 59,769,412$ 62,486,485$ 62,120,715$ 63,517,709$ 63,434,664$ 66,805,456$ 69,040,526$ 73,938,122$ 78,224,629$ Motor vehicle and boat excise………………………… 2,210,996 1,757,392 2,090,373 1,986,900 1,913,789 2,512,609 2,592,035 2,747,276 2,823,655 3,026,951 Hotel and meals excise………………………………… 1,237,233 1,035,291 2,726,360 2,745,571 3,092,446 3,558,082 4,026,389 4,486,662 4,535,824 4,743,787 User charges…………………………………………… - - - - - - - - 9,229,547 8,345,708 Departmental and other………………………………… 8,970,419 7,834,515 4,032,108 6,414,807 4,910,252 4,641,243 4,606,897 5,218,934 5,844,352 5,912,072 Communities Preservation surcharges………………… 1,616,989 1,669,975 1,666,540 1,724,556 1,739,157 1,773,519 1,844,628 1,930,955 2,072,835 2,188,658 Penalties and interest on taxes………………………………473,701 659,062 633,008 687,221 677,906 598,411 882,916 657,303 687,316 584,164 Licenses and permits………………………………………919,644 932,004 1,015,424 1,058,052 1,075,074 1,405,911 1,455,080 1,712,506 1,698,765 1,613,059 Fines and forfeitures………………………………………240,648 248,231 254,285 223,054 208,503 296,917 283,179 269,441 334,451 367,483 Intergovernmental…………………………………………7,066,988 6,946,282 7,131,244 7,280,969 7,148,723 8,119,346 8,728,025 10,894,441 11,007,339 25,667,485 Contributions………………………………………………96,821 83,320 1,249,415 - 258,425 372,331 107,578 408,337 687,574 377,203 Investment income……………………………………440,459 278,439 159,602 164,936 63,751 147,521 252,185 375,220 228,864 286,452 Total Revenue…………………………………… 80,221,256 81,213,923 83,444,844 84,406,781 84,605,735 86,860,554 91,584,368 97,741,601 113,088,644 131,337,651 Expenditures: General government…………………………………… 5,090,318 5,837,165 6,209,441 7,179,875 7,114,409 7,596,379 8,658,027 8,946,404 8,960,868 10,155,695 Public safety…………………………………………… 8,997,534 10,513,956 10,437,125 10,041,235 9,018,372 9,284,157 9,444,096 10,698,049 10,711,350 11,981,461 Education……………………………………………… 23,209,204 23,175,994 23,764,115 23,829,685 23,139,532 24,585,011 25,775,358 25,329,925 29,017,484 30,442,447 Public works…………………………………………… 3,031,636 2,323,502 2,406,506 2,582,349 2,242,399 2,700,144 2,977,129 2,981,431 11,974,875 14,356,435 Health and human services……………………………5,917,474 5,845,124 889,848 1,305,274 1,899,449 1,236,079 1,080,864 1,051,897 6,830,966 7,134,552 Culture and recreation………………………………… 2,236,031 2,312,808 2,037,840 1,492,926 1,842,298 5,083,442 4,875,189 4,128,951 4,335,613 3,722,357 Pension and fringe benefits…………………………… 12,143,139 12,698,735 11,662,320 11,479,906 14,831,570 15,661,255 16,212,172 18,393,297 23,325,610 23,225,437 State and county charges……………………………… 449,457 458,657 461,358 531,772 546,250 566,814 574,275 591,536 606,206 632,692 Capital outlay and other………………………………… 9,254,440 16,296,496 8,912,763 5,047,157 7,481,872 5,202,852 8,504,352 26,106,919 37,467,736 27,044,203 Debt service: Principal……………………………………………… 6,338,863 7,778,503 7,558,823 6,657,855 5,496,332 5,405,944 5,478,306 5,511,741 5,785,385 5,651,238 Interest……………………………………………… 2,952,425 2,501,019 2,401,588 2,171,097 2,260,152 2,186,325 1,746,458 1,550,529 1,599,106 3,131,571 Total Expenditures……………………………………… 79,620,521 89,741,959 76,741,727 72,319,131 75,872,635 79,508,402 85,326,226 105,290,679 140,615,199 137,478,088 Excess of revenues over (under) expenditures………… 600,735 (8,528,036) 6,703,117 12,087,650 8,733,100 7,352,152 6,258,142 (7,549,078) (27,526,555) (6,140,437) Other Financing Sources (Uses): Issuances from bonds and notes………………...……… 5,990,490 13,070,000 - 3,200,000 478,449 - 993,000 1,188,709 35,735,550 11,730,000 Issuances from refunding bonds………………...…………- - - 1,329,900 8,685,000 - 758,200 3,935,000 3,515,450 - Premiums from debt issuances………………………….- 279,138 - 212,513 808,509 - 51,600 123,130 1,700,430 895,909 Payments to refunded bond escrow agent…………………- - - (1,519,037) (9,505,125) - (790,820) (3,995,000) (3,976,820) - Sale of capital assets…………………………………… - 1,143,075 73,530 - 865,210 3,888,758 2,474,833 1,439,916 208,199 201,248 Transfers in……………………………………………1,345,000 4,008,898 1,554,704 1,008,975 919,323 2,101,972 1,631,000 15,779,728 2,448,154 9,294,704 Transfers out…………………………………………… (8,217,946) (7,543,208) (9,971,149) (12,409,606) (9,864,323) (9,044,592) (9,512,295) (24,439,112) (2,448,154) (9,009,440) Total other financing sources (uses)………………………… (882,456) 10,957,903 (8,342,915) (8,177,255) (7,612,957) (3,053,862) (4,394,482) (5,967,629) 37,182,809 13,112,421 Net change in fund balance…………………………………… (281,721)$ 2,429,867$ (1,639,798)$ 3,910,395$ 1,120,143$ 4,298,290$ 1,863,660$ (13,516,707)$ 9,656,254$ 6,971,984$ Debt service as a percentage of noncapital expenditures…… 13.20%14.00%14.68%13.12%11.34%10.22%9.40%8.92%7.16%7.95% LAST TEN FISCAL YEARS CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS Town of Nantucket, Massachusetts Page 144 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 144 of 157 Comprehensive Annual Financial Report Ratio ofTotalTotalStateAssessed toFiscalResidentialOpen Space Commercial Industrial Personal Commercial Town Equalized Equalized Residential Commercial Average Year Value Value Value Value Property Value Value Value Value Tax Rate Tax Rate Tax Rate 2009 19,297,012,011 28,148,400 1,212,268,373 73,994,478 207,661,750 1,493,924,601 20,819,085,012 22,498,040,300 92.54%2.76 4.92 2.81 2010 18,609,952,032 15,300,200 1,171,917,524 61,207,044 204,631,215 1,437,755,783 20,063,008,015 21,914,393,400 91.55%3.01 5.35 3.06 2011 15,812,302,942 12,152,700 1,118,103,719 56,154,439 209,716,105 1,383,974,263 17,208,429,905 21,914,393,400 78.53%3.58 6.41 3.66 2012 15,502,597,155 21,974,500 1,056,502,692 53,625,153 209,470,691 1,319,598,536 16,844,170,191 18,041,019,200 93.37%3.62 6.47 3.70 2013 15,890,745,965 22,428,100 932,271,034 50,373,351 205,311,229 1,187,955,614 17,101,129,679 18,041,019,200 94.79%3.67 6.51 3.72 2014 15,734,218,626 11,460,900 939,061,724 48,571,000 206,415,205 1,194,047,929 16,939,727,455 17,816,255,100 95.08%3.76 6.68 3.82 2015 16,946,921,756 11,664,300 944,004,094 49,617,300 229,217,719 1,222,839,113 18,181,425,169 17,816,255,100 102.05%3.61 6.38 3.65 2016 19,250,070,530 11,465,100 998,753,099 51,031,421 232,693,446 1,282,477,966 20,544,013,596 21,682,664,300 94.75%3.36 5.93 3.38 2017 20,458,398,100 1,862,400 1,032,434,600 51,432,021 242,474,296 1,326,340,917 21,786,601,417 21,682,664,300 100.48%3.39 5.99 3.42 2018 20,839,860,173 1,917,600 1,098,763,770 54,697,357 260,672,715 1,414,133,842 22,255,911,615 23,796,647,900 93.53%3.53 5.97 3.56 Source: Official Statements, State Division of Local Services Note: All property in the Commonwealth of Massachusetts is assessed at 100% of full and fair cash value. The State estimates this "equalized valuation" for all municipalities every two years. Chapter 59, Section 21C of the Massachusetts General Laws, known as "Proposition 2 1/2", imposes 2 separate limits on the annual tax levy of the Town. The primary limitation is that the tax levy cannot exceed 2 1/2% of the full and fair cash value. The secondary limitation is that the tax levy cannot exceed the maximum levy limit for the preceding fiscal year as determined by the State Commissioner of Revenue by more than 2 1/2%, subject to an exception for property added to the tax rolls and for certain valuation increases. Thissecondary limit may be exceeded in any fiscal year by majority approval of the voters, however, it cannot exceed the primary limitation. Assessed Value Tax Rates LAST TEN FISCAL YEARS ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY BY CLASSIFICATION AND TAX RATES Town of Nantucket, Massachusetts Page 145 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 145 of 157 Comprehensive Annual Financial Report PRINCIPAL TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Percentage of Percentage of Total Taxable Total Taxable Nature of Assessed Assessed Assessed Assessed Taxpayer Business Valuation Rank Value Valuation Rank Value NIR Retail LLC Resort 103,627,800$ 1 0.47%137,747,733$ 1 0.66% Nantucket Electric Company Private Utility 58,067,320 2 0.26%55,656,208 4 0.27% Penant Realty LLC Residential 51,493,399 3 0.23% Nantucket Yacht Club Recreation 48,310,008 4 0.22%49,975,898 5 0.24% Richmond Great Point Development LLC Private 41,321,233 5 0.19% Nantucket Island Resort LLC Resort 40,921,283 6 0.18%71,330,224 2 0.34% Great Harbor Yacht Club Inc.Recreation 36,807,985 7 0.17% White Elephant Hotel LLC Resort 25,972,083 8 0.12% Sankaty Head Golf Club, Inc.Recreation 24,918,906 9 0.11%18,572,899 8 0.09% US REIF Marine Nantucket FEE LLC Retail 23,297,390 10 0.10%Walter Glowacki Private 70,597,200 3 0.34% NIR Retail III LLC Resort 27,206,500 6 0.13% Nantucket Golf Course Recreation 21,232,582 7 0.10% Wauwinet Inn, LLC Resort 16,718,775 9 0.08% Westmoor Club Resort 15,078,258 10 0.07% Totals 454,737,407$ 2.04%484,116,277$ 2.33% Source: Official Statements 2018 2009 Town of Nantucket, Massachusetts Page 146 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 146 of 157 Comprehensive Annual Financial Report Percent of First Year Delinquent Total Total Tax Fiscal Total Current Percent of Tax Tax Collections to Year Tax Levy Tax Collections Collected Collections Collections Net Tax Levy 2009 58,510,142$ 54,375,139$ 92.93%2,645,627$ 57,020,766$ 97.45% 2010 61,333,595 57,209,185 93.28%2,497,999 59,707,184 97.35% 2011 63,040,150 59,526,709 94.43%2,439,718 61,966,427 98.30% 2012 62,274,744 59,645,473 95.78%1,802,851 61,448,324 98.67% 2013 63,618,273 60,028,036 94.36%2,645,031 62,673,067 98.51% 2014 64,647,039 60,979,366 94.33%3,024,466 64,003,832 99.01% 2015 66,329,953 63,876,955 96.30%1,625,167 65,502,122 98.75% 2016 69,636,373 67,228,059 96.54%1,232,877 68,460,936 98.31% 2017 74,553,632 72,289,087 96.96%1,376,323 73,665,410 98.81% 2018 78,168,480 76,433,219 97.78%- 76,433,219 97.78% Source: Accounting Records and Official Statements PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collections Town of Nantucket, Massachusetts Page 147 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 147 of 157 Comprehensive Annual Financial Report RATIOS OF OUTSTANDING DEBT AND GENERAL OBLIGATION DEBT General Obligation Percentage Percentage Fiscal U. S. Census Personal Assessed Bonds and Per of Personal of Assessed Year Population Income Value Other Notes Capita Income Value 2009 11,322 579,686,400 20,819,085,012 71,324,797 6,300 12.30%0.34% 2010 10,172 543,286,520 20,063,008,015 76,773,603 7,548 14.13%0.38% 2011 10,130 541,043,300 17,208,429,905 69,057,471 6,817 12.76%0.40% 2012 10,298 550,016,180 16,844,170,191 65,559,307 6,366 11.92%0.39% 2013 10,298 550,016,180 17,101,129,679 60,299,542 5,855 10.96%0.35% 2014 10,298 550,016,180 16,939,727,455 54,871,053 5,328 9.98%0.32% 2015 10,298 550,016,180 18,181,425,169 50,350,913 4,889 9.15%0.28% 2016 10,298 550,016,180 20,544,013,596 46,068,679 4,474 8.38%0.22% 2017 10,298 550,016,180 21,786,601,417 78,299,239 7,603 14.24%0.36% 2018 10,298 550,016,180 22,255,911,615 84,972,254 8,251 15.45%0.38% General Percentage Percentage Total Percentage Percentage Fiscal Obligation Per of Personal of Assessed Debt Per of Personal of Assessed Year Bonds Capita Income Value Outstanding Capita Income Value 2009 79,373,441 7,011 13.69%0.38%150,698,238 13,310 26.0%0.72% 2010 80,467,247 7,911 14.81%0.40%157,240,850 15,458 28.9%0.78% 2011 80,983,395 7,994 14.97%0.47%150,040,866 14,812 27.7%0.87% 2012 87,513,595 8,498 15.91%0.52%153,072,902 14,864 27.8%0.91% 2013 83,901,285 8,147 15.25%0.49%144,200,827 14,003 26.2%0.84% 2014 82,305,570 7,992 14.96%0.49%137,176,623 13,321 24.9%0.81% 2015 83,147,112 8,074 15.12%0.46%133,498,025 12,963 24.3%0.73% 2016 78,182,138 7,592 14.21%0.38%124,250,817 12,066 22.6%0.60% 2017 75,230,489 7,305 13.68%0.35%153,529,728 14,909 27.9%0.70% 2018 71,430,250 6,936 12.99%0.32%156,402,504 15,188 28.4%0.70% Source: U. S. Census, State Division of Local Services LAST TEN FISCAL YEARS Governmental Activities Debt Business Type Activities Debt Total Primary Government Town of Nantucket, Massachusetts Page 148 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 148 of 157 Comprehensive Annual Financial Report 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Equalized Valuation…………………… 22,498,040,300$ 21,914,393,400$ 21,914,393,400$ 18,041,019,200$ 18,041,019,200$ 17,816,255,100$ 17,816,255,100$ 21,682,664,300$ 21,682,664,300$ 23,796,647,900$ Debt Limit…………………………..…1,124,902,015 1,095,719,670 1,095,719,670 902,050,960 902,050,960 890,812,755 890,812,755 1,084,133,215 1,084,133,215 1,189,832,395 Outstanding general obligation bonds…150,698,238 157,240,850 150,040,866 153,072,902 144,200,827 137,176,623 133,498,025 124,250,817 153,529,728 156,402,504 Authorized and unissued debt…………81,093,282 68,310,085 72,315,737 48,369,825 51,318,862 24,976,578 87,611,526 166,096,099 124,200,429 157,015,166 Debt not applicable to debt limit………(43,482,004) (51,917,004) (42,042,147) (47,042,147) (43,393,647) (42,671,460) (38,186,867) (48,673,610) (35,291,063) (33,240,034) Legal debt margin……………………… 849,628,491$ 818,251,731$ 831,320,920$ 653,566,086$ 663,137,624$ 685,988,094$ 631,516,337$ 745,112,689$ 771,111,995$ 843,174,691$ Total debt applicable to the limit as a percentage of debt limit………… 16.74%15.85%16.46%17.12%16.86%13.41%20.53%22.29%22.36%23.55% Source: State Division of Local Services, Accounting Records LAST TEN FISCAL YEARS COMPUTATION OF LEGAL DEBT MARGIN Town of Nantucket, Massachusetts Page 149 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 149 of 157 Comprehensive Annual Financial Report Estimated Estimated Share of Debt Percentage Overlapping Outstanding Applicable*Debt Debt repaid with property taxes: Nantucket Regional Transit Authority……………………….-$ 100%-$ Nantucket County……………………………………………- 100%- Subtotal, overlapping debt……………………………………………… - Town direct debt………………………………………………………84,972,254 Total direct and overlapping debt……………………………………… 84,972,254$ *Outstanding debt as of June 30, 2018. Source: Official Statements, Accounting Records The estimated percentage applicable is based 100% to the Town. AS OF JUNE 30, 2018 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Town of Nantucket, Massachusetts Page 150 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 150 of 157 Comprehensive Annual Financial Report DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Per Capita Fiscal Population Personal Personal Median School Unemployment Year Estimates Income Income Age Enrollment Rate 2009 11,322 579,686,400 51,200 36.7 1,255 7.40% 2010 10,172 543,286,520 53,410 39.4 1,230 7.80% 2011 10,130 541,043,300 53,410 39.4 1,282 6.80% 2012 10,298 550,016,180 53,410 39.4 1,322 6.00% 2013 10,298 550,016,180 53,410 39.4 1,378 5.90% 2014 10,298 550,016,180 53,410 39.4 1,535 6.20% 2015 10,298 550,016,180 53,410 39.4 1,595 5.50% 2016 10,298 550,016,180 53,410 39.4 1,588 4.20% 2017 10,298 550,016,180 53,410 39.4 1,610 4.20% 2018 10,298 550,016,180 53,410 39.4 1,610 2.00% Source: U. S. Census, Division of Local Services, Massachusetts Department of Elementary and Secondary Education Median age is based on most recent census data Town of Nantucket, Massachusetts Page 151 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 151 of 157 Comprehensive Annual Financial Report Nature Percentage Percentage of Employees of Total Town Employees of Total Town Employer Business Year-Round Rank Employment Year-Round Rank Employment Town of Nantucket Government 670 1 9.61%710 1 10.83% Nantucket Cottage Hospital Medical 180 2 2.58%90 2 1.37% Nantucket Island Resorts Hospitality 125 3 1.79%105 3 1.60% Marine Home Center Retail 90 4 1.29%95 4 1.45% Stop & Shop Retail 90 5 1.29%65 6 0.99% Blue Hills Bank Finance 60 6 0.86%0.00% Myles Reis Trucking Haulage 30 7 0.43% Steamship Authority Transportation 28 8 0.40%32 7 0.49% Don Allen Auto Dealership 25 9 0.36% Bartlett Oceanview Farm Farm/Retail 25 10 0.36% Harbor Fuel Petroleum Products 30 8 0.46% Pacific National Bank/Fleet Finance 28 9 0.43% The Brotherhood Restaurant 22 10 0.34% Nantucket Bank Finance 60 5 0.92% Source: Official Statements 2018 2009 CURRENT YEAR AND NINE YEARS AGO PRINCIPAL EMPLOYERS (INCLUDING TOWN) Town of Nantucket, Massachusetts Page 152 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 152 of 157 Comprehensive Annual Financial Report Function 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General government…………………………58 60 60 63 60 66 68 73 75 76 Public safety………………………………78 77 77 81 81 81 81 83 85 85 Education……………………………………293 295 292 299 299 301 301 310 315 321 Public works………………………………27 24 26 28 27 30 30 32 31 32 Health and human services…………………74 74 74 74 75 75 75 75 75 67 Culture and recreation………………………18 16 17 9 10 10 10 10 10 10 Sub-total governmental activities ……548 546 546 554 552 563 565 583 591 591 Nantucket Memorial Airport………………41 45 47 44 44 41 41 44 44 46 Siasconset Water……………………………1 1 1 - - - - - - - Wannacomet Water…………………………11 11 11 11 11 11 11 11 11 12 Sewer………………………………………12 12 12 10 10 10 10 10 10 11 Sub-total business-type activities ……65 69 71 65 65 62 62 65 65 69 Total Town employees…………….………613 615 617 619 617 625 627 648 656 660 Source: Town personnel records Health and human services includes Our Island Home employees LAST TEN FISCAL YEARS FULL-TIME EQUIVALENT TOWN EMPLOYEES BY FUNCTION Town of Nantucket, Massachusetts Page 153 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 153 of 157 Comprehensive Annual Financial Report OPERATING INDICATORS BY FUNCTION/PROGRAM Function 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Government:Town Clerk Registered voters…………………………… 8,164 7,907 7,907 8,394 8,394 8,546 8,618 8,618 9,100 9,263 Public Safety: Police Criminal offensesArrests………………………… 1,309 1,169 1,062 1,160 1,531 992 584 568 887 952 Reported crimes………………… 587 621 716 499 479 490 501 356 345 345 Motor vehicle responses……… 3,103 2,910 2,600 2,994 3,469 3,411 3,432 3,493 4,322 4,625 Other responses………………… 18,962 17,659 15,913 18,553 20,648 17,899 21,576 23,678 22,023 24,327 Total criminal offenses………… 23,961 22,359 20,291 23,206 26,127 22,792 26,093 28,095 27,577 30,249 FireIncidents Fires…………………………… 56 40 66 41 52 67 82 86 66 68 Non-fire incidents……………… 4,072 3,783 3,637 3,640 3,721 4,915 3,893 3,942 4,011 4,234 Total fire calls………………… 4,128 3,823 3,703 3,681 3,773 4,982 3,975 4,028 4,077 4,302 Inspectional Services: Number of building permits………………… 972 1,156 1,145 1,406 1,639 1,797 2,010 2,137 1,996 1,875 Education:Number of students…………………………… 1,294 1,255 1,230 1,282 1,322 1,378 1,535 1,595 1,588 1,610 Public Works: Landfill Solid waste tonnage………………………… 40,056 24,687 34,933 34,000 33,710 37,400 38,000 39,000 38,000 33,237 Health and Human Services: Board of Health Inspections Food establishments…………… 228 210 205 212 230 247 262 668 675 675 Other………………………….. 355 329 302 341 358 367 380 1,373 1,563 1,563 Total inspections……………… 583 539 507 553 588 614 642 2,041 2,238 2,238 Our Island Home - Nursing HomeNumber of beds………………… 45 45 45 45 45 45 45 45 45 45 Culture and Recreation: Beaches Beach Stickers 3,512 3,838 3,628 3,845 3,795 3,973 4,102 4,259 4,559 4,680 Transportation: Nantucket Memorial Airport Number of enplanements……… 203,786 201,638 179,410 175,420 178,303 174,129 164,290 138,752 124,321 122,356 Number of tower operations…… 127,482 127,575 120,806 125,960 126,898 119,976 109,225 106,186 104,913 102,678 Gallons of jet fuel sold………… N/A N/A 1,127,270 1,217,635 1,164,958 1,194,978 1,207,361 1,277,228 1,309,802 1,346,285 N/A - Information not available Source: Various Town Departments, State websites and annual Town Report. LAST TEN FISCAL YEARS Town of Nantucket, Massachusetts Page 154 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 154 of 157 Comprehensive Annual Financial Report CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Function 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Government: Number of buildings……………………………7 7 7 7 7 7 7 7 7 7 Public Safety: Police Number of stations…………………………1 1 1 2 2 2 2 2 2 2 Fire Number of stations…………………………2 2 2 2 2 2 2 2 2 2 Education: Number of elementary schools…………………1 1 1 1 1 1 1 1 2 2 Number of middle schools……………………1 1 1 1 1 1 1 1 1 1 Number of high schools………………………1 1 1 1 1 1 1 1 1 1 Public Works: Number of cemeteries……………………..8 8 8 8 8 8 8 8 8 8 Human Services Number of nursing homes……………………1 1 1 1 1 1 1 1 1 1 Culture and Recreation: Number of beaches……………………………17 17 17 17 17 17 17 17 17 17 Transportation: Number of airports………………………….1 1 1 1 1 1 1 1 1 1 Source: Various Town Departments and State websites. LAST TEN FISCAL YEARS Town of Nantucket, Massachusetts Page 155 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 155 of 157 Comprehensive Annual Financial Report This page intentionally left blank. Town of Nantucket, Massachusetts Page 156 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 156 of 157 Comprehensive Annual Financial Report Known as the whaling capital of the world in the late 18th to early 19th centuries, Nantucket has a history steeped in whaling that can be experienced up front through the many whale watching tours available throughout the tourist season. (photo credit: Alex Perkins) Town of Nantucket, Massachusetts Page 157 of 157 Comprehensive Annual Financial ReportTown of Nantucket, Massachusetts Page 157 of 157 Comprehensive Annual Financial Report