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Fiscal Year 2012 Basic Financial StatementTOWN OF NANTUCKET, MASSACHUSETTS REPORT ON EXAMINATION OF BASIC FINANCIAL STATEMENTS FISCAL YEAR ENDED JUNE 30, 2012 TOWN OF NANTUCKET, MASSACHUSETTS REPORT ON EXAMINATION OF BASIC FINANCIAL STATEMENTS JUNE 30, 2012 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 ............................................................................................................................ 64  General Fund Budgetary Comparison Schedule ....................................................................................................... 65  Schedule of Revenues, Expenditures and Changes in Fund Balance – General Fund – Budget and Actual ...... 66  Retirement System Schedules ................................................................................................................................... 68  Retirement System Schedule of Funding Progress ............................................................................................... 69  Retirement System Schedule of Employer Contributions ...................................................................................... 70  Other Postemployment Benefit Schedules ................................................................................................................ 71  Other Postemployment Benefit Plan Schedule of Funding Progress and Employer Contributions ....................... 72  Other Postemployment Benefit Plan Actuarial Methods and Assumptions ........................................................... 73  Notes to Required Supplementary Information .......................................................................................................... 74  Nantucket County Component Unit Combining Statements ......................................................................................... 77  Nantucket County – Combining Balance Sheet ..................................................................................................... 79  Nantucket County – Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ........... 80  Additional Information .................................................................................................................................................... 81  Nantucket Planning and Economic Development Commission – Schedule of Indirect Cost Rate ........................ 82  Nantucket Planning and Economic Development Commission – Schedule of Public Support ............................. 83  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, the Nantucket County discretely presented component unit, and the aggregate remaining fund information of the Town of Nantucket, Massachusetts, as of and for the fiscal year ended June 30, 2012, 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 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. In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component units, each major fund, and the aggregate remaining fund information of the Town of Nantucket, Massachusetts, as of June 30, 2012, 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 October 31, 2012 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. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Town of Nantucket’s financial statements as a whole. The combining and individual fund statements and schedules, as listed in the table of contents, are presented for the purpose of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial 2 statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United State of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements taken as a whole. The Nantucket Planning and Economic Development Commission schedule of indirect cost rate and schedule of public support revenues and expenditures by grant, as listed in the table of contents, are presented for the purpose of additional analysis and are not a required part of the basic financial statements. We have applied certain limited procedures to these schedules, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the additional information. However, we did not audit the information and express no opinion on it. Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financials statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. October 31, 2012 Town of Nantucket, Massachusetts 3 Basic Financial Statements 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, 2012. 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 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 sick 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 and interest. The business-type activities include the activities of the sewer department, solid waste, airport, Our Island Home, 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 demonstrate compliance with finance-related legal requirements. All of the funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Town of Nantucket, Massachusetts 5 Basic Financial Statements 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, Our Island Home, 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. Town of Nantucket, Massachusetts 6 Basic Financial Statements Financial Highlights as of the close of fiscal year 2012  The total of assets exceeded liabilities (i.e., net assets) by $188 million for governmental activities, and $130 million for business-type activities.  Governmental funds reported combined ending fund balances of $38.8 million.  Unassigned fund balance for the general fund totaled $14.4 million.  Total governmental funds debt totaled $66.6 million, and total enterprise fund debt totaled $95.1 million. Government-wide Financial Analysis The following chart provides a summary of Governmental activities financial data for fiscal year 2012, with comparative fiscal year 2011 information. Governmental Activities Balance at Balance at June 30, June 30, 2012 2011 Assets: Current assets……………………………………………$ 51,366,752 $ 49,028,623 Noncurrent assets (excluding capital)………………… 159,445 227,651 Capital assets, not being depreciated………………… 178,612,012 197,704,996 Capital assets, net of accumulated depreciation…… 50,911,135 29,835,474 Total assets………………………………………… 281,049,344 276,796,744 Liabilities: Current liabilities (excluding debt)……………………… 6,331,757 6,937,422 Noncurrent liabilities (excluding debt)………………… 20,335,490 17,445,111 Current debt……………………………………………… 6,523,236 6,689,432 Noncurrent debt………………………………………… 60,036,071 62,489,407 Total liabilities……………………………………… 93,226,554 93,561,372 Net Assets: Capital assets net of related debt……………………… 182,940,477 177,625,537 Restricted………………………………………………… 2,459,409 3,150,056 Unrestricted……………………………………………… 2,422,904 2,459,785 Total net assets……………………………………$187,822,790 $183,235,378 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 $187.8 million at the close of fiscal year 2012. The largest portion of the Town’s net assets, $183 million, 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. Town of Nantucket, Massachusetts 7 Basic Financial Statements An additional portion of the net assets, $2.5 million, represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets, which reported a positive balance of $2.4 million, may be used to meet the government’s ongoing obligations to citizens and creditors. Governmental Activities June 30, June 30, 2012 2011 Program revenues: Charges for services……………………………………$ 4,072,262 $ 2,710,818 Operating grants and contributions…………………… 5,212,063 6,137,822 Capital grants and contributions……………………… 1,030,215 1,067,782 General revenues: Real estate and personal property taxes……………… 61,491,535 61,440,131 Tax liens………………………………………………… 371,752 507,919 Motor vehicle and other excise taxes………………… 2,066,878 1,867,286 Hotel and meals taxes………………………………… 2,745,571 2,726,360 Penalties and interest on taxes……………………… 687,221 633,008 Community preservation fund surtax………………… 1,724,556 1,666,540 Payments in lieu of taxes……………………………… 7,329 13,822 Nonrestricted grants and contributions……………… 307,901 935,761 Unrestricted investment income……………………… 173,698 65,960 Gain (loss) on sale of capital assets………………… 813,011 73,530 Miscellaneous revenues………………………………… 431,349 734,238 Total revenues……………………………………… 81,135,341 80,580,977 Expenses: General government…………………………………… 7,772,995 8,722,239 Public safety……………………………………………… 13,601,442 12,172,241 Education………………………………………………… 29,011,944 28,867,553 Public works……………………………………………… 4,692,304 4,082,163 Community preservation……………………………… 2,242,077 2,218,423 Human services………………………………………… 3,741,941 2,765,497 Culture and recreation………………………………… 2,170,903 2,119,755 Interest…………………………………………………… 2,082,337 2,354,427 Total expenses……………………………………… 65,315,943 63,302,298 Transfers and capital contributions…………………… (11,231,986) (8,967,926) Change in net assets……………………………………$4,587,412 $8,310,753 June 30, June 30, Increase 2012 2011 (Decrease) Net Assets: Capital assets net of related debt………………………$ 182,940,477 $ 177,625,537 $ 5,314,940 Restricted………………………………………………… 2,459,409 3,150,056 (690,647) Unrestricted……………………………………………… 2,422,904 2,459,785 (36,881) Total net assets……………………………………$187,822,790 $183,235,378 $4,587,412 Town of Nantucket, Massachusetts 8 Basic Financial Statements The governmental activities expenses totaled $65.3 million. Of that amount, $10.3 million was directly supported by program revenues consisting of charges for services, operating and capital grants and contributions. General revenues totaled $71 million, primarily coming from property taxes, motor vehicle excise, hotel/motel taxes, and community preservation surtaxes. The governmental activities also reported $11.2 million in net transfers to the enterprise fund which was for subsidies and transfers of capital. The Town realized a gain on sale of capital assets in fiscal year 2012 in the amount of $813,000 as a result of the sale of land that was previously in Tax Title and the sale of other various property easements. In total, governmental activities net assets increased by approximately $4.6 million in fiscal year 2012. The key components in this increase include the difference between the retirement of long-term debt ($6.7 million) which is raised in the general fund and the depreciation expense recorded on capital assets ($3.1 million); and the recognition of the amortization of the Town’s liability for Other Postemployment Benefits ($3 million). Overall revenue and expenses increased approximately $600,000 and $2 million, respectively, over FY2011 amounts. The revenue gains were mainly from increases in charges for services. The expense increases were mainly related to public safety, public works and human services. During fiscal year 2012, the Town transferred $22 million in capital assets from the non-depreciable construction in progress category to depreciable capital assets. The largest portion of this transfer related to the new public safety building. Town of Nantucket, Massachusetts 9 Basic Financial Statements The following chart provides a summary of Business-type activities financial data for fiscal year 2012, with comparative fiscal year 2011 information. Business-Type Activities Balance at Balance at June 30, June 30, 2012 2011 Assets: Current assets……………………………………………$ 36,952,078 $ 23,766,428 Noncurrent assets (excluding capital)………………… 1,926,873 2,052,589 Capital assets, not being depreciated………………… 35,533,925 53,031,956 Capital assets, net of accumulated depreciation…… 163,983,524 144,407,097 Total assets………………………………………… 238,396,400 223,258,070 Liabilities: Current liabilities (excluding debt)……………………… 2,916,348 3,640,054 Noncurrent liabilities (excluding debt)………………… 9,182,103 7,676,437 Current debt……………………………………………… 15,415,707 13,175,502 Noncurrent debt………………………………………… 81,065,978 76,157,893 Total liabilities……………………………………… 108,580,136 100,649,886 Net Assets: Capital assets net of related debt……………………… 119,950,372 119,408,316 Unrestricted……………………………………………… 9,865,892 3,199,868 Total net assets…………………………………… 129,816,264 122,608,184 Program revenues: Charges for services…………………………………… 32,847,185 27,568,533 Operating grants and contributions…………………… 746,499 1,287,762 Capital grants and contributions……………………… 4,041,191 3,307,275 General revenues: Unrestricted investment income……………………… 11,993 - Total revenues……………………………………… 37,646,868 32,163,570 Expenses: Water……………………………………………………… 4,357,175 4,290,667 Sewer…………………………………………………… 5,760,776 5,613,007 Solid Waste……………………………………………… 8,851,378 8,679,984 Airport…………………………………………………… 15,331,231 13,158,406 Our Island Home………………………………………… 6,923,716 7,165,650 Total expenses……………………………………… 41,224,276 38,907,714 Transfers and capital contributions…………………… 11,231,986 8,967,926 Change in net assets……………………………………$7,654,578 $2,223,782 Town of Nantucket, Massachusetts 10 Basic Financial Statements There was an increase of $7.7 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 2012 2011 (Decrease) Net Assets: Siasconset Water……………………………………… $ 4,984,254 $ 4,511,758 $ 472,496 Wannacomet Water Company………………………… 15,007,073 14,807,334 199,739 Nantucket Memorial Airport…………………………… 54,901,337 49,836,676 5,064,661 Sewer Enterprise Fund………………………………… 45,875,433 45,804,424 71,009 Solid Waste Enterprise Fund…………………………… 6,716,639 7,516,473 (799,834) Our Island Home………………………………………… 2,331,528 (314,979) 2,646,507 Total net assets……………………………………$129,816,264 $122,161,686 $7,654,578 One of the most significant factors of this change is the Nantucket Memorial Airport fund reporting a $5 million increase in net assets. The majority of the increase is related to transfers from the general fund to cover prior year deficits in the amount of $3.2 million. The remainder of the increase relates to capital grants reported for the construction of runway 33 and the administration building as the related costs for these projects were fully capitalized. On the operating side, the increases in airport charges for services and expenses were primarily related to the increased cost of jet fuel. The Our Island Home enterprise fund reported a $2.6 million increase in net assets mainly due to an increase in Medicaid revenue received. At the end of the current fiscal year, the Town reports $130 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, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, governmental funds reported combined ending fund balances of $38.8 million, of which $18.5 million is reported in the general fund, $5.4 million is reported in the Town capital projects major fund and $14.9 million is reported as nonmajor governmental funds. The general fund is the Town’s chief operating fund. At the end of fiscal year 2012, unassigned fund balance of the general fund totaled $14.4 million, while committed and assigned fund balances totaled $4 million. In according with accounting standards, the stabilization fund is reported within the unassigned balance of the general fund and had a year end fund balance totaling $3.8 million. Town of Nantucket, Massachusetts 11 Basic Financial Statements During fiscal year 2012, total general fund balance showed a decrease of ($314,000). This was the net result of approximately $5 million in free cash (unreserved fund balance) voted to fund the current year budget as well as to subsidize the Town’s enterprise funds, and positive budgetary results. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 19% of total general fund expenditures and transfers out, while total fund balance represents 25% of that same amount. Approximately $607,000 of the assigned fund balance was designated at year end to support the 2013 budget. An additional $1.5 million was assigned for year-end encumbrances and $2 million was committed for carry-over appropriations and articles. The Town Capital Projects major fund is used to account for major capital acquisitions, primarily financed through long-term borrowing. The Capital Projects fund experienced an increase of $3.4 million in fund balance when compared to prior year. The key component to the increase relates to the Town recognizing $3.2 million in bond proceeds in the current year utilized to fund prior year expenditures related to the public safety building construction. The building became operational in fiscal year 2012. The Town also maintains a community preservation fund, classified within the nonmajor governmental funds which had a year end fund balance of $5.9 million. 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 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 2012, the Town earned and accrued a year end receivable for state matching community preservation funds, of approximately $497,000. 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 $76.5 million. Changes during the year consisted largely of allocations between and among departments and appropriations from free cash and prior year articles used mainly to subsidize the operations of the Town’s enterprise funds. Total actual revenue was higher than estimated revenue by $1.9 million, mainly attributable to real estate and tax lien, hotel and meals taxes, and departmental receipts. At year end, outstanding purchase orders and carry-over appropriations and articles totaled approximately $3.5 million, which is reported as committed and assigned in fund balance at year end. The total of actual expenditures and the amounts reserved for future expenditures was lower than the final budget by approximately $3.2 million, a positive variance. None of the Towns expenditures exceeded the available appropriations. Capital Asset and Debt Administration Capital Assets 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. Town of Nantucket, Massachusetts 12 Basic Financial Statements The Town’s investment in capital assets for its governmental and business-type activities as of June 30, 2012, totals $230 million and $199.5 million, respectively (net of accumulated depreciation). This investment in capital assets includes land, buildings, land improvements, equipment, vehicles and infrastructure. Current year fixed asset additions totaled $5 million for governmental activities, and $8.4 million for business-type activities. The Town also placed in service $22 million in governmental assets previously reported as construction in progress, primarily related to the new public safety building. The Town placed $24 million in business-type assets previously reported as construction in progress, primarily related to airport construction. Long-term and Short-term Debt At the end of the current fiscal year, the Town of Nantucket had total long and short-term debt outstanding of $161.6 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, $10 million is in short-term notes and the remaining $151 million is outstanding long- term debt. The governmental fund portion of the outstanding debt is $66.5 million. The enterprise funds’ portion of the outstanding debt is $95 million. Governmental Enterprise Funds Funds Total Short-term debt……………………………$ 1,000,000 $ 8,968,090 $ 9,968,090 Current portion of long-term debt……… 5,496,334 5,067,015 10,563,349 Noncurrent portion of long-term debt…… 59,973,182 81,065,978 141,039,160 Total………………………………………$ 66,469,516 $ 95,101,083 $ 161,570,599 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 In fiscal year 2012, total assessed value of taxable property in the Town decreased by $364,259,714 or 2%. Tax limitation laws in Massachusetts are primarily limits on tax revenue which consist of the prior year’s levy base, plus 2.5%, plus revenue from new growth, plus any voter approved increases. The allowable increases to the levy base for 2012 were $1,353,830 (2.5%) and $518,585 for new growth (.9%). The allowable tax levy was further increased by debt payments on voter authorized borrowing. The tax limitation laws protect municipalities from fluctuations in real estate values, whether those values are increasing or decreasing, by forcing the tax rate to move in the opposite direction. In a declining real estate market, tax rates increase to raise the allowable revenue. The residential rate for 2012 was $3.62 per $1,000 of assessed value. The average residential assessed value was $1,489,345 million in 2012, a decrease of 2.4% from 2011. The 2012 Annual and Special Town Meetings approved a fiscal year 2013 total budget of $102,697,914 million, including a total general fund budget of $76,038,855 million. Requests for Information This financial report is designed to provide a general overview of the Town of Nantucket’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, 16 Broad Street, Nantucket, Massachusetts 02554. Town of Nantucket, Massachusetts 13 Basic Financial Statements Basic Financial Statements Primary Government Governmental Business-type Activities Activities Total ASSETS CURRENT: Cash and cash equivalents………………………………………………………….$ 37,661,060 $ 31,637,581 $ 69,298,641 Investments…………………………………………………………………………… 3,304,595 309,929 3,614,524 Investments, restricted……………………………………………………………… - - - Receivables, net of allowance for uncollectibles: Real estate and personal property taxes……………………………………… 3,472,823 - 3,472,823 Tax and trash liens………………………………………………………………… 2,538,594 - 2,538,594 Motor vehicle and other excise taxes…………………………………………… 174,010 - 174,010 User fees…………………………………………………………………………… 4,555 3,822,355 3,826,910 Departmental and other…………………………………………………………… 133,579 - 133,579 Special assessments……………………………………………………………… 25,171 49,532 74,703 Intergovernmental………………………………………………………………… 2,182,676 756,670 2,939,346 Deferred loss on refunding…………..……………………………………………… 68,206 - 68,206 Inventory……………………………………………………………………………… - 357,236 357,236 Working capital deposit……………………………………………………………… 1,810,600 - 1,810,600 Other assets…………………………………………………………………………… 9,658 - 9,658 Internal balances……………………………………………………………………… (18,775) 18,775 - NONCURRENT: Restricted assets: Cash and cash equivalents……………….……………………………………… - - - Investments………………………………………………………………………… - - - Cash surrender value of life insurance………………………………………… - - - Receivables, net of allowance for uncollectibles: Intergovernmental………………………………………………………………… - 1,883,355 1,883,355 Special assessments……………………………………………………………… - 43,518 43,518 Deferred loss on refunding…………………………………………………………… 159,445 - 159,445 Land conservation rights……………………...……………………………………… - - - Capital assets, not being depreciated……………………...……………………… 178,612,012 35,533,925 214,145,937 Capital assets, net of accumulated depreciation…………………………………… 50,911,135 163,983,524 214,894,659 TOTAL ASSETS………………………………………………………………………… 281,049,344 238,396,400 519,445,744 LIABILITIES CURRENT: Warrants payable……………………………………………………………………… 696,808 1,158,216 1,855,024 Accrued liabilities……………………………………………………………………… 34,751 32,701 67,452 Accrued payroll………………………………………………………………………… 1,503,698 165,360 1,669,058 Health claims payable………………………………………………………………… 778,820 - 778,820 Accrued interest……………………………………………………………………… 809,658 1,057,955 1,867,613 Payroll withholdings…………………………………………………………………… - - - Security deposits……………………………………………………………………… - 331,928 331,928 Abandoned property………………………………………………………………… 1,507,511 - 1,507,511 Other liabilities………………………………………………………………………… 674,329 51,300 725,629 Compensated absences……………………………………………………………… 236,672 118,888 355,560 Workers' compensation……………………………………………………………… 89,510 - 89,510 Notes payable………………………………………………………………………… 1,000,000 8,968,090 9,968,090 Bonds and notes payable…………………………………………………………… 5,523,236 6,447,617 11,970,853 NONCURRENT: Landfill closure………………………………………………………………………… - 4,029,000 4,029,000 Compensated absences……………………………………………………………… 946,690 475,555 1,422,245 Workers' compensation……………………………………………………………… - - - Court judgments……………………………………………………………………… - - - Unamortized premium on bonds and notes payable……………………………… - - - Other postemployment benefits……………………………………………………… 19,388,800 4,677,548 24,066,348 Bonds and notes payable…………………………………………………………… 60,036,071 81,065,978 141,102,049 TOTAL LIABILITIES……………………………………………………………………… 93,226,554 108,580,136 201,806,690 NET ASSETS Invested in capital assets, net of related debt………………………………………… 182,940,477 119,950,372 302,890,849 Restricted for: Debt service………………………………………………………...………………… - - - Permanent funds: Expendable……….………………………………………………………………… 27,779 - 27,779 Nonexpendable…………………………………………………………………… 44,305 - 44,305 Gifts and grants……………………………………………………………………… 2,387,325 - 2,387,325 Unrestricted………………………………………………………………………………… 2,422,904 9,865,892 12,288,796 TOTAL NET ASSETS……………………………………………………………………$ 187,822,790 $ 129,816,264 $ 317,639,054 See notes to basic financial statements. STATEMENT OF NET ASSETS JUNE 30, 2012 Town of Nantucket, Massachusetts 14 Basic Financial Statements Nantucket Islands County Land Bank Total $ 2,821,856 $ 2,913,644 $ 5,735,500 - 5,670,079 5,670,079 - 1,171,692 1,171,692 - - - - - - - - - - - - - 175,586 175,586 - - - - - - - - - - 214,788 214,788 - - - 247,347 355,693 603,040 - - - - 1,829,499 1,829,499 - 2,847,448 2,847,448 - 646,696 646,696 - - - - - - - - - - 30,000 30,000 28,458 240,424,440 240,452,898 66,954 16,500,932 16,567,886 3,164,615 272,780,497 275,945,112 995 298,420 299,415 - 396,277 396,277 3,337 - 3,337 - - - - - - 9,424 - 9,424 - - - - - - 37,928 - 37,928 - - - - - - - - - - 4,764,125 4,764,125 - - - - - - - - - - - - - - - 169,652 348,900 518,552 - 29,853,741 29,853,741 221,336 35,661,463 35,882,799 95,412 222,310,006 222,405,418 - 4,676,947 4,676,947 - - - - - - - - - 2,847,867 10,132,081 12,979,948 $ 2,943,279 $ 237,119,034 $ 240,062,313 Component Units Town of Nantucket, Massachusetts 15 Basic Financial Statements Operating Capital Charges for Grants and Grants and Net (Expense) Functions Expenses Services Contributions Contributions Revenue Primary Government: Governmental Activities: General government…………………… $ 7,772,995 $ 741,512 $ 686,576 $ - $ (6,344,907) Public safety……………………………… 13,601,442 1,668,420 525,627 - (11,407,395) Education………………………………… 29,011,944 780,977 3,607,586 - (24,623,381) Public works……………………………… 4,692,304 276,502 224,840 513,177 (3,677,785) Community preservation………………… 2,242,077 - - 517,038 (1,725,039) Human services………………………… 3,741,941 82,788 67,071 - (3,592,082) Culture and recreation…………………… 2,170,903 522,063 100,363 - (1,548,477) Interest…………………………………… 2,082,337 - - - (2,082,337) Total Governmental Activities………… 65,315,943 4,072,262 5,212,063 1,030,215 (55,001,403) Business-Type Activities: Water……………………………………… 4,357,175 5,059,598 230,778 - 933,201 Sewer……………………………………… 5,760,776 5,489,598 342,187 - 71,009 Solid waste………………………………… 8,851,378 3,060,459 - - (5,790,919) Airport……………………………………… 15,331,231 12,939,901 168,330 4,041,191 1,818,191 Our Island Home………………………… 6,923,716 6,297,629 5,204 - (620,883) Total Business-Type Activities……… 41,224,276 32,847,185 746,499 4,041,191 (3,589,401) Total Primary Government……………$ 106,540,219 $ 36,919,447 $ 5,958,562 $ 5,071,406 $(58,590,804) Component Units: County……………………………………… 1,155,618 538,808 636,705 401,815 421,710 Land Bank………………………………… 5,831,601 14,652,988 1,566,321 - 10,387,708 Total Component Units………………. $ 6,987,219 $ 15,191,796 $ 2,203,026 $ 401,815 $10,809,418 See notes to basic financial statements.(Continued) Program Revenues STATEMENT OF ACTIVITIES FISCAL YEAR ENDED JUNE 30, 2012 Town of Nantucket, Massachusetts 16 Basic Financial Statements Nantucket Governmental Business-Type Islands Activities Activities Total County Land Bank Total Changes in net assets: Net (expense) revenue from previous page…………$(55,001,403) $(3,589,401) $(58,590,804) $421,710 $10,387,708 $10,809,418 General revenues: Real estate and personal property taxes, net of tax refunds payable……………………… 61,491,535 - 61,491,535 - - - Tax liens…………………………………………… 371,752 - 371,752 - - - Motor vehicle and other excise taxes…………… 2,066,878 - 2,066,878 - - - Hotel and meals taxes…………………………… 2,745,571 - 2,745,571 - - - Penalties and interest on taxes………………… 687,221 - 687,221 - - Community Preservation Fund surcharges…… 1,724,556 - 1,724,556 - - - Payments in lieu of taxes………………………… 7,329 - 7,329 - - Grants and contributions not restricted to specific programs………………………………… 307,901 - 307,901 - - - Unrestricted investment income………………… 173,698 11,993 185,691 - - - Gain/(loss) on sale of capital assets…………… 813,011 - 813,011 - (48,991) (48,991) Miscellaneous……………………………………… 431,349 - 431,349 151,654 - 151,654 Capital contributions………………………………… (28,355) 28,355 - - - - Transfers, net………………………………………… (11,203,631) 11,203,631 - - - - Total general revenues and transfers……………… 59,588,815 11,243,979 70,832,794 151,654 (48,991) 102,663 Change in net assets…………………………… 4,587,412 7,654,578 12,241,990 573,364 10,338,717 10,912,081 Net Assets: Beginning of year, as restated…………………… 183,235,378 122,161,686 305,397,064 2,369,915 226,780,317 229,150,232 End of year………………………………………… $ 187,822,790 $ 129,816,264 $ 317,639,054 $ 2,943,279 $ 237,119,034 $ 240,062,313 (Concluded) Primary Government Component Units STATEMENT OF ACTIVITIES (Continued) FISCAL YEAR ENDED JUNE 30, 2012 Town of Nantucket, Massachusetts 17 Basic Financial Statements Component Nonmajor Total Unit - Town Governmental Governmental Nantucket ASSETS General Capital Projects Funds Funds County Cash and cash equivalents…………………………………$ 17,197,704 $ 5,370,795 $ 15,092,561 $ 37,661,060 $ 2,821,856 Investments…………………………………………………… 2,943,522 - 87,333 3,030,855 - Receivables, net of uncollectibles: Real estate and personal property taxes……………… 3,371,036 - 101,787 3,472,823 - Tax liens ……………………….………………………… 2,499,570 - 39,024 2,538,594 - Motor vehicle and other excise taxes………………… 174,010 - - 174,010 - User fees………………………………………………… 4,555 - - 4,555 - Departmental and other………………………………… 951 - 132,628 133,579 - Special assessments…………………………………… -- 25,171 25,171 - Intergovernmental………………………………………… 342,729 - 1,839,947 2,182,676 - Due from other funds………………………………………… 555,126 - - 555,126 - Other assets………………………………………………… 9,658 - - 9,658 247,347 TOTAL ASSETS…………………………………………… $ 27,098,861 $ 5,370,795 $ 17,318,451 $ 49,788,107 $ 3,069,203 LIABILITIES AND FUND BALANCES LIABILITIES: Warrants payable…………………………………………$ 464,476 $ 15,217 $ 211,006 $ 690,699 $ 995 Accrued liabilities………………………………………… 34,751 - - 34,751 - Accrued payroll…………………………………………… 1,471,230 - 32,468 1,503,698 3,337 Payroll withholdings……………………………………… - - - - 9,424 Abandoned property……………………………………… 1,507,511 - - 1,507,511 - Other liabilities…………………………………………… 401,692 - 272,637 674,329 37,928 Deferred revenues……………………………………… 4,643,054 - 332,448 4,975,502 - Due to other funds……………………………………… 78,316 - 572,569 650,885 - Notes payable…………………………………………… - - 1,000,000 1,000,000 - TOTAL LIABILITIES………………………………………… 8,601,030 15,217 2,421,128 11,037,375 51,684 FUND BALANCES: Nonspendable…………………………………………… - - 44,305 44,305 - Restricted………………………………………………… - 5,355,578 14,957,124 20,312,702 1,647,742 Committed………………………………………………… 1,941,738 - - 1,941,738 - Assigned………………………………………………… 2,182,323 - - 2,182,323 - Unassigned……………………………………………… 14,373,770 - (104,106) 14,269,664 1,369,777 TOTAL FUND BALANCES………………………………… 18,497,831 5,355,578 14,897,323 38,750,732 3,017,519 TOTAL LIABILITIES AND FUND BALANCES……………$ 27,098,861 $ 5,370,795 $ 17,318,451 $ 49,788,107 $ 3,069,203 See notes to basic financial statements. JUNE 30, 2012 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, 2012 Total governmental fund balances……………………………………………………………………… $ 38,750,732 Capital assets (net) used in governmental activities are not financial resources and, therefore, are not reported in the funds…………………………………………………… 229,523,147 Accounts receivable are not available to pay for current-period expenditures and, therefore, are deferred in the funds………………………………………… 4,975,502 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……………………………… 1,376,395 In the statement of activities, interest is accrued on outstanding long-term debt, whereas in governmental funds interest is not reported until due……………………………… (809,658) Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds Bonds payable…………………………………………………………………………………… (64,559,307) Unamortized premiums on bonds and notes………………………………………………… (1,000,000) Workers' compensation………………………………………………………………………… (89,510) Compensated absences………………………………………………………………………… (1,183,362) Other postemployment benefits………………………………………………………………… (19,388,800) Net effect of reporting long-term liabilities……………………………………………… (86,220,979) 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…………………………………… 227,651 Net assets of governmental activities………………………………………………………………… $ 187,822,790 See notes to basic financial statements. Town of Nantucket, Massachusetts 19 Basic Financial Statements Component Nonmajor Total Unit - Town Governmental Governmental Nantucket General Capital Projects Funds Funds County REVENUES: Real estate and personal property taxes, net of tax refunds…………………………………………………$ 61,795,660 $ - $ - $ 61,795,660 $ - Tax liens……………………………………………………………… 325,055 - - 325,055 - Motor vehicle and other excise taxes…………………………… 1,948,316 - 38,584 1,986,900 - Hotel and meals taxes……………………………………………… 2,745,571 - - 2,745,571 - Charges for services……………………………………………… 83,315 - 107,455 190,770 - Community Preservation surcharges…………………………… - - 1,724,556 1,724,556 - Penalties and interest on taxes…………………………………… 681,176 - 6,045 687,221 - Payments in lieu of taxes………………………………………… 7,329 - - 7,329 - Licenses and permits……………………………………………… 1,058,052 - - 1,058,052 - Fines and forfeitures……………………………………………… 223,054 - - 223,054 - Intergovernmental………………………………………………… 3,997,021 - 3,283,948 7,280,969 401,815 Departmental and other…………………………………………… 1,592,320 - 4,463,952 6,056,272 1,320,289 Investment income………………………………………………… 152,279 - 12,657 164,936 6,878 TOTAL REVENUES………………………………………… 74,609,148 - 9,637,197 84,246,345 1,728,982 EXPENDITURES: Current: County administration…………………………………………… - - - - 295,105 Registry of deeds……………………………………………… - - - - 477,412 Special projects………………………………………………… - - - - 380,695 General government…………………………………………… 7,179,875 20,690 428,232 7,628,797 - Public safety…………………………………………………… 8,487,197 108,726 1,554,038 10,149,961 - Education………………………………………………………… 22,496,281 - 2,377,203 24,873,484 - Public works……………………………………………………… 2,582,349 34,005 751,682 3,368,036 - Community preservation……………………………………… - - 2,660,023 2,660,023 - Human services………………………………………………… 1,042,313 - 262,961 1,305,274 - Culture and recreation………………………………………… 1,147,001 - 345,925 1,492,926 - Pension benefits………………………………………………… 5,345,749 - - 5,345,749 - Employee benefits……………………………………………… 6,134,157 - - 6,134,157 - State and county charges………………………………………… 531,772 - - 531,772 - Debt service: Principal………………………………………………………… 6,656,685 - 1,170 6,657,855 - Interest…………………………………………………………… 2,171,097 - - 2,171,097 - TOTAL EXPENDITURES…………………………………… 63,774,476 163,421 8,381,234 72,319,131 1,153,212 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES…………………………………………………… 10,834,672 (163,421) 1,255,963 11,927,214 575,770 OTHER FINANCING SOURCES (USES): Proceeds from bonds and notes………………………………… - 3,200,000 - 3,200,000 - Proceeds from refunding bonds…………………………………… 1,329,900 - - 1,329,900 - Premium from issuance of refunding bonds……………………… 212,513 - - 212,513 - Payments to refunded bond escrow agent……………………… (1,519,037) - - (1,519,037) - Transfers in………………………………………………………… 106,831 561,074 341,070 1,008,975 474,202 Transfers out………………………………………………………… (11,278,447) (179,206) (951,953) (12,409,606) (474,202) TOTAL OTHER FINANCING SOURCES (USES)……… (11,148,240) 3,581,868 (610,883) (8,177,255) - NET CHANGE IN FUND BALANCES……………………………… (313,568) 3,418,447 645,080 3,749,959 575,770 FUND BALANCES AT BEGINNING OF YEAR…………………… 18,811,399 1,937,131 14,252,243 35,000,773 2,441,749 FUND BALANCES AT END OF YEAR………………………………$ 18,497,831 $ 5,355,578 $ 14,897,323 $ 38,750,732 $ 3,017,519 See notes to basic financial statements. GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FISCAL YEAR ENDED JUNE 30, 2012 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, 2012 Net change in fund balances - total governmental funds…………………………………………………… $ 3,749,959 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………………………………………………………………………………………… 5,047,157 Depreciation expense………………………………………………………………………………… (3,064,480) Net effect of reporting capital assets………………………………………………………… 1,982,677 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…………………………………………………………………… (854,845) 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…………………………………………………………………… (3,200,000) Debt service principal payments…………………………………………………………………… 6,657,855 Net effect of reporting long-term debt……………………………………………………… 3,457,855 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…………………………………………………… 110,020 Net change in accrued interest on long-term debt………………………………………………… 113,864 Net change in workers' compensation……………………………………………………………… 159,864 Amortization of issuance costs……………………………………………………………………… 130,094 Amortization of deferred charge on refunding……………………………………………………… (80,056) Amortization of premiums on bonds and notes payable………………………………………… 31,577 Other postemployment benefits…………………………………………………………………… (2,978,395) Net effect of recording long-term liabilities and amortizing deferred losses…………… (2,513,032) 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…………… (1,235,202) Change in net assets of governmental activities…………………………………………………………… $ 4,587,412 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……………………………….………………$ 915,397 $ 7,400,158 $ 2,147,596 $ 11,533,140 Restricted cash and cash equivalents……………………………..…… - - - - Investments………………………………………………………………… - - - - Receivables, net of allowance for uncollectibles: Land Bank accounts…………………………………………………… - - - - User fees………………………………………………………………… 225,739 911,574 395,539 1,002,339 Sewer privilege fees…………………………………………………… - 49,532 - - Intergovernmental……………………………………………………… - 133,831 - 622,839 Inventory…………………………………………………………………… - - - 227,213 Working capital deposit…………………………………………………… - - - - Other assets………………………………………………………………… - - - - Land deposits…………………………………………….………………… - - - - Due from other funds……………………………………………………… 78,021 461,644 - 18,775 Total current assets………………………………………………… 1,219,157 8,956,739 2,543,135 13,404,306 NONCURRENT: Receivables, net of allowance for uncollectibles: Intergovernmental……………………………………………………… - 1,883,355 - - Sewer privilege fees…………………………………………………… - 43,518 - - Restricted cash and cash equivalents…………………………..……… - - - - Restricted investments…………………………………………………… - - - - Cash surrender value of life insurance…………………………………… - - - - Land conservation rights…………………………………………………… - - - - Capital assets, not being depreciated……………………...…………… 3,498,323 13,933,196 2,651,406 11,166,924 Capital assets, net of accumulated depreciation……………………… 8,516,935 68,521,849 6,369,948 51,335,315 Total noncurrent assets…………………………………………… 12,015,258 84,381,918 9,021,354 62,502,239 TOTAL ASSETS……………………………………………………………… 13,234,415 93,338,657 11,564,489 75,906,545 LIABILITIES CURRENT: Warrants payable…………………………………………………………… 3,596 84,520 140,315 780,548 Accrued liabilities…………………………………………………………… 5,003 - - 19,925 Accrued payroll……………………………………………………………… 411 15,100 563 58,271 Health claims payable……………………………………………………… - - - - Security deposits…………………………………………………………… - - - 331,928 Accrued interest…………………………………………………………… 108,387 561,056 8,736 95,130 Other liabilities……………………………………………………………… - - - 51,300 Due to other funds………………………………………………………… - - - - Compensated absences…………………………………………………… - 7,395 - 54,095 Notes payable……………………………………………………………… - - - 8,968,090 Bonds payable……………………………………………………………… 660,820 2,517,997 110,000 919,964 Total current liabilities……………………………………………… 778,217 3,186,068 259,614 11,279,251 NONCURRENT: Landfill closure……………………………………………………………… - - 4,029,000 - Compensated absences…………………………………………………… - 29,582 - 216,381 Notes payable……………………………………………………………… - - - - Other postemployment benefits…………………………………………… 96,944 266,596 24,236 1,599,576 Bonds payable……………………………………………………………… 7,375,000 43,980,978 535,000 7,910,000 Total noncurrent liabilities………………………………………… 7,471,944 44,277,156 4,588,236 9,725,957 TOTAL LIABILITIES…………………………………………………………… 8,250,161 47,463,224 4,847,850 21,005,208 NET ASSETS Invested in capital assets, net of related debt……………………………… 4,767,478 41,130,505 8,886,354 51,275,849 Restricted……………………………………………………………………… - - - - Unrestricted: Undesignated……………………………………………………………… 216,776 4,744,928 (2,169,715) 3,625,488 TOTAL NET ASSETS…………………………………………………………$ 4,984,254 $ 45,875,433 $ 6,716,639 $ 54,901,337 See notes to basic financial statements. PROPRIETARY FUNDS STATEMENT OF NET ASSETS JUNE 30, 2012 Business-type Activities - Enterprise Funds Town of Nantucket, Massachusetts 22 Basic Financial Statements Component Unit Governmental Wannacomet Our Total Activities - Water Island Business-Type Internal Service Nantucket Islands Company Home Activities Fund Land Bank $ 6,336,816 $ 3,304,474 $ 31,637,581 $ - $ 2,913,644 - - - - 1,171,692 - 309,929 309,929 273,740 5,670,079 - - - - 175,586 521,398 765,766 3,822,355 - - - - 49,532 - - - - 756,670 - - 130,023 - 357,236 - 214,788 - - - 1,810,600 - - - - - 353,193 - - - - 2,500 - - 558,440 76,984 - 6,988,237 4,380,169 37,491,743 2,161,324 10,501,482 - - 1,883,355 - - - - 43,518 - - - - - - 1,829,499 - - - - 2,847,448 - - - - 646,696 - - - - 30,000 4,207,359 76,717 35,533,925 - 240,424,440 28,738,575 500,902 163,983,524 - 16,500,932 32,945,934 577,619 201,444,322 - 262,279,015 39,934,171 4,957,788 238,936,065 2,161,324 272,780,497 56,875 92,362 1,158,216 6,109 298,420 7,773 - 32,701 - 396,277 18,286 72,729 165,360 - - - - - 778,820 - - - 331,928 - - 284,646 - 1,057,955 - - - - 51,300 - - 539,665 - 539,665 - - 25,648 31,750 118,888 - - - - 8,968,090 - 4,764,125 2,238,836 - 6,447,617 - - 3,171,729 196,841 18,871,720 784,929 5,458,822 - - 4,029,000 - - 102,593 126,999 475,555 - - - - - - 29,853,741 387,776 2,302,420 4,677,548 - 348,900 21,265,000 - 81,065,978 - - 21,755,369 2,429,419 90,248,081 - 30,202,641 24,927,098 2,626,260 109,119,801 784,929 35,661,463 13,312,567 577,619 119,950,372 - 222,310,006 - - - - 4,676,947 1,694,506 1,753,909 9,865,892 1,376,395 10,132,081 $ 15,007,073 $ 2,331,528 $ 129,816,264 $ 1,376,395 $ 237,119,034 Town of Nantucket, Massachusetts 23 Basic Financial Statements Siasconset Nantucket Water Memorial Company Sewer Solid Waste Airport OPERATING REVENUES: Fee revenues…………………………………………...……………$- $ - $ - $ - Golf course fee revenues………………………………………… - - - - Rental income……………………………………………………… - - - - Donated land………………………………………………………… - - - - Charges for services……………………………………………… 1,150,107 5,312,936 3,060,459 12,921,369 Intergovernmental………………………………………………… - 342,187 - - Other………………………………………………………………… - - - - Contributions………………………………………………………… - - - - TOTAL OPERATING REVENUES …………………………… 1,150,107 5,655,123 3,060,459 12,921,369 OPERATING EXPENSES: Cost of services and administration……………………………… 188,183 2,161,378 8,310,385 11,322,671 Depreciation………………………………………………………… 146,216 2,036,045 493,906 2,403,673 Pension benefits…………………………………………………… - - - - Employee benefits………………………………………………… 41,422 211,509 20,951 1,324,716 TOTAL OPERATING EXPENSES…………………………… 375,821 4,408,932 8,825,242 15,051,060 OPERATING INCOME (LOSS)……………………………… 774,286 1,246,191 (5,764,783) (2,129,691) NONOPERATING REVENUES (EXPENSES): Investment income………………………………………………… 5,071 5,388 - 18,532 Interest expense…………………………………………………… (306,861) (1,351,844) (26,136) (280,171) Intergovernmental capital grants………………………………… - - - 4,209,521 Gain/(loss) on disposal of capital assets………………………… - - - - TOTAL NONOPERATING REVENUES (EXPENSES), NET…………………………… (301,790) (1,346,456) (26,136) 3,947,882 INCOME (LOSS) BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS…………………………… 472,496 (100,265) (5,790,919) 1,818,191 Capital contributions…………………………………………………… - - - - Capital contributions - privilege fees………………………………… - 171,274 - - Transfers in…….……………………………………………………… - - 4,991,085 3,246,470 Transfers out…………………………………………………………… - - - - CHANGE IN NET ASSETS……………………………………… 472,496 71,009 (799,834) 5,064,661 NET ASSETS AT BEGINNING OF YEAR, as restated…………… 4,511,758 45,804,424 7,516,473 49,836,676 NET ASSETS AT END OF YEAR…………………………………… $ 4,984,254 $ 45,875,433 $ 6,716,639 $ 54,901,337 See notes to basic financial statements. PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS FISCAL YEAR ENDED JUNE 30, 2012 Business-type Activities - Enterprise Funds Town of Nantucket, Massachusetts 24 Basic Financial Statements Component Unit Governmental Wannacomet Our Total Activities - Water Island Business-Type Internal Service Nantucket Islands Company Home Activities Fund Land Bank $- - $ - $ - $ 11,426,986 - - - - 2,983,802 - - - - 204,358 - - - - 1,460,400 3,909,491 6,297,629 32,651,991 - - - - 342,187 - - 212,951 - 212,951 92,106 - - 5,204 5,204 9,625,245 37,842 4,122,442 6,302,833 33,212,333 9,717,351 16,113,388 2,089,779 6,639,532 30,711,928 - 4,791,486 791,001 43,994 5,914,835 - - - 9,549 9,549 - - 40,970 230,641 1,870,209 11,158,288 - 2,921,750 6,923,716 38,506,521 11,158,288 4,791,486 1,200,692 (620,883) (5,294,188) (1,440,937) 11,321,902 12,756 11,993 53,740 8,735 105,921 (752,743) - (2,717,755) - (1,040,115) - - 4,209,521 - - - - - - (48,991) (739,987) 11,993 1,545,506 8,735 (983,185) 460,705 (608,890) (3,748,682) (1,432,202) 10,338,717 - 28,355 28,355 - - - - 171,274 - - - 3,227,042 11,464,597 197,000 - (260,966) - (260,966) - - 199,739 2,646,507 7,654,578 (1,235,202) 10,338,717 14,807,334 (314,979) 122,161,686 2,611,597 226,780,317 $ 15,007,073 $ 2,331,528 $ 129,816,264 $ 1,376,395 $ 237,119,034 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…………………………………………………………………………$ 929,178 $ 5,126,439 $ 3,277,123 $ 12,183,724 Employer and employee contributions to fund……………………………………………………………… - - - - Receipts from other governments…………………………………………………………………………… - 342,187 - - Receipts from other operating revenues…………………………………………………………………… - - - - Payments to vendors………………………………………………………………………………………… (173,752) (1,366,171) (7,716,163) (7,931,950) Payments to employees……………………………………………………………………………………… (12,330) (787,963) (19,628) (3,104,299) Payments for interfund services used……………………………………………………………………… (41,422) (211,509) (20,951) (1,324,716) NET CASH FROM OPERATING ACTIVITIES………………………………………………………………… 701,674 3,102,983 (4,479,619) (177,241) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers in…………………………………………………………………………………………………… - - 4,991,085 3,246,470 Transfers out…………………………………………………………………………………………………… - - - - Advances (to) from other funds……………………………………………………………………………… (10,435) (151,462) (63,374) (621,554) NET CASH FROM NONCAPITAL FINANCING ACTIVITIES……………………………………………… (10,435) (151,462) 4,927,711 2,624,916 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from the issuance of bonds and notes………………………………………………………… 150,000 3,666,100 - 17,816,090 Capital grants………………………………………………………………………………………………… - - - 6,065,406 Sewer privilege fees…………………………………………………………………………………………… - 345,369 - - Acquisition and construction of capital assets……………………………………………………………… (390,938) (202,613) - (5,864,062) Net change in land deposits………………………………………………………………………………… - - - - Principal payments on bonds and notes…………………………………………………………………… (675,000) (2,843,832) (110,000) (12,909,000) Interest expense……………………………………………………………………………………………… (319,283) (1,038,671) (27,358) 25,446 Capital contributions.………………………………………………………………………………………… - - - - NET CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES………………………………… (1,235,221) (73,647) (137,358) 5,133,880 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of investments……………………………………………………………………………………… - - - - Investment income…………………………………………………………………………………………… 5,071 5,388 - 18,532 NET CASH FROM INVESTING ACTIVITIES………………………………………………………………… 5,071 5,388 - 18,532 NET CHANGE IN CASH AND CASH EQUIVALENTS……………………………………………………… (538,911) 2,883,262 310,734 7,600,087 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR…………………………………………… 1,454,308 4,516,896 1,836,862 3,933,053 CASH AND CASH EQUIVALENTS AT END OF YEAR………………………………………………………$ 915,397 $ 7,400,158 $ 2,147,596 $ 11,533,140 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FROM OPERATING ACTIVITIES: Operating income (loss)………………………………………………………………………………………$ 774,286 $ 1,246,191 $ (5,764,783) $ (2,129,691) Adjustments to reconcile operating income (loss) to net cash from operating activities: Depreciation………………………………………………………………………………………………… 146,216 2,036,045 493,906 2,403,673 Loss on disposal of capital assets……………………………………………………………………… - - - - Changes in assets and liabilities: Increase in cash value of life insurance……………………………………………………………… - - - - Insurance reimbursements……………………..…………………………………………………… - - - - User fees………………………………………………………………………………………………… (220,929) (186,497) 216,664 (737,645) Accounts receivable………………………………………………………………….………………… - - - - Inventory………………………………………………………………………………………………… - - - 312,683 Other assets…………………………………………………………………………………………… - - - - Warrants payable……………………………………………………………………………………… (9,987) (38,202) (388,458) 364,620 Accrued liabilities……………………………………………………………………………………… (3,096) - (5,727) (572,781) Accrued payroll………………………………………………………………………………………… 292 3,212 56 17,613 Health claims payable………………………………………………………………………………… - - - - Landfill closure………………………………………………………………………………………. - - 965,000 - Other liabilities………………………………………………………………………………………… - - - 550 Accrued compensated absences…………………………………………………………………… - 1,281 - (81,981) Other postemployment benefit……………………………………………………………………… 14,892 40,953 3,723 245,718 Total adjustments…………………………………………………………………………………… (72,612) 1,856,792 1,285,164 1,952,450 NET CASH FROM OPERATING ACTIVITIES…………………………………………………………………$ 701,674 $ 3,102,983 $ (4,479,619) $ (177,241) NONCASH INVESTING CAPITAL AND FINANCING ACTIVITIES: Intergovernmental subsidy of debt service principal………………………………………………………$- $ 124,853 $ - $ - Intergovernmental subsidy of debt service interest………………………………………………………… - 346,240 - - Bond premium amortization………………………………………………………………………………… (85,820) - - - See notes to basic financial statements. PROPRIETARY FUNDS STATEMENT OF CASH FLOWS FISCAL YEAR ENDED JUNE 30, 2012 Business-type Activities - Enterprise Funds Town of Nantucket, Massachusetts 26 Basic Financial Statements Component Unit Governmental Wannacomet Our Total Activities Water Island Business-Type Internal Service Nantucket Islands Company Home Activities Fund Land Bank $ 4,104,512 $ 6,214,396 $ 31,835,372 $ - $ 18,864,899 - 5,204 5,204 9,723,617 - - - 342,187 - - - - - 92,106 1,702,600 (1,134,987) (1,219,101) (19,542,124) (11,152,940) (6,551,706) (1,303,363) (5,235,372) (10,462,955) - (1,719,412) (40,970) (230,641) (1,870,209) - - 1,625,192 (465,514) 307,475 (1,337,217) 12,296,381 - 3,227,042 11,464,597 197,000 - (260,966) - (260,966) - - (3,905) 348,285 (502,445) 225,783 - (264,871) 3,575,327 10,701,186 422,783 - 6,960,000 - 28,592,190 - - - - 6,065,406 - - - - 345,369 - - (1,573,465) (46,112) (8,077,190) - (5,401,636) - - - - - (5,840,000) - (22,377,832) - (5,592,312) (297,039) - (1,656,905) - (1,040,115) - 28,355 28,355 - - (750,504) (17,757) 2,919,393 - (12,034,063) - (309,929) (309,929) (273,740) (597,953) 12,756 11,993 53,740 8,735 105,921 12,756 (297,936) (256,189) (265,005) (492,032) 622,573 2,794,120 13,671,865 (1,179,439) (229,714) 5,714,243 510,354 17,965,716 1,179,439 3,143,358 $ 6,336,816 $ 3,304,474 $ 31,637,581 $ - $ 2,913,644 $ 1,200,692 $ (620,883) $ (5,294,188) $ (1,440,937) $ 11,321,902 791,001 43,994 5,914,835 - 988,783 - - - - 48,991 - - - - (20,568) - - - 49,407 - (17,930) (83,233) (1,029,570) - - - - - - (49,932) (13,641) - 299,042 - (70,191) - - - - (52,350) (373,336) (58,519) (503,882) 5,348 - (8,813) (3,562) (593,979) - 129,746 6,249 26,048 53,470 - - - - - 48,965 - - - 965,000 - - - - 550 - - (18,598) (123,043) (222,341) - - 59,568 353,684 718,538 - - 424,500 155,369 5,601,663 103,720 974,479 $ 1,625,192 $ (465,514) $ 307,475 $ (1,337,217) $ 12,296,381 $- $ - $ 124,853 $ - $ - - - 346,240 - - (12,830) - - - - Town of Nantucket, Massachusetts 27 Basic Financial Statements FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET ASSETS JUNE 30, 2012 Private Purpose Agency Trust Funds Funds ASSETS Cash and cash equivalents……………………………………$ 568,942 $ 105,682 Investments…………………………………………………… 1,932,065 - TOTAL ASSETS…………………………………………………… 2,501,007 105,682 LIABILITIES Warrants payable……………………………………………… 1,961 4,838 Liabilities due depositors……………………………………… - 100,844 TOTAL LIABILITIES……………………………………………… 1,961 105,682 NET ASSETS Held in trust for other purposes………………………………$ 2,497,532 $ - 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, 2012 Private Purpose Trust Funds ADDITIONS: Contributions: Rental income…………………………………………………………………………………$ 5,700 Private donations……………………………………………………………………………… 51,852 Total contributions………………………………………………………………………… 57,552 Net investment income (loss): Interest………………………………………………………………………………………… 85,226 TOTAL ADDITIONS……………………………………………………………………… 142,778 DEDUCTIONS: Educational scholarships…………………………………………………………………… 59,568 Human services……………………………………………………………………………… 121,317 TOTAL DEDUCTIONS…………………………………………………………………… 180,885 CHANGE IN NET ASSETS……………………………………………………………… (38,107) NET ASSETS AT BEGINNING OF YEAR…………………………………………………… 2,535,639 NET ASSETS AT END OF YEAR………………………………………………………………$ 2,497,532 See notes to basic financial statements. Town of Nantucket, Massachusetts 29 Basic Financial Statements Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 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 Corrections 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 and Certain Town Enterprise Funds The Nantucket Islands Land Bank issues separate audited financial statements. A copy of the complete financial statements can be obtained by contacting them at 22 Broad Street, Nantucket, MA 02554. Nantucket Memorial Airport issues separate audited financial statements. A copy of the complete financial statements can be obtained by contacting them at 14 Airport Road, Nantucket, MA 02554. The Wannacomet Water Company issues separate audited financial statements. A copy of the complete financial statements can be obtained by contacting them at 1 Milestone Road, Nantucket, MA 02554. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 31 Basic Financial Statements 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. 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. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 32 Basic Financial Statements  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. 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 and, 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 capital projects fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets of the governmental funds. The nonmajor governmental funds consist of other special revenue and permanent funds that are aggregated and presented in the nonmajor governmental funds column on the governmental funds financial statements. The following describes the general use of these fund types: The special revenue fund is used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than permanent funds. The permanent fund is used to account for and report financial resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the governmental programs. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 33 Basic Financial Statements 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. The following major proprietary funds and component unit 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 Our Island Home enterprise fund is used to account for the Town’s nursing home activities. 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 component unit 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. 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, 2012 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 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, 2012 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 User Fees Water User Fees for Siasconset Water are levied monthly based on individual meter readings. Water User Fees for Wannacomet Water Company are levied monthly based on individual meter readings and average bills. All water fees are subject to penalties and interest if they are not paid by the respective due date. Unbilled water fees at year-end are accrued and are recorded as revenue in the current period. Sewer User Fees Sewer User Fees are levied monthly based on individual meter readings and 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 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 User Fees The outstanding receivable for Landfill User Fees is comprised of annual commercial fees assessed to restaurants and inns and monthly tipping fees charged to private haulers. Airport User Fees The outstanding receivable for Airport User Fees is comprised primarily of fuel sales. Sewer Privilege Fees Sewer privilege fees consist of betterments assessed to homeowners in relation to upgrades to the Surfside Wastewater Treatment Plant. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 36 Basic Financial Statements 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. G. Restricted Assets Government-Wide and Fund Financial Statements Certain assets of the enterprise funds and component units 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, construction in progress, land improvements, plant, buildings, vehicles, machinery and equipment, furniture, fixtures and company 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 Machinery and equipment……………………… 5-15 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. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 37 Basic Financial Statements 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. 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 reported as “invested in capital assets, net of related debt” includes capital assets, net of accumulated depreciation, less the principal balance of outstanding debt used to acquire capital assets. Unspent proceeds of Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 38 Basic Financial Statements capital related debt are not considered to be capital assets. Outstanding debt relating to future reimbursements from the Massachusetts Water Pollution Abatement Trust is not considered to be capital related debt. 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. “Gifts and grants” represents restrictions placed on assets from outside parties. Fund Financial Statements (Fund Balances) Governmental fund balances are classified as nonspendable, restricted, committed, assigned, or unassigned based on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The governmental fund balance classifications are as follows: “Nonspendable” fund balance includes amounts that cannot be spent because they are either not in spendable form or they are legally or contractually required to be maintained intact. “Restricted” fund balance includes amounts subject to constraints placed on the use of resources that are either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or that are imposed by law through constitutional provisions or enabling legislation. “Committed” fund balance includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority, which is a Town Meeting vote. Once committed, the limitation imposed by the vote remains in place until the funds are used on their intended purpose or a Town Meeting vote is taken to remove or revise the commitment. “Assigned” fund balance includes amounts that are constrained by the Town’s intent to be used for specific purposes, but are neither restricted nor committed. “Unassigned” fund balance includes the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund. The Town’s spending policy is to spend restricted fund balance first, followed by committed, assigned and unassigned fund balance. Most governmental funds are designated for one purpose at the time of their creation. Therefore, any expenditure from the fund will be allocated to the applicable fund balance classifications in the order of the aforementioned spending policy. The general fund and certain other funds may have more than one purpose. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 39 Basic Financial Statements 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 sick leave are reported as liabilities and expensed as incurred. Governmental Fund Financial Statements Vested or accumulated sick leave, which will be liquidated with expendable available financial resources, are reported as expenditures and fund liabilities. P. Individual Fund Deficits At June 30, 2012, there was an individual fund deficit within a special revenue fund related to police off-duty details, which is classified as non-major governmental funds in the fund financial statements. This deficit is expected to be funded through departmental collections during fiscal year 2013. Q. 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. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 40 Basic Financial Statements R. 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 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. The Town participates in MMDT, which maintains a cash portfolio and a short-term bond fund with combined average maturities of approximately 3 months. 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, Nantucket County, and Nantucket Islands Land Bank component units, has adopted a deposit policy which stipulates that the Treasurer will review each bank doing business with the Town on a quarterly basis. The policy does not restrict the value of uninsured or uncollateralized investments held at any point in time. Primary Government At fiscal year-end, the carrying amount of deposits of the primary government totaled $66,044,483 and the bank balance totaled $67,681,501. Of the bank balance, $2,802,537 was covered by the Federal Depositors Insurance Company, $8,124,274 was covered by the Depositors Insurance Fund, and $56,754,690 was collateralized. Component Unit-County At fiscal year-end, the carrying amount of deposits of Nantucket County totaled $2,821,856 and the bank balance totaled $2,840,262. Of the bank balance, $750,000 was covered by Federal Depository Insurance and the remaining $2,090,262 was fully collateralized. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 41 Basic Financial Statements 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 $250,000. At fiscal year-end, the carrying amount of deposits of the Nantucket Islands Land Bank totaled $4,743,143, of which $300,294 was exposed to custodial credit risk. The Land Bank, as part of a Land purchase in previous years, is required to maintain a reserve fund to cover the purchase of Life Insurance to be used to pay off the note at the time of the seller’s death. These reserve funds are included in restricted cash and cash equivalents in the accompanying financial statements. Investments As of June 30, 2012, the Town of Nantucket had the following investments: Primary Government Under 1-5 Fair Value 1 Year Years Debt Securities: Federal Home Loan Bank………………………………………$ 472,718 $ - $ 472,718 Federal Home Loan Mortgage Corporation.........................1,391,635 203,658 1,187,977 Federal National Mortgage Association.............................. 1,143,734 253,042 890,692 Federal Home Loan Mortgage Corporation Gold................ 927 - 927 United States Treasury Notes............................................. 2,537,575 354,696 2,182,879 Repurchase Agreements………………………………………2,165,609 2,165,609 - Total Debt Securities............................................................. 7,712,198 $ 2,977,005 $ 4,735,193 Other Investments: MMDT……………………………………………………………… 1,763,173 Total Investments..................................................................$ 9,475,371 Maturity Component Unit-County The County did not have any investments as of June 30, 2012. Component Unit-Nantucket Islands Land Bank At June 30, 2012, the Land Bank’s investments of $9,689,219 represent certificates of deposits that are insured by the FDIC and Depositors Insurance Fund. The investments are stated at the fair market value, are unrated in terms of credit risk quality ratings, and all mature in less than 1 year. 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; the balance of this fund is reported as designated investments. This fund, along with the pledge of the Town of Nantucket of its full faith and credit, secures the Series 2007A and Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 42 Basic Financial Statements Series 2009A bonds outstanding as of June 30, 2012. 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. 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 have an investment policy addressing custodial credit risk which requires that all securities not held directly by the Town & County must be held by a third party custodian approved by the Treasurer in the Town or County’s name and tax identification number. The policy also requires that Treasurer receive monthly safekeeping reports from the custodian as well as safekeeping receipts detailing each transaction from the account. The Land Bank currently follows investment policies largely defined by the Commonwealth of Massachusetts, as well as internal Land Bank investment policies. Primary Government The Town’s investments of $472,718 in Federal Home Loan Bank, $1,391,636 in Federal Home Loan Mortgage Corporation, $1,143,734 in Federal National Mortgage Association $927 in Federal Home Loan Mortgage Corporation Gold, and $2,537,575 in U.S. Treasury Notes are held by a broker-dealer where the Town’s assets are segregated from the broker-dealer firm assets and are protected up to $500,000 under coverage through the Securities Investor Protection Corporation (SIPC). Additionally, the broker-dealer carries excess insurance to cover claims over the SIPC limit through Lloyd’s with a firm cap of $1 billion with no individual client limit. The repurchase agreement consists of an overnight sweep agreement which is invested in U.S. Treasury Notes. Interest Rate Risk The Town, including the primary government and Nantucket County and Nantucket Islands Land Bank component units, limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The policy limits investments of operating funds to one year or less and limits investment maturities of trust funds and other special funds to periods not longer than seven years, maintaining an average maturity no greater than three years for the investment portfolio. Credit Risk The Town, including the primary government and Nantucket County component unit adopted a formal policy related to Credit Risk during fiscal year 2012. The policy restricts the investment of operating funds to U.S. Treasury or Agency securities which carry “AAA” ratings. Trust and other special funds which are longer-term investments may invest in fixed income securities which are held principally for capital preservation and income potential, corporate debt that carries a rating of “A” or better by either Standard and Poor’s or Moody’s rating services. If a security falls below the “A” rating, the security will be monitored by the Treasurer and advisor and will be noted as an exception to the policy if held in the investment portfolio. The Treasurer will sell the securities if a decline in value is expected. Of the Town’s investments at June 30, 2012 in debt securities, $5,545,663 are rated AAA and $927 is unrated. Investments in U.S. Treasury notes are not considered to have credit risk. Concentration of Credit Risk The Town, including the primary government and Nantucket County and Nantucket Islands Land Bank component units, places no limit on the amount the government may invest in any one issuer. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 43 Basic Financial Statements Primary Government Greater than 5 percent of the primary government’s investments are in the following securities: Percentage of Issuer Federal Home Loan Mortgage Corporation............................ 15% Federal National Mortgage Association.................................. 12% Total Investments NOTE 3 – RECEIVABLES At June 30, 2012, receivables for the individual major, nonmajor governmental funds and internal service funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: Allowance Gross for Net Amount Uncollectibles Amount Receivables: Real estate and personal property taxes……$ 3,841,429 $ (368,606) $ 3,472,823 Tax liens ……………………….……………… 2,538,594 - 2,538,594 Motor vehicle and other excise taxes……… 789,352 (615,342) 174,010 User fees……………………………………… 4,555 - 4,555 Departmental and other……………………… 267,703 (134,124) 133,579 Special assessments………………………… 25,171 - 25,171 Intergovernmental…………………………… 2,182,676 - 2,182,676 Total……………………………………………$ 9,649,480 $ (1,118,072) $ 8,531,408 At June 30, 2012, receivables for the enterprise funds consist of the following: Allowance Gross for Net Amount Uncollectibles Amount Receivables: Water fees………………………………………$ 747,137 $ - $ 747,137 Sewer fees……………………………………… 961,106 - 961,106 Solid waste fees……………………………… 527,046 (131,507) 395,539 Airport fees…………………………………… 1,002,339 - 1,002,339 Our Island Home fees………………………… 962,852 (197,086) 765,766 Intergovernmental…………………………… 2,640,025 - 2,640,025 Total………………………………………………$ 6,840,505 $ (328,593) $ 6,511,912 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 44 Basic Financial Statements 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……$ 1,963,966 $ 101,787 $ 2,065,753 Tax liens………………….…………………… 2,499,570 39,024 2,538,594 Motor vehicle and other excise taxes……… 174,010 - 174,010 User fees………………………………………4,555 - 4,555 Departmental and other……………………… 953 132,626 133,579 Special assessments………………………… - 25,171 25,171 Intergovernmental…………………………… - 33,840 33,840 Total……………………………………………$ 4,643,054 $ 332,448 $ 4,975,502 NOTE 4 – CAPITAL ASSETS Capital asset activity for the primary government for the fiscal year ended June 30, 2012, was as follows: Beginning Ending Balance Increases Decreases Balance Governmental Activities: Capital assets not being depreciated: Land………………………………………………………… $ 169,985,564 $ - $ - $ 169,985,564 Construction in progress…………………………………… 27,719,432 2,943,703 (22,036,687) 8,626,448 Total capital assets not being depreciated………… 197,704,996 2,943,703 (22,036,687) 178,612,012 Capital assets being depreciated: Vehicles……………………………………………………… 8,821,004 853,785 (1,116,858) 8,557,931 Buildings……………………………………………………… 34,427,862 20,656,442 - 55,084,304 Machinery and equipment………………………………… 8,586,030 1,056,550 (1,972,612) 7,669,968 Infrastructure………………………………………………… 27,030,978 1,573,364 - 28,604,342 Total capital assets being depreciated……………… 78,865,874 24,140,141 (3,089,470) 99,916,545 Less accumulated depreciation for: Vehicles……………………………………………………… (6,634,029) (673,322) 1,116,858 (6,190,493) Buildings.…………………………………………………… (16,850,666) (1,107,707) - (17,958,373) Machinery and equipment………………………………… (7,337,802) (429,890) 1,972,612 (5,795,080) Infrastructure.………………………………………………… (18,207,903) (853,561) - (19,061,464) Total accumulated depreciation……………………… (49,030,400) (3,064,480) 3,089,470 (49,005,410) Total capital assets being depreciated, net…………………… 29,835,474 21,075,661 - 50,911,135 Total governmental activities capital assets, net………………$ 227,540,470 $ 24,019,364 $ (22,036,687) $ 229,523,147 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 45 Basic Financial Statements The capital asset totals for the business-type activities at June 30, 2012 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…………………………………… 35,443,031 7,073,961 (24,125,495) 18,391,497 Total capital assets not being depreciated………… 52,585,459 7,073,961 (24,125,495) 35,533,925 Capital assets being depreciated: Land improvements………………………………………… 25,731,512 - - 25,731,512 Plant………………………………………………………… 61,730,450 - - 61,730,450 Infrastructure………………………………………………… 39,800,871 18,152,200 (40,000) 57,913,071 Buildings……………………………………………………… 53,351,963 7,164,461 - 60,516,424 Vehicles……………………………………………………… 4,808,630 90,262 (45,769) 4,853,123 Machinery and equipment………………………………… 18,674,345 84,340 - 18,758,685 Furniture, fixtures and computer equipment……………… 611,534 - - 611,534 Total capital assets being depreciated……………… 204,709,305 25,491,263 (85,769) 230,114,799 Less accumulated depreciation………………………………… (60,302,209) (5,914,835) 85,769 (66,131,275) Total capital assets being depreciated, net…………………… 144,407,096 19,576,428 - 163,983,524 Total business-type activities, capital assets…………………$ 196,992,555 $ 26,650,389 $ (24,125,495) $ 199,517,449 The overstatement of capital assets of $446,498, in the Sewer Enterprise Fund as of June 30, 2011, was discovered by management during the current year. Accordingly, an adjustment has been made in this report to restate the Net Assets of the Sewer Enterprise Fund as of June 30, 2011 from $46,250,922 to $45,804,427. Capital asset activity for the Nantucket County and Nantucket Islands Land Bank component units for the fiscal year ended June 30, 2012 was as follows: Beginning Ending Balance Increases Decreases Balance Nantucket Islands Land Bank Component Unit Capital assets not being depreciated: Land………………………………………………………… $ 227,565,497 $ 12,858,943 $ - $ 240,424,440 Capital assets being depreciated: Buildings, improvements and equipment………………… 22,156,475 1,034,045 (50,900) 23,139,620 Less accumulated depreciation…………………………… (5,667,698) (972,899) 1,909 (6,638,688) Total capital assets being depreciated, net…………………… 16,488,777 61,146 (48,991) 16,500,932 Total Nantucket Islands Land Bank Component Unit, capital assets…………………………………………………$ 244,054,274 $ 12,920,089 $ (48,991) $ 256,925,372 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 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: Equipment…………………………………………………… 371,950 73,458 - 445,408 Total capital assets being depreciated……………… 371,950 73,458 - 445,408 Less accumulated depreciation for: Equipment…………………………………………………… (328,651) (49,803) - (378,454) Total accumulated depreciation……………………… (328,651) (49,803) - (378,454) Total capital assets being depreciated, net…………………… 43,299 23,655 - 66,954 Total County Component Unit capital assets…………………$ 71,757 $ 23,655 $ - $ 95,412 Depreciation expense was charged to functions/programs as follows: Governmental Activities: General government…………………………………………………………………$ 98,982 Public safety………………………………………………………………………… 1,024,188 Education…………………………………………………………………………… 839,485 Public works………………………………………………………………………… 990,792 Human services……………………………………………………………………… 8,384 Culture and recreation……………………………………………………………… 102,649 Total depreciation expense - governmental activities……………………………… $ 3,064,480 Business-Type Activities: Water………………………………………………..…………………………………$ 937,217 Sewer……………………………………….………………………………………… 2,036,045 Solid waste……………………………………….…………………………………… 493,906 Airport……………………………………….………………………………………… 2,403,673 Our Island Home……………………………………….…………………………… 43,994 Total depreciation expense - business-type activities……………………………… $ 5,914,835 Nantucket County Component Unit: Registry of Deeds……………………………………………………………………$ 49,803 Nantucket Islands Land Bank Component Unit: Land Bank……………………………………………………………………………$ 972,899 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 47 Basic Financial Statements NOTE 5 – INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS Interfund receivables and payables at June 30, 2012 are summarized as follows: Siasconset Sewer Nantucket General Water Enterprise Memorial Internal Fund Company Fund Airport Service Total General Fund……………………………… $ - $ - $ - $ 1,332 $ 76,984 $ 78,316 Nonmajor Governmental Funds………… 555,126 - - 17,443 - 572,569 Wannacomet Water Company…………… - 78,021 461,644 - - 539,665 Total……………………………………$ 555,126 $ 78,021 $ 461,644 $ 18,775 $ 76,984 $ 1,190,550 Due To: Due From: Interfund receivables and payables represent timing differences between financial transactions and the corresponding transfer of cash between accounts. Interfund transfers for the fiscal year ended June 30, 2012, are summarized as follows: Nonmajor Nantucket Our Solid Waste Internal General Capital Governmental Memorial Island Enterprise Service Fund Projects Funds Airport Home Fund Fund Total General Fund…………………………$- $ 175,108 $ 341,070 $ 2,792,264 $ 2,781,920 $ 4,991,085 $ 197,000 $ 11,278,447 (1) Capital Projects……………….……… - 125,000 - 54,206 - - - 179,206 (2) Nonmajor Governmental Funds…… 106,831 - - 400,000 445,122 - - 951,953 (3) Wannacomet Water Company……… - 260,966 - - - - - 260,966 (4) Total……………………………………$ 106,831 $ 561,074 $ 341,070 $ 3,246,470 $ 3,227,042 $ 4,991,085 $ 197,000 $ 12,670,572 Transfers In: Transfers Out: (1) Appropriations from the General Fund to fund prior year deficits in other funds, annual funding to the Community School and General Fund subsidies to Enterprise Funds. (2) Transfers within the Town’s various Capital Projects Funds and to Airport capital projects. (3) Transfers to the General Fund from the 3C grant fund, and the Parks and Recreation Revolving Funds to reimburse for indirect costs and to fund appropriations. Also, transfers from revolving funds to the Airport and Our Island Home enterprise funds. (4) Transfer to the Capital Project Fund from Wannacomet Water Company to fund prior year a deficit. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 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, 2012, are as follows: Balance at Balance at Rate June 30, Renewed/ Retired/ June 30, Type Purpose (%) Due Date 2011 Issued Redeemed 2012 Governmental Funds BAN MWPAT Title V Loan……………………… 0.00 N/A $ - $ 1,000,000 $ - $ 1,000,000 Enterprise Funds BAN Bond Anticipation Note…………………… 1.25 02/24/12 2,600,000 - 2,600,000 - BAN Bond Anticipation Note…………………… 1.50 02/24/12 3,550,000 - 3,550,000 - BAN Bond Anticipation Note…………………… 1.00 06/08/12 - 6,089,000 6,089,000 - BAN Bond Anticipation Note…………………… 1.25 06/07/13 - 8,968,090 - 8,968,090 BAN Bond Anticipation Note…………………… 1.50 02/24/12 150,000 - 150,000 - BAN Bond Anticipation Note…………………… 1.50 02/24/12 2,050,000 - 2,050,000 - BAN Bond Anticipation Note…………………… 1.00 06/08/12 - 2,050,000 2,050,000 - Total Enterprise Fund………………………………………………… 8,350,000 17,107,090 16,489,000 8,968,090 Total……………………………………………………………………$ 8,350,000 $ 18,107,090 $ 16,489,000 $ 9,968,090 The Town entered into a $1,000,000 zero percent interim loan agreement with the Massachusetts Water Pollution Abatement Trust (MWPAT). Proceeds of the interim loan are to be used to fund a community septic management program. The Town has recorded the interim loan as short-term debt until the loan is permanently funded by the MWPAT. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 49 Basic Financial Statements 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". Details related to the outstanding indebtedness at June 30, 2012, and the debt service requirements are as follows: Bonds and Notes Payable Schedule – Governmental Funds Original Interest Outstanding Outstanding Maturities Loan Rate at June 30, at June 30, Issue Through Amount (%) 2011 Issued Redeemed 2012 Municipal Purpose Refunding Bonds of 1997…………… 2011 $ 10,896,166 4.75 - 6.00 $ 1,385,000 $ - $ 1,385,000 $ - Municipal Purpose Bonds 2001…………………………… 2018 330,000 4.00 - 4.90 130,000 - 130,000 - MWPAT Bonds 2001……………………………………… 2019 20,893 - 10,424 - 1,170 9,254 Municipal Purpose Bonds 2003…………………………… 2023 2,945,000 2.25 - 5.00 1,825,000 - 1,510,000 315,000 Municipal Purpose Bonds 2004…………………………… 2024 17,498,000 2.50 - 4.25 13,020,000 - 835,000 12,185,000 Municipal Purpose Bonds 2005…………………………… 2025 19,764,000 3.75 - 5.00 14,395,000 - 1,775,000 12,620,000 Municipal Purpose Bonds 2008…………………………… 2028 11,453,613 3.00 - 5.00 7,465,600 - 1,226,800 6,238,800 MWPAT Bonds 2008……………………………………… 2038 44,635,228 2.14 12,965,549 - 344,730 12,620,819 Municipal Purpose Bonds 2009…………………………… 2048 1,380,000 4.125 1,311,000 - 34,500 1,276,500 MWPAT Bonds 2009……………………………………… 2028 5,340,420 2.00 4,154,898 - 200,655 3,954,243 Municipal Purpose Bonds 2010…………………………… 2030 13,070,000 2.50 - 4.00 12,395,000 675,000 11,720,000 Municipal Purpose Bonds 2012…………………………… 2026 3,200,000 2.00 - 5.00 - 3,200,000 - 3,200,000 Municipal Purpose Refunding Bonds of 2012…………… 2018 1,329,900 2.00 - 4.90 - 1,329,900 - 1,329,900 Total Governmental Bonds Payable……………………………………………………………………………… 69,057,471 4,529,900 8,117,855 65,469,516 Unamortized Premiums on Bonds and Notes…………………………………………………………………… 121,368 - 31,577 89,791 Total……………………………………………………………………………………………………………………$ 69,178,839 $ 4,529,900 $ 8,149,432 $ 65,559,307 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 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 2013………………$ 5,496,334 $ 2,201,215 $ 7,697,549 2014……………… 5,358,098 2,020,141 7,378,239 2015……………… 5,430,460 1,821,312 7,251,772 2016……………… 5,429,097 1,624,025 7,053,122 2017……………… 5,523,166 1,416,307 6,939,473 2018……………… 5,052,149 1,214,477 6,266,626 2019……………… 3,121,457 1,063,060 4,184,517 2020……………… 3,101,093 951,659 4,052,752 2021……………… 3,089,920 845,769 3,935,689 2022……………… 3,070,241 731,925 3,802,166 2023……………… 3,015,915 624,864 3,640,779 2024……………… 2,921,951 512,151 3,434,102 2025……………… 1,893,358 429,571 2,322,929 2026……………… 1,880,144 366,025 2,246,169 2027……………… 1,788,545 306,697 2,095,242 2028……………… 1,520,131 255,388 1,775,519 2029……………… 1,450,303 206,702 1,657,005 2030……………… 916,852 163,669 1,080,521 2031……………… 579,860 135,237 715,097 2032……………… 593,185 120,489 713,674 2033……………… 606,837 105,414 712,251 2034……………… 620,822 90,006 710,828 2035……………… 635,148 74,257 709,405 2036……………… 649,825 58,157 707,982 2037……………… 664,861 41,698 706,559 2038……………… 680,264 24,872 705,136 2039……………… 34,500 15,654 50,154 2040……………… 34,500 14,231 48,731 2041……………… 34,500 12,808 47,308 2042……………… 34,500 11,385 45,885 2043……………… 34,500 9,962 44,462 2044……………… 34,500 8,539 43,039 2045……………… 34,500 7,116 41,616 2046……………… 34,500 5,693 40,193 2047……………… 34,500 4,269 38,769 2048……………… 34,500 2,846 37,346 2049……………… 34,500 1,423 35,923 Total………………$ 65,469,516 $ 17,499,013 $ 82,968,529 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 51 Basic Financial Statements Bonds Payable Schedule – Enterprise Original Interest Outstanding Outstanding Maturities Loan Rate at June 30, at June 30, Project Through Amount (%) 2011 Issued Redeemed 2012 Municipal Purpose Bonds 2001…………………………… 2021 $ 850,000 4.00 - 5.00 $ 450,000 $ - $ 450,000 $ - MWPAT Bonds 2004……………………………………… 2023 2,107,708 Various 1,420,858 - 102,052 1,318,806 Municipal Purpose Bonds 2004…………………………… 2023 1,216,000 2.25 - 5.00 780,000 - 660,000 120,000 MWPAT Bonds 2005……………………………………… 2024 11,587,521 4.50 - 5.25 4,839,965 - 370,289 4,469,676 MWPAT Bonds 2007……………………………………… 2026 53,642,118 Various 28,609,377 - 821,958 27,787,419 Municipal Purpose Bonds 2008…………………………… 2028 3,268,088 3.00 - 5.00 2,474,400 - 218,200 2,256,200 MWPAT Bonds 2009……………………………………… 2026 3,125,318 2.00 2,830,978 - 151,644 2,679,334 Municipal Purpose Bonds 2011…………………………… 2014 120,000 2.50 - 3.00 90,000 - 30,000 60,000 MWPAT Bonds 2011……………………………………… 2031 4,006,000 2.00 4,006,000 - 164,542 3,841,458 Municipal Purpose Bonds 2012…………………………… 2032 2,750,000 2.00 - 5.00 - 2,750,000 - 2,750,000 Municipal Purpose Refunding Bonds of 2012…………… 2021 916,100 2.00 - 5.00 - 916,100 - 916,100 Total Sewer Enterprise Bonds Payable………………………………………….………………………………… 45,501,578 3,666,100 2,968,685 46,198,993 Municipal Purpose Bonds 2004…………………………… 2013 390,000 2.25 - 5.00 110,000 - 40,000 70,000 Municipal Purpose Bonds 2005…………………………… 2013 1,751,000 2.50 - 4.00 580,000 - 195,000 385,000 Municipal Purpose Bonds 2006…………………………… 2015 219,000 3.75 - 5.00 100,000 - 20,000 80,000 Municipal Purpose Bonds 2008…………………………… 2017 1,522,312 3.00 - 5.00 650,000 - 275,000 375,000 Municipal Purpose Bonds 2011…………………………… 2036 5,000,000 2.00 - 5.00 5,000,000 - 140,000 4,860,000 Municipal Purpose Bonds 2012…………………………… 2032 2,759,000 2.00 - 5.00 - 2,759,000 - 2,759,000 Total Airport Enterprise Bonds Payable…………………………………………………………………………… 6,440,000 2,759,000 670,000 8,529,000 Municipal Purpose Bonds 2001…………………………… 2021 1,168,000 4.00 - 5.00 565,000 - 565,000 - Municipal Purpose Bonds 2005…………………………… 2024 4,000,000 2.50 - 4.13 2,800,000 - 200,000 2,600,000 Municipal Purpose Bonds 2006…………………………… 2025 5,150,000 3.75 - 5.00 4,040,000 - 250,000 3,790,000 Municipal Purpose Bonds 2008…………………………… 2030 9,400,000 3.00 - 5.00 7,975,000 - 475,000 7,500,000 Municipal Purpose Bonds 2009…………………………… 2029 2,815,000 3.00 - 5.00 2,600,000 - 110,000 2,490,000 Municipal Purpose Bonds 2010…………………………… 2030 1,800,000 2.50 - 4.00 1,660,000 - 140,000 1,520,000 Municipal Purpose Bonds 2012…………………………… 2032 4,450,000 2.00 - 5.00 - 4,450,000 - 4,450,000 Municipal Purpose Refunding Bonds of 2012…………… 2021 460,000 2.00 - 5.00 - 460,000 - 460,000 Total Wannacomet Water Enterprise Bonds Payable…………………………………………………………… 19,640,000 4,910,000 1,740,000 22,810,000 Municipal Purpose Bonds 2006…………………………… 2015 2,000,000 3.75 - 5.00 1,105,000 - 205,000 900,000 Municipal Purpose Bonds 2009…………………………… 2029 6,373,000 3.00 - 5.00 5,890,000 - 250,000 5,640,000 Municipal Purpose Bonds 2010…………………………… 2030 1,400,000 2.50 - 4.00 1,330,000 - 70,000 1,260,000 Municipal Purpose Bonds 2012…………………………… 2016 150,000 2.00 - 3.00 - 150,000 - 150,000 Total Siasconset Water Enterprise Bonds Payable……………………………………………………………… 8,325,000 150,000 525,000 7,950,000 Municipal Purpose Bonds 2005…………………………… 2024 100,000 2.50 - 4.13 70,000 - 5,000 65,000 Municipal Purpose Bonds 2008…………………………… 2028 1,000,000 3.00 - 5.00 685,000 - 105,000 580,000 Total Solid Waste Enterprise Bonds Payable…………………………………………………………………… 755,000 - 110,000 645,000 Total Enterprise Bonds Payable…………………………………………………………………………………… 80,661,578 11,485,100 6,013,685 86,132,993 Unamortized Premiums on Bonds and Notes…………………………………………………………………… 321,817 1,076,663 17,878 1,380,602 Total……………………………………………………………………………………………………………………$ 80,983,395 $ 12,561,763 $ 6,031,563 $ 87,513,595 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 52 Basic Financial Statements Debt service requirements for principal and interest for enterprise fund bonds payable in future fiscal years are as follows: Fiscal Year Principal Interest Total 2013………………$ 5,067,015 $ 2,943,557 $ 8,010,572 2014……………… 5,019,019 2,771,174 7,790,193 2015……………… 4,840,525 2,590,021 7,430,546 2016……………… 4,905,733 2,420,246 7,325,979 2017……………… 4,593,417 2,251,044 6,844,461 2018……………… 4,401,131 2,090,809 6,491,940 2019……………… 4,463,779 1,935,622 6,399,401 2020……………… 4,455,068 1,754,738 6,209,806 2021……………… 4,574,484 1,591,540 6,166,024 2022……………… 4,341,162 1,427,844 5,769,006 2023……………… 4,411,001 1,261,742 5,672,743 2024……………… 4,365,691 1,096,568 5,462,259 2025……………… 4,269,792 934,679 5,204,471 2026……………… 3,609,826 793,850 4,403,676 2027……………… 3,306,204 678,105 3,984,309 2028……………… 3,129,477 571,601 3,701,078 2029……………… 2,604,916 464,587 3,069,503 2030……………… 1,999,234 361,926 2,361,160 2031……………… 1,914,250 304,535 2,218,785 2032……………… 1,704,507 252,860 1,957,367 2033……………… 1,361,007 208,846 1,569,853 2034……………… 1,398,154 169,823 1,567,977 2035……………… 1,440,964 129,663 1,570,627 2036……………… 1,479,455 88,111 1,567,566 2037……………… 1,223,641 45,030 1,268,671 2038……………… 1,253,541 15,130 1,268,671 Total………………$ 86,132,993 $ 29,153,651 $ 115,286,644 In order to take advantage of favorable interest rates, the Town issued $2,706,000 of General Obligation Refunding Bonds on June 7, 2012. The Town advanced refunded $2,970,000 of general obligation bonds by placing the proceeds of the refunding bonds and additional Town funds in an irrevocable trust to provide for all future debt service payments on the refunded bonds. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the statement of net assets. The reacquisition price exceeded the net carrying amount of the old debt by $130,076. This advance refunding was undertaken to reduce total debt service payments over the next 12 years by $342,475 and resulted in an economic gain of $303,421. At June 30, 2012, $2,970,000 of bonds outstanding from the advance refunding are considered defeased. 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 $2,017,186 and interest costs of $2,132,318, relating to certain MWPAT bonds outstanding in the sewer enterprise fund. Thus, net principal debt repayments in the sewer enterprise fund are scheduled to be $41,520,707. The principal subsidies are guaranteed and therefore a $2,017,186 intergovernmental receivable has been reported in the sewer enterprise fund. 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 2012 principal and interest subsidies totaled approximately $124,854 and $346,240, respectively. For MWPAT loans issued for projects first appearing on Department of Environmental Protection’s Intended Use Plan in 2002 and forward, the net debt service is structured to result in the financial equivalent of a loan with an annual interest rate of 2%. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 53 Basic Financial Statements Bonds and Notes Payable Schedule – Land Bank Component Unit Original Interest Outstanding Outstanding Maturities Loan Rate at June 30, at June 30, Project Through Amount (%) 2011 Issued Redeemed 2012 Land Bank Bonds and Notes Payable………………… 2016 N/A 6.06% $ 6,650,000 $ 1,845,343 $ (4,200,000) $ 4,295,343 Land Bank Bonds and Notes Payable………………… 2032 N/A 4.00 - 5.50 24,989,835 6,725,000 (1,392,312) 30,322,523 Total Land Bank Component Unit Bonds Payable……………….………………………………………………$ 31,639,835 $ 8,570,343 $ (5,592,312) $ 34,617,866 Debt service requirements for principal and interest for Land Bank bonds and notes payable in future fiscal years are as follows: Fiscal Year Principal Interest Total 2013………………$ 4,785,829 $ 1,141,559 $ 5,927,388 2014……………… 2,400,315 954,701 3,355,016 2015……………… 2,475,279 878,251 3,353,530 2016……………… 2,570,736 796,349 3,367,085 2017……………… 2,151,704 711,504 2,863,208 2018-2022……… 10,048,520 2,491,090 12,539,610 2023-2027……… 7,023,520 1,109,312 8,132,832 2028-2032……… 3,161,963 177,031 3,338,994 Total………………$ 34,617,866 $ 8,259,797 $ 42,877,663 Bonds payable is comprised of the 2007 Series A Bonds dated December 1, 2007 and bearing interest at rates ranging from 4% to 5.5% and mature serially from December 1, 2008 through December 1, 2027. The 2009 Series A Bonds dated March 13, 2009 bear interest at a rate of 2.95% and mature serially from June 30, 2009 through June 30, 2023. During the current fiscal year, the Land Bank issued 2012 Series A Bonds, in the aggregate principle amount of $6,725,000, bearing interest at rates ranging from 2% to 3% and maturing serially from February 15, 2013 to February 15, 2032. The bonds are secured by a second priority security interest in the Land Bank’s present and future transfer fees and unrestricted revenue. The bonds are additionally secured by a guarantee of the Town. Proceeds from the 2012 Series A Bonds were used to purchase the Siasconset Golf Course. The Town is subject to various debt limits by statute and may issue additional general obligation debt under the normal debt limit. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 54 Basic Financial Statements At June 30, 2012, the Town had the following authorized and unissued debt: Governmental Activities Purpose Amount Bike paths……………………………………………………$ 599,250 Title V Septic……………………………………………… 2,000,000 Total General Government………………………………$2,599,250 Business-Type Activities Purpose Amount Landfill…………………………………………………..……$ 2,308,948 Sewer……………………………………………………… 11,831,872 Our Island Home……………………………………………175,000 Nantucket Memorial Airport………………………………30,032,100 Siasconsset Water Company…………………………… 2,100,000 Wannacomet Water Company……………………………1,100,000 Total Enterprise……………….……………………………$47,547,920 Land Bank Component Unit Purpose Amount Land Bank …………………………………………………$1,171,692 Total…………………………………………………………$ 51,318,862 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 55 Basic Financial Statements Changes in Long-term Liabilities During the fiscal year ended June 30, 2012, the following changes occurred in long-term liabilities: Balance at Balance at June 30, June 30, Current 2011 Additions Reductions 2012 Portion GOVERNMENTAL ACTIVITIES: Long-Term Bonds………………………………$ 69,057,471 $ 4,529,900 $ (8,117,855) $ 65,469,516 $ 5,496,334 Compensated Absences……………………… 1,293,382 148,656 (258,676) 1,183,362 236,672 Workers' Compensation……………………… 249,374 89,510 (249,374) 89,510 89,510 Other Postemployment Benefits……………… 16,410,405 5,005,600 (2,027,205) 19,388,800 - Total Governmental Funds……………………$ 87,010,632 $ 9,773,666 $ (10,653,110) $ 86,131,188 $ 5,822,516 BUSINESS-TYPE ACTIVITIES: Long-Term Bonds and Notes…………………$ 80,661,578 $ 11,485,100 $ (6,013,685) $ 86,132,993 $ 5,067,015 Compensated Absences……………………… 816,784 222,341 (444,682) 594,443 118,888 Other Postemployment Benefits……………… 3,959,010 1,207,600 (489,062) 4,677,548 - Landfill Closure………………………………… 3,064,000 965,000 - 4,029,000 - Total Business-type Funds……………………$ 88,501,372 $ 13,880,041 $ (6,947,429) $ 95,433,984 $ 5,185,903 LAND BANK COMPONENT UNIT: Long-Term Bonds and Notes…………………$ 31,639,835 $ 8,570,343 $ (5,592,312) $ 34,617,866 $ 4,764,125 Other Postemployment Benefits……………… 348,900 - - 348,900 - Total Land Bank Component Unit…………… 31,988,735 8,570,343 (5,592,312) 34,966,766 4,764,125 COUNTY COMPONENT UNIT: Other Postemployment Benefits……………… 143,591 52,122 (26,061) 169,652 - Total Component Units…………………………$ 32,132,326 $ 8,622,465 $ (5,618,373) $ 35,136,418 $ 4,764,125 Total………………………………………………$ 207,644,330 $ 32,276,172 $ (23,218,912) $ 216,701,590 $ 15,772,544 Long-term liabilities of the governmental activities, business-type activities, and Land Bank and County component units are generally liquidated by the general fund, the business-type activities, and the Land Bank and County component units, respectively. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 56 Basic Financial Statements NOTE 8 – GOVERNMENTAL FUND BALANCE CLASSIFICATIONS Governmental accounting standards establish a hierarchy for fund balance classifications and the constraints imposed on the uses of those resources. The reporting standards establish a hierarchy for fund balance classifications and the constraints imposed on the uses of those resources. The Town reports two major types of fund balances, which are nonspendable and spendable. Nonspendable fund balances are balances that cannot be spent because they are not expected to be converted to cash or they are legally or contractually required to remain intact. Examples of this classification are prepaid items, inventories, and principal (corpus) of an endowment fund. In addition to the nonspendable fund balance, the Town reports spendable fund balances based on a hierarchy of spending constraints.  Restricted: fund balances that are constrained by external parties, constitutional provisions, or enabling legislation.  Committed: fund balances that contain self-imposed constraints of the government from its highest level of decision making authority.  Assigned: fund balances that contain self-imposed constraints of the government to be used for a particular purpose.  Unassigned: fund balance of the general fund that is not constrained for any particular purpose. Massachusetts General Law Ch.40 §5B allows for the establishment of Stabilization funds for one or more different purposes. The creation of a fund requires a two-thirds vote of Town Meeting and must clearly define the purpose of the fund. Any change to the purpose of the fund along with any additions to or appropriations from the fund requires a two-thirds vote of Town Meeting. At year end the balance of the General Stabilization Fund is approximately $3.8 million and is reported as unassigned fund balance within the General Fund. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 57 Basic Financial Statements As of June 30, 2012, the governmental fund balances consisted of the following: Town Nonmajor Total Capital Governmental Governmental General Projects Funds Funds FUND BALANCES Nonspendable: Permanent fund principal……………………..$- $ - $ 44,305 $ 44,305 Restricted for: Town capital projects…………...……………… - 5,355,578 - 5,355,578 Community preservation……………………… - - 5,915,827 5,915,827 Town revolving funds…………………………… - - 4,688,461 4,688,461 Federal and state grants……………………… - - 538,807 538,807 Education revolving funds…………….……… - - 736,639 736,639 Trust funds……….……………………………… - - 39,704 39,704 Federal and state education grants…………. - - 762,327 762,327 School lunch……………………..……………… - - 229,793 229,793 Gift funds………………………...……………… - - 1,086,191 1,086,191 School revolving funds………………………… - - 283,760 283,760 Road improvements…………………………… - - 647,836 647,836 Expendable permanent funds………………… - - 27,779 27,779 Committed to: General government…………………………… 1,404,655 - - 1,404,655 Public safety…………………………………… 930 - - 930 Education………………………………………… 359,597 - - 359,597 Public works…………………………………… 176,461 - - 176,461 Human services………………………………… 95 - - 95 Assigned to: General government…………………………… 814,424 - - 814,424 Public safety…………………………………… 191,695 - - 191,695 Education………………………………………… 217,271 - - 217,271 Public works…………………………………… 315,622 - - 315,622 Human services………………………………… 1,005 - - 1,005 Culture and recreation………………………… 444 - - 444 Employee benefits……………………………… 34,598 - - 34,598 Free cash for FY2013 budget………………… 607,264 - - 607,264 Unassigned……………………………………….. 14,373,770 - (104,106) 14,269,664 TOTAL FUND BALANCES (DEFICIT)………………$ 18,497,831 $ 5,355,578 $ 14,897,323 $ 38,750,732 GOVERNMENTAL FUNDS Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 58 Basic Financial Statements As of June 30, 2012, the county fund balances consisted of the following: Nonmajor Total Governmental Governmental General Funds Funds FUND BALANCES Restricted for: Deeds excise……………………………………$- $ 1,049,015 $ 1,049,015 Other special revenue funds………………… - 598,727 598,727 Unassigned……………………………………….. 1,369,777 - 1,369,777 TOTAL FUND BALANCES……………………………$ 1,369,777 $ 1,647,742 $ 3,017,519 GOVERNMENTAL FUNDS NOTE 9 – 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 historical trends. At June 30, 2012, the amount of the liability for health insurance claims totaled $778,820. This liability is the best estimate based on available information. Changes in the reported liability since July 1, 2009, are as follows: Current Year Balance at Claims and Balance at Beginning of Changes in Claims Fiscal Fiscal Year Estimate Payments Year-End Fiscal Year 2010…………$ 721,784 $ 11,111,752 $ (11,050,453) $ 783,083 Fiscal Year 2011………… 783,083 10,816,282 (10,869,510) 729,855 Fiscal Year 2012………… 729,855 11,207,253 (11,158,288) 778,820 (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 special revenue fund for workers compensation. Annual appropriations are made to add to the fund. The estimated future workers’ compensation liability is based on history and injury type. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 59 Basic Financial Statements At June 30, 2012, the amount of the liability for workers’ compensation claims totaled $89,510. This liability is the Town’s best estimate based on available information. Changes in the reported liability since July 1, 2009, are as follows: Current Year Balance at Claims and Balance at Beginning of Changes in Claims Fiscal Fiscal Year Estimate Payments Year-End Fiscal Year 2010…………$ 93,146 $ 228,930 $ (145,426) $ 176,650 Fiscal Year 2011………… 176,650 219,799 (147,075) 249,374 Fiscal Year 2012………… 249,374 102,269 (262,133) 89,510 NOTE 10 – 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 $2,357,000 for the fiscal year ended June 30, 2012, 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 increases 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 actuarially 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, 2012, 2011 and 2010 totaled $4,372,452, $4,263,340 and $3,925,224 respectively, which equaled its required contributions for each fiscal year. The County’s contribution to the System for the fiscal years ended June 30, 2012, 2011 and 2010 were $126,269, $110,888, and $152,865 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 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 60 Basic Financial Statements 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 plan’s annual contributions. This information is designed to be helpful for understanding the scale of the information presented relative to the Town. NOTE 11 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS Plan Description – The Town of Nantucket administers a single-employer defined benefit healthcare plan (the plan). The plan provides lifetime healthcare for eligible retirees and their spouses through the Town’s health insurance plan, which covers both active and retired members, including the Town’s school teacher. Chapter 32B of the MGL assigns authority to establish and amend benefit provisions of the plan. Benefit provisions are negotiated between the Town and the unions representing Town employees and are renegotiated each bargaining period. The Retiree Health Plan does not issue a publicly available financial report. Funding Policy – Contribution requirements are also negotiated between the Town and union representatives. The required contribution is based on a pay-as-you-go financing requirement. The Town contributes between 80 and 90 percent of the cost of current-year premiums for eligible retired plan members and their spouses. Plan members receiving benefits contribute the remaining 10 to 20 percent of their premium costs. For fiscal year 2012, the Town contributed approximately $2.5, million to the plan. Annual OPEB Cost and Net OPEB Obligation – The Town’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The components of the Town’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Town’s net OPEB obligation are summarized in the following table: Annual required contribution……………………………………$ 5,982,000 Interest on net OPEB obligation……………………………… 1,025,000 Adjustment to the ARC………………………………………… (750,000) Annual OPEB cost (expense)……………………………… 6,257,000 Contributions made……………………………………………… (2,534,000) Increase in net OPEB obligation……………………………… 3,723,000 Net OPEB obligation - beginning of year……………………… 20,513,000 Net OPEB obligation - end of year…………………………… $ 24,236,000 The Town’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for Fiscal year 2012 was as follows: Percentage of Fiscal Year Annual Annual OPEB Net OPEB Ended OPEB Cost Cost Contributed Obligation 6/30/2012 $ 6,257,000 40% $ 24,236,000 6/30/2011 5,905,000 37% 20,513,000 6/30/2010 11,184,000 23% 16,808,000 Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 61 Basic Financial Statements Funded Status and Funding Progress – The funded status of the Plan as of the most recent actuarial valuation date, July 1, 2010, is as follows: Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Projected Unit Credit (UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 7/1/2010 $ - $ 82,253,000 $ 82,253,000 0% $ N/A N/A 7/1/2009 - 127,923,000 127,923,000 0% N/A N/A 7/1/2007 - 104,980,000 104,980,000 0% N/A N/A Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions – Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2010, actuarial valuation, actuarial liabilities were determined using the projected unit credit cost method. The actuarial assumptions included a 5.00% investment return assumption, calculated based on the funded level of the plan at the valuation date. The UAAL is being amortized over a 30 year period. The remaining amortization period at June 30, 2012 is 26 years. NOTE 12 – LANDFILL CLOSURE State and Federal laws and regulations require the Town to construct a final capping system on its landfill site when it stops accepting waste and to perform certain maintenance and monitoring functions at the site after closure. The Town’s landfill operates under an Administrative Consent Order (ACO) with the Department of Environmental Protection. The ACO was amended in fiscal year 2010 to allow for landfill mining over a five year period. The landfill currently maintains three cells, one unlined cell and two lined cells. The largest is the unlined cell which has been closed (no longer accepts waste) and is currently being mined to reduce the total footprint of the unlined area and to potentially increase future capacity. The first lined cell has been closed for several years. The second lined cell is currently accepting waste and is estimated to be closed in fiscal year 2014. The final capping of the cells is dependent on the successful continuance of the mining program, construction of new lined cells, and the approval of the Department of Environmental Protection. The Town has reflected a $4 million, closure liability at June 30, 2012, as an obligation of the solid waste enterprise fund. This amount is based upon estimates of what it would cost to perform all closure costs and post-closure care for 30 years. Actual costs may change due to inflation, changes in technology, or changes in regulations. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 62 Basic Financial Statements NOTE 13 – COMMITMENTS The Town has entered into contracts totaling approximately $13.5 million where $3 million relates to Town projects, $6.7 million relates to Airport projects, $1.5 million relates to Wannacomet improvement projects, $1.6 million relates to Sewer improvement projects and $738,000 relates to Siasconset improvement projects. NOTE 14 – 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, 2012, 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, 2012, cannot be ascertained, management believes any resulting liability should not materially affect the financial position at June 30, 2012. The Town is contingently liable for $35% of any deficit, including the operating and debt service costs, which may be incurred by the Woods Hole, Martha’s Vineyard and Nantucket Steamship Authority (the “Authority”). As of December 31, 2011, the Authority had total amount of bonds outstanding, net of unamortized premiums of $1,859,968 and the deferred loss on defeasance of $186,557, of $63,185,000, and the amount of monies in its reserve fund totaled $3,102,712. For the fiscal year ended December 31, 2011, the Authorities costs of services exceeded operating revenues $11,210,536, (Change in Net Assets). The Town is not required to make payment to the Authority unless the amount in the Authority’s reserve is insufficient. Since 1962, the Town has never made a payment to the Authority. NOTE 15 – SIGNIFICANT EVENTS The Nantucket Memorial Airport is one of over 100 transportation hubs in the United Stated that is facing the possibility of federal spending cuts by the Federal Aviation Administration (FAA). The FAA currently funds and staffs the island’s air traffic control tower. Federal grant agreements require the Airport to remain open regardless of the operation of the air traffic control tower. If the cuts are implemented, the Airport expects that operations would continue without the guidance of the control tower. The most significant financial impact that the Airport expects would be a reduction in aviation fuel revenue due to a decrease in landings. This revenue source is currently accounted for within a revolving fund and, accordingly, it is not anticipated to have a significant impact on the Airport’s operating budget. The pending deadline of the budget cut decision is currently set for early in 2013. Notes to Basic Financial Statements Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 63 Basic Financial Statements NOTE 16 – IMPLEMENTATION OF NEW GASB PRONOUNCEMENTS During fiscal year 2012, the following GASB pronouncements were implemented:  GASB Statement #62, Codification of Accounting and Financial Reporting Guidance Contained in Pre- November 30, 1989 FASB and AICPA Pronouncements. The implementation of this pronouncement did not impact the basic financial statements.  GASB Statement #64, Derivative Instruments: Application of Hedge Accounting Termination Provisions, an amendment of GASB Statement No. 53. The implementation of this pronouncement did not impact the basic financial statements. The following GASB pronouncements will be implemented in future fiscal years:  The GASB issued Statement #60, Accounting and Financial Reporting for Service Concession Arrangements, which is required to be implemented in fiscal year 2013.  The GASB issued Statement #61, The Financial Reporting Entity: Omnibus, which is required to be implemented in fiscal year 2013.  The GASB issued Statement #63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, which is required to be implemented in fiscal year 2013.  The GASB issued Statement #65, Items Previously Reported as Assets and Liabilities, which is required to be implemented in fiscal year 2013.  The GASB issued Statement #66, Technical Corrections – 2012, an amendment of GASB Statements No. 10 and No. 62, which is required to be implemented in fiscal year 2013.  The GASB issued Statement #67, Financial Reporting for Pension Plans, an amendment of GASB Statement No. 25, which is required to be implemented in fiscal year 2014.  The GASB issued Statement #68, Accounting and Financial Reporting for Pensions, an amendment of GASB Statement No. 27, which is required to be implemented in fiscal year 2015. Management is currently assessing the impact that the implementation of these pronouncements will have on the basic financial statements. Town of Nantucket, Massachusetts 64 Required Supplementary Information Required Supplementary Information Town of Nantucket, Massachusetts 65 Required Supplementary Information General Fund Budgetary Comparison Schedule General Fund Budgetary Comparison Schedule The General Fund is the general operating fund of the Town. It is used to account for all of the Town’s financial resources, except those required to be accounted for in another fund. 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…………………………………………………$- $ 61,252,026 $ 61,252,026 $ 61,252,026 Tax liens……………………………………………………………… - - - - Motor vehicle and other excise taxes……………………………… - 1,997,000 1,997,000 1,997,000 Hotel and meals taxes……………………………………………… - 2,240,000 2,240,000 2,240,000 Charges for services………………………………………………… - 9,000 9,000 9,000 Penalties and interest on taxes…………………………………… - 580,000 580,000 580,000 Payments in lieu of taxes…………………………………………… - 8,000 8,000 8,000 Licenses and permits……………………………………………… - 1,007,000 1,007,000 1,007,000 Fines and forfeitures………………………………………………… - 250,000 250,000 250,000 Intergovernmental…………………………………………………… - 1,606,689 1,606,689 1,606,689 Departmental and other…………………………………………… - 1,072,500 1,072,500 1,072,500 Investment income…………………………………………………… - 50,000 50,000 50,000 TOTAL REVENUES……………………………………………… - 70,072,215 70,072,215 70,072,215 EXPENDITURES: Current: General government…………………………………………… 1,929,121 6,460,039 8,389,160 10,518,219 Public safety……………………………………………………… 528,121 9,025,754 9,553,875 9,064,122 Education………………………………………………………… 783,257 22,789,121 23,572,378 23,261,130 Public works……………………………………………………… 469,681 3,312,650 3,782,331 3,130,326 Human services………………………………………………… 28,639 841,023 869,662 1,106,458 Culture and recreation…………………………………………… 4,366 978,106 982,472 1,166,140 Pension benefits………………………………………………… - 2,988,750 2,988,750 2,988,750 Employee benefits……………………………………………… - 8,963,860 8,963,860 7,258,907 State and county charges…………………………………………… - 532,144 532,144 532,144 Debt service: Principal…………………………………………………………… - 6,751,900 6,751,900 6,751,900 Interest…………………………………………………………… - 2,301,960 2,301,960 2,301,960 TOTAL EXPENDITURES……………………………………… 3,743,185 64,945,307 68,688,492 68,080,056 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES…………………………………………………… (3,743,185) 5,126,908 1,383,723 1,992,159 OTHER FINANCING SOURCES (USES): Transfers in…………………………………………………………… - - - 40,000 Transfers out………………………………………………………… - (7,835,552) (7,835,552) (11,278,447) TOTAL OTHER FINANCING SOURCES (USES)…………… - (7,835,552) (7,835,552) (11,238,447) NET CHANGE IN FUND BALANCE…………………………………… (3,743,185) (2,708,644) (6,451,829) (9,246,288) BUDGETARY FUND BALANCE, Beginning of year………………… - 13,660,442 13,660,442 13,660,442 BUDGETARY FUND BALANCE, End of year…………………………$(3,743,185) $ 10,951,798 $ 7,208,613 $ 4,414,154 See notes to required supplementary information. GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL FISCAL YEAR ENDED JUNE 30, 2012 Budgeted Amounts Town of Nantucket, Massachusetts 66 Required Supplementary Information Actual Amounts Variance Budgetary Carried Forward To Final Amounts To Next Year Budget $ 61,602,908 $ - $ 350,882 325,055 - 325,055 1,948,316 - (48,684) 2,711,174 - 471,174 83,315 - 74,315 681,176 - 101,176 7,329 - (671) 1,058,052 - 51,052 223,054 - (26,946) 1,640,021 - 33,332 1,592,320 - 519,820 51,408 - 1,408 71,924,128 - 1,851,913 7,167,598 2,219,079 1,131,542 8,487,197 192,626 384,299 22,496,281 576,868 187,981 2,582,349 492,083 55,894 1,042,313 1,100 63,045 1,147,001 444 18,695 2,988,749 - 1 6,134,157 34,598 1,090,152 531,772 - 372 6,656,685 - 95,215 2,147,721 - 154,239 61,381,823 3,516,798 3,181,435 10,542,305 (3,516,798) 5,033,348 106,831 - 66,831 (11,278,447) - - (11,171,616) - 66,831 (629,311) (3,516,798) 5,100,179 13,660,442 - - $ 13,031,131 $(3,516,798) $ 5,100,179 Town of Nantucket, Massachusetts 67 Required Supplementary Information Town of Nantucket, Massachusetts 68 Required Supplementary Information Retirement System Schedules of Funding Progress and Employer Contributions The Retirement System Schedule of Funding Progress presents multiyear trend information about whether the actuarial value of planned assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. The Retirement System Schedule of Employer Contributions presents multiyear trend information for required and actual contributions relating to the cost-sharing plan as a whole, of which the Town is one participating employer, as well as the Town’s proportionate share of the plan’s annual contributions. Retirement System Schedules Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 1/1/2011 $ 651,063,981 $ 1,173,483,848 $ 522,419,867 55.5% $ 239,437,303 218.2% 1/1/2010 554,876,554 1,030,210,321 475,333,767 53.9% 234,374,075 202.8% 1/1/2009 520,089,855 966,564,614 446,474,759 53.8% 249,971,296 178.6% 1/1/2007 517,396,087 825,863,068 308,466,981 62.6% 226,391,633 136.3% 1/2/2006 465,637,984 765,747,723 300,109,739 60.8% 215,474,180 139.3% 1/1/2004 378,317,300 647,655,411 269,338,111 58.4% 190,614,004 141.3% 1/1/2002 362,911,896 553,531,966 190,620,070 65.6% 173,610,557 109.8% 1/1/2000 300,396,700 462,462,500 162,065,800 65.0% 152,293,100 106.4% 1/1/1998 235,247,660 404,215,695 168,968,035 58.2% 121,161,677 139.5% 1/1/1996 157,044,089 276,107,221 119,063,132 56.9% 108,456,079 109.8% 1/1/1993 97,194,645 226,430,792 129,236,147 42.9% 97,074,725 133.1% The Town's share of the UAAL, as of January 1, 2011, is approximately 10%. See notes to required supplementary information. BARNSTABLE COUNTY CONTRIBUTORY RETIREMENT SYSTEM SCHEDULE OF FUNDING PROGRESS Town of Nantucket, Massachusetts 69 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 2011 $ 43,807,158 $ 43,807,158 100% $ 4,372,452 9.98% 2010 41,327,508 41,327,508 100% 4,263,340 10.32% 2009 39,820,453 39,820,453 100% 3,925,224 9.86% 2008 41,826,233 41,826,233 100% 3,643,915 8.71% 2007 36,738,676 36,738,676 100% 3,346,353 9.11% 2006 31,044,132 31,044,132 100% 2,761,460 8.90% 2005 27,846,430 27,846,430 100% 2,629,487 9.44% (B/A) Plan Year Annual (A) (B) County's Percentage Ended Required Actual Percentage Actual of System Wide December 31 Contributions Contributions Contributed Contributions Actual Contributions 2011 $ 43,807,158 $ 43,807,158 100% $ 126,269 0.29% 2010 41,327,508 41,327,508 100% 110,888 0.27% 2009 39,820,453 39,820,453 100% 152,865 0.38% 2008 41,826,233 41,826,233 100% 145,083 0.35% 2007 36,738,676 36,738,676 100% 138,012 0.38% 2006 31,044,132 31,044,132 100% 128,612 0.41% 2005 27,846,430 27,846,430 100% 112,420 0.40% The Town and County's Actual Contributions equaled 100% of their Required Contributions for each year presented. See notes to required supplementary information. County of Nantucket System Wide County of Nantucket BARNSTABLE COUNTY CONTRIBUTORY RETIREMENT SYSTEM SCHEDULE OF EMPLOYER CONTRIBUTIONS System Wide Town of Nantucket Town of Nantucket Town of Nantucket, Massachusetts 70 Required Supplementary Information Town of Nantucket, Massachusetts 71 Required Supplementary Information Other Postemployment Benefits Plan Schedules The Schedule of Funding Progress compares, over time, the actuarial accrued liability for benefits with the actuarial value of accumulated plan assets. The Schedule of Employer Contributions presents multiyear trend information for required and actual contributions relating to the plan. The Schedule of Actuarial Methods and Assumptions presents factors that significantly affect the identification of trends in the amounts reported. Other Postemployment Benefit Schedules Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Projected Unit Credit (UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 7/1/2010 $ - $ 82,253,000 $ 82,253,000 0% $ N/A N/A 7/1/2009 - 127,923,000 127,923,000 0% N/A N/A 7/1/2007 - 104,980,000 104,980,000 0% N/A N/A Annual Actual Percentage of Year Required Contributions the ARC Ended Contribution (ARC) Made Contributed 6/30/2012 $ 5,982,000 $ 2,534,000 42% 6/30/2011 5,680,000 2,201,000 39% 6/30/2010 10,647,000 2,587,000 24% 6/30/2009 10,745,000 2,534,000 24% See notes to required supplementary information. SCHEDULE OF FUNDING PROGRESS AND EMPLOYER CONTRIBUTIONS Schedule of Funding Progress Schedule of Employer Contributions OTHER POSTEMPLOYMENT BENEFIT PLAN Town of Nantucket, Massachusetts 72 Required Supplementary Information Actuarial Methods: Valuation date………………………………………… July 1, 2010 Actuarial cost method………………………………… Projected Unit Credit Cost Method Amortization method………………………………… Amortization payments increasing at 4.50% Remaining amortization period……………………… 30 years, open Actuarial Assumptions: Investment rate of return…………………………… 5.00%, pay-as-you-go scenario Medical/drug cost trend rate………………………… 10.0% decreasing by .75% for 6 years and by .50% for 1 year to an ultimate level of 5.00% per year. Plan Membership: Current retirees, beneficiaries, and dependents… 213 Current active members……………………………… 474 Total……………………………………………………687 See notes to required supplementary information. ACTUARIAL METHODS AND ASSUMPTIONS OTHER POSTEMPLOYMENT BENEFIT PLAN Town of Nantucket, Massachusetts 73 Required Supplementary Information Notes to Required Supplementary Information Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 74 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. An annual budget is prepared by Town Administration, reviewed and forwarded by the Board of Selectmen, reviewed and recommended by the Finance Committee to Annual Town Meeting for adoption by positive vote. 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 or in certain circumstances by vote of the Finance Committee and Board of Selectmen, as outlined in Massachusetts General Law. 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 claims and 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 2012 budget includes $73 million in appropriations and other amounts to be raised and $3.7 million in amounts carried forward from the previous fiscal year. During fiscal year 2012, the Town’s budget increased by $2.8 million mainly due free cash voted for unpaid bills and to subsidize the enterprise funds at the annual Town meeting. 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, 2012, is presented below: Net change in fund balance - budgetary basis…………………… $ (629,311) Perspective difference: Activity of the stabilization fund recorded in the general fund for GAAP…………………………………………… 100,871 Basis of accounting differences: Recognition of revenue based on available criteria……………… 227,149 Accrued expenditures……………………………………………… (12,277) Recognition of revenue for on-behalf payments………………… (2,357,000) Recognition of expenditures for on-behalf payments…………… 2,357,000 Net change in fund balance - GAAP basis…………………………$ (313,568) Notes to Required Supplementary Information Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 75 Required Supplementary Information 3. Appropriation Deficits During Fiscal year 2012, none of the Town’s general fund expenditures exceeded budgeted appropriations. 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: Notes to Required Supplementary Information Fiscal Year Ended June 30, 2012 Town of Nantucket, Massachusetts 76 Required Supplementary Information Actuarial Methods and Assumptions: Valuation Date…………………………………………………January 1, 2010 Actuarial Cost Method…………………………………………Entry Age Normal Cost Method Amortization Method…………………………………………Increasing at 4.0% per year after fiscal 2015 and 2003 Early Retirement Incentives, retiree sheriffs liability and remaining unfunded liability Asset Valuation Method………………………………………5-year smoothing of investment returns greater (less) than expected Actuarial Assumptions: Investment rate of return……………………………………8.00% Projected salary increases…………………………………Varies by length of service with ultimate rates of 4.75% and 5.25% for Groups 1 and 4, respectively Cost of living adjustments………………………………… 3.0% for the first $12,000 of retirement income, increasing to $13,000 in fiscal 2012. Plan Membership: Retired participants and beneficiaries receiving benefits……………………………………… 2,422 Terminated participants entitled to a return of their employee contributions………………… 649 Terminated participants with a vested right to a deferred or immediate benefit……………… 123 Active participants…………………………………………………………………………………… 4,786 Total…………………………………………………………………………………………………… 7,980 Remaining Amortization Period………………………………28 years from July 1, 2010 for 2002 NOTE C – OTHER POSTEMPLOYMENT BENEFITS The Town administers a single-employer defined benefit healthcare plan (“the Retiree Health plan”). The plan provides lifetime healthcare for eligible retirees and their spouses through the Town’s health insurance plan, which covers both active and retired members, including teachers. The Town currently finances its other postemployment benefits (OPEB) on a pay-as-you-go basis. As a result, the funded ratio (actual value of assets expressed as a percentage of the actuarial accrued liability) is 0%. In accordance with Governmental Accounting Standards, the Town has recorded its OPEB cost equal to the actuarial determined annual required contribution (ARC) which includes the normal cost of providing benefits for the year and a component for the amortization of the total unfunded actuarial accrued liability of the plan. The Schedule of Funding Progress presents multi-year trend information which compares, over time, the actuarial accrued liability for benefits with the actuarial value of accumulated plan assets. Projections of benefits for financial reporting purposes are based on the substantive plan and included the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit cost between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The Schedule of Actuarial Methods and Assumptions presents factors that significantly affect the identification of trends in the amounts reported. Town of Nantucket, Massachusetts 77 Other Supplementary Information Nantucket County Component Unit Combining Statements Town of Nantucket, Massachusetts 78 Other Supplementary Information Nantucket County Component Unit Combining Statements County General Fund – primary operating fund for Nantucket County. It is used to account for all financial resources, except those that are required to be accounted for in another fund. County Deeds Excise Special Revenue Fund – accounts for the deeds excise tax revenue that is returned to the County each year. County Administration – accounts for the 15% of deeds excise tax revenue that is required to be designated for County Administration. Corrections Department – accounts for the 75% of deeds excise tax revenue that is required to be designated for the County Corrections Department. Registry of Deeds – accounts for the 10% of deeds excise tax revenue that is required to be designated for the Registry of Deeds. County Other Special Revenue Funds – accounts for the proceeds of specific revenue sources that are restricted by law or administrative action to expenditures for specified purposes. This fund is comprised of the sheriff funds, state and federal grants, Cape Cod license plate fund, escrow funds and gift funds. Total Total General County Correction's Registry Deeds Excise Other Special Nantucket ASSETS Fund Administration Department of Deeds Fund Revenue Funds County Cash and cash equivalents……………………………………$ 1,199,438 $ 150,400 $ 1,407 $ 871,884 $ 1,023,691 $ 598,727 $ 2,821,856 Other assets…………………………………………………… 222,023 - - 25,324 25,324 - 247,347 TOTAL ASSETS……………………………………………… $ 1,421,461 $ 150,400 $ 1,407 $ 897,208 $ 1,049,015 $ 598,727 $ 3,069,203 LIABILITIES AND FUND BALANCES LIABILITIES: Warrants payable……………………………………………$ 995 $ - $ - $ - $ - $ - $ 995 Accrued payroll…………………………………………… 3,337 - - - - - 3,337 Payroll withholdings………………………………………… 9,424 - - - - - 9,424 Other liabilities……………………………………………… 37,928 - - - - - 37,928 TOTAL LIABILITIES…………………………………………… 51,684 - - - - - 51,684 FUND BALANCES: Restricted…………………………………………………… - 150,400 1,407 897,208 1,049,015 598,727 1,647,742 Unassigned………………………………………………… 1,369,777 - - - - - 1,369,777 TOTAL FUND BALANCES…………………………………… 1,369,777 150,400 1,407 897,208 1,049,015 598,727 3,017,519 TOTAL LIABILITIES AND FUND BALANCES………………$ 1,421,461 $ 150,400 $ 1,407 $ 897,208 $ 1,049,015 $ 598,727 $ 3,069,203 Deeds Excise Special Revenue Fund NANTUCKET COUNTY COMBINING BALANCE SHEET JUNE 30, 2012 Town of Nantucket, Massachusetts 79 Other Supplementary Information Total Other Total General County Correction's Registry Deeds Special Revenue Nantucket Fund Administration Department of Deeds Excise Funds County REVENUES: Intergovernmental………………………………………………$ 178,200 $ - $ - $ - - $ 223,615 $ 401,815 Departmental and other………………………………………… 407,011 171,920 250,000 114,614 536,534 376,744 1,320,289 Investment income……………………………………………… 4,604 96 310 1,868 2,274 - 6,878 TOTAL REVENUES…………………………………… 589,815 172,016 250,310 116,482 538,808 600,359 1,728,982 EXPENDITURES: Current: County administration……………………………………… 295,105 - - - - - 295,105 Registry of Deeds…………………………………………… 344,201 - - 59,753 59,753 73,458 477,412 Special Projects……………………………………………… - - - - - 380,695 380,695 TOTAL EXPENDITURES……………………………… 639,306 - - 59,753 59,753 454,153 1,153,212 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES…………………………… (49,491) 172,016 250,310 56,729 479,055 146,206 575,770 OTHER FINANCING SOURCES (USES): Transfers in……………………………………………………… 474,202 - - - - - 474,202 Transfers out…………………………………………………… - (140,250) (250,000) (83,952) (474,202) - (474,202) TOTAL OTHER FINANCING SOURCES (USES)…… 474,202 (140,250) (250,000) (83,952) (474,202) - - NET CHANGE IN FUND BALANCES…………………………… 424,711 31,766 310 (27,223) 4,853 146,206 575,770 FUND BALANCES AT BEGINNING OF YEAR………………… 945,066 118,634 1,097 924,431 1,044,162 452,521 2,441,749 FUND BALANCES AT END OF YEAR………………………… $ 1,369,777 $ 150,400 $ 1,407 $ 897,208 $ 1,049,015 $ 598,727 $ 3,017,519 FISCAL YEAR ENDED JUNE 30, 2012 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NANTUCKET COUNTY Deeds Excise Special Revenue Fund Town of Nantucket Massachusetts 80 Other Supplementary Information Town of Nantucket, Massachusetts 81 Additional Information Additional Information Reimbursed Reimbursed OtherDirect Direct Direct Indirect Direct Total Labor Costs Costs Costs Costs ExpendituresEXPENDITURES:Direct Salaries…………………………$ 94,495 $ - $ 24,265 $ - $ - $ 118,760 Payroll taxes…………………………… 1,359 - - - - 1,359 Consultants and professional fees… - 23,489 20,401 - 1,919 45,809 Travel…………………………………… - 1,505 1,201 - 113 2,819 Equipment……………………………… - 1,116 145 - 14 1,275 Supplies………………………………… - - 2,536 - 239 2,775 Advertising…………………………… - - 1,001 - 94 1,095 Postage………………………………… - - 706 - 66 772 Conference…………………………… - - 17 - 2 19 Dues and subscriptions……………… - - 423 - 40 463 Repairs and maintenance…………… - - 1,012 - 95 1,107 Health insurance……………………… 7,596 - - 12,656 1,480 21,732 General governance………………… - - - 17,481 - 17,481 Finance and treasurer's office……… - - - 3,372 - 3,372 Information technology……………… - - - 2,451 - 2,451 Utilities………………………………… - - - 7,321 - 7,321 TOTAL EXPENDITURES………… $ 103,450 $ 26,110 $ 51,707 $ 43,281 $ 4,062 $ 228,610 (a) (a) (b)(a) = Direct and indirect grant costs reimbursed through grant overhead.(b) = Direct and indirect grant costs not reimbursed. Indirect Cost Rate = All related costs not paid by grant/Direct labor paid by grant99,050 103,450 = 95.747%NANTUCKET PLANNING AND ECONOMIC DEVELOPMENT COMMISSIONSCHEDULE OF INDIRECT COST RATEFISCAL YEAR ENDED JUNE 30, 2012Highway Planning and General Fund UnreimbursedConstruction Grant Amounts allocable to 3C GrantTown of Nantucket, Massachusetts82Additional Information Highway Planning and General Construction Fund Grant Total REVENUES: Federal and state grants……………………………………………$- $ 224,548 $ 224,548 General fund subsidy………………………………………………… 4,062 - 4,062 TOTAL REVENUES…………………………………………… 4,062 224,548 228,610 EXPENDITURES: Salaries……………………………………………………………… - 118,760 118,760 Payroll taxes………………………………………………………… - 1,359 1,359 Consultants and professional fees………………………………… 1,919 43,890 45,809 Travel………………………………………………………………… 113 2,706 2,819 Equipment…………………………………………………………… 14 1,261 1,275 Supplies……………………………………………………………… 239 2,536 2,775 Advertising…………………………………………………………… 94 1,001 1,095 Postage……………………………………………………………… 66 706 772 Conferences………………………………………………………… 2 17 19 Dues and subscriptions……………………………………………… 40 423 463 Repairs and maintenance…………………………………………… 95 1,012 1,107 General governance………………………………………………… - 17,481 17,481 Finance and treasurer's office……………………………………… - 3,372 3,372 Information technology……………………………………………… - 2,451 2,451 Utilities………………………………………………………………… - 7,321 7,321 Health insurance……………………………………………………… 1,480 20,252 21,732 TOTAL EXPENDITURES……………………………………… 4,062 224,548 228,610 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES………$- $ - $ - NANTUCKET PLANNING AND ECONOMIC DEVELOPMENT COMMISSION SCHEDULE OF PUBLIC SUPPORT FISCAL YEAR ENDED JUNE 30, 2012 Town of Nantucket, Massachusetts 83 Additional Information