HomeMy WebLinkAboutFiscal Year 2008 Basic Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
REPORT ON EXAMINATION OF
BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2008
TOWN OF NANTUCKET, MASSACHUSETTS
REPORT ON EXAMINATION OF BASIC FINANCIAL STATEMENTS
JUNE 30, 2008
TABLE OF CONTENTS
Page
Independent Auditors’ Report..........................................................................................................................................1
Management’s Discussion and Analysis.........................................................................................................................3
Basic Financial Statements ...........................................................................................................................................13
Statement of Net Assets............................................................................................................................................14
Statement of Activities ...............................................................................................................................................16
Governmental Funds – Balance Sheet......................................................................................................................18
Reconciliation of the Governmental Funds Balance Sheet Total Fund Balances to the Statement of Net Assets...19
Governmental Funds – Statement of Revenues, Expenditures and Changes in Fund Balances.............................20
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental
Funds to the Statement of Activities.....................................................................................................................21
Proprietary Funds – Statement of Net Assets ...........................................................................................................22
Proprietary Funds – Statement of Revenues, Expenses and Changes in Fund Net Assets.....................................24
Proprietary Funds – Statement of Cash Flows..........................................................................................................26
Fiduciary Funds – Statement of Fiduciary Net Assets...............................................................................................28
Fiduciary Funds – Statement of Changes in Fiduciary Net Assets ...........................................................................29
Notes to Basic Financial Statements.........................................................................................................................30
Required Supplementary Information............................................................................................................................59
Schedule of Revenues, Expenditures and Changes in Fund Balance – General Fund – Budget and Actual..........60
Schedule of Funding Progress...................................................................................................................................62
Schedule of Employer Contributions .........................................................................................................................63
Notes to Required Supplementary Information..........................................................................................................64
This page intentionally left blank.
1
Independent Auditors’ Report
To the Honorable Board of Selectmen
Town of Nantucket, Massachusetts
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the Town of Nantucket,
Massachusetts, as of and for the year ended June 30, 2008, which collectively comprise the Town’s basic
financial statements as listed in the table of contents. These financial statements are the responsibility of the
Town of Nantucket's management. Our responsibility is to express opinions on these financial statements based
on our audit.
We did not audit the financial statements of the Nantucket Islands Land Bank discretely presented component
unit. Those financial statements were audited by other auditors whose reports thereon have been furnished to us,
and our opinion, insofar as it relates to the amounts included for the Nantucket Islands Land Bank discretely
presented component unit, is based on the report of the other auditor.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis
for our opinions.
The Town does not have a system of internal control that allows us to form an opinion on the balance of cash,
investments and interfund receivables and payables. These internal control deficiencies also do not allow us to
form an opinion on the accuracy of the revenue, expenses and expenditure lines reported.
In our opinion, based on our audit and the report of other auditors, except for the effects on the financial
statements of the matters described in the previous paragraph, the financial statements referred to above present
fairly, in all material respects, the respective financial position of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the Town of Nantucket,
Massachusetts, as of June 30, 2008, and the respective changes in financial position and cash flows, where
applicable, thereof for the fiscal year then ended in conformity with accounting principles generally accepted in the
United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 20, 2009 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 read in conjunction with this report in considering the results of our audit.
2
Management’s discussion and analysis, located on the following pages, and the schedule of revenues,
expenditures and changes in fund balance – general fund – budgetary basis, schedule of funding progress, and
schedule of employer contributions located after the notes to the basic financial statements, are not a required
part of the basic financial statements but are supplementary information required by accounting principles
generally accepted in the United States of America. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion on it.
March 20, 2009
Town of Nantucket, Massachusetts 3 Management’s Discussion and Analysis
Management’s Discussion and Analysis
Town of Nantucket, Massachusetts 4 Basic Financial Statements
Management’s Discussion and Analysis
As management of the Town of Nantucket, we offer readers of these financial statements this narrative overview
and analysis of the financial activities for the fiscal year ended June 30, 2008. The Town complies with financial
reporting requirements issued by the Governmental Accounting Standards Board (GASB), and Management’s
Discussion and Analysis are part of these requirements. The GASB is the authoritative standards-setting body
that provides guidance on the preparation of financial statements in conformity with Generally Accepted
Accounting Principles (GAAP). External users of these financial statements, such as investors and rating
agencies, rely on consistent reporting standards in order to compare the financial position of the Town of
Nantucket with that of other governmental entities.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Town of Nantucket’s basic financial
statements. These basic financial statements comprise three components: 1) government-wide financial
statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other
required supplementary information in addition to the basic financial statements.
Government-wide financial statements. The government-wide financial statements are designed to provide
readers with a broad overview of finances, in a manner similar to private-sector business.
The statement of net assets presents information on all assets and liabilities, with the difference between the two
reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of
whether the financial position is improving or deteriorating.
The statement of activities presents information showing how the government’s net assets changed during the
most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and
earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions that are principally supported by taxes and
intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a
significant portion of their costs through user fees and charges (business-type activities). The governmental
activities include general government, public safety, education, public works, community preservation, human
services, culture and recreation, interest and state and county charges. The business-type activities include the
activities of the sewer department, solid waste, airport, and the Siasconset and Wannacomet water departments.
The government-wide financial statements include not only the Town of Nantucket itself (known as the primary
government), but also the County of Nantucket (County) and the Nantucket Islands Land Bank (Land Bank),
which are legally separate entities. The County is included because the elected Board of Selectmen serves also
as County Commissioners. The Land Bank is included because a portion of the Town’s debt was incurred on
behalf of the Land Bank, and the Town guarantees other debt incurred by the Land Bank. Financial information
for these component units is reported separately within the governmental and proprietary fund statements
respectively.
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. Fund accounting is used to ensure and
Town of Nantucket, Massachusetts 5 Basic Financial Statements
demonstrate compliance with finance-related legal requirements. All of the funds can be divided into three
categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund statements focus on near-term inflows 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.
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. Both the governmental fund balance
sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The Town of Nantucket adopts an annual appropriated budget for its general fund. A budgetary comparison
schedule has been provided for the general fund as required supplementary information 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 its sewer department, solid waste,
airport, and the Siasconset and Wannacomet water departments’ activities and activities of the Nantucket Islands
Land Bank component unit.
Internal service funds are used by the Town to report the activity of self funded insurance programs, including
health and workers’ compensation insurance. Governmental accounting principles allow self funded insurance
programs to be reported in either the general fund or in an internal service fund. The insurance programs benefit
both the governmental and business-type activities of the town; however, the governmental activities include more
employees and retirees than the business-type activities. For that reason, the internal service funds are included
within the category of governmental activities in the government-wide financial statements.”
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 basic 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.
Financial Highlights as of the close of Fiscal 2008
• The total of assets exceeded liabilities (i.e., net assets) by $176 million for governmental activities, and
$103 million for business type activities.
• Governmental funds reported combined ending fund balances of $34 million.
• Unreserved fund balance for the general fund totaled $7 million.
• Total governmental funds debt totaled $77.2 million, and total enterprise fund debt totaled $83.5 million.
Town of Nantucket, Massachusetts 6 Basic Financial Statements
Government-wide Financial Analysis
The following chart provides a summary of Governmental activities financial data for fiscal year 2008, with
comparative fiscal 2007 information.
Governmental Activities
Balance at Balance at
June 30, June 30,
2008 2007
Assets:
Current assets……………………………………………$ 57,632,959 $ 46,460,116
Noncurrent assets (excluding capital)………………… 499,024 608,233
Capital assets, not being depreciated………………… 175,330,456 172,004,677
Capital assets, net of accumulated depreciation…… 27,777,272 26,493,294
Total assets………………………………………… 261,239,711 245,566,320
Liabilities:
Current liabilities (excluding debt)…………………… 6,579,717 5,923,957
Noncurrent liabilities (excluding debt)………………… 1,221,905 1,495,480
Current debt……………………………………………… 11,976,816 10,228,096
Noncurrent debt………………………………………… 65,196,354 52,121,592
Total liabilities………………………………………84,974,792 69,769,125
Net Assets:
Capital assets net of related debt……………………… 153,639,878 145,427,507
Restricted………………………………………………… 13,803,760 9,291,543
Unrestricted……………………………………………… 8,821,281 21,078,145
Total net assets……………………………………$ 176,264,919 $ 175,797,195
As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. For
governmental activities, assets exceeded liabilities by $176 million at the close of fiscal year 2008. The largest
portion of the Town’s net assets, $153 million, (87%), reflects investment in capital assets (e.g., land, buildings,
machinery, and equipment), less any outstanding debt which was borrowed in order to build or acquire those
assets. The Town uses these capital assets to provide services to citizens; consequently, these assets are not
available for future spending. Although the investment in capital assets is reported net of related debt, it should
be noted that the resources needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
An additional portion of the net assets, $14 million (8%), represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets, $9 million (5%), may be
used to meet the government’s ongoing obligations to citizens and creditors. At the end of the current fiscal year,
the Town reports positive balances in all three categories of net assets.
Town of Nantucket, Massachusetts 7 Basic Financial Statements
Governmental Activities
June 30, June 30,
2008 2007
Program revenues:
Charges for services……………………………………$ 7,408,010 $ 6,443,813
Operating grants and contributions…………………… 5,462,762 4,330,913
Capital grants and contributions……………………… 1,991,891 1,881,330
General revenues:
Real estate and personal property taxes……………… 55,285,952 51,611,421
Tax liens………………………………………………… 295,646 253,933
Motor vehicle and other excise taxes………………… 2,367,735 2,222,084
Hotel/motel tax…………………………………………… 1,343,140 1,291,414
Penalties and interest on taxes……………………… 410,785 398,796
Community Preservation Fund surtax………………… 1,535,337 1,459,647
Payments in lieu of taxes……………………………… 3,645 -
Nonrestricted grants and contributions……………… 469,868 413,538
Unrestricted investment income……………………… 634,539 355,288
Miscellaneous revenues………………………………… 579,775 593,982
Total revenues……………………………………… 77,789,085 71,256,159
Expenses:
General government…………………………………… 6,832,016 7,176,690
Public safety……………………………………………… 10,691,407 10,073,622
Education………………………………………………… 27,607,296 25,691,799
Public works……………………………………………… 3,146,271 3,889,166
Community preservation……………………………… 2,105,908 1,939,092
Human services………………………………………… 7,473,662 7,537,766
Culture and recreation………………………………… 2,232,982 2,147,117
Interest…………………………………………………… 2,419,841 2,246,838
Total expenses……………………………………… 62,509,383 60,702,090
Transfers…………………………………………………… (14,811,978) (4,124,760)
Change in net assets…………………………………… $ 467,724 $ 6,429,309
The primary governmental expenses totaled $62 million. Of that amount, $14.9 million was directly supported by
program revenues consisting of charges for services, operating and capital grants and contributions. General
revenues totaled $62.9 million, primarily coming from property taxes, motor vehicle excise, hotel/motel taxes, non-
restricted state aid and other miscellaneous charges. The governmental activities net assets increased by
approximately $468,000 in Fiscal 2008 after recording a capital transfer of over $15 million to the Sewer
Enterprise Fund for debt that will be repaid by the general government which will be used to construct capital
assets for the Sewer Enterprise Fund. The resources for that transfer (borrowing agreement) are not included in
the revenues shown above, in accordance with accrual accounting. Disregarding that capital transfer,
governmental activities net assets increased by $15 million on a GAAP accounting basis. The major increase
was a total of $8.2 million in capital assets, net of related debt. Other large increases include a $3.3 million
capital transfer from the Nantucket County Sheriff’s department, a $2.8 million increase in the Internal Service
Fund, and a $1 million increase in the community preservation fund.
Town of Nantucket, Massachusetts 8 Basic Financial Statements
Governmental Activities
Balance at Balance at Net
June 30, June 30, Increase
2008 2007 (Decrease)
Net Assets:
Capital assets net of related debt………………………$ 153,639,878 $ 145,427,507 $ 8,212,371
Restricted………………………………………………… 13,803,760 9,291,543 4,512,217
Unrestricted……………………………………………… 8,821,281 21,078,145 (12,256,864)
Total net assets……………………………………$ 176,264,919 $ 175,797,195 $ 467,724
The following chart provides a summary of Business-type activities financial data for fiscal year 2008, with
comparative fiscal 2007 information.
Business-Type Activities
Balance at Balance at
June 30, June 30,
2008 2007
Assets:
Current assets……………………………………………$ 44,675,721 $ 31,864,833
Noncurrent assets (excluding capital)………………… 2,367,761 2,469,066
Capital assets, not being depreciated………………… 74,107,339 40,459,326
Capital assets, net of accumulated depreciation…… 76,145,691 73,524,319
Total assets………………………………………… 197,296,512 148,317,544
Liabilities:
Current liabilities (excluding debt)…………………… 10,768,076 6,275,354
Noncurrent liabilities (excluding debt)………………… 327,726 248,590
Current debt……………………………………………… 12,710,329 7,765,653
Noncurrent debt………………………………………… 70,859,005 52,399,347
Total liabilities……………………………………… 94,665,136 66,688,944
Net Assets:
Capital assets net of related debt……………………… 78,358,807 69,117,523
Unrestricted……………………………………………… 24,272,569 12,511,077
Total net assets…………………………………… 102,631,376 81,628,600
Program revenues:
Charges for services…………………………………… 25,376,292 24,449,745
Operating grants and contributions…………………… 1,773,605 2,154,457
Capital grants and contributions……………………… 6,804,856 1,340,057
Total revenues……………………………………… 33,954,753 27,944,259
Expenses:
Water……………………………………………………… 3,941,308 3,219,051
Sewer…………………………………………………… 4,416,855 3,954,894
Solid Waste……………………………………………… 8,988,076 8,983,570
Airport…………………………………………………… 13,717,716 12,171,263
Total expenses……………………………………… 31,063,955 28,328,778
Transfers…………………………………………………… 18,111,978 4,124,760
Change in net assets…………………………………… $ 21,002,776 $ 3,740,241
Town of Nantucket, Massachusetts 9 Basic Financial Statements
There was a net increase of $21 million in net assets reported in connection with the Town’s business-type
activities (enterprise funds). The changes by fund are listed in the following table:
Business-Type Activities
Balance at Balance at Net
June 30, June 30, Increase
2008 2007 (Decrease)
Net Assets:
Siasconset Water……………………………………… $ 4,017,461 $ 3,858,279 $ 159,182
Wannacomet Water Company………………………… 14,063,649 13,067,642 996,007
Nantucket Memorial Airport…………………………… 30,242,477 23,852,347 6,390,130
Sewer Enterprise Fund………………………………… 44,380,438 29,326,631 15,053,807
Solid Waste Enterprise Fund…………………………… 9,927,351 11,523,701 $ (1,596,350)
Total net assets……………………………………$ 102,631,376 $ 81,628,600 $21,002,776
The most significant factor in this change is a $15 million capital transfer from the general government to the
Sewer Enterprise Fund. This represents approximately one-third of the long term debt incurred on behalf of the
Sewer Enterprise Fund to expand and improve a waste water treatment facility. The general government is
responsible for the repayment of that portion of the debt, as approved by voters at Annual Town meetings and by
ballot election.
The increase in net assets for Nantucket Memorial Airport consists primarily of $6 million in capital contributions
from state and federal grants for construction projects, including a new airport terminal.
The change in net assets for the Wannacomet Water and Solid Waste Enterprise Funds occurred as a result of
the fiscal year net income and net loss, respectively, in each of the Funds.
At the end of the current fiscal year, the Town reports $103 million in net assets for its combined business-type
activities.
Financial Analysis of the Government’s Funds
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental funds. The focus of governmental funds is to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing financing requirements. In
particular, unreserved 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 end of the current fiscal year, governmental funds reported combined ending fund balances of $34.6
million, of which $10.6 million is general fund, and $24 million is nonmajor governmental funds. The general fund
is the chief operating fund. At the end of fiscal 2008, unreserved fund balance of the general fund was $7.2
million, while total fund balance was $10.6 million.
Town of Nantucket, Massachusetts 10 Basic Financial Statements
As a measure of the general fund’s liquidity, it may be useful to compare both unreserved fund balance and total
fund balance to total fund expenditures. Unreserved fund balance represents 11% of total general fund
expenditures, while total fund balance represents 15% of that same amount. $364 thousand of the unreserved
fund balance was designated at year end to support the 2009 budget. An additional $2.1 million was reserved for
carry-over appropriations and encumbrances, and $931 thousand was reserved for future debt service. The
unreserved, undesignated fund balance increased by $1 million.
The Town also maintains a community preservation fund, classified within the non-major governmental funds
which had a year end fund balance of $5.5 million. Of this amount, $3.3 million is designated for ongoing
projects, by previous Annual Town Meeting votes. This fund is attributable to the Town’s acceptance of the
Community Preservation Act, which allows the Town to impose a surcharge on property taxes and to receive
matching state funds for specified uses related to the acquisition, creation, preservation and support of open
space, historic resources, land for recreation use and community housing. In fiscal year 2008 the Town earned
and accrued a year end receivable for state matching community preservation funds, of $1.1 million.
General Fund Budgetary Highlights
The General fund budget consists of those appropriations voted at Annual Town Meeting, carryover
encumbrances and appropriations from the previous year, amounts charged by the Commonwealth and deducted
from state revenues, and amounts required to be raised as a result of any deficits. The Town’s budget may be
changed by action of Town Meeting or, in the last two months of the fiscal year, by vote of the Board of Selectmen
and the Finance Committee, with statutory limitation as to amount. The original appropriation budget and the
carryover encumbrances and appropriations totaled $73 million. Changes during the year consisted largely of
allocations between and among departments. The net increase from changes to the appropriation budget totaled
$127,214.
Total actual revenue was lower than estimated revenue by $1.1 million, a negative variance of 2% of estimated
revenue. At year end, outstanding purchase orders totaled approximately $500 thousand and carry-over
appropriations totaled approximately $1.6 million. The total of these two items, $2.1 million, is reserved in fund
balance at year end. The total of actual expenditures and these amounts reserved for future expenditures was
lower than the final budget by approximately $3.4 million, a positive variance.
The net of actual revenue and expense, compared to budgeted amounts, was a positive variance of $2.3 million.
Of that amount, $931 thousand was reserved for 2009 debt service. The remainder, approximately $1.4 million,
represents about 2% of the current year initial budget. The primary source of savings in expenditures resulted
from health insurance coverage costs remaining stable.
Capital Asset and Debt Administration
In conjunction with the annual operating budget, the Town annually prepares a capital budget for the upcoming
fiscal year and a Capital Improvement Plan (CIP) that is used as a guide for future capital expenditures.
The Town’s investment in capital assets for its governmental and business-type activities as of June 30, 2008,
totals $203 million in the governmental funds, and $150 million in the enterprise funds (net of accumulated
depreciation). This investment in capital assets includes land, buildings, land improvements, equipment, vehicles
and infrastructure.
Current year fixed asset additions totaled $7.5 million for governmental activities, and $39.6 million for business-
type activities.
Town of Nantucket, Massachusetts 11 Basic Financial Statements
Long-term Debt
At the end of the current fiscal year, the Town of Nantucket had total bonded debt outstanding of $160.7 million.
The entire amount is classified as general obligation debt and is backed by the full faith and credit of the Town.
Of this amount, $14.2 million is in short term notes and the remaining $146.6 is outstanding long term debt. The
governmental fund portion of the outstanding debt is $77.2 million. The enterprise funds’ portion of the
outstanding debt is $83.6 million. This amount is fully supported by the revenue of the enterprise funds, and does
not rely upon a general fund subsidy.
Governmental Enterprise
Funds Funds Total
Short term………………………………$ 5,500,000 $ 8,712,725 $ 14,212,725
Current portion of long term………… 6,476,815 3,997,604 10,474,419
Noncurrent portion of long term……… 65,196,355 70,859,005 136,055,360
Total…………………………………$ 77,173,170 $ 83,569,334 $ 160,742,504
Please refer to the notes to the financial statements for further discussion of the major capital and debt activity.
Economic Factors and Next Year’s Budgets and Rates
The Town’s tax base continued to grow in fiscal 2008. Taxable property increased by $234 million (1.2%) in
2008. New growth provided additional tax revenue of $1.1 million in 2008 or 2.6% of the prior year’s levy base.
The average residential assessed value was $1.9 million in 2008. The residential tax rate for 2008 was $2.67 per
$1,000 of assessed value.
The 2008 Annual and Special Town Meetings approved a fiscal year 2009 total budget of $108.9 million, including
a total general fund budget of $72.7 million, and an increase to the stabilization fund of $500 thousand. The
residential tax rate for 2009 is $2.76 per $1,000 of assessed value.
Requests for Information
This financial report is designed to provide a general overview of the Town of Nantucket’s finances for all those
with an interest in the government’s finances. Questions concerning any of the information provided in this report
or requests for additional financial information should be addressed to the Finance Director, 16 Broad Street,
Nantucket, Massachusetts 02554.
Town of Nantucket, Massachusetts 12 Basic Financial Statements
This Page Left Intentionally Blank.
Town of Nantucket, Massachusetts 13 Basic Financial Statements
Basic Financial Statements
Primary Government
Governmental Business-type
Activities Activities Total
ASSETS
CURRENT:
Cash and cash equivalents…………………………………………………………$ 30,292,229 $ 22,595,839 $ 52,888,068
Restricted cash and cash equivalents……………………………………...……… - - -
Investments…………………………………………………………………………… 2,695,431 - 2,695,431
Investments, restricted……………………………………………………………… - - -
Receivables, net of allowance for uncollectibles:
Real estate and personal property taxes……………………………………… 2,496,874 - 2,496,874
Tax and trash liens……………………………………………………………… 1,737,638 - 1,737,638
Motor vehicle and other excise taxes…………………………………………… 490,473 - 490,473
User fees………………………………………………………………………… 3,885 1,494,665 1,498,550
Departmental and other………………………………………………………… 731,423 7,978 739,401
Special assessments…………………………………………………………… 25,171 - 25,171
Intergovernmental………………………………………………………………… 18,034,963 19,306,600 37,341,563
Deferred loss on refunding…………..……………………………………………… 109,209 - 109,209
Inventory……………………………………………………………………………… - 764,626 764,626
Working capital deposit……………………………………………………………… 1,490,900 - 1,490,900
Other assets………………………………………………………………………… - - -
Prepaid expenses…………………………………………………………………… 10,900 19,876 30,776
Internal balances……………………………………………………………………… (486,137) 486,137 -
NONCURRENT:
Restricted assets:
Cash and cash equivalents……………….…………………………………… - - -
Cash surrender value of life insurance………………………………………… - - -
Receivables, net of allowance for uncollectibles:
Intergovernmental………………………………………………………………… - 2,367,761 2,367,761
Deferred loss on refunding………………………………………………………… 499,024 - 499,024
Capital assets, not being depreciated……………………...……………………… 175,330,456 74,107,339 249,437,795
Capital assets, net of accumulated depreciation………………………………… 27,777,272 76,145,691 103,922,963
TOTAL ASSETS………………………………………………………………………… 261,239,711 197,296,512 458,536,223
LIABILITIES
CURRENT:
Warrants payable…………………………………………………………………… 949,441 9,077,289 10,026,730
Accrued liabilities…………………………………………………………………… - 9,315 9,315
Accrued payroll……………………………………………………………………… 2,566,922 124,638 2,691,560
Health claims payable……………………………………………………………… 710,419 - 710,419
Accrued interest……………………………………………………………………… 823,380 1,105,522 1,928,902
Payroll withholdings………………………………………………………………… 96,517 - 96,517
Security deposits……………………………………………………………………… - 309,097 309,097
Abandoned property………………………………………………………………… 22,094 - 22,094
Other liabilities………………………………………………………………………… 1,017,264 51,300 1,068,564
Compensated absences…………………………………………………………… 256,269 90,915 347,184
Workers' compensation……………………………………………………………… 94,336 - 94,336
Unamortized premium on bonds and notes payable…………………………… 43,075 - 43,075
Bonds and notes payable…………………………………………………………… 11,976,816 12,710,329 24,687,145
NONCURRENT:
Compensated absences…………………………………………………………… 1,025,075 327,726 1,352,801
Unamortized premium on bonds and notes payable…………………………… 196,830 - 196,830
Bonds and notes payable…………………………………………………………… 65,196,354 70,859,005 136,055,359
TOTAL LIABILITIES…………………………………………………………………… 84,974,792 94,665,136 179,639,928
NET ASSETS
Invested in capital assets, net of related debt………………………………………… 153,639,878 78,358,807 231,998,685
Restricted for:
Debt service………………………………………………………...………………… - - -
Permanent funds:
Expendable……….……………………………………………………………… 206,985 - 206,985
Nonexpendable…………………………………………………………………… 308,153 - 308,153
Other purposes……………………………………………………………………… 13,288,622 - 13,288,622
Unrestricted……………………………………………………………………………… 8,821,281 24,272,569 33,093,850
TOTAL NET ASSETS……………………………………………………………………$ 176,264,919 $ 102,631,376 $ 278,896,295
See notes to basic financial statements.
STATEMENT OF NET ASSETS
JUNE 30, 2008
Town of Nantucket, Massachusetts 14 Basic Financial Statements
County Land Bank Total
$ 3,982,061 $ 12,219,219 $ 16,201,280
- 353,413 353,413
- - -
- 1,271,969 1,271,969
- - -
- - -
- - -
- - -
- 108,863 108,863
- - -
34,289 - 34,289
- - -
- 110,493 110,493
- - -
101,950 2,500 104,450
- 365,012 365,012
- - -
- 2,027,328 2,027,328
- 493,831 493,831
- - -
- - -
28,458 195,732,972 195,761,430
624,171 14,924,504 15,548,675
4,770,929 227,610,104 232,381,033
5,359 179,218 184,577
- 691,967 691,967
11,421 - 11,421
- - -
- - -
391,888 - 391,888
- - -
- - -
254,120 - 254,120
- - -
- - -
- - -
- 2,986,919 2,986,919
- - -
- - -
- 27,667,226 27,667,226
662,788 31,525,330 32,188,118
652,629 180,005,831 180,658,460
- 2,380,741 2,380,741
- - -
- - -
- - -
3,455,512 13,698,202 17,153,714
$ 4,108,141 $ 196,084,774 $ 200,192,915
Component Units
Town of Nantucket, Massachusetts 15 Basic Financial Statements
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2008
Operating Capital
Charges for Grants and Grants and Net (Expense)
Functions/Programs Expenses Services Contributions Contributions Revenue
Primary Government:
Governmental Activities:
General government………………………$ 6,832,016 $ 1,018,223 $ 512,146 $ - $ (5,301,647)
Public safety……………………………… 10,691,407 2,028,994 995,169 - (7,667,244)
Education………………………………… 27,607,296 688,028 3,470,447 - (23,448,821)
Public works……………………………… 3,146,271 69,200 8,075 763,713 (2,305,283)
Community preservation………………… 2,105,908 - - 1,228,178 (877,730)
Human services…………………………… 7,473,662 3,284,823 25,752 - (4,163,087)
Culture and recreation…………………… 2,232,982 318,742 451,173 - (1,463,067)
Interest……………………………………… 2,419,841 - - - (2,419,841)
Total Governmental Activities………… 62,509,383 7,408,010 5,462,762 1,991,891 (47,646,720)
Business-Type Activities:
Water………………………………………… 3,941,308 4,279,554 816,943 - 1,155,189
Sewer……………………………………… 4,416,855 3,871,716 422,968 - (122,171)
Solid waste………………………………… 8,988,076 4,237,488 216,325 1,913 (4,532,350)
Airport……………………………………… 13,717,716 12,987,534 317,369 6,802,943 6,390,130
Total Business-Type Activities………… 31,063,955 25,376,292 1,773,605 6,804,856 2,890,798
Total Primary Government…………… 93,573,338 32,784,302 7,236,367 8,796,747 (44,755,922)
Component Units:
County……………………………………… 1,722,840 1,637,356 417,965 - 332,481
Land Bank………………………………… 5,714,381 17,919,375 696,519 - 12,901,513
Total Component Units……………….. 7,437,221 19,556,731 1,114,484 - 13,233,994
Total………………………………………$ 101,010,559 $ 52,341,033 $ 8,350,851 $ 8,796,747 $(31,521,928)
See notes to basic financial statements.(Continued)
Program Revenues
Town of Nantucket, Massachusetts 16 Basic Financial Statements
Governmental Business-Type
Activities Activities Total County Land Bank Total
Changes in net assets:
Net (expense) revenue from previous page…… $(47,646,720) $2,890,798 $(44,755,922) $332,481 $12,901,513 $13,233,994
General revenues:
Real estate and personal property taxes,
net of tax refunds payable…………………… 55,285,952 - 55,285,952 - - -
Tax liens………………………………………… 295,646 - 295,646 - - -
Motor vehicle and other excise taxes………… 2,367,735 - 2,367,735 6,765 - 6,765
Hotel/motel tax………………………………… 1,343,140 - 1,343,140 - - -
Penalties and interest on taxes……………… 410,785 - 410,785 - - -
Community Preservation Fund surcharges… 1,535,337 - 1,535,337 - - -
Payments in lieu of taxes……………………… 3,645 - 3,645 - - -
Grants and contributions not restricted to
specific programs……………………………… 469,868 - 469,868 - - -
Unrestricted investment income……………… 634,539 - 634,539 - - -
Miscellaneous…………………………………… 579,775 - 579,775 105 - 105
Capital transfers…………………………………… (15,175,978) 15,175,978 - - - -
Transfers to/from component unit………………… - 3,300,000 3,300,000 (3,300,000) - (3,300,000)
Transfers, net……………………………………… 364,000 (364,000) - - - -
Total general revenues and transfers…………… 48,114,444 18,111,978 66,226,422 (3,293,130) - (3,293,130)
Change in net assets………………………… 467,724 21,002,776 21,470,500 (2,960,649) 12,901,513 9,940,864
Net Assets:
Beginning of year, as restated………………… 175,797,195 81,628,600 257,425,795 7,068,790 183,183,261 190,252,051
End of year……………………………………… $ 176,264,919 $ 102,631,376 $ 278,896,295 $ 4,108,141 $ 196,084,774 $ 200,192,915
(Concluded)
Primary Government Component Units
STATEMENT OF ACTIVITIES (Continued)
FISCAL YEAR ENDED JUNE 30, 2008
Town of Nantucket, Massachusetts 17 Basic Financial Statements
Component
Nonmajor Total Unit -
Governmental Governmental Nantucket
ASSETS General Funds Funds County
Cash and cash equivalents…………………………………$- $ 24,977,043 $ 24,977,043 $ 3,982,061
Investments………………………………………………… - 2,534,699 2,534,699 -
Receivables, net of uncollectibles:
Real estate and personal property taxes……………… 2,432,506 64,368 2,496,874 -
Tax liens ……………………….………………………… 1,719,206 18,432 1,737,638 -
Motor vehicle and other excise taxes………………… 490,473 - 490,473 -
User fees………………………………………………… 3,885 - 3,885 -
Departmental and other………………………………… 406,591 228,442 635,033 -
Special assessments…………………………………… - 25,171 25,171 -
Intergovernmental……………………………………… 15,453,080 2,581,883 18,034,963 34,289
Due from other funds……………………………………… 958,600 619,852 1,578,452 -
Other assets………………………………………………… - - - 101,950
Prepaid expenses…………………………………………… 10,900 - 10,900 -
TOTAL ASSETS…………………………………………… $ 21,475,241 $ 31,049,890 $ 52,525,131 $ 4,118,300
LIABILITIES AND FUND BALANCES
LIABILITIES:
Warrants payable…………………………………………$ 532,001 $ 414,956 $ 946,957 $ 5,359
Accrued payroll…………………………………………… 2,535,505 31,417 2,566,922 11,421
Accrued interest on short-term debt…………………… 37,739 - 37,739 -
Payroll withholdings……………………………………… 96,517 - 96,517 391,888
Abandoned property…………………………………… 22,094 - 22,094 -
Other liabilities…………………………………………… 871,722 145,542 1,017,264 254,120
Deferred revenues……………………………………… 4,152,172 1,077,623 5,229,795 14,730
Due to other funds……………………………………… 2,615,418 - 2,615,418 -
Notes payable…………………………………………… - 5,500,000 5,500,000 -
TOTAL LIABILITIES………………………………………… 10,863,168 7,169,538 18,032,706 677,518
FUND BALANCES:
Reserved for:
Encumbrances and continuing appropriations…… 2,142,523 - 2,142,523 -
Debt service………………………………………...… 931,390 - 931,390 -
Perpetual permanent funds………………………… - 308,153 308,153 -
Unreserved:
Designated for subsequent year's expenditures… 364,200 - 364,200 -
Undesignated, reported in:
General fund……………………………………… 7,173,960 - 7,173,960 394,544
Special revenue funds…………………………… - 16,061,734 16,061,734 3,046,238
Capital projects funds…………………………… - 7,303,480 7,303,480 -
Permanent funds………………………………… - 206,985 206,985 -
TOTAL FUND BALANCES………………………………… 10,612,073 23,880,352 34,492,425 3,440,782
TOTAL LIABILITIES AND FUND BALANCES……………$ 21,475,241 $ 31,049,890 $ 52,525,131 $ 4,118,300
See notes to basic financial statements.
JUNE 30, 2008
GOVERNMENTAL FUNDS
BALANCE SHEET
Town of Nantucket, Massachusetts 18 Basic Financial Statements
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET ASSETS
JUNE 30, 2008
Total governmental fund balances……………………………………………………………………… $ 34,492,425
Capital assets (net) used in governmental activities are not financial resources
and, therefore, are not reported in the funds…………………………………………………… 203,107,728
Accounts receivable are not available to pay for current-period
expenditures and, therefore, are deferred in the funds………………………………………… 5,229,795
Internal service funds are used by management to account for retirees'
health insurance and workers' compensation activities.
The assets and liabilities of the internal service funds are included in
the governmental activities in the statement of net assets………………………………… 6,901,134
In the statement of activities, interest is accrued on outstanding long-term debt,
whereas in governmental funds interest is not reported until due……………………………… (785,641)
Long-term liabilities are not due and payable in the current period and, therefore,
are not reported in the governmental funds
Bonds payable…………………………………………………………………………………… (71,673,170)
Unamortized premiums on bonds and notes………………………………………………… (239,905)
Workers' compensation………………………………………………………………………… (94,336)
Compensated absences………………………………………………………………………… (1,281,344)
Net effect of reporting long-term liabilities……………………………………………… (73,288,755)
In the statement of activities, deferred losses are reported for refundings of
debt, which are amortized over the shorter of the remaining life of the
refunding bonds or refunded bonds. In governmental funds, defeasances
of debt are expensed when the refunding bonds are issued…………………………………… 608,233
Net assets of governmental activities…………………………………………………………………… $ 176,264,919
See notes to basic financial statements.
Town of Nantucket, Massachusetts 19 Basic Financial Statements
Component
Nonmajor Total Unit -
Governmental Governmental Nantucket
General Funds Funds County
REVENUES:
Real estate and personal property taxes,
net of tax refunds…………………………………………………………… $ 55,129,913 $ - $ 55,129,913 $ -
Tax liens…………………………………………………………………………… 74,677 - 74,677 -
Motor vehicle and other excise taxes………………………………………… 2,332,743 - 2,332,743 6,765
Hotel/motel tax…………………………………………………………………… 1,343,140 - 1,343,140 -
Charges for services…………………………………………………………… 4,742,366 681,365 5,423,731 -
Community Preservation surcharges………………………………………… - 1,535,337 1,535,337 -
Penalties and interest on taxes………………………………………………… 409,101 1,684 410,785 -
Payments in lieu of taxes……………………………………………………… 3,645 - 3,645 -
Licenses and permits…………………………………………………………… 1,321,794 - 1,321,794 -
Fines and forfeitures…………………………………………………………… 266,693 - 266,693 -
Intergovernmental……………………………………………………………… 3,186,379 3,992,328 7,178,707 100,000
Departmental and other………………………………………………………… 163,521 187,156 350,677 1,782,089
Contributions……………………………………………………………………… - 1,300 1,300 -
Investment income……………………………………………………………… 549,686 209,215 758,901 158,502
Miscellaneous…………………………………………………………………… 544,193 2,327,087 2,871,280 105
TOTAL REVENUES……………………………………………………… 70,067,851 8,935,472 79,003,323 2,047,461
EXPENDITURES:
Current:
County administration……………………………………………………… - - - 266,369
Registry of Deeds…………………………………………………………… - - - 312,741
Sheriff's department………………………………………………………… - - - 919,706
Special projects……………………………………………………………… - - - 61,754
General government………………………………………………………… 5,327,955 1,379,707 6,707,662 962
Public safety………………………………………………………………… 7,918,077 498,793 8,416,870 42,763
Education……………………………………………………………………… 21,041,055 2,919,937 23,960,992 -
Public works…………………………………………………………………… 2,883,144 3,219,949 6,103,093 -
Community preservation…………………………………………………… - 2,105,908 2,105,908 -
Human services……………………………………………………………… 6,118,790 33,210 6,152,000 -
Culture and recreation……………………………………………………… 2,097,818 551,235 2,649,053 -
Pension benefits……………………………………………………………… 4,716,353 - 4,716,353 -
Employee benefits…………………………………………………………… 8,587,434 - 8,587,434 -
State and county charges……………………………………………………… 462,130 - 462,130 -
Debt service:
Principal……………………………………………………………………… 4,728,096 - 4,728,096 -
Interest………………………………………………………………………… 2,343,057 - 2,343,057 -
TOTAL EXPENDITURES………………………………………………… 66,223,909 10,708,739 76,932,648 1,604,295
EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER)
EXPENDITURES………………………………………………………………… 3,843,942 (1,773,267) 2,070,675 443,166
OTHER FINANCING SOURCES (USES):
Proceeds from bonds and notes……………………………………………… 15,175,978 4,375,600 19,551,578 -
Transfer to primary government………………………………………………… - - - (3,300,000)
Transfer from component unit………………………………………………… - 3,300,000 3,300,000 -
Transfers in……………………………………………………………………… 642,464 910,000 1,552,464 -
Transfers out……………………………………………………………………… (3,846,000) (642,464) (4,488,464) -
Capital transfer…………………………………………………………………… (15,175,978) - (15,175,978) -
TOTAL OTHER FINANCING SOURCES (USES)…………………… (3,203,536) 7,943,136 4,739,600 (3,300,000)
NET CHANGE IN FUND BALANCES…………………………………………… 640,406 6,169,869 6,810,275 (2,856,834)
FUND BALANCES AT BEGINNING OF YEAR………………………………… 9,971,667 17,710,483 27,682,150 6,297,616
FUND BALANCES AT END OF YEAR……………………………………………$ 10,612,073 $ 23,880,352 $ 34,492,425 $ 3,440,782
See notes to basic financial statements.
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FISCAL YEAR ENDED JUNE 30, 2008
Town of Nantucket, Massachusetts 20 Basic Financial Statements
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2008
Net change in fund balances - total governmental funds…………………………………………………… $ 6,810,275
Governmental funds report capital outlays as expenditures. However, in the
Statement of Activities the cost of those assets is allocated over their
estimated useful lives and reported as depreciation expense.
Capital outlay…………………………………………………………………………………………… 6,913,592
Depreciation expense………………………………………………………………………………… (2,303,835)
Net effect of reporting capital assets………………………………………………………… 4,609,757
Revenues in the Statement of Activities that do not provide current financial
resources are fully deferred in the Statement of Revenues, Expenditures and
Changes in Fund Balances. Therefore, the recognition of revenue for various
types of accounts receivable (i.e., real estate and personal property, motor
vehicle excise, etc.) differ between the two statements. This amount represents
the net change in deferred revenue…………………………………………………………………… 773,409
The issuance of long-term debt (e.g., bonds and leases) provides current financial
resources to governmental funds, while the repayment of the principal of long-
term debt consumes the financial resources of governmental funds. Neither
transaction, however, has any effect on net assets. Also, governmental funds
report the effect of premiums, discounts, and similar items when debt is
first issued, whereas these amounts are deferred and amortized in the
Statement of Activities.
Proceeds from bonds and notes…………………………………………………………………… (19,551,578)
Debt service principal payments…………………………………………………………………… 4,728,096
Net effect of reporting long-term debt………………………………………………………… (14,823,482)
Some expenses reported in the Statement of Activities do not require the use of
current financial resources and, therefore, are not reported as expenditures
in the governmental funds.
Net change in compensated absences accrual…………………………………………………… 288,125
Net change in accrued interest on long-term debt………………………………………………… (7,686)
Net change in workers' compensation……………………………………………………………… 50,338
Amortization of deferred charge on refunding……………………………………………………… (114,104)
Amortization of premiums on bonds and notes payable………………………………………… 45,006
Net effect of recording long-term liabilities and amortizing deferred losses……………… 261,679
Internal service funds are used by management to account for health
insurance and workers' compensation activities.
The net activity of internal service funds is reported with Governmental Activities…………… 2,836,086
Change in net assets of governmental activities……………………………………………………………… $ 467,724
See notes to basic financial statements.
Town of Nantucket, Massachusetts 21 Basic Financial Statements
Nantucket
Siasconset Memorial
Water Sewer Solid Waste Airport
ASSETS
CURRENT:
Cash and cash equivalents………………………………$ (300) $ 1,962,589 $ - $ 10,238,314
Restricted cash and cash equivalents…………………… - - - -
Investments………………………………………………… - - - -
Investments, designated………………………………… - - - -
Receivables, net of allowance for uncollectibles:
Land Bank accounts…………………………………… - - - -
Insurance reimbursements…………………………… - - 7,978 -
User fees……………………………………………… 29,940 143,294 544,601 341,802
Intergovernmental……………………………………… - 17,185,373 - 2,121,227
Inventory…………………………………………………… - - - 649,111
Working capital deposit…………………………………… - - - -
Prepaid expenses………………………………………… - - - 19,876
Land deposits…………………………………………….… - - - -
Due from other funds……………………………………… 67,981 3,070,418 188,320 -
Total current assets……………………………… 97,621 22,361,674 740,899 13,370,330
NONCURRENT:
Receivables, net of allowance for uncollectibles:
Intergovernmental……………………………………… - 2,367,761 - -
Restricted cash and cash equivalents…………………… - - - -
Cash surrender value of life insurance………………… - - - -
Capital assets, not being depreciated…………………… 4,537,825 49,125,475 2,651,406 12,488,698
Capital assets, net of accumulated depreciation……… 2,409,496 27,651,838 8,357,588 19,280,738
Total noncurrent assets…………………………… 6,947,321 79,145,074 11,008,994 31,769,436
TOTAL ASSETS……………………………………………… 7,044,942 101,506,748 11,749,893 45,139,766
LIABILITIES
CURRENT:
Warrants payable………………………………………… 132,369 6,471,338 536,054 1,806,954
Accrued liabilities………………………………………… - - - -
Accrued payroll…………………………………………… 3,412 14,755 1,496 85,058
Health claims payable…………………………………… - - - -
Security deposits………………………………………… - - - 309,097
Accrued interest…………………………………………… 32,130 696,083 10,205 106,182
Other liabilities……………………………………………… - - - 51,300
Due to other funds………………………………………… 1,169,388 253,711 189,787 44,128
Compensated absences………………………………… 5,036 8,225 - 39,907
Notes payable……………………………………………… - - - 8,712,725
Bonds payable…………………………………………… 180,000 1,720,292 110,000 732,312
Total current liabilities……………………………… 1,522,335 9,164,404 847,542 11,887,663
NONCURRENT:
Compensated absences………………………………… 20,146 32,901 - 159,626
Notes payable……………………………………………… - - - -
Bonds payable…………………………………………… 1,485,000 47,929,005 975,000 2,850,000
Total noncurrent liabilities………………………… 1,505,146 47,961,906 975,000 3,009,626
TOTAL LIABILITIES………………………………………… 3,027,481 57,126,310 1,822,542 14,897,289
NET ASSETS
Invested in capital assets, net of related debt……………… 5,282,321 30,077,387 9,923,994 19,880,316
Restricted……………………………………………………… - - - -
Unrestricted:
Undesignated……………………………………………… (1,264,860) 14,303,051 3,357 10,362,161
TOTAL NET ASSETS…………………………………………$ 4,017,461 $ 44,380,438 $ 9,927,351 $ 30,242,477
See notes to basic financial statements.
Business-type Activities - Enterprise Funds
PROPRIETARY FUNDS
STATEMENT OF NET ASSETS
JUNE 30, 2008
Town of Nantucket, Massachusetts 22 Basic Financial Statements
Component
Unit
Governmental
Wannacomet Total Activities -
Water Business-Type Internal Service Nantucket Islands
Company Activities Fund Land Bank
$ 10,395,236 $ 22,595,839 $ 5,315,186 $ 12,219,219
- - - 353,413
- - 160,732 -
- - - 1,271,969
- - - 108,863
- 7,978 96,390 -
435,028 1,494,665 - -
- 19,306,600 - -
115,515 764,626 - 110,493
- - 1,490,900 -
- 19,876 - -
- - - 2,500
8,320 3,335,039 550,829 365,012
10,954,099 47,524,623 7,614,037 14,431,469
- 2,367,761 - -
- - - 2,027,328
- - - 493,831
5,303,935 74,107,339 - 195,732,972
18,446,031 76,145,691 - 14,924,504
23,749,966 152,620,791 - 213,178,635
34,704,065 200,145,414 7,614,037 227,610,104
130,574 9,077,289 2,484 179,218
9,315 9,315 - 691,967
19,917 124,638 - -
- - 710,419 -
- 309,097 - -
260,922 1,105,522 - -
- 51,300 - -
1,191,888 2,848,902 - -
37,747 90,915 - -
- 8,712,725 - 2,986,919
1,255,000 3,997,604 - -
2,905,363 26,327,307 712,903 3,858,104
115,053 327,726 - -
- - - 27,667,226
17,620,000 70,859,005 - -
17,735,053 71,186,731 - 27,667,226
20,640,416 97,514,038 712,903 31,525,330
13,194,789 78,358,807 - 180,005,831
- - - 2,380,741
868,860 24,272,569 6,901,134 13,698,202
$ 14,063,649 $ 102,631,376 $ 6,901,134 $ 196,084,774
Town of Nantucket, Massachusetts 23 Basic Financial Statements
Siasconset Nantucket
Water Memorial
Company Sewer Solid Waste Airport
OPERATING REVENUES:
Lease and rental income………………………………… $ - $ - $ - $ -
Fee revenue………………………………………………… - - - -
Charges for services……………………………………… 592,654 3,870,841 4,237,488 12,719,037
Utility liens…………………………………………………… - - 212,603 -
Intergovernmental………………………………………… - 421,621 - -
Other………………………………………………………… - - - -
Contributions……………………………………………… - - - -
TOTAL OPERATING REVENUES …………………… 592,654 4,292,462 4,450,091 12,719,037
OPERATING EXPENSES:
Cost of services and administration……………………… 305,581 1,695,766 8,576,603 11,234,778
Depreciation………………………………………………… 42,995 1,298,801 379,056 1,472,107
Other………………………………………………………… 5,231 - 2,580 -
Employee benefits………………………………………… 10,082 21,133 - 654,955
TOTAL OPERATING EXPENSES…………………… 363,889 3,015,700 8,958,239 13,361,840
OPERATING INCOME (LOSS)……………………… 228,765 1,276,762 (4,508,148) (642,803)
NONOPERATING REVENUES (EXPENSES):
Investment income………………………………………… 800 2,222 5,635 585,866
Interest expense…………………………………………… (70,383) (1,401,155) (29,837) (355,876)
Intergovernmental capital grants………………………… - - - 6,802,943
TOTAL NONOPERATING
REVENUES (EXPENSES), NET…………………… (69,583) (1,398,933) (24,202) 7,032,933
INCOME (LOSS) BEFORE TRANSFERS AND
CAPITAL CONTRIBUTIONS………………...……… 159,182 (122,171) (4,532,350) 6,390,130
CAPITAL CONTRIBUTIONS………………………………… - 15,175,978 - -
TRANSFERS IN……………………………………………… - - 2,936,000 -
CHANGE IN NET ASSETS……………………………… 159,182 15,053,807 (1,596,350) 6,390,130
NET ASSETS AT BEGINNING OF YEAR………………… 3,858,279 29,326,631 11,523,701 23,852,347
NET ASSETS AT END OF YEAR…………………………… $ 4,017,461 $ 44,380,438 $ 9,927,351 $ 30,242,477
See notes to basic financial statements.
Business-type Activities - Enterprise Funds
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
FISCAL YEAR ENDED JUNE 30, 2008
Town of Nantucket, Massachusetts 24 Basic Financial Statements
Component
Unit
Governmental
Wannacomet Total Activities -
Water Business-Type Internal Service Nantucket Islands
Company Activities Fund Land Bank
$- $ - $ - $ 157,620
- - - 17,460,366
3,686,900 25,106,920 - -
- 212,603 - -
- 421,621 - -
401,019 401,019 - 90,239
- - 10,848,339 211,150
4,087,919 26,142,163 10,848,339 17,919,375
2,037,283 23,850,011 - 4,397,714
635,033 3,827,992 - -
- 7,811 - -
99,474 785,644 8,046,171 -
2,771,790 28,471,458 8,046,171 4,397,714
1,316,129 (2,329,295) 2,802,168 13,521,661
415,124 1,009,647 33,918 696,519
(735,246) (2,592,497) - (1,316,667)
- 6,802,943 - -
(320,122) 5,220,093 33,918 (620,148)
996,007 2,890,798 2,836,086 12,901,513
- 15,175,978 - -
- 2,936,000 - -
996,007 21,002,776 2,836,086 12,901,513
13,067,642 81,628,600 4,065,048 183,183,261
$ 14,063,649 $ 102,631,376 $ 6,901,134 $ 196,084,774
Town of Nantucket, Massachusetts 25 Basic Financial Statements
Siasconset Nantucket
Water Memorial
Company Sewer Solid Waste Airport
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers and users……………………………………………………………$ 661,838 $ 3,972,859 $ 4,419,681 $ 11,918,603
Employer and employee contributions to fund………………………………………………… - - - -
Receipts from other governments……………………………………………………………… - 522,926 - -
Receipts from other operating revenues……………………………………………………… - - - -
Payments to vendors……………………………………………………………………………… (94,512) (1,063,486) (8,728,741) (7,530,279)
Payments to employees………………………………………………………………………… (122,846) (632,760) (61,314) (3,688,872)
Payments for interfund services used…………………………………………………………… (10,082) (21,133) - (654,955)
NET CASH FROM OPERATING ACTIVITIES…………………………………………………… 434,398 2,778,406 (4,370,374) 44,497
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers in………………………………………………………………………………………… - - 2,936,000 -
Transfers out……………………………………………………………………………………… - - - -
Advances from other funds……………………………………………………………………… 1,134,855 10,437,764 13,842 -
Advances to other funds………………………………………………………………………… (300) (13,235,297) - (373,623)
NET CASH FROM NONCAPITAL FINANCING ACTIVITIES…………………………………… 1,134,555 (2,797,533) 2,949,842 (373,623)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Proceeds from the issuance of bonds and notes……………………………………………… - 23,269,441 350,000 3,203,537
Capital grants……………………………………………………………………………………… - - - 6,802,943
Acquisition and construction of capital assets………………………………………………… (2,256,968) (23,037,754) (1,028,340) (6,414,443)
Net change in land deposits……………………………………………………………………… - - - -
Principal payments on bonds and notes……………………………………………………… (170,000) (748,972) (5,000) (435,000)
Interest expense…………………………………………………………………………………… (73,500) (1,008,729) (20,444) (270,824)
NET CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES……………………… (2,500,468) (1,526,014) (703,784) 2,886,213
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales and maturities of investments…………………………………………… - - - -
Purchase of investments………………………………………………………………………… - - - -
Investment income………………………………………………………………………………… 800 2,222 5,635 585,866
NET CASH FROM INVESTING ACTIVITIES……………………………………………………… 800 2,222 5,635 585,866
NET CHANGE IN CASH AND CASH EQUIVALENTS…………………………………………… (930,715) (1,542,919) (2,118,681) 3,142,953
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR………………………………… 930,415 3,505,508 2,118,681 7,095,361
CASH AND CASH EQUIVALENTS AT END OF YEAR…………………………………………$ (300) $ 1,962,589 $ - $ 10,238,314
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
FROM OPERATING ACTIVITIES:
Operating income (loss)………………………………………………………………………… $ 228,765 $ 1,276,762 $ (4,508,148) $ (642,803)
Adjustments to reconcile operating income (loss) to net
cash from operating activities:
Depreciation…………………………………………………………………………………… 42,995 1,298,801 379,056 1,472,107
Insurance reimbursements……………………..………………………………………… - - - -
User fees…………………………………………………………………………………… 69,184 102,018 (22,432) 115,069
Accounts receivable………………………………………………………………….…… - - (7,978) -
Intergovernmental………………………………………………………………………… - 101,305 - (915,503)
Inventory…………………………………………………………………………………… - - - (378,426)
Working capital deposit…………………………………………………………………… - - - -
Prepaid expenses………………………………………………………………………… - - - (15,400)
Warrants payable………………………………………………………………………… 87,362 (14,630) (183,810) 286,788
Accrued liabilities…………………………………………………………………………… - - - -
Security deposits………………………………...………………………………………… - - - 77,253
Accrued payroll…………………………………………………………………………… 1,454 2,957 120 85,058
Health claims payable…………………………………………………………………… - - - -
Other liabilities……………………………………………………………………………… - - - (6,100)
Accrued compensated absences………………………………………………………… 4,638 11,193 (27,182) (33,546)
Total adjustments……………………………………………………………………… 205,633 1,501,644 137,774 687,300
NET CASH FROM OPERATING ACTIVITIES……………………………………………………$ 434,398 $ 2,778,406 $ (4,370,374) $ 44,497
See notes to basic financial statements.
Business-type Activities - Enterprise Funds
PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
FISCAL YEAR ENDED JUNE 30, 2008
Town of Nantucket, Massachusetts 26 Basic Financial Statements
Component
Unit
Governmental
Wannacomet Total Activities -
Water Business-Type Internal Service Nantucket Islands
Company Activities Fund Land Bank
$ 4,383,769 $ 25,356,750 $ - $ 17,488,144
- - 11,159,942 -
- 522,926 - -
- - - 459,009
(915,535) (18,332,553) (8,574,732) (2,417,265)
(1,085,828) (5,591,620) - (1,649,425)
(99,474) (785,644) - -
2,282,932 1,169,859 2,585,210 13,880,463
- 2,936,000 - -
- - - -
- 11,586,461 - -
(18,189) (13,627,409) - -
(18,189) 895,052 - -
1,100,000 27,922,978 - 15,343,181
- 6,802,943 - -
(3,291,447) (36,028,952) - (17,608,938)
- - - 125,000
(800,000) (2,158,972) - (10,769,067)
(474,324) (1,847,821) - (1,316,667)
(3,465,771) (5,309,824) - (14,226,491)
- - - 1,577,324
- - (160,732) -
415,124 1,009,647 33,918 696,519
415,124 1,009,647 (126,814) 2,273,843
(785,904) (2,235,266) 2,458,396 1,927,815
11,181,140 24,831,105 2,856,790 10,291,404
$ 10,395,236 $ 22,595,839 $ 5,315,186 $ 12,219,219
$ 1,316,129 $ (2,329,295) $ 2,802,168 $ 13,521,661
635,033 3,827,992 - 693,918
- - 273,462 (69,390)
295,850 559,689 - -
- (7,978) - 27,778
- (814,198) - -
1,061 (377,365) - 16,791
- - 10,300 -
- (15,400) - (210,849)
(147,173) 28,537 (538,861) -
9,315 9,315 - (99,446)
- 77,253 - -
19,917 109,506 - -
- - 38,141 -
- (6,100) - -
152,800 107,903 - -
966,803 3,499,154 (216,958) 358,802
$ 2,282,932 $ 1,169,859 $ 2,585,210 $ 13,880,463
Town of Nantucket, Massachusetts 27 Basic Financial Statements
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET ASSETS
JUNE 30, 2008
Private
Purpose Agency
Trust Funds Funds
ASSETS
Cash and cash equivalents……………………………………$ 699,974 $ 579,359
Investments…………………………………………………… 1,673,368 -
TOTAL ASSETS…………………………………………………… 2,373,342 579,359
LIABILITIES
Liabilities due depositors……………………………………… - 579,359
TOTAL LIABILITIES……………………………………………… - 579,359
NET ASSETS
Held in trust for other purposes………………………………$ 2,373,342 $ -
See notes to basic financial statements.
Town of Nantucket, Massachusetts 28 Basic Financial Statements
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FISCAL YEAR ENDED JUNE 30, 2008
Private
Purpose
Trust Funds
ADDITIONS:
Contributions:
Private donations………………………………………………………………………………$ 22,501
Net investment income (loss):
Interest………………………………………………………………………………………… 181,503
TOTAL ADDITIONS……………………………………………………………………… 204,004
DEDUCTIONS:
General government………………………………………………………………………… 6,499
CHANGE IN NET ASSETS……………………………………………………………… 197,505
NET ASSETS AT BEGINNING OF YEAR…………………………………………………… 2,175,837
NET ASSETS AT END OF YEAR………………………………………………………………$ 2,373,342
See notes to basic financial statements.
Town of Nantucket, Massachusetts 29 Basic Financial Statements
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 30 Basic Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Notes to Basic Financial Statements
The accompanying basic financial statements of the Town of Nantucket, Massachusetts (the Town) have been
prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
The Governmental Accounting Standards Board (GASB) is the recognized standard-setting body for establishing
governmental accounting and financial reporting principles. The significant accounting policies are described
herein.
A. Reporting Entity
The Town is a municipal corporation that is governed by an elected five member Board of Selectmen.
For financial reporting purposes, the Town has included all funds, organizations, agencies, boards, commissions
and institutions. The Town has also considered all potential component units for which it is financially
accountable as well as other organizations for which the nature and significance of their relationship with the
Town are such that exclusion would cause the basic financial statements to be misleading or incomplete. As
required by GAAP, these basic financial statements present the Town (the primary government) and its
component units. Two entities have been included as component units in the reporting entity, because of the
significance of their operational and/or financial relationships with the Town.
Discretely Presented Component units – Discretely presented component units are entities that are legally
separate from the Town, but for which the Town is financially accountable, or whose relationship with the Town is
such that exclusion would cause the Town’s financial statements to be misleading or incomplete. These
component units are reported in separate columns to emphasize that they are legally separate from the Town.
In the Governmental Funds:
(1) The County of Nantucket (County) has the same geographical boundaries as the Town of Nantucket, and
the Town’s selectmen serve ex officio as the County Commissioners. The principal services provided by
the County are the Registry of Deeds and the Sheriff’s Office.
In the Enterprise Funds:
(1) The Nantucket Islands Land Bank (Land Bank) was created by Chapter 669 of the Acts of 1983 of the
Commonwealth of Massachusetts to acquire and manage open space and resource protection within
Nantucket County. The Land Bank is administered by the Nantucket Islands Land Bank Commission
comprised of five elected members.
Availability of Financial Information for Component Units
The Nantucket Islands Land Bank issued separate audited financial statements. A copy of the complete financial
statements can be obtained by contacting them at 22 Broad Street, Nantucket, MA 02554.
B. Government-Wide and Fund Financial Statements
Government-Wide Financial Statements
The government-wide financial statements (i.e., statement of net assets and the statement of changes in net
assets) report information on all of the non-fiduciary activities of the primary government and its component units.
Governmental activities, which are primarily supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which are supported primarily by user fees and charges.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 31 Basic Financial Statements
Fund Financial Statements
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even
though fiduciary funds are excluded from the government-wide financial statements. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund financial
statements. Nonmajor funds are aggregated and displayed in a single column.
Major Fund Criteria
Major funds must be reported if the following criteria are met:
• If the total assets, liabilities, revenues, or expenditures/expenses of an individual governmental or
enterprise fund are at least 10 percent of the corresponding element (assets, liabilities, etc.) for all
funds of that category or type (total governmental or total enterprise funds), and
• If the total assets, liabilities, revenues, or expenditures/expenses of the individual governmental
fund or enterprise fund are at least 5 percent of the corresponding element for all governmental
and enterprise funds combined.
Additionally, any other governmental or enterprise fund that management believes is particularly
significant to the basic financial statements may be reported as a major fund.
Internal service funds and fiduciary funds are reported by fund type.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
Government-Wide Financial Statements
The government-wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are
recorded when the liabilities are incurred. Real estate and personal property taxes are recognized as revenues in
the fiscal year for which they are levied. Grants and similar items are recognized as revenue as soon as all
eligibility requirements imposed by the provider have been met.
The statement of activities demonstrates the degree to which the direct expenses of a particular function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function or segment. Program revenues include the following:
• Charges to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment.
• Grants and contributions that are restricted to meeting the operational requirements of a particular
function or segment.
• Grants and contributions that are restricted to meeting the capital requirements of a particular function or
segment.
Taxes and other items not identifiable as program revenues are reported as general revenues.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 32 Basic Financial Statements
For the most part, the effect of interfund activity has been removed from the government-wide financial
statements. However, the effect of interfund services provided and used between functions is not eliminated as
the elimination of these charges would distort the direct costs and program revenues reported for the functions
affected.
Fund Financial Statements
Governmental fund financial statements are reported using the flow of current financial resources measurement
focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues
are recognized when susceptible to accrual (i.e., measurable and available). Measurable means the amount of
the transaction can be determined and available means collectible within the current period or soon enough
thereafter to pay liabilities of the current period. Expenditures are recorded when the related fund liability is
incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain
compensated absences, claims and judgments which are recognized when the obligations are expected to be
liquidated with current expendable available resources.
Real estate and personal property tax revenues are considered available if they are collected within 60 days after
fiscal year-end. Investment income is susceptible to accrual. Other receipts and tax revenues become
measurable and available when the cash is received and are recognized as revenue at that time.
Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria
is met. Expenditure driven grants recognize revenue when the qualifying expenditures are incurred and all other
grant requirements are met.
The following major governmental funds are reported:
The general fund is the primary operating fund. It is used to account for all financial resources, except those that
are required to be accounted for in another fund.
The nonmajor governmental funds consist of other special revenue, capital projects 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 fund is used to account for the proceeds of specific revenue sources (other than permanent
funds or capital projects funds) that are restricted by law or administrative action to expenditures for specified
purposes.
The capital projects fund is used to account for financial resources to be used for the acquisition or construction of
major capital facilities (other than those financed by enterprise and trust funds).
The permanent fund is used to account for financial resources that are legally restricted to the extent that only
earnings, not principal, may be used for purposes that support the governmental programs.
Proprietary fund financial statements are reported using the flow of economic resources measurement focus and
use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are
recorded when the liabilities are incurred.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues
and expenses generally result from providing services and producing and delivering goods in connection with the
proprietary funds principal ongoing operations. All revenues and expenses not meeting this definition are
reported as nonoperating revenues and expenses.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 33 Basic Financial Statements
The following major proprietary funds are reported:
The Siasconset Water enterprise fund is used to account for the Town’s water distribution activities within its
service area.
The Sewer enterprise fund is used to account for the Town’s sewer activities.
The Solid Waste enterprise fund is used to account for the Town’s landfill activities.
The Nantucket Memorial Airport enterprise fund is used to account for the operations of the Town’s airport.
The Wannacomet Water Company enterprise fund is used to account for the Town’s water distribution activities
within its service area.
The internal service fund is used to account for the financing of services provided by one department to other
departments or governmental units. This fund is used to account for risk financing activities related to health
insurance and workers’ compensation.
The Nantucket Islands Land Bank enterprise fund is used to account for the activity of the Nantucket Islands Land
Bank.
Fiduciary fund financial statements are reported using the flow of economic resources measurement focus and
use the accrual basis of accounting. Fiduciary funds are used to account for assets held in a trustee capacity for
others that cannot be used to support the governmental programs.
The following fiduciary fund types are reported:
The private-purpose trust fund is used to account for trust arrangements, other than those properly reported in the
pension trust fund or permanent fund, under which principal and investment income exclusively benefit
individuals, private organizations, or other governments.
The agency fund is used to account for assets held in a purely custodial capacity.
Government-Wide and Fund Financial Statements
For enterprise fund accounting, all applicable Financial Accounting Standards Board (FASB) pronouncements
issued on or prior to November 30, 1989, are applied, unless those pronouncements conflict with or contradict
GASB pronouncements.
D. Cash and Investments
Government-Wide and Fund Financial Statements
Cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with
an original maturity of three months or less from the date of acquisition. Investments are carried at fair value.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 34 Basic Financial Statements
E. Accounts Receivable
Government-Wide and Fund Financial Statements
The recognition of revenue related to accounts receivable reported in the government-wide financial statements
and the proprietary funds and fiduciary funds financial statements are reported under the accrual basis of
accounting. The recognition of revenue related to accounts receivable reported in the governmental funds
financial statements are reported under the modified accrual basis of accounting.
Real Estate, Personal Property Taxes and Tax Liens
Real estate and personal property taxes are levied and based on values assessed on January 1st of every year.
Assessed values are established by the Board of Assessor’s for 100% of the estimated fair market value. Taxes
are due on November 1st and May 1st and are subject to penalties and interest if they are not paid by the
respective due date. Real estate and personal property taxes levied are recorded as receivables in the fiscal year
of the levy.
The Town has the legal authority to impose real estate tax liens on delinquent properties. Liens are recorded as
receivables in the fiscal year they are imposed.
Real estate receivables which have been secured via the tax lien process are considered 100% collectible.
Accordingly, an allowance for uncollectibles is not reported. An allowance of uncollectibles for other real estate
receivables is estimated based on historical trends and specific account analysis.
Personal property taxes cannot be secured through the lien process. The allowance of uncollectibles is estimated
based on historical trends and specific account analysis.
Motor Vehicle and Other Excise Taxes
Motor vehicle excise taxes are assessed annually for each vehicle registered and are recorded as receivables in
the fiscal year of the levy. The Commonwealth is responsible for reporting the number of vehicles registered and
the fair values of those vehicles. The tax calculation is the fair value of the vehicle multiplied by $25 per $1,000 of
value. Boat excise taxes are assessed annually for each boat registered and are recorded as receivables in the
fiscal year of the levy. The Commonwealth is responsible for reporting the number of boats registered and the fair
value of those boats. The tax calculation is the fair value of the boat multiplied by $10 per $1,000 of value.
The allowance for uncollectibles is estimated based on historical trends and specific account analysis.
Departmental and Other
Departmental and other receivables consist primarily of police and fire details and are recorded as receivables in
the fiscal year accrued. The allowance of uncollectibles is estimated based on historical trends and specific
account analysis.
Special Assessments
Special Assessments consist of betterments assessed to residents of Golf View Drive and in relation to the
Town’s Septic Loan Betterment program. The allowance of uncollectibles is estimated based on historical trends
and specific account analysis.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 35 Basic Financial Statements
Intergovernmental
Various federal and state grants for operating and capital purposes are applied for and received annually. For
non-expenditure driven grants, receivables are recorded as soon as all eligibility requirements imposed by the
provider have been met. For expenditure driven grants, receivables are recorded when the qualifying
expenditures are incurred and all other grant requirements are met.
These receivables are considered 100% collectible and therefore do not report an allowance for uncollectibles.
Water Fees
Water Fees for Siasconset Water are levied monthly based on individual meter readings.
Water Fees for Wannacomet Water Company are levied monthly based on individual meter readings and average
bills.
All water fees are subject to penalties and interest if they are not paid by the respective due date. Unbilled water
fees at year-end are accrued and are recorded as revenue in the current period.
Sewer Fees
Sewer Fees are levied monthly based on individual meter readings and on average bills and are subject to
penalties and interest if they are not paid by the respective due date. Unbilled user fees at year-end and are
accrued and are recorded as revenue in the current period.
The Town has the ability to issue Water and Sewer liens for delinquent fees which are included as a lien on the
property owner’s tax bill. Water and Sewer charges and liens are recorded as receivables in the fiscal year of the
levy.
Allowances for uncollectible water and sewer fees are estimated based on historical trends and specific account
analysis.
Landfill Fees
The outstanding receivable for Landfill Fees is comprised of annual commercial fees assessed to restaurants and
inns and monthly tipping fees charged to private haulers.
Airport Fees
The outstanding receivable for Airport Fees is comprised primarily of fuel sales.
F. Inventories
Government-Wide and Fund Financial Statements
Inventories of the Nantucket Memorial Airport and the Wannacomet Water Company are priced at the lower of
cost or market, with cost being determined on the first-in, first-out method basis. Expendable supplies and small
tools are not inventoried but rather expensed when purchased.
All other inventories are recorded as expenditures at the time of purchase. Such inventories are not material in
total to the government-wide and fund financial statements, and therefore are not reported.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 36 Basic Financial Statements
G. Restricted Assets
Government-Wide and Fund Financial Statements
Certain assets of the enterprise fund are classified as restricted because their use is restricted by contract
covenants.
H. Capital Assets
Government-Wide and Proprietary Fund Financial Statements
Capital assets, which include land, land improvements, buildings, machinery and equipment, and infrastructure
(e.g., roads, water mains, sewer mains, and similar items), are reported in the applicable governmental or
business-type activity column of the government-wide financial statements, and the proprietary fund financial
statements. Capital assets are recorded at historical cost or at estimated historical cost when actual historical
cost could not be determined. Donated capital assets are recorded at the estimated fair market value at the date
of donation. Except for the capital assets of the governmental activities column in the government-wide financial
statements, construction period interest is capitalized on constructed capital assets.
All purchases and construction costs in excess of $10,000 are capitalized at the date of acquisition or
construction, respectively, with expected useful lives of greater than one year.
Capital assets (excluding land) are depreciated on a straight-line basis. The estimated useful lives of capital
assets are as follows:
Estimated
Useful
Life
(in years)
Vehicles………………………………………… 5
Office equipment……………………………… 5-10
Shop equipment………………………………… 10-15
Runway improvements………………………… 20
Water infrastructure…………………………… 40-70
Buildings and improvements………………… 33-50
Capital Asset Type
The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend asset
lives are not capitalized and are treated as expenses when incurred. Improvements are capitalized.
Governmental Fund Financial Statements
Capital asset costs are recorded as expenditures in the acquiring fund in the fiscal year of the purchase.
I. Interfund Receivables and Payables
During the course of its operations, transactions occur between and within individual funds that may result in
amounts owed between funds.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 37 Basic Financial Statements
Government-Wide Financial Statements
Transactions of a buyer/seller nature between and within governmental funds and internal service funds are
eliminated from the governmental activities in the statement of net assets. Any residual balances outstanding
between the governmental activities and business-type activities are reported in the statement of net assets as
“internal balances”.
Fund Financial Statements
Transactions of a buyer/seller nature between and within funds are not eliminated from the individual fund
statements. Receivables and payables resulting from these transactions are classified as “Due from other funds”
or “Due to other funds” on the balance sheet.
J. Interfund Transfers
During the course of its operations, resources are permanently reallocated between and within funds. These
transactions are reported as transfers in and transfers out.
Government-Wide Financial Statements
Transfers between and within governmental funds and fiduciary funds are eliminated from the governmental
activities in the statement of activities. Any residual balances outstanding between the governmental activities
and business-type activities are reported in the statement of activities as “Transfers, net”.
Fund Financial Statements
Transfers between and within funds are not eliminated from the individual fund statements and are reported as
transfers in and transfers out.
K. Deferred Revenue
Deferred revenue at the governmental fund financial statement level represents billed receivables that do not
meet the available criterion in accordance with the current financial resources measurement focus and the
modified accrual basis of accounting. Deferred revenue is recognized as revenue in the conversion to the
government-wide (full accrual) financial statements
L. Net Assets and Fund Equity
Government-Wide Financial Statements (Net Assets)
Net assets are reported as restricted when amounts are not available for appropriation or are legally restricted by
outside parties for a specific future use.
Net assets have been “restricted for” the following:
“Permanent funds - expendable” represents amounts held in trust for which the expenditures are restricted by
various trust agreements.
“Permanent funds - nonexpendable” represents amounts held in trust for which only investment earnings may be
expended.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 38 Basic Financial Statements
“Other purposes” represents restrictions placed on assets from outside parties.
Fund Financial Statements (Fund Balances)
Fund balances are reserved for amounts that are not available for appropriation or are legally restricted by outside
parties for a specific future use. Designations of fund balance represent tentative management plans that are
subject to change.
Fund balances have been “reserved for” the following:
“Encumbrances and continuing appropriations” represents amounts obligated under purchase orders, contracts
and other commitments for expenditures that are being carried over to the ensuing fiscal year.
“Debt service” represents amounts raised in the current fiscal year specifically for debt service payments and not
spent at year end. The tax levy for debt service in the subsequent fiscal year will be reduced by those amounts.
“Perpetual permanent funds” represents amounts held in trust for which only investment earnings may be
expended.
M. Long-term debt
Government-Wide and Proprietary Fund Financial Statements
Long-term debt is reported as liabilities in the government-wide and proprietary fund statement of net assets.
Material bond premiums and discounts are deferred and amortized over the life of the bonds using the effective
interest method. Bonds payable are reported net of the applicable bond premium or discount.
Governmental Fund Financial Statements
The face amount of governmental funds long-term debt is reported as other financing sources. Bond premiums
and discounts, as well as issuance costs, are recognized in the current period. Bond premiums are reported as
other financing sources and bond discounts are reported as other financing uses. Issuance costs, whether or not
withheld from the actual bond proceeds received, are reported as general government expenditures.
N. Investment Income
Excluding the permanent funds, investment income derived from major and nonmajor governmental funds is
legally assigned to the general fund unless otherwise directed by Massachusetts General Law (MGL).
O. Compensated Absences
Employees are granted vacation and sick leave in varying amounts based on collective bargaining agreements,
state laws and executive policies.
Government-Wide and Proprietary Fund Financial Statements
Vested or accumulated vacation and sick leave are reported as liabilities and expensed as incurred.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 39 Basic Financial Statements
Governmental Fund Financial Statements
Vested or accumulated vacation and sick leave, which will be liquidated with expendable available financial
resources, are reported as expenditures and fund liabilities.
P. Post Retirement Benefits
Government-Wide and Fund Financial Statements
In addition to providing pension benefits, health insurance coverage is provided for retired employees and their
survivors in accordance with MGL, Chapter 32, on a pay-as-you-go basis. The cost of providing health insurance
is recognized by recording the employer’s 90% share of insurance premiums in the general fund in the fiscal year
paid. For the fiscal year ended June 30, 2008, this expense/expenditure totaled approximately $1,514,000.
There were approximately 144 participants eligible to receive benefits at June 30, 2008.
Q. Individual Fund Deficits
At June 30, 2008, there are several individual fund deficits within the special revenue funds and capital project
funds, which are classified as non-major governmental funds in the fund financial statements. These deficits will
be funded through available funds and grants during fiscal year 2009.
R. Use of Estimates
Government-Wide and Fund Financial Statements
The preparation of basic financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure for contingent assets
and liabilities at the date of the basic financial statements and the reported amounts of the revenues and
expenditures/expenses during the fiscal year. Actual results could vary from estimates that were used.
S. Total Column
Government-Wide Financial Statements
The total column presented on the government-wide financial statements represents consolidated financial
information.
Fund Financial Statements
The total column on the fund financial statements is presented only to facilitate financial analysis. Data in this
column is not the equivalent of consolidated financial information.
NOTE 2 – CASH AND INVESTMENTS
A cash and investment pool is maintained that is available for use by all funds. Each fund type's portion of this
pool is displayed on the balance sheet as "Cash and cash equivalents". The deposits and investments of the
trust funds are held separately from those of other funds.
Statutes authorize the investment in obligations of the U.S. Treasury, agencies, and instrumentalities, certificates
of deposit, repurchase agreements, money market accounts, bank deposits and the State Treasurer's Investment
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 40 Basic Financial Statements
Pool (the Pool). The Treasurer may also invest trust funds in securities, other than mortgages or collateral loans,
which are legal for the investment of funds of savings banks under the laws of the Commonwealth.
The Pool meets the criteria of an external investment pool. The Pool is administered by the Massachusetts
Municipal Depository Trust (MMDT), which was established by the Treasurer of the Commonwealth who serves
as Trustee. The fair value of the position in the Pool is the same as the value of the Pool shares.
Custodial Credit Risk – Deposits
In the case of deposits, this is the risk that in the event of a bank failure, the Town of Nantucket’s deposits may
not be returned to it. The Town, including the primary government and Nantucket County and Nantucket Islands
Land Bank component units, does not have a deposit policy for custodial credit risk.
Primary Government
At fiscal year-end, the carrying amount of deposits of the primary government totaled $43,430,950 and the bank
balance totaled $49,323,041. Of the bank balance, $600,000 was covered by the Federal Depositors Insurance
Company (“FDIC”), $1,016,384 was covered by Federal Depository Insurance, $45,178,825 was collateralized
and $2,527,832 was exposed to custodial credit risk because it was uninsured and uncollateralized.
Component Unit-County
At fiscal year-end, the carrying amount of deposits of Nantucket County totaled $3,982,061 and the bank balance
totaled $4,155,883. Of the bank balance, $200,000 was covered by Federal Depository Insurance and the
remainder of $3,955,883 was collateralized, therefore the County did not have funds that were exposed to
custodial credit risk because of being uninsured or uncollateralized.
Component Unit-Nantucket Islands Land Bank
The Land Bank considers securities purchased within six months of their date of maturity to be cash equivalents.
The Land Bank holds a substantial amount of cash in time certificates of deposit and Federal treasury obligations.
Cash and equivalents are insured by the Federal Depositors Insurance Company (“FDIC”), Depositors Insurance
Fund (“DIF”) and the full faith pledge of the Commonwealth of Massachusetts. From time to time, the Land
Bank’s cash balances fluctuate and can exceed the Federally insured limit of $100,000.
At fiscal year-end, the carrying amount of deposits of the Nantucket Islands Land Bank totaled $14,599,960. No
amount was exposed to custodial credit risk because it was uninsured or uncollateralized.
Restricted cash of the Land Bank as of June 30, 2008 consists of the following:
Debt Service funds:
Series 98E……………………………………………………$ 807,485
Series 2007A Debt Service…………………………………32,244
Series 2007A Reserve………………………………………1,148,203
Security Deposit Fund……………………………………… 650
Marble Reserve Fund…………………………………………353,413
Smooth Hummocks Management Escrow…………………38,746
Total Restricted Cash…………………………………………$ 2,380,741
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 41 Basic Financial Statements
The Land Bank has entered into an agreement with the Town of Nantucket, which requires the Land Bank to
establish a working capital reserve fund. This fund, along with the pledge of the Town of Nantucket of its full faith
and credit, secures the Series 98E bonds outstanding as of June 30, 2008. 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 in the
reserve fund is not on deposit.
Investments
As of June 30, 2008, the Town of Nantucket had the following investments:
Primary Government
Under 1-5 6-10
Fair Value 1 Year Years Years
Investment Type
Debt Securities:
Federal Home Loan Bank………………………………… $ 556,987 $ - $ 153,235 $ 403,752
Federal Home Loan Mortgage Corporation....................713,875 - 411,438 302,437
Federal National Mortgage Association..........................644,853 202,626 442,227 -
Federal Home Loan Mortgage Corporation Gold............10,960 - 10,960 -
United States Treasury Note.......................................... 2,442,124 556,995 1,155,306 729,823
Repurchase Agreements……………………………………9,026,146 9,026,146 - -
Total Debt Securities......................................................13,394,945 $ 9,785,767 $ 2,173,166 $ 1,436,012
Other Investments:
MMDT…………………………………………………………1,710,305
Total Investments........................................................... $15,105,250
Maturity
Component Unit-County
The County did not have any investments as of June 30, 2008.
Component Unit-Nantucket Islands Land Bank
The Land Bank designated investments according to the level of risk assumed by the Land Bank. At June 30,
2008, the entire balance of investments, $1,271,969, represent investments that are insured, registered or held by
the Land Bank’s agent in the Land Bank name. The entire balance of investments represents certificates of
deposit stated at the fair market value that are unrated in terms of credit risk quality ratings
All designated investments consist of certificates of deposit maturing in less than 1 year.
Custodial Credit Risk – Investments
For an investment, this is the risk that, in the event of a failure by the counterparty, the Town will not be able to
recover the value of its investments or collateral security that are in the possession of an outside party. The
Town, including the primary government and Nantucket County component unit, does not have an investment
policy for custodial credit risk. The Land Bank currently follows investment policies largely defined by the
Commonwealth of Massachusetts, as well as internal Land Bank investment policies.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 42 Basic Financial Statements
Primary Government
The investments of $556,987 in Federal Home Loan Bank, $713,875 in Federal Home Loan Mortgage
Corporation, $644,853 in Federal National Mortgage Association $10,960 in Federal Home Loan Mortgage
Corporation Gold, and $2,442,124 in U.S. Treasury Notes are subject to custodial credit risk exposure because
the related securities are uninsured, unregistered, and held by the counterparty. The repurchase agreement
consists of an overnight sweep agreement.
Component Unit-County
The County did not have any investments as of June 30, 2008.
Component Unit-Nantucket Islands Land Bank
The entire balance of Land Bank investments represents certificates of deposit stated at the fair market value that
are unrated in terms of credit risk quality ratings.
Interest Rate Risk
The Town, including the primary government and Nantucket County and Nantucket Islands Land Bank
component units, does not have a formal investment policy that limits investment maturities as a means of
managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk
The Town, including the primary government and Nantucket County and Nantucket Islands Land Bank
component units has not adopted a formal policy related to Credit Risk. Of the Town’s investments at June 30,
2008, $4,357,839 are rated AAA and $10,960 are unrated.
Concentration of Credit Risk
The Town, including the primary government and Nantucket County and Nantucket Islands Land Bank
component units, places no limit on the amount the government may invest in any one issuer.
Primary Government
More than 5 percent of the primary government’s investments are in the following securities:
Percentage of
Issuer
Federal Home Loan Mortgage Corporation..................... 5%
United States Treasury Note............................................16%
Repurchase Agreements……………………………………60%
MMDT…………………………………………………………11%
Total Investments
Component Unit-County
The County did not have any investments as of June 30, 2008.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 43 Basic Financial Statements
NOTE 3 – RECEIVABLES
At June 30, 2008, receivables for the individual major, non-major governmental funds and internal service funds in
the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Allowance
Gross for Net
Amount Uncollectibles Amount
Receivables:
Real estate and personal property taxes…………… $ 2,789,788 $ (292,914) $ 2,496,874
Tax liens ……………………….………………………… 1,737,638 - 1,737,638
Excise taxes……………………………………………… 1,050,796 (560,323) 490,473
User fees………………………………………………… 3,885 - 3,885
Departmental and other………………………………… 1,052,220 (320,797) 731,423
Special assessments…………………………………… 25,171 - 25,171
Intergovernmental……………………………………… 18,034,963 - 18,034,963
Total…………………………………………………… $ 24,694,461 $ (1,174,034) $ 23,520,427
At June 30, 2008, receivables for the enterprise funds consist of the following:
Allowance
Gross for Net
Amount Uncollectibles Amount
Receivables:
Water fees……………………………………………… $ 464,968 $ - $ 464,968
Sewer fees……………………………………………… 143,294 - 143,294
Solid waste fees………………………………………… 658,331 (113,730) 544,601
Airport fees……………………………………………… 416,802 (75,000) 341,802
Intergovernmental……………………………………… 21,674,361 - 21,674,361
Total………………………………………………………$ 23,357,756 $ (188,730) $ 23,169,026
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered
to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various
components of deferred revenue reported in the governmental funds were as follows:
Nonmajor
General Governmental
Fund Funds Total
Receivable:
Real estate and personal property taxes…………… $ 1,532,017 $ 64,368 $ 1,596,385
Tax liens………………….……………………………… 1,719,206 18,432 1,737,638
Motor vehicle and other excise taxes………………… 490,473 - 490,473
User fees………………………………………………… 3,885 - 3,885
Departmental and other………………………………… 406,591 228,442 635,033
Special assessments…………………………………… - 25,171 25,171
Intergovernmental……………………………………… - 741,210 741,210
Total………………………………………………………$ 4,152,172 $ 1,077,623 $ 5,229,795
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 44 Basic Financial Statements
NOTE 4 – CAPITAL ASSETS
Capital asset activity for the primary government for the fiscal year ended June 30, 2008, was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital assets not being depreciated:
Land…………………………………………………………$ 171,176,126 $ - $ - $ 171,176,126
Construction in progress………………………………… 828,551 3,676,085 (350,306) 4,154,330
-
Total capital assets not being depreciated………… 172,004,677 3,676,085 (350,306) 175,330,456
Capital assets being depreciated:
Vehicles…………………………………………………… 7,633,192 1,297,033 (594,491) 8,335,734
Buildings…………………………………………………… 31,207,129 324,065 - 31,531,194
Machinery and equipment………………………………… 7,610,206 57,592 - 7,667,798
Infrastructure……………………………………………… 21,088,698 2,503,614 - 23,592,312
Total capital assets being depreciated…………… 67,539,225 4,182,304 (594,491) 71,127,038
Less accumulated depreciation for:
Vehicles…………………………………………………… (4,650,790) (1,197,128) 485,903 (5,362,015)
Buildings.…………………………………………………… (14,638,276) (699,587) - (15,337,863)
Machinery and equipment………………………………… (6,671,725) (177,945) 21,178 (6,828,492)
Infrastructure.……………………………………………… (15,085,140) (736,256) - (15,821,396)
Total accumulated depreciation…………………… (41,045,931) (2,810,916) 507,081 (43,349,766)
Total capital assets being depreciated, net………………… 26,493,294 1,371,388 (87,410) 27,777,272
Total governmental activities capital assets, net……………$ 198,497,971 $ 5,047,473 $ (437,716) $ 203,107,728
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 45 Basic Financial Statements
The capital asset totals for the individual business-type activities at June 30, 2008 were as follows:
Beginning Ending
Balance Increases Decreases Balance
Business-type activities
Capital assets not being depreciated:
Land…………………………………………………………$ 17,142,428 $ - $ - $ 17,142,428
Construction in progress………………………………… 23,316,898 35,703,186 (2,055,173) 56,964,911
Total capital assets not being depreciated………… 40,459,326 35,703,186 (2,055,173) 74,107,339
Capital assets being depreciated:
Land improvements……………………………………… 23,574,534 980,361 - 24,554,895
Plant………………………………………………………… 15,594,467 12,113 - 15,606,580
Infrastructure……………………………………………… 33,201,380 4,501,758 (20,000) 37,683,138
Buildings…………………………………………………… 19,660,436 364,456 - 20,024,892
Vehicles…………………………………………………… 4,350,438 43,888 (25,909) 4,368,417
Machinery and equipment………………………………… 17,561,565 530,979 - 18,092,544
Furniture, fixtures and computer equipment…………… 441,830 32,246 - 474,076
Total capital assets being depreciated…………… 114,384,650 6,465,801 (45,909) 120,804,542
Less accumulated depreciation……………………………… (40,860,331) (3,827,992) 29,472 (44,658,851)
Total capital assets being depreciated, net………………… 73,524,319 2,637,809 (16,437) 76,145,691
Total business-type activities, capital assets…………………$ 113,983,645 $ 38,340,995 $ (2,071,610) $ 150,253,030
Capital asset activity for the Nantucket County and Nantucket Islands Land Bank component units for the fiscal
year ended June 30, 2008 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Nantucket Islands Land Bank Component Unit
Capital assets not being depreciated:
Land…………………………………………………………$ 183,119,050 $ 12,613,922 $ - $ 195,732,972
Capital assets being depreciated:
Buildings, improvements and equipment……………… 12,931,131 4,999,127 (9,180) 17,921,078
Less accumulated depreciation………………………… (2,307,725) (698,029) 9,180 (2,996,574)
Total capital assets being depreciated, net………………… 10,623,406 4,301,098 - 14,924,504
Total Nantucket Islands Land Bank Component Unit,
capital assets…………………………………………………$ 193,742,456 $ 16,915,020 $ - $ 210,657,476
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 46 Basic Financial Statements
Beginning Ending
Balance Increases Decreases Balance
Nantucket County Component Unit
Capital assets not being depreciated:
Land…………………………………………………………$ 28,458 $ - $ - $ 28,458
Capital assets being depreciated:
Vehicles…………………………………………………… 232,067 45,116 - 277,183
Equipment………………………………………………… 1,390,589 24,845 - 1,415,434
Total capital assets being depreciated…………… 1,622,656 69,961 - 1,692,617
Less accumulated depreciation for:
Vehicles…………………………………………………… (176,824) (25,529) - (202,353)
Equipment………………………………………………… (703,116) (162,977) - (866,093)
Total accumulated depreciation…………………… (879,940) (188,506) - (1,068,446)
Total capital assets being depreciated, net………………… 742,716 (118,545) - 624,171
Total County Component Unit capital assets……………… $ 771,174 $ (118,545) $ - $ 652,629
Depreciation expense was charged to functions/programs as follows:
Governmental Activities:
General government………………………………………………………………$ 58,132
Public safety………………………………………………………………………… 971,214
Education…………………………………………………………………………… 624,733
Public works………………………………………………………………………… 992,943
Human services…………………………………………………………………… 1,579
Culture and recreation…………………………………………………………… 162,315
Total depreciation expense - governmental activities………………………………$ 2,810,916
Business-Type Activities:
Water………………………………………………..……………………………… $ 678,028
Sewer……………………………………….………………………………………… 1,298,801
Solid waste……………………………………….………………………………… 379,056
Airport……………………………………….……………………………………… 1,472,107
Total depreciation expense - business-type activities………………………………$ 3,827,992
Nantucket County Component Unit:
Registry of Deeds……………………………………………………………………$ 50,496
Sheriff's Department………………………………………………………………… 138,010
Total depreciation expense - component unit activities…………………………… $ 188,506
Nantucket Islands Land Bank Component Unit:
Land Bank……………………………………………………………………………$ 698,029
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 47 Basic Financial Statements
NOTE 5 – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
Interfund receivables and payables at June 30, 2008 are summarized as follows:
Nonmajor Siasconset Sewer Solid Waste Wannacomet
General Governmental Water Enterprise Enterprise Water Internal Service
Fund Funds Company Fund Fund Company Fund Total
General Fund………………………$- $ 619,852 $ - $ 1,303,384 $ 188,320 $ 8,320 $ 495,542 $ 2,615,418
Siasconset Water Company……… - - - 1,152,163 - - 17,225 1,169,388
Sewer Enterprise Fund…………… 232,826 - - - - - 20,885 253,711
Solid Waste Enterprise Fund……… - - - 189,787 - - - 189,787
Nantucket Memorial Airport……… 33,118 - - - - - 11,010 44,128
Wannacomet Water company…… 692,656 - 67,981 425,084 - - 6,167 1,191,888
Total……………………………$ 958,600 $ 619,852 $ 67,981 $ 3,070,418 $ 188,320 $ 8,320 $ 550,829 $ 5,464,320
Due To:
Due From:
Interfund transfers for the fiscal year ended June 30, 2008, are summarized as follows:
Nonmajor Sewer Solid Waste
General Governmental Enterprise Enterprise
Fund Funds Fund Fund Total
General Fund………………………… $ - $ 310,000 $ - $ - $ 310,000 (1)
General Fund………………………… - - - 2,936,000 2,936,000 (2)
General Fund………………………… - 600,000 - - 600,000 (3)
General Fund………………………… - - 15,175,978 - 15,175,978 (4)
Nonmajor Governmental Funds……… 370,000 - - - 370,000 (5)
Nonmajor Governmental Funds……… 41,000 - - - 41,000 (6)
Nonmajor Governmental Funds……… 231,464 - - - 231,464 (7)
Total……………………………………$ 642,464 $ 910,000 $ 15,175,978 $ 2,936,000 $ 19,664,442
(1) Transfer from General Fund Operating Budget to Community School Revolving Fund.
(2) General Fund subsidy to Solid Waste Enterprise Fund.
(3) Gerneral Fund appropriation to fund the Stabilization Fund.
(4) Capital Transfer to fund capital asset construction of the Sewer Enterprise with debt to be repaid from the general government.
(5) Ambulance Reserve Fund transfer to fund the ambulance budget in the General Fund.
(6) Waterway Improvement Fund transfer for the Marine & Coastal Resources Department for an outboard
motor and vehicle.
(7) Ferry Embarcation Fee transfer to the Town's Operating Budget.
Transfers In:
Transfers Out:
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 48 Basic Financial Statements
NOTE 6 – SHORT-TERM FINANCING
Short-term debt may be authorized and issued to fund the following:
• Current operating costs prior to the collection of revenues through issuance of revenue or tax anticipation
notes (RANS or TANS).
• Capital project costs and other approved expenditures incurred prior to obtaining permanent financing through
issuance of bond anticipation notes (BANS) or grant anticipation notes (GANS).
Short-term loans are general obligations and carry maturity dates that are limited by statute. Interest
expenditures and expenses for short-term borrowings are accounted for in the general fund and enterprise funds,
respectively.
Details related to the short-term debt activity for the fiscal year ended June 30, 2008, are as follows:
Balance at Balance at
Rate June 30, Renewed/ Retired/ June 30,
Type Purpose (%) Due Date 2007 Issued Redeemed 2008
Governmental Funds
BAN Stormwater Drainage Improvements…………… 4.00 02/27/09 $ 5,500,000 $ 5,500,000 $ 5,500,000 $ 5,500,000 (a)
Enterprise Fund
BAN Airport Equipment - New Airfield Equipment…… 4.00 02/28/08 109,188 - 109,188 -
BAN Airport Improvement and Protection…………… 4.00 02/28/08 400,000 - 400,000 -
BAN Airport……………………………………………… 4.00 02/27/09 5,000,000 5,000,000 1,287,275 8,712,725 ( b)
BAN Wastewater Treatment Facility………………… 4.00 02/28/08 9,000,000 - 9,000,000 -
Total Enterprise Fund………………………………………………………… 14,509,188 5,000,000 10,796,463 8,712,725
Total……………………………………………………………………………$ 20,009,188 $ 10,500,000 $ 16,296,463 $ 14,212,725
(a) Subsequent to year end, the $5,500,000 was reissued as part of a new BAN, totaling $14,212,725, with
interest rates from 2% to 2.25%, which matured on February 27, 2009. The Town upon maturity rolled $4,610,490
of the $5,500,000 into a BAN maturing on March 30, 2009 with an interest rate of 1%. The remaining $889,510
was rolled into a BAN with the $8,712,725 of short term debt for the Airport in the value of $9,602,235 that
matures on February 26, 2010 at an interest rate of 1.75%.
(b) The $8,712,725 of BANs outstanding on February 27, 2009 was reissued as part of a new BAN totaling
$9,602,235 with an interest rate of 1.75% that matures on February 26, 2010.
NOTE 7 – LONG-TERM DEBT
Under the provisions of Chapter 44, Section 10, Municipal Law authorizes indebtedness up to a limit of 5% of the
equalized valuation. Debt issued in accordance with this section of the law is designated as being "inside the
debt limit". In addition, however, debt may be authorized in excess of that limit for specific purposes. Such debt,
when issued, is designated as being "outside the debt limit".
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 49 Basic Financial Statements
Details related to the outstanding indebtedness at June 30, 2008, and the debt service requirements are as
follows:
Bonds and Notes Payable Schedule – Governmental Funds
Interest Outstanding Outstanding
Rate at June 30, at June 30,
Project (%)2007 Issued Redeemed 2008
Land……………………………………………………………4.75 - 6.00 $ 1,300,000 $ - $ 1,300,000 $ -
Advanced Refunding of 91 Landfill…………………………4.75 - 6.00 3,849,631 - 686,899 3,162,732
Advanced Refunding of 91 Sewer………………………… 4.75 - 6.00 2,391,905 - 424,724 1,967,181
Advanced Refunding of 91 School 1………………………4.75 - 6.00 656,672 - 319,854 336,818
Advanced Refunding of 91 School 2………………………4.75 - 6.00 586,792 - 183,523 403,269
Land Acquisition………………………………………………4.00 - 4.90 210,000 - 20,000 190,000
MWPAT Title V Loan - 97-1148……………………………- 15,080 - 1,162 13,918
Recreational facility……………………………………………2.25 - 5.00 480,000 - 40,000 440,000
School remodeling……………………………………………2.25 - 5.00 1,985,000 - 120,000 1,865,000
School remodeling……………………………………………2.50 - 4.25 130,000 - 10,000 120,000
Land acquisition 1……………………………………………2.50 - 4.10 14,445,000 - 565,000 13,880,000
Road, sidewalk and bikepath……………………………… 2.50 - 3.00 330,000 - 110,000 220,000
Recreational facility……………………………………………2.50 - 4.00 130,000 - 10,000 120,000
Planning……………………………………………………… 2.50 - 3.00 80,000 - 30,000 50,000
Public wharf 1…………………………………………………2.50 - 4.00 90,000 - 15,000 75,000
Assessors map……………………………………………… 2.50 - 4.00 40,000 - 5,000 35,000
Fire departmental equipment……………………………… 2.50 - 3.00 25,000 - 10,000 15,000
Departmental equipment……………………………………2.50 - 3.00 570,000 - 190,000 380,000
Computer hardware………………………………………… 2.50 - 4.00 440,000 - 55,000 385,000
Remodeling……………………………………………………2.50 - 4.13 495,000 - 30,000 465,000
Road and drainage……………………………………………2.50 - 3.00 315,000 - 105,000 210,000
Recreational facility 2…………………………………………2.50 - 4.00 170,000 - 15,000 155,000
Bulkhead………………………………………………………2.50 - 4.00 95,000 - 15,000 80,000
Public wharf 2…………………………………………………2.50 - 4.00 60,000 - 10,000 50,000
School Remodeling……………………………………………3.75 - 5.00 665,000 - 35,000 630,000
Planning………………………………………………………3.75 - 4.00 400,000 - 100,000 300,000
Outdoor Recreational Facility………………………………3.75 - 5.00 535,000 - 40,000 495,000
Fire departmental equipment………………………………3.75 - 4.00 280,000 - 70,000 210,000
Bath House Construction……………………………………3.75 - 5.00 235,000 - 15,000 220,000
Public Works Equipment……………………………………3.75 - 4.00 95,000 - 25,000 70,000
Land Acquisition………………………………………………3.75 - 5.00 295,000 - 20,000 275,000
Advance Refunding of 97 Land Bonds……………………3.75 - 5.00 17,815,000 - 110,000 17,705,000
MWPAT CW-04-19……………………………………………2.00 959,608 - 41,934 917,674
Children's Beach Ramp………………………………………3.00-5.00 200,000 - - 200,000
Public Safety Communications………………………………3.00-5.00 3,000,000 - - 3,000,000
Bikepath………………………………………………………3.00-5.00 650,000 - - 650,000
Fairgrounds Road……………………………………………3.00-5.00 1,375,000 - - 1,375,000
Fire Engine……………………………………………………3.00-5.00 - 450,000 - 450,000
Washington Street Building…………………………………3.00-5.00 - 200,000 - 200,000
Sidewalk Design………………………………………………3.00-5.00 - 25,000 - 25,000
South Shore Road Bike Path……………………………… 3.00-5.00 - 425,600 - 425,600
Nobadeer Farm Road Bike Path……………………………3.00-5.00 - 100,000 - 100,000
Study of Proporsed Bulk Fuel Facility………………………3.00-5.00 - 250,000 - 250,000
NES Building Improvements…………………………………3.00-5.00 200,000 - - 200,000
NES Building Improvements (2)……………………………3.00-5.00 - 400,000 - 400,000
CPS Building Improvements…………………………………3.00-5.00 390,000 - - 390,000
CPS Building Improvements (2)……………………………3.00-5.00 - 350,000 - 350,000
NHS Building Improvements…………………………………3.00-5.00 865,000 - - 865,000
NHS Building Improvements (2)……………………………3.00-5.00 - 725,000 - 725,000
MWPAT CW-05-21……………………………………………3.00-5.00 - 15,175,978 - 15,175,978
New School Playing Fields………………………………… 3.00-5.00 - 1,200,000 - 1,200,000
School Bus Lanes and Parking Lot Improvements………3.00-5.00 - 250,000 - 250,000
Total Governmental Bonds Payable……………………… $ 56,849,688 $ 19,551,578 $ 4,728,096 $ 71,673,170
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 50 Basic Financial Statements
Debt service requirements for principal and interest for Governmental bonds payable in future fiscal years are as
follows:
Fiscal Year Principal Interest Total
2009………………$ 6,476,815 $ 2,566,158 $ 9,042,973
2010……………… 6,337,765 2,265,192 8,602,957
2011……………… 5,827,402 2,008,747 7,836,149
2012……………… 5,817,262 1,776,224 7,593,486
2013……………… 4,437,359 1,568,616 6,005,975
2014……………… 4,302,699 1,406,047 5,708,746
2015……………… 4,383,287 1,233,349 5,616,636
2016……………… 4,384,110 1,065,156 5,449,266
2017……………… 4,475,214 896,554 5,371,768
2018……………… 4,001,585 737,548 4,739,133
2019……………… 2,068,230 628,588 2,696,818
2020……………… 2,040,154 558,269 2,598,423
2021……………… 2,026,217 486,642 2,512,859
2022……………… 2,003,723 415,352 2,419,075
2023……………… 1,956,530 343,827 2,300,357
2024……………… 1,859,645 273,040 2,132,685
2025……………… 818,075 227,518 1,045,593
2026……………… 801,829 203,973 1,005,802
2027……………… 694,594 182,601 877,195
2028……………… 632,779 162,830 795,609
2029……………… 566,286 145,921 712,207
2030……………… 580,123 132,084 712,207
2031……………… 594,299 117,908 712,207
2032……………… 608,820 103,386 712,206
2033……………… 623,697 88,510 712,207
2034……………… 638,937 73,270 712,207
2035……………… 654,549 57,657 712,206
2036……………… 670,543 41,663 712,206
2037……………… 686,928 25,279 712,207
2038……………… 703,714 8,494 712,208
Total………………$ 71,673,170 $ 19,800,403 $ 91,473,573
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 51 Basic Financial Statements
Bonds and Notes Payable Schedule – Enterprise Funds
Interest Outstanding Outstanding
Rate at June 30, at June 30,
Project (%) 2007 Issued Redeemed 2008
Sewer………………………………………………………… 4.00 - 5.00 $ 610,000 $ - $ 40,000 $ 570,000
MWPAT - 94-10………………………………………………Various 147,868 - 15,071 132,797
MWPAT CW-01-40……………………………………………2.00 - 5.50 1,656,114 - 78,124 1,577,990
Sewer………………………………………………………… 2.25 - 5.00 1,020,000 - 60,000 960,000
MWPAT Sewer 98-143………………………………………4.50 - 5.25 762,400 - 45,096 717,304
MWPAT Sewer 98-144………………………………………4.50 - 5.25 170,594 - 9,752 160,842
MWPAT Sewer 98-145………………………………………4.50 - 5.25 188,570 - 10,466 178,104
MWPAT CW-02-50-A…………………………………………Various 5,112,589 - 271,850 4,840,739
Sewer Department……………………………………………3.75 - 4.00 50,000 - 10,000 40,000
MWPAT CW-04-20……………………………………………2.00 3,994,925 - 157,555 3,837,370
MWPAT CW-02-50……………………………………………Various 4,015,365 - 138,551 3,876,814
MWPAT CW-05-21……………………………………………2.14 9,000,000 20,459,250 - 29,459,250
Stormwater Planning…………………………………………3.75 - 4.00 40,000 - 10,000 30,000
Cleaning Equipment…………………………………………3.00-5.00 165,000 - - 165,000
Sewer Construction………………………………………… 3.00-5.00 250,000 - - 250,000
Sewer………………………………………………………… 3.00-5.00 870,000 - - 870,000
Waste Water Treatment Facility……………………………3.00-5.00 - 398,013 - 398,013
Sewer………………………………………………………… 3.00-5.00 1,435,075 - - 1,435,075
Sewer Departmental Equipment……………………………3.00-5.00 - 150,000 - 150,000
Airport land acquisition…………………………………………4.00 - 4.25 380,000 - 95,000 285,000
Airport…………………………………………………………2.25 - 5.00 270,000 - 40,000 230,000
Airport departmental equipment……………………………2.50 - 3.00 90,000 - 30,000 60,000
Airport improvement…………………………………………2.50 - 4.00 1,360,000 - 195,000 1,165,000
Airport Improvement…………………………………………3.75 - 5.00 195,000 - 25,000 170,000
Airport Equipment……………………………………………3.75 - 4.00 200,000 - 50,000 150,000
Airport Equipment……………………………………………3.00 - 5.00 440,811 - - 440,811
Airport Equipment Refurbishment………………………… 3.00 - 5.00 676,500 - - 676,500
Airport Equipment (2)…………………………………………3.00 - 5.00 230,000 - - 230,000
Airport Equipment Refurbishment………………………… 3.00 - 5.00 175,000 - - 175,000
Water projects…………………………………………………4.00 - 5.00 805,000 - 60,000 745,000
Water meters…………………………………………………4.00 - 4.25 600,000 - 150,000 450,000
Current Refunding of Dec. 1991 Water……………………2.25 - 5.00 320,000 - 170,000 150,000
Water 1…………………………………………………………2.50 - 4.13 450,000 - 25,000 425,000
Water 2…………………………………………………………2.50 - 4.13 450,000 - 25,000 425,000
Land acquisition 2……………………………………………2.50 - 4.13 2,700,000 - 150,000 2,550,000
Water 1…………………………………………………………3.75 - 5.00 2,905,000 - 110,000 2,795,000
Water 2…………………………………………………………3.75 - 5.00 690,000 - 65,000 625,000
Water 3…………………………………………………………3.75 - 5.00 485,000 - 15,000 470,000
Garage & Maintenance Facility………………………………3.75 - 5.00 870,000 - 30,000 840,000
Rehab & Administration Building……………………………3.00-5.00 750,000 - - 750,000
Source Well & Pump…………………………………………3.00-5.00 1,300,000 - - 1,300,000
Water Storage Tank…………………………………………3.00-5.00 5,000,000 - - 5,000,000
Water Mains……………………………………………………3.00-5.00 1,250,000 - - 1,250,000
Water System Distribution Improvements…………………3.00-5.00 - 1,000,000 - 1,000,000
Water Mains (2)………………………………………………3.00-5.00 - 100,000 - 100,000
Water Meter……………………………………………………3.75 - 5.00 1,745,000 - 160,000 1,585,000
Water 4…………………………………………………………3.75 - 5.00 90,000 - 10,000 80,000
Solid waste facility……………………………………………2.50 - 4.13 90,000 - 5,000 85,000
Landfill cell……………………………………………………3.00-5.00 650,000 - - 650,000
Material recovery facility…………………………………… 3.00-5.00 - 350,000 - 350,000
Total Enterprise Bonds Payable……………………………$ 54,655,811 $ 22,457,263 $ 2,256,465 $ 74,856,609
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 52 Basic Financial Statements
Debt service requirements for principal and interest for enterprise fund bonds and notes payable in future fiscal
years are as follows:
Fiscal Year Principal Interest Total
2009………………$ 3,997,604 $ 2,561,835 $ 6,559,439
2010……………… 3,943,904 2,351,718 6,295,622
2011……………… 3,962,283 2,194,906 6,157,189
2012……………… 3,692,406 2,058,175 5,750,581
2013……………… 3,510,413 1,929,177 5,439,590
2014……………… 3,455,073 1,785,828 5,240,901
2015……………… 3,294,515 1,649,088 4,943,603
2016……………… 3,353,638 1,529,089 4,882,727
2017……………… 3,060,315 1,412,987 4,473,302
2018……………… 3,011,600 1,310,165 4,321,765
2019……………… 3,057,798 1,211,481 4,269,279
2020……………… 3,112,614 1,089,719 4,202,333
2021……………… 3,210,537 979,053 4,189,590
2022……………… 3,040,697 870,567 3,911,264
2023……………… 3,113,995 758,663 3,872,658
2024……………… 3,042,122 647,226 3,689,348
2025……………… 2,909,635 540,666 3,450,301
2026……………… 2,208,058 453,582 2,661,640
2027……………… 1,922,803 389,963 2,312,766
2028……………… 1,673,042 334,977 2,008,019
2029……………… 1,099,262 283,257 1,382,519
2030……………… 1,126,122 256,396 1,382,518
2031……………… 1,153,638 228,880 1,382,518
2032……………… 1,181,827 200,691 1,382,518
2033……………… 1,210,705 171,813 1,382,518
2034……………… 1,240,289 142,230 1,382,519
2035……………… 1,270,595 111,924 1,382,519
2036……………… 1,301,642 80,877 1,382,519
2037……………… 1,333,447 49,071 1,382,518
2038……………… 1,366,030 16,488 1,382,518
Total………………$ 74,856,609 $ 27,600,492 $ 102,457,101
Bonds and Notes Payable Schedule – Land Bank Component Unit
Interest Outstanding Outstanding
Rate at June 30, at June 30,
Project (%)2007 Issued Redeemed 2008
Land Bank Bonds and Notes Payable……………………6.03 $ 16,536,588 $ - $ 10,219,198 $ 6,317,390
Land Bank Bonds and Notes Payable……………………4.00 - 5.50 9,543,443 15,343,181 549,869 24,336,755
Total Land Bank Component Unit Bonds Payable………$ 26,080,031 $ 15,343,181 $ 10,769,067 $ 30,654,145
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 53 Basic Financial Statements
Debt service requirements for principal and interest for enterprise fund bonds and notes payable in future fiscal
years are as follows:
Fiscal Year Principal Interest Total
2009………………$ 2,986,919 $ 1,360,493 $ 4,347,412
2010……………… 1,347,452 1,192,871 2,540,323
2011……………… 1,403,469 1,129,442 2,532,911
2012……………… 1,474,991 1,062,262 2,537,253
2013……………… 1,542,042 988,150 2,530,192
2014-2018……… 8,891,284 3,674,765 12,566,049
2019-2023……… 7,821,535 1,760,811 9,582,346
2024-2028……… 5,186,453 545,789 5,732,242
Total………………$ 30,654,145 $ 11,714,583 $ 42,368,728
The Town is scheduled to be subsidized by the Massachusetts Water Pollution Abatement Trust (MWPAT) on a
periodic basis for principal in the amount of $2,469,067 and interest costs of $3,644,957. Thus, net MWPAT loan
repayments, including interest, are scheduled to be $54,511,297. The principal subsidies are guaranteed and
therefore a $2,469,067 intergovernmental receivable has been reported in the enterprise fund financial
statements. Since the Town is legally obligated for the total amount of the debt, such amounts have been
reported in the accompanying basic financial statements. The fiscal year 2008 principal and interest subsidies
totaled approximately $97,000 and $425,000, respectively.
The Land Bank’s notes payable are with various entities and bear interest at 6.063%. The notes payable balance
is amortized over periods of one to sixteen years. Bonds payable is comprised of the 1998 Series E Refunding
Bonds dated July 15, 1998, bear interest at rates ranging from 4.25% to 5.25% and mature serially from July 1,
2001 through July 1, 2019. The 2007 Series A Bonds dated December 4, 2007 bear interest at rates ranging
from 4% to 5.5% and mature serially from December 1, 2008 through December 1, 2027. The bonds are secured
by a second priority security interest in the Land Bank’s present and future transfer fees and unrestricted revenue.
The bonds are additionally secured by a guarantee of the Town.
The Town is subject to various debt limits by statute and may issue additional general obligation debt under the
normal debt limit.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 54 Basic Financial Statements
At June 30, 2008, the Town had the following authorized and unissued debt:
General Government
Purpose Amount
Bikepaths……………………………………………………$ 599,250
Fire Station Expansion……………………………………1,100,000
Wastewater……………………………...…………………451,976
Total General Government……………………………… $ 2,151,226
Enterprise
Purpose Amount
Siasconset Water………………………………………… $ 3,900,000
Sewer……………………………………………………… 40,918,487
Solid Waste…………………………………………………1,633,000
Nantucket Memorial Airport………………………………30,968,600
Wannacomet Water Company……………………………250,000
Total Enterprise……………….……………………………$ 77,670,087
Land Bank Component Unit
Purpose Amount
Land Bank …………………………………………………$ 1,271,969
Total…………………………………………………………$81,093,282
Changes in Long-term Liabilities
During the fiscal year ended June 30, 2008, the following changes occurred in long-term liabilities:
Balance at Balance at
June 30, June 30, Current
2007 Additions Reductions 2008 Portion
GOVERNMENTAL ACTIVITIES:
Long-Term Bonds and Notes……………$ 56,849,688 $ 19,551,578 $ (4,728,096) $ 71,673,170 $ 6,476,815
Compensated Absences………………… 1,569,469 - (288,125) 1,281,344 256,269
Workers' Compensation………………… 144,674 312,975 (363,313) 94,336 94,336
Total Governmental Funds………………$ 58,563,831 $ 19,864,553 $ (5,379,534) $ 73,048,850 $ 6,827,420
BUSINESS-TYPE ACTIVITIES:
Long-Term Bonds and Notes……………$ 54,655,811 $ 22,457,263 $ (2,256,465) $ 74,856,609 $ 3,997,604
Compensated Absences………………… 310,738 188,669 (89,750) 409,657 90,915
Total Business-type Funds……………… 54,966,549 22,645,932 (2,346,215) 75,266,266 4,088,519
LAND BANK COMPONENT UNIT:
Long-Term Bonds and Notes……………$ 26,080,031 15,343,181 (10,769,067) 30,654,145 2,986,919
Total……………………………………… $ 139,610,411 $ 57,853,666 $ (18,494,816) $ 178,969,261 $ 13,902,858
The governmental activities long-term liabilities are generally liquidated by the general fund.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 55 Basic Financial Statements
NOTE 8 – RISK FINANCING
The Town is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors
and omissions; and natural disasters for which the Town carries commercial insurance. The amount of claim
settlements has not exceeded insurance coverage in any of the previous three fiscal years.
The Town is self-insured for its health insurance and workers’ compensation activities. These activities are
accounted for in the internal service fund where revenues are recorded when earned and expenses are recorded
when the liability is incurred.
(a) Health Insurance
The estimate of Incurred But Not Reported (IBNR) claims is based on a three month claims paid average.
At June 30, 2008, the amount of the liability for health insurance claims totaled $710,419. This liability is
the best estimate based on available information. Changes in the reported liability since July 1, 2006, are
as follows:
Current Year
Balance at Claims and Balance at
Beginning of Changes in Claims Fiscal
Fiscal Year Estimate Payments Year-End
Fiscal Year 2007………..$ 639,480 $ 10,706,881 $ (10,674,083) $ 672,278
Fiscal Year 2008……….. 672,278 8,198,903 (8,160,762) 710,419
(b) Workers’ Compensation
Workers’ compensation claims are administered by a third party administrator and are funded on a pay-
as-you-go basis from a trust fund for workers compensation. Annual appropriations are made to add to
the trust fund. The estimated future workers’ compensation liability is based on history and injury type.
At June 30, 2008, the amount of the liability for workers’ compensation claims totaled $94,336. This
liability is the Town’s best estimate based on available information. Changes in the reported liability since
July 1, 2006, are as follows:
Current Year
Balance at Claims and Balance at
Beginning of Changes in Claims Fiscal
Fiscal Year Estimate Payments Year-End
Fiscal Year 2007………..$ 48,306 $ 281,898 $ (185,530) $ 144,674
Fiscal Year 2008……….. 144,674 312,975 (363,313) 94,336
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 56 Basic Financial Statements
NOTE 9 – PENSION PLAN
Plan Description - The Town and the County contribute to the Barnstable County Retirement Association (the
System), a cost-sharing multiple-employer defined benefit pension plan administered by the Barnstable County
Retirement Board. Substantially all employees of both the Town and County are members of the System, except
for public school teachers and certain administrators who are members of the Massachusetts Teachers
Retirement System, to which the Town does not contribute. Pension benefits and administrative expenses paid
by the Teachers Retirement Board are the legal responsibility of the Commonwealth. The amount of these on-
behalf payments totaled approximately $1,370,000 for the fiscal year ended June 30, 2008, and, accordingly, are
reported in the general fund as intergovernmental revenues and pension expenditures.
The System provides retirement, disability and death benefits to plan members and beneficiaries. Chapter 32 of
the MGL assigns authority to establish and amend benefit provisions of the plan. Cost-of-living adjustments
granted between 1981 and 1997 and any increase in other benefits imposed by the Commonwealth’s state law
during those years are borne by the Commonwealth and are deposited into the pension fund. Cost-of-living
adjustments granted after 1997 must be approved by the Barnstable County Retirement Board and are borne by
the System. The System issues a publicly available, unaudited, financial report in accordance with guidelines
established by the Commonwealth of Massachusetts’ Public Employee Retirement Administration Commission
(PERAC). That report may be obtained by contacting the System located at 99 Willow Street, Yarmouthport,
Massachusetts, 02675.
Funding Policy - Plan members are required to contribute to the System at rates ranging from 5% to 11% of
annual covered compensation. The Town and County are required to pay into the System their share of the
system-wide actuarial determined contribution that is apportioned among the employers based on active current
payroll. Administrative expenses are funded through investment earnings. Chapter 32 of the MGL governs the
contributions of plan members and the Town. The Town’s contributions to the System for the fiscal year ended
June 30, 2006, 2007 and 2008 totaled $2,761,460, $3,058,753, and $3,346,353 respectively, which equaled its
required contributions for each fiscal year. The County’s contribution to the System for the fiscal years ended
June 30, 2006, 2007 and 2008 were $112,420, $128,612 and $138,012 respectively, which equaled its required
contributions for each fiscal year.
The schedule of funding progress, presented as required supplementary information, following the notes to the
basic financial statements, presents multiyear trend information about whether the actuarial value of plan assets
is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Additionally, the
schedule of employer contributions, presented as required supplementary information, following the notes to the
basic financial statements, presents multiyear trend information for required and actual contributions relating to
the cost-sharing plan as a whole, of the Town is one participating employer, as well as the Town’s proportionate
share of the plan’s annual contributions. This information is designed to be helpful for understanding the scale of
the information presented relative to the Town.
NOTE 10 – COMMITMENTS
Construction Contracts:
The Town has a contract with Carlin Contracting for the Surfside Waste Water Treatment Facility upgrade and
expansion. At year end, the open contract totaled approximately $12,740,000.
The Town has a contract with Skanska USA Building, Inc. for construction of the new airport terminal. At year
end, the open contract totaled approximately $11,022,000.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 57 Basic Financial Statements
The Town has various contracts with Earth Tech that include air terminal design and expansion, wastewater and
drainage infrastructure evaluation and mapping, upgrades to and expansion of the Surfside Waste Water
Treatment Facility. At year end, open contracts totaled approximately $8,400,000.
The Town has contracts with C. C. Construction for sewer pipe and stormwater drainage construction. At year
end, open contracts totaled approximately $450,000.
The Town has contracts with Edwards & Kelcey, Inc. for airport engineering projects, and terminal design. At
year end, open contracts totaled approximately $410,000.
The Town has contracts with Haley & Ward, Inc. that include the work for Siasconset and Wannacomet Water
companies. At year end, open contracts totaled approximately $340,000.
Operating Contracts
The Town has a long-term contract with Waste Options, Inc. to operate the municipal landfill. The Town is
charged by tonnage, with annual increases based on changes in the Consumer Price Index. Some fixed costs,
fixed asset investments, and reimbursable expenses (transportation, disposal of construction and demolition
waste) are charged to the Town. In Fiscal Year 2008, the contract resulted in annual payments of approximately
$8,500,000.
The Town has entered into various contracts with Blue Cross Blue Shield for administration of the Town’s self-
funded medical insurance program, and for supplementary insurance for employees or retirees who are covered
by Medicare insurance. The contract resulted in annual payments of approximately $7,490,000 in Fiscal Year
2008, which includes reimbursement payments for direct medical care, hospitalization, and prescriptions. The
administrative cost portion of the contract is based on a monthly fee per enrolled member.
NOTE 11 – CONTINGENCIES
The Town participates in a number of federal award programs. Although the grant programs have been audited
in accordance with the provisions of the Single Audit Act Amendments of 1996 through June 30, 2008, these
programs are still subject to financial and compliance audits. The amount, if any, of expenditures which may be
disallowed by the granting agencies cannot be determined at this time, although it is expected such amounts, if
any, to be immaterial.
Various legal actions and claims are pending. Litigation is subject to many uncertainties, and the outcome of
individual litigated matters is not always predictable. Although the amount of liability, if any, at June 30, 2008,
cannot be ascertained, management believes any resulting liability should not materially affect the financial
position at June 30, 2008.
NOTE 12 – LAND BANK PRIOR YEAR ADJUSTMENT
During the fiscal year ended on June 30, 2008 the Land Bank recognized accrued post retirement benefits as
required by GASB Statement 45 – Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions.
Notes to Basic Financial Statements Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 58 Basic Financial Statements
As a result of implementing this pronouncement, the following restatements have been made to beginning net
assets:
Net Assets at June 30, 2007,
as previously reported…………………………… $ 183,470,161
To recognize liabilities related to
accrued post retirement benefits………………… (286,900)
Net Assets at June 30, 2007, restated…………… $ 183,183,261
NOTE 13 – IMPLEMENTATION OF NEW GASB PRONOUNCEMENTS
During fiscal year 2008, the Town has implemented the following GASB pronouncements:
The GASB issued Statement #43, Financial Reporting for Postemployment Benefit Plans Other Than Pension
Plans, which is required to be implemented in fiscal year 2009. Management elected to implement this standard
early. This standard did not impact the basic financial statements.
The GASB issued Statement #50, Pension Disclosures—an amendment of GASB Statements No. 25 and No. 27,
which was implemented in fiscal year 2008. This GASB changed the disclosures related to pensions.
The GASB issued Statement #52, Land and Other Real Estate Held as Investments by Endowments, which is
required to be implemented in fiscal year 2009. The standards in this statement require all investments in land
and real estate in permanent and similar funds to be reported at fair value Management elected to implement this
standard early. This standard did not impact the basic financial statements.
The GASB issued Statement #53, Accounting and Financial Reporting for Derivative Instruments, which is
required to be implemented in fiscal year 2010. The standards in this statement require governments to measure
most derivative instruments at fair value in their financial statements that are prepared using the economic
resources measurement focus and the accrual basis of accounting. Management elected to implement this
standard early. This standard did not impact the basic financial statements.
Future Implementation of GASB Pronouncements
The GASB issued Statement #45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions, which is required to be implemented in Fiscal 2009. Management believes this
pronouncement will require additional disclosure and impact the basic financial statements.
Town of Nantucket, Massachusetts 59 Required Supplementary Information
Required Supplementary Information
Amounts Current Year
Carried forward Initial Original Final
From Prior Year Budget Budget Budget
REVENUES:
Real estate and personal property taxes,
net of tax refunds……………………………………………$- $ 55,830,438 $ 55,830,438 $ 55,830,438
Tax liens………………………………………………………… - - - -
Motor vehicle and other excise taxes………………………… - 2,320,000 2,320,000 2,320,000
Hotel/motel tax…………………………………………………… - 1,315,000 1,315,000 1,315,000
Charges for services…………………………………………… - 4,985,200 4,985,200 4,985,200
Penalties and interest on taxes………………………………… - 410,000 410,000 410,000
Payments in lieu of taxes……………………………………… - - - -
Licenses and permits…………………………………………… - 1,650,000 1,650,000 1,650,000
Fines and forfeitures…………………………………………… - 412,000 412,000 412,000
Intergovernmental……………………………………………… - 1,765,354 1,765,354 1,765,354
Departmental and other………………………………………… - 221,000 221,000 221,000
Investment income……………………………………………… - 300,000 300,000 300,000
Miscellaneous…………………………………………………… - 895,000 895,000 895,000
TOTAL REVENUES………………………………………… - 70,103,992 70,103,992 70,103,992
EXPENDITURES:
Current:
General government………………………………………… 853,183 5,806,398 6,659,581 6,531,261
Public safety………………………………………………… 98,826 8,120,968 8,219,794 8,304,472
Education…………………………………………………… 281,116 21,173,921 21,455,037 21,197,321
Public works………………………………………………… 238,644 2,940,200 3,178,844 3,249,810
Human services……………………………………………… 148,413 6,064,512 6,212,925 6,375,707
Culture and recreation……………………………………… 49,731 2,219,800 2,269,531 2,175,971
Employee benefits…………………………………………… 19,180 10,037,000 10,056,180 9,714,564
State and county charges……………………………………… - 3,708,483 3,708,483 3,808,483
Debt service:
Principal……………………………………………………… - 6,449,000 6,449,000 6,449,000
Interest………………………………………………………… - 2,643,000 2,643,000 2,643,000
TOTAL EXPENDITURES…………………………………… 1,689,093 69,163,282 70,852,375 70,449,589
EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER)
EXPENDITURES………………………………………………… (1,689,093) 940,710 (748,383) (345,597)
OTHER FINANCING SOURCES (USES):
Transfers in……………………………………………………… - 642,400 642,400 642,400
Transfers out…………………………………………………… - (3,316,000) (3,316,000) (3,846,000)
TOTAL OTHER FINANCING SOURCES (USES)……… - (2,673,600) (2,673,600) (3,203,600)
NET CHANGE IN FUND BALANCE……………………………… (1,689,093) (1,732,890) (3,421,983) (3,549,197)
BUDGETARY FUND BALANCE, Beginning of year…………… 9,077,878 9,077,878 9,077,878 9,077,878
BUDGETARY FUND BALANCE, End of year……………………$ 7,388,785 $ 7,344,988 $ 5,655,895 $ 5,528,681
See notes to required supplementary information.
Budgeted Amounts
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL
FISCAL YEAR ENDED JUNE 30, 2008
Town of Nantucket, Massachusetts 60 Required Supplementary Information
Actual Amounts Variance
Budgetary Carried Forward To Final
Amounts To Next Year Budget
$ 55,368,768 $ - $ (461,670)
74,677 - 74,677
2,332,743 - 12,743
1,343,448 - 28,448
4,742,366 - (242,834)
409,101 - (899)
3,645 - 3,645
1,321,794 - (328,206)
266,693 - (145,307)
1,816,379 - 51,025
140,215 - (80,785)
549,686 - 249,686
664,193 - (230,807)
69,033,708 - (1,070,284)
5,312,105 1,201,397 17,759
7,869,360 327,117 107,995
21,041,055 98,401 57,865
2,873,069 319,588 57,153
6,094,152 189,900 91,655
2,114,417 5,750 55,804
8,711,895 370 1,002,299
3,808,483 - -
4,728,096 - 1,720,904
2,305,318 - 337,682
64,857,950 2,142,523 3,449,116
4,175,758 (2,142,523) 2,378,832
642,464 - 64
(3,846,000) - -
(3,203,536) - 64
972,222 (2,142,523) 2,378,896
9,077,878 - -
$ 10,050,100 $ (2,142,523) $ 2,378,896
Town of Nantucket, Massachusetts 61 Required Supplementary Information
Actuarial UAAL as a
Actuarial Accrued Unfunded Percentage
Actuarial Value of Liability (AAL) AAL Funded Covered of Covered
Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Date (A) (B) (B-A) (A/B) (C) ((B-A)/C)
1/1/1993 $ 97,194,645 $ 226,430,792 $ 129,236,147 42.9% $ 97,074,725 133.1%
1/1/1996 157,044,089 276,107,221 119,063,132 56.9% 108,456,079 109.8%
1/1/1998 235,247,660 404,215,695 168,968,035 58.2% 121,161,677 139.5%
1/1/2000 300,396,700 462,462,500 162,065,800 65.0% 152,293,100 106.4%
1/1/2002 362,911,896 553,531,966 190,620,070 65.6% 173,610,557 109.8%
1/1/2004 378,317,300 647,655,411 269,338,111 58.4% 190,614,004 141.3%
1/2/2006 465,637,984 765,747,723 300,109,739 60.8% 215,474,180 139.3%
1/1/2007 517,396,087 825,863,068 308,466,981 62.6% 226,391,633 136.3%
The Town's share of the UAAL, as of January 1, 2007, is approximately 8.9%.
See notes to required supplementary information.
Barnstable County Contributory Retirement System
Schedule of Funding Progress
Town of Nantucket, Massachusetts 62 Required Supplementary Information
(B/A)
Plan Year Annual (A) (B) Town's Percentage
Ended Required Actual Percentage Actual of System Wide
December 31 Contributions Contributions Contributed Contributions Actual Contributions
2005 $ 27,846,430 $ 27,846,430 100% $ 2,629,487 9.44%
2006 31,044,132 31,044,132 100% 2,761,460 8.90%
2007 34,360,912 34,360,912 100% 3,058,753 8.90%
The Town's Actual Contributions equaled 100% of its Required Contributions for each year presented.
See notes to required supplementary information.
Barnstable County Contributory Retirement System
Schedule of Employer Contributions
System Wide Town of Nantucket
Town of Nantucket, Massachusetts 63 Required Supplementary Information
Notes to Required Supplementary Information Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 64 Required Supplementary Information
NOTE A – BUDGETARY BASIS OF ACCOUNTING
Notes to Required Supplementary Information
1. Budgetary Information
Municipal Law requires the adoption of a balanced budget. The Town’s Finance Committee (Committee)
presents an annual budget to the Annual Town Meeting for adoption. Increases or decreases to the originally
adopted budget require approval at a Special Town Meeting. Transfers between and within departments
subsequent to the approval of the annual budget typically require approval at a Special Town Meeting.
The majority of appropriations are non-continuing which lapse at the end of each fiscal year. Others are
continuing appropriations for which the governing body has authorized that an unspent balance from a prior fiscal
year be carried forward and made available for spending in the current fiscal year. These carry forwards are
included as part of the subsequent fiscal year’s original budget.
Generally, expenditures may not exceed the legal level of spending (salaries, expenses and capital) authorized
for an appropriation account. However, the payment of debt service is statutorily required, regardless of whether
such amounts are appropriated. Additionally, expenditures for disasters, natural or otherwise, and final judgments
may exceed the level of spending authorized by two-thirds majority vote of the Committee.
An annual budget is adopted for the general fund in conformity with the guidelines described above. The Town’s
original fiscal year 2008 budget includes $74,168,375in appropriations and other amounts to be raised and
$1,689,093 in amounts carried forward from the previous fiscal year. During fiscal year 2008, the Town’s budget
was increased by $127,214.which includes subsequent appropriations as well as the use of available funds to
finance a legal settlement.
The Town Accountant’s office has the responsibility to ensure that budgetary control is maintained. Budgetary
control is exercised through the accounting system.
2. Budgetary - GAAP Reconciliation
For budgetary financial reporting purposes, the Uniform Municipal Accounting System basis of accounting
(established by the Commonwealth) is followed, which differs from the GAAP basis of accounting. A
reconciliation of budgetary-basis to GAAP-basis results for the general fund for the fiscal year ended June 30,
2008, is presented below:
Net change in fund balance - budgetary basis…………………$ 972,222
Basis of accounting differences:
Recognition of revenue based on available criteria…………… (239,163)
Accrued expenditures…………………………………………… (634,971)
Accrued payroll…………………….……………………………… 542,318
Recognition of bond proceeds received from MWPAT……… 15,175,978
Capital transfer of bond proceeds to the Sewer Enterprise… (15,175,978)
Recognition of revenue for on-behalf payments……………… 1,370,000
Recognition of expenditures for on-behalf payments………… (1,370,000)
Net change in fund balance - GAAP basis………………………$ 640,406
Notes to Required Supplementary Information Fiscal Year Ended June 30, 2008
Town of Nantucket, Massachusetts 65 Required Supplementary Information
NOTE B – PENSION PLAN
The Town and the County contribute to the Barnstable County Retirement Association (“Retirement System”), a
cost-sharing, multiple-employer defined benefit pension plan (“Plan”) administered by the Barnstable County
Retirement Board. The Retirement System provides retirement, disability, and death benefits to members and
beneficiaries. Chapter 32 of the MGL assigns authority to establish and amend benefit provisions of the Plan.
Plan members are required to contribute to the Retirement System at rates ranging from 5% to 11% of annual
covered compensation. The Town and County are required to pay into the Retirement System its share of the
systemwide actuarially determined contribution which is apportioned among the employers based on active
covered payroll.
The schedule of funding progress, presented as required supplementary information, following the notes to the
basic financial statements, presented multiyear trend information about whether the actuarial value of plan assets
is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Additionally, the
schedule of employer contributions, presented as required supplementary information, following the notes to the
basic financial statements, presents multiyear trend information for required and actual contributions relating to
the cost-sharing plan as a whole, of which the Town is one participating employer, as well as the Town’s
proportionate share of the plans annual contributions. This information is designed to be helpful for
understanding the scale of the information presented relative to the Town.
The following actuarial methods and assumptions were used in the Retirement System’s most recent actuarial
valuation:
Actuarial Methods and Assumptions:
Valuation Date…………………………………………………January 1, 2007
Actuarial Cost Method……………………………………… Entry Age Normal Cost Method
Amortization Method…………………………………………Increasing at 4.50% per year
Incentive, 21 years from July 1, 2007 for 2002 and
2003 Early Retirement Incentives and remaining
unfunded liability
Asset Valuation Method………………………………………5-year smoothing of investment returns greater (less)
than expected.
Actuarial Assumptions:
Investment rate of return……………………………………8.25%
Projected salary increases…………………………………5.00%
Cost of living adjustments………………………………… 3.0% for the first $12,000 of retirement income
Plan Membership:
Retired participants and beneficiaries receiving benefits…………………………………… 2,267
Terminated participants entitled to a return of their employee contributions……………… 670
Terminated participants with a vested right to a deferred or immediate benefit………… 117
Active participants……………………………………………………………………………… 5,314
Total……………………………………………………………………………………………… 8,368
Remaining Amortization Period………………………………1 year from July 1, 2007 for 1992 Early Retirement