HomeMy WebLinkAboutNantucket FS 2013
TOWN OF NANTUCKET, MASSACHUSETTS
Report on Examination of
Basic Financial Statements
and Additional Information
Year Ended June 30, 2013
TOWN OF NANTUCKET, MASSACHUSETTS
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2013
Page
INDEPENDENT AUDITORS' REPORT 1-3
MANAGEMENT’S DISCUSSION AND ANALYSIS 4-15
BASIC FINANCIAL STATEMENTS:
Government-Wide Financial Statements:
Statement of Net Position 17
Statement of Activities 18
Fund Financial Statements:
Balance Sheet – Governmental Funds 19
Reconciliation of the Governmental Funds Balance Sheet Total Fund Balances
to the Statement of Net Position 20
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds 21
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 22
Statement of Net Position – Proprietary Funds 23
Statement of Revenues, Expenses, and Changes in Fund Net
Position – Proprietary Funds 24
Statement of Cash Flows – Proprietary Funds 25
Statement of Fiduciary Net Position – Fiduciary Funds 26
Statement of Changes in Fiduciary Net Position – Fiduciary Funds 27
Notes to Basic Financial Statements 28-60
REQUIRED SUPPLEMENTARY INFORMATION:
Schedules of Funding Progress –
Pension System and Other Post-Employment Benefits 62
Schedule of Contribution Funding –
Pension System and Other Post-Employment Benefits 62
Schedule of Revenues, Expenditures and Changes in Fund Balances –
Budget and Actual – General Fund 63
Notes to Required Supplementary Information 64
SUPPLEMENTARY SCHEDULES – DISCRETELY PRESENTED COMPONENT UNIT:
Nantucket County – Balance Sheet 67
Nantucket County – Schedule of Revenues, Expenditures and Changes in Fund Balances 68
ADDITIONAL INFORMATION:
Nantucket Planning and Economic Development Commission – Schedule of Indirect Cost Rate 70
Nantucket Planning and Economic Development Commission – Schedule of Public Support 71
INDEPENDENT AUDITOR’S REPORT
Honorable Board of Selectmen
Town of Nantucket, Massachusetts
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, the discretely presented component units, each major fund and the aggregate remaining fund
information of the Town of Nantucket, Massachusetts, (the “Town”) as of and for the year ended June 30,
2013 which collectively comprise the Town’s basic financial statements as listed in the table of contents.
We did not audit the financial statements of the Nantucket Islands Land Bank, a discretely presented
component unit. Those financial statements were audited by other auditors whose report has been
furnished to us, and our opinion, insofar as it relates to the amounts included for this discretely presented
component unit, is based solely on the report of the other auditors.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
out audit opinions.
Town of Nantucket, Massachusetts Page 1 of 71 Basic Annual Financial Statements
Town of Nantucket
Page Two
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, the discretely
presented component units, each major fund and the aggregate remaining fund information of the Town,
as of June 30, 2013, and the respective changes in financial position and, where applicable, cash flows
thereof for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Change in Accounting Principle
As described in Note B, the Town implemented Governmental Accounting Standards Board (GASB)
Statement No. 63, Financial Reporting of Deferred Outflow of Resources, Deferred Inflow of Resources
and Net Position. Our opinion was not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management’s
discussion and analysis, the funding and contribution progress for pension benefits and other post-
employment benefits information and budgetary comparison information as listed in the table of contents,
be presented to supplement the basic financial statements. Such information, although not part of the
basic financial statements, is required by the Governmental Accounting Standards Board, who considers
it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The combining and individual fund financial statements
are presented for purposes of additional analysis and are not a required part of the basic financial
statements. The combining and individual fund financial statements are the responsibility of management
and were derived from and relate directly to the underlying accounting and other records used to prepare
the basic financial statements. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional procedures
in accordance with auditing standards generally accepted in the United States of America. In our opinion,
the combining and individual fund financial statements are fairly stated, in all material respects, in
relation to the financial statements taken as a whole.
Town of Nantucket, Massachusetts Page 2 of 71 Basic Annual Financial Statements
Town of Nantucket
Page Three
Other Reporting Required By Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated December 5,
2013, on our consideration of the Town of Nantucket, Massachusetts’ internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
Roselli, Clark and Associates
Certified Public Accountants
Woburn, Massachusetts 01801
December 5, 2013
Town of Nantucket, Massachusetts Page 3 of 71 Basic Annual Financial Statements
Management’s Discussion and Analysis
Town of Nantucket, Massachusetts Page 4 of 71 Basic Annual Financial Statements
MANAGEMENT’S DISCUSSION AND ANALYSIS
As the management of the Town, we offer readers of the accompanying financial statements this narrative
overview and analysis of the financial activities of the Town and its component units for the fiscal year
ended June 30, 2013.
Financial Highlights
The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by
approximately $320.4 million (total net position).
The government’s total net position increased by approximately $7.3 million (2.3%). This consisted
of an increase in governmental activities’ net position by approximately $ 8.6 million (4.7% of total
governmental activities’ net position) offset by a decrease in business - type activities’ net position of
approximately $1.3 million (1.0% of business-type activities’ net position).
The Town’s Unassigned Fund Balance reported in the General Fund was approximately $13.9 million
(21.4% of General Fund expenditures). Total Fund Balance in the General Fund was approximately
$22.7 million (35.0% of General Fund expenditures). The Town reported a Restricted Fund Balance
of $1.3 million in its High School Renovation Fund and reported Total Fund Balances of
approximately $16.1 million in the Combined Nonmajor Governmental Funds.
The Town’s total debt decreased by approximately $8.9 million during the fiscal year. Detail of this
net decrease is illustrated as follows:
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Town’s basic financial
statements. The Town’s basic financial statements comprise three components: 1) government-wide
financial statements, 2) fund financial statements, 3) notes to the financial statements. This report also
contains other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements – The government-wide financial statements are designed to
provide readers with a broad overview of the Town’s finances, in a manner similar to a private-sector
business. The statement of position presents information on all of the Town’s assets and liabilities, with
Regular scheduled maturities:
Governmental Activities (5,711,332)$
Business-Type Activities (7,117,015)
Amortization of bond premium:
Governmental Activities (26,882)
Business-Type Activities (135,295)
Issuance of debt
Governmental Activities 478,449
Business-Type Activities 3,640,000
(8,872,075)$
Town of Nantucket, Massachusetts Page 5 of 71 Basic Annual Financial Statements
the difference between the two reported as net position. Over time, increases or decreases in net position
may serve as a useful indicator of whether the financial position of the Town is improving or
deteriorating.
The statement of activities presents information showing how the government’s net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flows in future fiscal
periods (e.g., uncollected taxes and earned but unused vacation leave.)
The government-wide financial statements consist of three classifications; (1) those whose activities are
principally supported by taxes and intergovernmental revenue (governmental activities); (2) those whose
activities are intended to recover all or a significant portion of their costs through user fees and charges
(business-type activities), and (3) component units.
The Town’s governmental activities consist of:
1. General government;
2. Public safety;
3. Education;
4. Public works;
5. Health and human services;
6. Culture and recreation; and,
7. Interest expense.
The Town’s business-type activities consist of:
1. Siasconset Water District;
2. Wannacomet Water District;
3. Sewer;
4. Nantucket Memorial Airport;
5. Our Island Home; and
6. Solid waste.
The Town’s component units consist of:
1. Nantucket County; and
2. Nantucket Islands Land Bank.
Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The Town, like other state
and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements. All of the funds of the Town can be divided into three categories: governmental
funds, proprietary funds, and fiduciary funds.
Accounting guidelines distinguish fund balance between amounts that are considered nonspendable, such
as fund balance associated with inventories, and other amounts that are classified based on the relative
strength of the constraints that control the purposes for which specific amounts can be spent. Beginning
with the most binding constraints, fund balance amounts will be reported in the following classifications:
Town of Nantucket, Massachusetts Page 6 of 71 Basic Annual Financial Statements
• Restricted—amounts constrained by external parties, constitutional provision, or enabling
legislation
• Committed—amounts constrained by a government using its highest level of decision-making
authority
• Assigned—amounts a government intends to use for a particular purpose
• Unassigned—amounts that are not constrained at all will be reported in the general fund or in
other major funds if negative
Governmental funds – Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By doing
so, readers may better understand the long-term impact of the government’s near-term financing
decisions.
The Town maintains numerous individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the General Fund, and Capital Projects Fund which are considered to be
major funds. Data from the other governmental funds are combined into a single, aggregated
presentation.
The Town adopts an annual appropriated budget for its general fund and its enterprise funds. A budgetary
comparison schedule has been provided for the general fund to demonstrate compliance with this budget.
Proprietary funds – The Town maintains two types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements. The Town uses an enterprise fund to account for all the business-type activities previously
discussed.
Internal service funds are used to report activities that service all other Town Departments. The Town
uses an internal service fund to account for self-insured health insurance claims.
Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial statement because
the resources of those funds are not available to support the Town’s own programs. The accounting used
for fiduciary funds is much like that used for proprietary funds.
Notes to the Financial Statements - The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Other Information - In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information concerning the Town’s progress in funding its
Town of Nantucket, Massachusetts Page 7 of 71 Basic Annual Financial Statements
obligation to provide pension benefits and other post-employment benefits to its employees as well as the
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. In the case of the Town, assets exceeded liabilities by approximately $320.5 million at the close
of the most recent fiscal year.
Condensed net asset data is presented as follows:
Net Position
By far, the largest portion (approximately $295.1 million) of the Town’s net position reflects its
investment in capital assets (e.g. land, buildings, infrastructure, machinery, and equipment) less any
related debt used to acquire those assets that is still outstanding. The Town uses these capital assets to
provide services to citizens; consequently, these assets are not available for future spending. Although
the Town’s investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
An additional portion, approximately $15.8 million, of the Town’s net position represents resources that
are subject to external restrictions on how they may be used.
The final portion, approximately $9.5 million is unrestricted and may be used to meet the Town’s current
obligations and commitments.
Governmental Activities Business-Type Activities Total
June 30,June 30,June 30,June 30,June 30,June 30,
2013 2012 2013 2012 2013 2012
Assets
Currrent and other assets 55,207,342$ 50,849,322$ 33,632,184$ 38,878,951$ 88,839,526$ 89,728,273$
Capital assets, net 231,330,728 227,503,133 199,504,003 198,089,279 430,834,731 425,592,412
Total assets 286,538,070 278,352,455 233,136,187 236,968,230 519,674,257 515,320,685
Liabilities
Long-term liabilities 79,160,096 80,466,796 91,572,974 90,248,081 170,733,070 170,714,877
Other liabilities 14,053,131 13,212,006 14,514,004 18,332,055 28,567,135 31,544,061
Total liabilities 93,213,227 93,678,802 106,086,978 108,580,136 199,300,205 202,258,938
Net Position
Invested in capital assets,
net of related debt 179,338,227 180,920,463 115,761,910 118,522,202 295,100,137 299,442,665
Restricted 15,818,386 7,698,361 - - 15,818,386 7,698,361
Unrestricted (1,831,770) (3,945,171) 11,287,299 9,865,892 9,455,529 5,920,721
Total Net Position 193,324,843$ 184,673,653$ 127,049,209$ 128,388,094$ 320,374,052$ 313,061,747$
Town of Nantucket, Massachusetts Page 8 of 71 Basic Annual Financial Statements
Condensed changes in net position data is presented as follows:
Governmental Activities Business-Type Activities Total
June 30,June 30,June 30,June 30,June 30,June 30,
2013 2012 2013 2012 2013 2012
Revenues
Program revenues:
Charges for services 5,562,748$ 4,044,598$ 31,799,794$ 32,847,185$ 37,362,542$ 36,891,783$
Operating grants and
contributions 6,022,440 5,212,063 85,992 746,499 6,108,432 5,958,562
Capital grants and
contributions 1,874,830 1,019,472 1,989,292 4,041,191 3,864,122 5,060,663
General revenues:
Property taxes 63,594,267 61,863,287 - - 63,594,267 61,863,287
Hotel and meals excise 3,092,446 2,745,571 - - 3,092,446 2,745,571
Intergovernmental 737,402 307,901 - - 737,402 307,901
Other 6,169,618 5,875,687 55,748 40,348 6,225,366 5,916,035
Total Revenues 87,053,751 81,068,579 33,930,826 37,675,223 120,984,577 118,743,802
Expenses
General government 9,765,641 8,067,153 - - 9,765,641 8,067,153
Public safety 14,042,554 14,027,728 - - 14,042,554 14,027,728
Education 35,190,752 30,155,166 - - 35,190,752 30,155,166
Public works 4,171,361 4,808,564 - - 4,171,361 4,808,564
Health and human
services 2,301,279 4,430,896 - - 2,301,279 4,430,896
Culture and recreation 2,327,315 3,782,155 - - 2,327,315 3,782,155
Debt service 2,368,538 2,082,337 - - 2,368,538 2,082,337
Siasconset water - - 712,820 682,682 712,820 682,682
Wannacomet water - - 3,785,742 3,674,493 3,785,742 3,674,493
Sewer - - 6,149,616 5,760,776 6,149,616 5,760,776
Nantucket Memorial
Airport - - 14,523,220 15,331,231 14,523,220 15,331,231
Our Island Home - - 7,079,676 6,923,716 7,079,676 6,923,716
Solid Waste - - 11,302,336 8,851,378 11,302,336 8,851,378
Total Expenses 70,167,440 67,353,999 43,553,410 41,224,276 113,720,850 108,578,275
Change in net position
before transfers 16,886,311 13,714,580 (9,622,584) (3,549,053) 7,263,727 10,165,527
Transfers (8,303,291) (11,203,631) 8,303,291 11,203,631 - -
Change in net position 8,583,020 2,510,949 (1,319,293) 7,654,578 7,263,727 10,165,527
Net position, beginning of
year, as restated 184,673,653 182,162,704 128,388,094 120,733,516 313,061,747 302,896,220
Net position, end of year 193,256,673$ 184,673,653$ 127,068,801$ 128,388,094$ 320,325,474$ 313,061,747$
Town of Nantucket, Massachusetts Page 9 of 71 Basic Annual Financial Statements
Governmental Activities – The governmental activities experienced a net increase in net position by
approximately $ 8.6 million (4.7% of governmental activities’ net position).
The following are the primary causes for the net increase in governmental activities:
Net position of the business-type activities decreased by approximately $1.3 million (1.0% of
business-type activities’ net position) from the prior year balances. The following is the
breakdown by activity of the change in net position:
Solid waste experienced a significant loss due to the increase in the provision to estimated
landfill costs. Engineering studies determined that previous estimates were not sufficient. The
Nantucket Memorial Airport overall loss was primarily due to an operating loss of approximately
$2.5 million. This was consistent with expectations and the prior year operating loss of $2.1
million. These negative results were offset by favorable operations in the other business-type
funds.
Expenses:
Provision for other post employment benefits (5,926,200)$
Provision for compensated absences (237,680)
Provision for workmen's compensation (161,236)
Expenses less than budget 2,459,444
Depreciation (3,191,816)
Other miscellaneous items (220,671)
(7,278,159)$
Revenues:
Receipts exceeding forecast 2,462,350
Gain on sale of capital assets 736,256
3,198,606$
Other Items:
Forecasted revenue surplus to fund capital additions 6,951,241$
Forecasted revenue surplus to fund principal payback 5,711,332
12,662,573$
Total Change 8,583,020$
Siasconset Water District 518,416$
Wannacomet Water District 536,360
Sewer 1,264,174
Nantucket Memorial Airport (946,506)
Our Island Home (12,959)
Solid Waste (2,678,778)
Total Change (1,319,293)$
Town of Nantucket, Massachusetts Page 10 of 71 Basic Annual Financial Statements
Fiscal Year 2013 Expenses and Program Revenues – governmental activities are graphically presented as
follows:
Major revenue sources of governmental activities consist of revenue from; Property taxes which
represented 73.1% of total revenues, down from 76.3% in the prior year. Although the percentage of
overall revenue was lower, the property tax amount increased in accordance with proposition 2 1/2, which
caps property tax increases at 2 1/2% of the prior year levy plus new growth. No other revenue sources
exceeded 10% of total revenues in either fiscal 2013 or 2012.
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
$50,000,000
Functional expenses
Program Revenues
73%
7%
2%
6%7%
4%1%
Revenues
Property taxes
Operating grants and contributions
Capital grants and contributions
Charges for services
Other
Hotel and meals excise
Intergovernmental (unrestricted)
Town of Nantucket, Massachusetts Page 11 of 71 Basic Annual Financial Statements
Educational expenses continues to be an area in which the Town devotes substantial resources. Education
costs represented the area of largest disbursement for the Town as approximately 50.3% of total
disbursements related to education up from 44.8% in the prior year. The increase, representing
approximately $5.0 million was primarily due to an increase in health insurance benefits, post-
employment benefits, salaries and general inflation. The Town is required under State law to fund a net
school spending calculation. The Town funds well in excess of the minimum requirements. Public
Safety expenses represented 20.1% of total expenses, down slightly from 20.8% in the prior year as
operations were consistent from year to year. General Government expenses represented approximately
14% of total expenses up from 12% in the previous year. This was due to increases in general costs
primarily a result of inflation and increased administration.
No other expenses represented greater than 10.0% of total expenses in either fiscal 2013 and 2012.
Fund-wide Financial Analysis of the Government’s Funds
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Governmental funds – The focus of the Town’s governmental funds is to provide information on near-
term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
Town’s financing requirements. In particular, unrestricted fund balance may serve as a useful measure of
a government’s net resources available for spending at the end of the fiscal year.
As of the close of the current fiscal year, the Town’s governmental funds balance sheet reported a
combined ending fund balance of approximately $40.0 million, an increase of approximately $1.1 million
over the prior year.
Decreases of $4.1 million in the Capital Projects Fund were offset by increases in the General Fund of
$2.7 due to favorable operating results and increases in the aggregate Nonmajor Funds of $2.5 million due
to proceeds from sale of assets, and excess grant revenue received over expenditures.
14%
20%
50%
6%
3%3%
4%
Expenses
General government
Public safety
Education
Public works
Health and human services
Culture and recreation
Interest expense
Town of Nantucket, Massachusetts Page 12 of 71 Basic Annual Financial Statements
Unassigned fund balance in the general fund was approximately $13.9 million or 21.4% of general fund
expenditures. This is available for spending at the government’s discretion. Assigned fund balance of
$5.1 million; committed fund balance of approximately $2.1 million and restricted fund balance of $1.6
million bring total general fund balance to $22.7 million or 35% of general fund expenditures.
The remainder of governmental fund balances are included as Combined Nonmajor Fund Balances and
are classified as either (1) non-spendable, due to being the corpus of an endowment in the amount of
approximately $44,000; or (2) restricted due to constraints placed externally by third-parties in the
amount of approximately $16.0 million.
Proprietary funds – The Town’s proprietary funds are made up of the same type of information found in
the government-wide financial statements under business-type activities, but in more detail; and (2) the
Town’s Internal Service Fund which accounts for the Town’s Health Claims Fund.
The Health Claims Fund has a Net Asset balance of approximately $0.3 million. This represents an
increase of approximately $0.8 million over the prior year. A positive amount from contributions
combined with lower claim activity contributed to operating revenues exceeding operating expenses.
Fiduciary Fund – The Town’s fiduciary fund is comprised primarily of the Town’s Private Purpose
Trust Funds whose net assets are approximately $2.6 million. These assets are used strictly for purposes
outside of the public domain such as scholarships and public assistance and increased by about $126,000
over the prior year due to positive contribution activity.
In addition, the Town has elected to establish a trust under Chapter 32B Section 20 of the MGL whose
sole purpose will be to accumulate funds to reduce the Town’s unfunded Post-Employment Benefits. In
2013 the Town elected to transfer seed money of $250,000 to establish the first contribution to the fund.
5
7
9
11
13
15
Revenues Expenses
Health Claims Fund
Town of Nantucket, Massachusetts Page 13 of 71 Basic Annual Financial Statements
General Fund Budgetary Highlights
Differences between the original budget and the final amended were for the most part not significant (less
than 1%) except for pensions and other employee benefits which increased by about $0.9 million
Further detail of budget to actual comparisons may be reviewed as part of the Required Supplementary
Information following the footnotes to the report.
Capital Asset and Debt Administration
Capital Assets – The Town’s investment in capital assets for its governmental and business type
activities as of June 30, 2013 amounts to approximately $431.0 million (net of accumulated depreciation)
an increase from the previous year’s balance of approximately $5.4 million. This investment in capital
assets includes land, buildings and improvements, infrastructure, machinery, equipment, and software.
The total increase is due to capital investments exceeding depreciation for the year.
Additional information on the Town’s capital assets can be found in Note II subsection D.
Long-term Debt – At the end of the current fiscal year, the Town had total debt outstanding of
approximately $144.2 million. The entire amount comprises debt backed by the full faith and credit of
the government. The Town’s total debt decreased by approximately $8.9 million during the fiscal year
due to:
The Town’s most recent credit evaluation resulted in an “Aa2” rating from Moody’s Investment Services
for general obligation debt.
State statutes limit the amount of general obligation debt a governmental entity may issue to 5.0 % of its
total assessed valuation. The current debt limitation for the Town is approximately $855 million, which
is significantly in excess of the Town’s outstanding general obligation debt classified as inside the debt
limit.
Bond anticipation note payable balances outstanding at year-end amount to approximately $8.3 million..
Additional information on the Town’s short-term and long-term debt can be found in Note II under
subsections F and G.
Regular scheduled maturities:
Governmental Activities (5,711,332)$
Business-Type Activities (7,117,015)
Amortization of bond premium:
Governmental Activities (26,882)
Business-Type Activities (135,295)
Issuance of debt
Governmental Activities 478,449
Business-Type Activities 3,640,000
(8,872,075)$
Town of Nantucket, Massachusetts Page 14 of 71 Basic Annual Financial Statements
Economic Factors and Next Year’s Budgets and Rates
Consistent with both State and National work force trends, the Town’s unemployment rates have
improved over the last 12 months but still remain at historic highs. While this trend is expected to
continue, the extent, timing or certainty of any full economic rebound cannot be reasonably estimated
at this time.
The Town’s real estate tax base is made up predominantly of residential taxes, which comprise nearly
87.8% of the Town’s real estate tax base. The Town also relies heavily on its commercial and
industrial real estate tax base, which in aggregate comprise 10.2 % of the Town’s real estate tax base.
In addition, Chapter 580 of the Acts of 1980, more commonly referred to as Proposition 2 ½, limits
the Town’s ability to increase taxes in any one year by more than two and one-half percent (2 ½%) of
the previous year tax levy plus new growth.
The Town’s housing market continues to be vibrant and consistently outpaces the state and national
indexes. Average home prices approximate $1.5 million and the average residential tax rate is 3.67
per $1,000.
The Town has responded well to the recent economic challenges. Reductions in local revenue,
primarily interest income and other reductions in revenue have caused the Town to aggressively seek
other revenue producing initiatives in order to maintain appropriations in ways that preserved local
service levels.
All of the above items were considered when the Town developed its budget for fiscal year 2014.
The budget was adopted in May 2013 and the Town expects its tax rate to be certified in December
2013.
Requests for Information
This financial report is designed to provide a general overview of the Town’s finances for all those with
an interest in the government’s finances. Questions concerning any of the information provided in this
report or request for additional financial information should be addressed to the Office of the Finance
Director, 37 Washington Street, Nantucket, Massachusetts 02554.
Complete stand-alone financial statements for Nantucket County were not prepared and thus are not
available.
Complete stand-alone financial statements for Nantucket Islands Land Bank may be obtained by
contacting Nantucket Islands Land Bank, 22 Broad Street, Nantucket, Massachusetts 02554.
Complete stand-alone financial statements for Nantucket Memorial Airport may be obtained from the
Office of the Director of Finance 37 Washington Street, Nantucket, Massachusetts 02554.
Town of Nantucket, Massachusetts Page 15 of 71 Basic Annual Financial Statements
Basic Financial Statements
Town of Nantucket, Massachusetts Page 16 of 71 Basic Annual Financial Statements
Nantucket
Governmental Business-Type Nantucket Islands
Activities Activities Total County Land Bank
Assets
Cash and cash equivalents 41,500,923$ 26,958,239$ 68,459,162$ 3,120,979$ 4,166,122$
Investments 2,127,300 - 2,127,300 - 1,178,612
Investments, designated - - - - 4,684,029
Receivables, net:
Property taxes 3,133,855 - 3,133,855 - -
User fees - 3,662,914 3,662,914 - -
Privilege fees - 273,870 273,870 - -
Departmental and other 3,491,808 - 3,491,808 - 197,400
Intergovernmental 3,369,992 2,024,182 5,394,174 82,321 -
Inventory - 466,443 466,443 - 294,660
Deposit held by third party 1,830,000 - 1,830,000 - -
Other assets - - - - 552,202
Internal balances (246,536) 246,536 - - -
Restricted cash and cash equivalents - - - - 1,769,693
Restricted investments - - - - 2,846,750
Cash surrender value of life insurance - - - - 718,096
Land conservation rights - - - - 30,000
Capital assets not being depreciated 183,934,349 27,393,089 211,327,438 3,283,842 251,723,240
Capital assets, net of accumulated depreciation 47,396,379 172,110,914 219,507,293 51,420 16,400,742
Total Assets 286,538,070 233,136,187 519,674,257 6,538,562 284,561,546
Liabilities
Warrants and accounts payable 2,819,273 1,380,078 4,199,351 16,200 290,024
Accrued payroll and withholdings 1,753,301 254,421 2,007,722 24,263 -
Accrued expenses - - - - 424,195
Health claims incurred but not reported 667,271 - 667,271 - -
Accrued interest 717,275 1,038,114 1,755,389 - -
Other liabilities 132,815 357,078 489,893 - -
Bond anticipation notes payable 2,255,034 6,060,895 8,315,929 - -
Noncurrent liabilities:
Due within one year 5,708,162 5,423,418 11,131,580 - 4,078,611
Due in more than one year 79,160,096 91,572,974 170,733,070 88,699 27,802,752
Total Liabilities 93,213,227 106,086,978 199,300,205 129,162 32,595,582
Net Position
Invested in capital assets, net of related debt 179,338,227 115,761,910 295,100,137 3,335,262 236,810,768
Restricted for:
Nonexpendable permanent funds 44,305 - 44,305 - -
Federal and State grants 3,744,513 - 3,744,513 - -
Community preservation 6,416,704 - 6,416,704 - -
Other purposes 5,612,864 - 5,612,864 1,768,963 4,616,443
Unrestricted (1,831,770) 11,287,299 9,455,529 1,305,175 10,538,753
Total Net Position 193,324,843$ 127,049,209$ 320,374,052$ 6,409,400$ 251,965,964$
TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2013
See accompanying notes to basic financial statements.
Primary Government Component Units
Town of Nantucket, Massachusetts Page 17 of 71 Basic Annual Financial Statements
Program Revenues Net (Expenses) Revenues and Changes in Net Assets
Operating Capital Nantucket
Charges for Grants and Grants and Governmental Business-Type Nantucket Islands
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total County Land Bank
Primary government:
Governmental activities:
General government 9,765,641$ 622,049$ 670,412$ 74,000$ (8,399,180)$ (8,399,180)$
Public safety 14,042,554 2,771,517 111,942 1,000 (11,158,095) (11,158,095)
Education 35,190,752 1,488,121 5,138,993 - (28,563,638) (28,563,638)
Public works 4,171,361 300,317 11,270 1,302,740 (2,557,034) (2,557,034)
Health and human services 2,301,279 132,655 70,712 - (2,097,912) (2,097,912)
Culture and recreation 2,327,315 248,089 19,111 497,090 (1,563,025) (1,563,025)
Interest expense 2,368,538 - - - (2,368,538) (2,368,538)
Total governmental activities 70,167,440 5,562,748 6,022,440 1,874,830 (56,707,422) (56,707,422)
Business-type activities:
Siasconset water 712,820 969,148 - - 256,328$ 256,328
Wannacomet water 3,785,742 4,395,389 609,647 609,647
Sewer 6,149,616 6,401,034 - 1,082,574 1,333,992 1,333,992
Nantucket Memorial Airport 14,523,220 11,595,061 85,992 906,718 (1,935,449) (1,935,449)
Our Island Home 7,079,676 4,900,186 - - (2,179,490) (2,179,490)
Solid waste 11,302,336 3,538,976 - - (7,763,360) (7,763,360)
Total business-type activities 43,553,410 31,799,794 85,992 1,989,292 (9,678,332) (9,678,332)
Total Primary Government 113,720,850$ 37,362,542$ 6,108,432$ 3,864,122$ (56,707,422) (9,678,332) (66,385,754)
Component units:
Nantucket County 828,001$ 925,233$ 166,050$ -$ 263,282
Nantucket Islands Land Bank 6,364,132 19,310,842 2,550,854 - 15,497,564
Total Component units 7,192,133$ 20,236,075$ 2,716,904$ -$ 263,282 15,497,564
General Revenues:
Property taxes 63,594,267 - 63,594,267 - -
Motor vehicle and other excise 2,338,423 - 2,338,423 - -
Hotel and meals taxes 3,092,446 - 3,092,446 - -
Community Preservation Fund surcharges 1,745,927 - 1,745,927 - -
Grants and contributions not restricted to
specific programs 737,402 - 737,402 - -
Penalties and interest on taxes 677,906 - 677,906 - -
Unrestricted investment income 66,235 55,748 121,983 - 79,753
Gain on sale of capital assets 736,256 - 736,256 - (730,387)
Miscellaneous 604,871 - 604,871 - -
Transfers (net)(8,303,291) 8,303,291 - - -
Total general revenues and transfers 65,290,442 8,359,039 73,649,481 - (650,634)
Change in Net Position 8,583,020 (1,319,293) 7,263,727 263,282 14,846,930
Net Position:
Beginning of year, as restated (see Note I)184,741,823 128,368,502 313,110,325 6,146,118 237,119,034
End of year 193,324,843$ 127,049,209$ 320,374,052$ 6,409,400$ 251,965,964$
See accompanying notes to basic financial statements.
TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2013
Component Units
Town of Nantucket, Massachusetts Page 18 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2013
Town Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Assets
Cash and cash equivalents 21,716,310$ 1,253,482$ 17,648,340$ 40,618,132$
Investments 1,839,531 - 113,682 1,953,213
Receivables, net of allowance for uncollectibles:
Property taxes 2,986,274 - 147,581 3,133,855
Departmental and other 3,361,063 - 130,745 3,491,808
Intergovernmental 728,709 - 2,641,283 3,369,992
Due from other funds 31,464 - - 31,464
Total Assets 30,663,351$ 1,253,482$ 20,681,631$ 52,598,464$
Liabilities and Fund Balances
Liabilities:
Warrants and accounts payable 625,601$ -$ 195,902$ 821,503$
Accrued payroll and withholdings 1,685,999 - 67,302 1,753,301
Deferred revenues 5,156,974 - 1,972,526 7,129,500
Other liabilities - - 132,815 132,815
Due to other funds 475,000 - - 475,000
Bond anticipation notes payable - - 2,255,034 2,255,034
Total Liabilities 7,943,574 - 4,623,579 12,567,153
Fund Balances:
Nonspendable - - 44,305 44,305
Restricted 1,577,323 1,253,482 16,013,747 18,844,552
Committed 2,114,218 - - 2,114,218
Assigned 5,146,635 - - 5,146,635
Unassigned 13,881,601 - - 13,881,601
Total Fund Balances 22,719,777 1,253,482 16,058,052 40,031,311
Total Liabilities and Fund Balances 30,663,351$ 1,253,482$ 20,681,631$ 52,598,464$
See accompanying notes to basic financial statements.
Town of Nantucket, Massachusetts Page 19 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION
JUNE 30, 2013
Total Governmental Fund Balances 40,031,311$
Capital assets used in governmental activities are not financial resources and therefore are
not reported in the funds.231,330,728
Other assets are not available to pay for current-period expenditures and are therfore
deferred in the funds.7,129,500
Assets and liabilities of the Town's internal service funds are included in the
Statement of Net Position, but are not reported in the governmental funds.257,601
In the Statement of Activities, interest is accrued on outstanding long-term debt
whereas in governmental fund interest is not reported until due.(717,275)
Long-term liabilities are not due and payable in the current period and therefore are not
reported in the government funds:
Unamortized premiums on bonds (62,909)
Bonds and notes payable (60,236,633)
Compensated absences (1,184,370)
Other post employment benefits (23,223,110)
Net Position of Governmental Activities 193,324,843$
See accompanying notes to basic financial statements.
Town of Nantucket, Massachusetts Page 20 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED JUNE 30, 2013
Town Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Revenues:
Property taxes 63,517,709$ -$ -$ 63,517,709$
Intergovernmental 4,276,032 - 2,872,691 7,148,723
Motor vehicle and other excises 1,880,619 - 33,170 1,913,789
Hotel and meals taxes 3,092,446 - - 3,092,446
Community preservation surcharges - - 1,739,157 1,739,157
Licenses and permits 1,075,074 - - 1,075,074
Penalties and interest on taxes 677,906 - - 677,906
Fines and forfeitures 208,503 - - 208,503
Investment income 64,122 - (371) 63,751
Departmental and other revenue 2,110,226 - 2,799,756 4,909,982
Contributions and donations - 1,000 257,425 258,425
Total Revenues 76,902,637 1,000 7,701,828 84,605,465
Expenditures:
Current:
General government 7,452,340 120,423 579,948 8,152,711
Public safety 8,571,708 818,044 978,921 10,368,673
Education 21,473,502 121 2,761,744 24,235,367
Public works 2,723,317 60,179 261,083 3,044,579
Health and human services 989,186 - 910,263 1,899,449
Culture and recreation 1,155,888 3,083,348 798,316 5,037,552
Pension and fringe benefits 14,831,570 - - 14,831,570
State and county assessments 546,250 - - 546,250
Debt service:
Principal 5,031,332 - 465,000 5,496,332
Interest 2,136,485 - 123,667 2,260,152
Total Expenditures 64,911,578 4,082,115 6,878,942 75,872,635
Excess (Deficiency) of Revenues Over (Under) Expenditures 11,991,059 (4,081,115) 822,886 8,732,830
Other Financing Sources (Uses):
Proceeds from bonds and notes - - 478,449 478,449
Proceeds from refunding bonds 8,685,000 - - 8,685,000
Premiums from refunding bonds 808,509 - - 808,509
Sale of capital assets - - 865,210 865,210
Payments to refunding escrow agent (9,505,125) - - (9,505,125)
Transfers in 600,428 - 318,895 919,323
Transfers out (9,843,342) (20,981) - (9,864,323)
Total Other Financing Sources (Uses)(9,254,530) (20,981) 1,662,554 (7,612,957)
Net Change in Fund Balances 2,736,529 (4,102,096) 2,485,440 1,119,873
FUND BALANCES - Beginning of year, as restated (See Note I)19,983,248 5,355,578 13,572,612 38,911,438
FUND BALANCES - End of year 22,719,777$ 1,253,482$ 16,058,052$ 40,031,311$
See acompanying notes to basic financial statements.
Town of Nantucket, Massachusetts Page 21 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
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, 2013
Net Change in Fund Balances - Total Governmental Fund Balances 1,119,873$
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. The net amounts are reflected here as reconciling items:
Capital outlays 6,951,241
Depreciation expense (3,191,816)
Net effect of reporting capital assets 3,759,425
In the Statement of Activities, Internal Service Funds established to administer the Town's
health insurance and worker's compensation activities are included within the activity,
whereas these activities are not presented in the Statement of Revenues, Expenditures and
Changes in Fund Balances.813,146
The issuance of long-term debt provides current financial resources to governmental funds,
while the repayment of the principal of long-term debt consumes the financial resources of
governmental funds. Neither has any effect on net assets. Also governmental funds report
the effect of issuance costs, premiums, discounts, and similar items when debt is first issued,
whereas these amounts are deferred and amortized in the Statement of Activities. The
net amounts are reflected here as reconciling items:
Proceeds from bonds and notes (478,449)
Proceeds from refunding bonds (8,685,000)
Premiums from refunding bonds (808,509)
Payments to refunding escrow agent 9,505,125
Repayments of debt 5,496,332
Net effect of reporting long-term debt 5,029,499
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 differ between
the two statements. The amount presented represents the difference in deferred revenue.1,506,162
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and therefore are not reported as expenditures in the governmental funds:
Accrued interest 92,383
Compensated absences (1,008)
Amortization of deferred charges on refunding (24,267)
Amortization of premiums on bonds and notes payable 26,882
Other post employment benefits (3,739,075)
Net effect of reporting long-term liabilities (3,645,085)
Change in Net Position of Governmental Activities 8,583,020$
See accompanying notes to basic financial statements.
Town of Nantucket, Massachusetts Page 22 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2013
Governmental
Activities
Nantucket Our Internal
Siasconset Wannacomet Memorial Island Solid Service
Water Water Sewer Airport Home Waste Total Fund
Assets
Current assets:
Cash and cash equivalents 1,189,217$ 5,342,193$ 6,285,346$ 7,645,000$ 3,738,240$ 2,758,243$ 26,958,239$ 882,791$
Investments - - - - - - - 174,087
Receivables (net):
User charges 105,359 476,654 768,390 670,650 1,136,274 505,587 3,662,914 -
Privilege fees - - 273,870 - - - 273,870 -
Intergovernmental - - 145,485 15,713 - - 161,198 -
Inventory - 21,614 - 444,829 - - 466,443 -
Due from other funds 412,362 - 526,304 - - - 938,666 197,000
Total current assets 1,706,938 5,840,461 7,999,395 8,776,192 4,874,514 3,263,830 32,461,330 1,253,878
Noncurrent assets:
Receivables (net):
Intergovernmental - - 1,862,984 - - - 1,862,984 -
Deposit held by third party - - - - - - - 1,830,000
Nondepreciable capital assets 2,812,067 3,388,367 8,895,207 9,610,325 35,717 2,651,406 27,393,089 -
Capital assets (net of depreciation)9,129,197 29,546,404 73,886,461 52,992,408 577,568 5,978,876 172,110,914 -
Total noncurrent assets 11,941,264 32,934,771 84,644,652 62,602,733 613,285 8,630,282 201,366,987 1,830,000
Total Assets 13,648,202 38,775,232 92,644,047 71,378,925 5,487,799 11,894,112 233,828,317 3,083,878
Liabilities
Current liabilities:
Warrants and accounts payable 77,020 24,348 222,445 550,001 117,568 388,696 1,380,078 1,997,770
Accrued payroll and withholdings 574 22,375 28,099 71,137 131,862 374 254,421 -
Health claims incurred but not reported - - - - - - - 667,271
Accrued interest 96,808 253,878 584,667 95,330 - 7,431 1,038,114 -
Other liabilities - - - 357,078 - - 357,078 -
Due to other funds - 669,008 - 23,122 - - 692,130 -
Bond anticipation notes payable 500,000 800,000 97,000 4,663,895 - - 6,060,895 -
Unamortized premiums on bonds 5,048 65,148 33,005 29,496 - - 132,697 -
Compensated absences - 13,323 4,309 30,303 18,767 - 66,702 -
Workers' compensation claims - - - - - - - 161,236
Bonds and notes payable 590,000 1,545,000 2,284,019 765,000 - 40,000 5,224,019 -
Total current liabilities 1,269,450 3,393,080 3,253,544 6,585,362 268,197 436,501 15,206,134 2,826,277
Noncurrent liabilities:
Unamortized premiums on bonds 75,720 562,528 232,755 241,607 - - 1,112,610 -
Compensated absences - 119,903 38,784 272,723 168,899 - 600,309 -
Landfill closure - - - - - 6,924,750 6,924,750 -
Other post employment benefits 92,379 458,999 341,375 1,854,402 2,756,191 - 5,503,346 -
Bonds and notes payable 6,785,000 19,710,000 41,971,959 8,470,000 - 495,000 77,431,959 -
Total noncurrent liabilities 6,953,099 20,851,430 42,584,873 10,838,732 2,925,090 7,419,750 91,572,974 -
Total Liabilities 8,222,549 24,244,510 45,838,417 17,424,094 3,193,287 7,856,251 106,779,108 2,826,277
Net Position
Invested in capital assets, net of related debt 4,571,149 13,562,723 40,486,736 48,432,735 613,285 8,095,282 115,761,910 -
Unrestricted 854,504 967,999 6,318,894 5,522,096 1,681,227 (4,057,421) 11,287,299 257,601
Total Net Position 5,425,653$ 14,530,722$ 46,805,630$ 53,954,831$ 2,294,512$ 4,037,861$ 127,049,209$ 257,601$
See accompanying notes to basic financial statements.
Business-Type Activities
Town of Nantucket, Massachusetts Page 23 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2013
Governmental
Activities
Nantucket Our Internal
Siasconset Wannacomet Memorial Island Solid Service
Water Water Sewer Airport Home Waste Total Fund
Operating Revenues:
Charges for services 966,059$ 4,156,950$ 6,396,715$ 11,674,061$ 4,890,168$ 3,538,520$ 31,622,473$ -$
Contributions - - - - - - - 11,441,754
Other 3,089 238,439 4,319 150,911 10,018 456 407,232 -
Total Operating Revenues 969,148 4,395,389 6,401,034 11,824,972 4,900,186 3,538,976 32,029,705 11,441,754
Operating Expenses:
Operating costs 213,444 2,269,898 2,667,292 11,769,432 7,018,610 10,889,490 34,828,166 -
Depreciation 198,769 774,522 2,124,472 2,337,481 61,066 391,072 5,887,382 -
Provision for bad debts - - - 230,890 - - 230,890 -
Employee benefits - - - - - - - 11,272,801
Total Operating Expenses 412,213 3,044,420 4,791,764 14,337,803 7,079,676 11,280,562 40,946,438 11,272,801
Operating Income (Loss)556,935 1,350,969 1,609,270 (2,512,831) (2,179,490) (7,741,586) (8,916,733) 168,953
Nonoperating Revenues (Expenses):
Intergovernmental - - 443,646 993,688 - - 1,437,334 -
Investment income 851 13,933 9,417 34,277 (2,729) - 55,749 2,484
Interest expense (300,607) (741,322) (1,357,852) (416,307) - (21,774) (2,837,862) -
Total Nonoperating Revenues (Expenses)(299,756) (727,389) (904,789) 611,658 (2,729) (21,774) (1,344,779) 2,484
Income (Loss) Before Transfers and Capital Contributions 257,179 623,580 704,481 (1,901,173) (2,182,219) (7,763,360) (10,261,512) 171,437
Privilege fees - - 638,928 - - - 638,928 -
Transfers in 278,000 - - 1,150,728 2,261,560 5,192,450 8,882,738 641,709
Transfers out (16,763) (87,220) (79,235) (196,061) (92,300) (107,868) (579,447) -
Change in Net Position 518,416 536,360 1,264,174 (946,506) (12,959) (2,678,778) (1,319,293) 813,146
Total Net Position - Beginning of the Year,
as restated (see Note I)4,907,237 13,994,362 45,541,456 54,901,337 2,307,471 6,716,639 128,368,502 (555,545)
Total Net Position - End of the Year 5,425,653$ 14,530,722$ 46,805,630$ 53,954,831$ 2,294,512$ 4,037,861$ 127,049,209$ 257,601$
See accompanying notes to basic financial statements.
Business-Type Activities
Town of Nantucket, Massachusetts Page 24 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2013
Governmental
Activities
Nantucket Our Internal
Siasconset Wannacomet Memorial Island Solid Service
Water Water Sewer Airport Home Waste Total Fund
Cash Flows from Operating Activities:
Receipts from users 1,086,439$ 4,201,694$ 6,539,899$ 11,800,010$ 4,519,660$ 3,428,472$ 31,576,174$ -$
Employee and employer contributions - - - - - - - 11,441,754
Receipts from other operating revenues 3,089 238,439 4,319 150,911 10,018 456 407,232 -
Payments to employees - (1,003,915) (851,302) (2,904,209) (3,955,305) (19,526) (8,734,257) -
Payments to vendors (149,425) (1,117,577) (1,584,171) (9,084,379) (2,496,278) (7,751,563) (22,183,393) -
Payments for interfund services used - - - - - - - (11,182,793)
Net Cash Provided by (Used in) Operating
Activities 940,103 2,318,641 4,108,745 (37,667) (1,921,905) (4,342,161) 1,065,756 258,961
Cash Flows from Noncapital Financing Activities:
Operating grants - - - 72,727 - - 72,727 -
Advances (to) from other funds (334,341) 129,343 (64,660) 41,897 - - (227,761) (120,016)
Transfers in 278,000 - - 1,150,728 2,261,560 5,192,450 8,882,738 641,709
Transfers out (16,763) (87,220) (79,235) (196,061) (92,300) (107,868) (579,447) -
Net Cash Provided by (Used in) Noncapital
Financing Activities (73,104) 42,123 (143,895) 1,069,291 2,169,260 5,084,582 8,148,257 521,693
Cash Flows from Capital and Related Financing Activities:
Proceeds from the issuance of bonds and notes - - 275,000 1,325,000 - - 1,600,000 -
Sewer privilege fees - - 458,108 - - - 458,108 -
Proceeds from capital grants - - - 1,528,087 - - 1,528,087 -
Acquisition and construction of capital assets (201,792) (1,776,070) (2,785,072) (2,437,965) (120,789) - (7,321,688) -
Proceeds from bond anticipation notes 500,000 800,000 97,000 4,663,895 - - 6,060,895 -
Repayments of bond anticipation notes - - - (8,968,090) - - (8,968,090) -
Principal payments on bonds and notes (575,000) (1,555,000) (2,081,802) (619,000) - (110,000) (4,940,802) -
Interest payments on bonds and notes (317,238) (838,250) (1,052,313) (445,968) - (21,774) (2,675,543) -
Net Cash Used in Capital and Related
Financing Activities (594,030) (3,369,320) (5,089,079) (4,954,041) (120,789) (131,774) (14,259,033) -
Cash Flows from Investing Activities:
Investment income 851 13,933 9,417 34,277 (2,729) - 55,749 2,484
Investment of operating cash - - - - 309,929 - 309,929 99,653
Net Cash Provided by Investing Activities 851 13,933 9,417 34,277 307,200 - 365,678 102,137
Net Change in Cash and Cash Equivalents 273,820 (994,623) (1,114,812) (3,888,140) 433,766 610,647 (4,679,342) 882,791
Cash and Cash Equivalents:
Beginning of the year 915,397 6,336,816 7,400,158 11,533,140 3,304,474 2,147,596 31,637,581 -
End of the year 1,189,217$ 5,342,193$ 6,285,346$ 7,645,000$ 3,738,240$ 2,758,243$ 26,958,239$ 882,791$
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used in) Operating Activities:
Operating Income (Loss)556,935$ 1,350,969$ 1,609,270$ (2,512,831)$ (2,179,490)$ (7,741,586)$ (8,916,733)$ 168,953$
Adjustments to reconcile operating income (loss) to net
cash provided by (used in) operating activities:
Depreciation 198,769 774,522 2,124,472 2,337,481 61,066 391,072 5,887,382 -
Provision for bad debt expense - - - 230,890 - - 230,890 -
Changes in assets and liabilities:
Receivables 120,380 44,744 143,184 100,799 (370,508) (110,048) (71,449) -
Inventory - 108,409 - (217,616) - - (109,207) -
Working capital deposit - - - - - - - (19,400)
Accounts payable and accrued expenses 64,019 39,997 231,819 49,760 567,027 222,651 1,175,273 109,408
Landfill closure - - - - - 2,895,750 2,895,750 -
Other liabilities - - - (26,150) - - (26,150) -
Net Cash Provided by (Used in) Operating
Activities 940,103$ 2,318,641$ 4,108,745$ (37,667)$ (1,921,905)$ (4,342,161)$ 1,065,756$ 258,961$
Noncash investing capital and financing activities:
Intergovernmental subsidies of debt service -$ -$ 452,363$ -$ -$ -$ 452,363$ -$
Amortization of bond premiums 5,052 66,160 34,222 29,861 - - 135,295 -
See accompanying notes to basic financial statements.
Business-Type Activities
Town of Nantucket, Massachusetts Page 25 of 71 Basic Annual Financial Statements
TOWN OF NANUCKET, MASSACHUSETTS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2013
Other Post Private
Employment Purpose Agency
Benefits Trust Fund Trust Funds Funds
Assets
Cash and cash equivalents 250,111$ 226,629$ 299,625$
Investments - 2,397,951 -
Receivables, net of allowance for uncollectibles - - 99,046
Total Assets 250,111 2,624,580 398,671
Liabilities
Warrants payable - 225 -
Accrued payroll and withholdings - - 8,281
Agency liabilities - - 390,390
Total Liabilities - 225 398,671
Net Position
Held in trust for other post employment benefits 250,111 - -
Held in trust for private purposes - 2,624,355 -
Total Net Position 250,111$ 2,624,355$ -$
See accompanying notes to basic financial statements.
Town of Nantucket, Massachusetts Page 26 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
YEAR ENDED JUNE 30, 2013
Other Post Private
Employment Purpose
Benefits Trust Fund Trust Funds
Additions
Contributions:
Employer 250,000$ -$
Other - 400,702
Total contributions 250,000 400,702
Investment income:
Interest and dividends 111 -
Net appreciation in fair value of investments - (16,239)
Less - investment management fees - -
Net investment earnings 111 (16,239)
Other income - 11,400
Total Additions 250,111 395,863
Deductions
Life and health insurance premiums paid for retirees - -
Education - scholarships - 130,850
Health and human services - public assistance - 138,190
Total Deductions - 269,040
CHANGE IN NET POSITION 250,111 126,823
NET POSITION AT BEGINNING OF YEAR - 2,497,532
NET POSITION AT END OF YEAR 250,111$ 2,624,355$
See accompanying notes to basic financial statements.
Town of Nantucket, Massachusetts Page 27 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2013
I. Summary of Significant Accounting Policies
The accompanying basic financial statements of the Town have been prepared in conformity with
generally accepted accounting principles (GAAP) as applied to state and local governments. GAAP
is prescribed by the Governmental Accounting Standards Board (GASB), which is the primary
standard-setting body for state and local government entities. The following is a summary of the more
significant policies and practices used by the Town:
A. Reporting Entity
The Town is located in Nantucket County, thirty miles south of Cape Cod and was incorporated as a
Town in 1671. An elected five member Board of Selectmen (“Selectmen”) governs the Town and an
appointed Town Manager oversees the Town’s daily executive and administrative duties. The Town
provides governmental services for the territory within its boundaries, including police and fire
protection, public education in grades K-12, water and sewer services, solid waste disposal, street
maintenance, elderly housing, parks and recreational facilities and an airport.
Discretely Presented Component Units – The Town includes two entities as component units in the
Town's reporting entity because of the significance of their operations or financial relationships with
the Town are such that exclusion would cause the basic financial statements to be misleading. Unless
otherwise indicated, the notes to the basic financial statements pertain only to the primary
government. A description of the discretely presented component units and their relationships with
the Town follows:
Nantucket County – The County of Nantucket (“the County”) is presented in a separate column to
emphasize that it is legally separate from the Town but included because the Town is financially
accountable for, and can impose its will on, the organization. The County shares the same
geographical boundaries as the Town, and the Town’s Selectmen serve ex-officio as the County
Commissioners. The County operates a Registry of Deeds and a Corrections Office. The County
does not issue complete financial statements at June 30, 2013.
Nantucket Islands Land Bank – The Nantucket Islands Land Bank (“the Land Bank”) was created
by Chapter 669 of the Acts of 1983 of the Commonwealth of Massachusetts to acquire and
manage open space and protect natural resources in Nantucket County. The Land Bank is
administered by the Nantucket Islands Land Bank Commission, which is comprised of five
elected members. It is legally separate from the Town but presented as a discrete component unit
as the Land Bank’s bonds payable are guaranteed by the full faith and credit of the Town. The
Land Bank issued complete financial statements at June 30, 2013 which may be obtained by
contacting Nantucket Islands Land Bank, 22 Broad Street, Nantucket, Massachusetts 02554.
Availability of Financial Information of Certain Town Enterprise Funds – The Nantucket Memorial
Airport issues separate audited financial statements which may be obtained by contacting them at 14
Airport Road, Nantucket, MA 02554.
Town of Nantucket, Massachusetts Page 28 of 71 Basic Annual Financial Statements
B. Government-Wide and Fund Financial Statements
In 2013, the Town implemented GASB Statement No. 63, Financial Reporting of Deferred
Outflows of Resources, Deferred Inflows of Resources, and Net Position. As a result of the
implementation, the basic financial statements were renamed to the statement of net position and
statement of revenues, expenses and changes in net position. These statements were formerly
referred to as the statement of net assets and statement of revenues, expenses and changes in net
assets. All previous references to net assets have been replaced with the concept of net position
in accordance with GASB 63. The Town did not have any assets or liabilities that were required
to be reported as deferred outflows of resources and deferred inflows of resources in these
financial statements.
The government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the non-fiduciary activities of the primary government and
its component units. For the most part, the effect of interfund activity has been removed from
these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a
significant extent on fees and charges for support. Likewise the primary government is reported
separately from the legally separate component units.
Separate financial statements are provided for governmental funds, proprietary funds and
fiduciary funds, even though the fiduciary funds are excluded from the government-wide
financial statements. Major individual government funds and major individual enterprise funds
are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated
and presented in a single column.
Major Fund Criteria – Major funds must be reported if both of the following criteria are met:
1) The total assets, liabilities, revenues, or expenditures/expenses of an individual
governmental or enterprise fund are at least ten percent of the corresponding element
(assets, liabilities, etc.) for all funds of that category or type (total governmental or total
enterprise funds), and
2) The total assets, liabilities, revenues, or expenditures/expenses of the individual
governmental fund or enterprise fund are at least five 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.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Under this method, revenues are
recorded when earned and expenses are recorded when a liability is incurred. 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 are met.
Town of Nantucket, Massachusetts Page 29 of 71 Basic Annual Financial Statements
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include: 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
The governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized when
susceptible to accrual (i.e. measurable and available). Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay liabilities of
the current period. Expenditures are recorded when the related fund liability is incurred, except
for unmatured interest on general long-term debt which is recognized when due, certain
compensated absences, claims and judgments which are recognized when the obligations are
expected to be liquidated with current expendable available resources.
The Town considers property tax revenues to be available if they are collected within 60 days
after the end of the fiscal year. Investment income associated with the current fiscal period is
susceptible to accrual and has been recognized as revenue of the current fiscal period. All other
revenue items are considered to be measurable and available only when the cash is received and
are recognized as revenue at that time.
The government reports the following major Governmental Funds:
General Fund – is the government’s primary operating fund. It accounts for all financial
resources of the general government except those required to be accounted for in another
fund.
Town Capital Projects Fund – is used to account for all financial resources that are restricted,
committed or assigned for the acquisition or construction of capital facilities and other capital
assets of the governmental funds.
Nonmajor Governmental Funds – consist of other special revenue and permanent funds that
are aggregated and presented in the Nonmajor Governmental Funds column on the
Governmental Funds financial statements. The following describes the general use of these
fund types:
The Special Revenue Funds are used to account for the proceeds of specific revenue sources
that are restricted or committed to expenditures for specified purposes other than debt service
or capital projects.
The Permanent Funds are used to account for financial resources that are restricted to the
extent that only earnings, not principal, may be used for purposes that support the
governmental programs.
The proprietary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Under this method, revenues are
recognized when earned and expenses are recorded when the liabilities are incurred.
Town of Nantucket, Massachusetts Page 30 of 71 Basic Annual Financial Statements
Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues are user charges and fees, while operating expenses consist of
salaries, ordinary maintenance, assessments and depreciation. All revenues and expenses not
meeting this definition are reported as non-operating revenues and expenses.
The government reports the following major proprietary funds:
Siasconset Water Enterprise Fund – is used to account for the operations of the Town’s water
activities in the Siasconset service area of the Town.
Wannacomet Water Enterprise Fund – is used to account for the operations of the Town’s
water activities in the remaining service areas of the Town.
Sewer Enterprise Fund – is used to account for the operations of the Town’s sewer activities.
Nantucket Memorial Airport Enterprise Fund – is used to account for the operations of the
Town’s airport.
Our Island Home Enterprise Fund – is used to account for the operations of Town’s nursing
home activities.
Solid Waste Enterprise Fund – is used to account for the operations of the Town’s landfill
activities.
Additionally, the following proprietary fund type is reported:
Internal Service Fund – is used to account for the Town’s self-insured health insurance and
workers’ compensation activities. Because these services primarily benefit governmental
rather than business-type activities, they have been included within governmental activities in
the government-wide financial statements.
Fiduciary fund financial statements are reported using the economic resources measurement focus
and use the accrual basis of accounting. Fiduciary funds are used to account for assets held in a
trustee capacity and cannot be used to support the governmental programs.
The government reports the following fiduciary funds:
Other Post-Employment Benefits Trust Fund – is used to accumulate funds for future
payments of other post-employment benefits for retirees, such as health and life insurance.
Private Purpose Trust Fund – is used to account for trust arrangements under which the
principal and income benefit individuals, private organizations or other governments. This
fund is used for scholarships and affordable housing programs.
Agency Fund – is used to account for assets held in a purely custodial capacity. The Town’s
agency funds consist primarily of student activities, off-duty work details and escrow and
other deposits.
Town of Nantucket, Massachusetts Page 31 of 71 Basic Annual Financial Statements
When both restricted and unrestricted resources are available for use, it is the Town’s policy to
use restricted resources first, then unrestricted resources, as they are needed.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Equity
Deposits and Investments – The Town’s cash and cash equivalents are considered to be cash on
hand, demand deposits, and short-term investments with original maturities of three months or
less from the date of acquisition.
Investments for the Town and its component units are reported at fair value.
Receivables – Real estate and personal property taxes are assessed on January 1 every year. Bills
are sent quarterly and are due on August 1, November 1, February 1, and May 1, or thirty days
subsequent to the mailing date. Interest accrues on delinquent taxes at the rate of 14% per
annum. Property taxes levied are recorded as receivables in the fiscal year of the levy. The Town
is allowed to take delinquent taxes into tax title fourteen days subsequent to the mailing of a
demand for payment of the delinquent taxes.
User charges receivables represent amounts billed for water, sewer, monthly landfill tipping fees,
annual commercial landfill user fees, airport fuel sales and nursing home fees. Water and sewer
charges are billed monthly and are subject to penalties and interest if not paid by the respective
due date. The Town is authorized to take water and sewer fees into tax title fourteen days
subsequent to the mailing of a demand for payment of the delinquent taxes.
Real estate taxes, water user fees and sewer user fees that are secured through a lien process are
considered 100% collectible. Accordingly, an allowance for uncollectible balances for these
receivables is not reported. All personal property tax and excise tax receivables are shown net of
an allowance for uncollectible balances comprised of those outstanding amounts greater than five
years old. Departmental, landfill, airport and nursing home receivables are shown net of an
allowance for uncollectible balances based on historical trends and specific account analysis.
Sewer privilege fees represent betterments assessed to property owners related to upgrades to the
Surfside Wastewater Treatment Plant. These are considered 100% collectible since they are
secured through a lien on the owner’s property.
Inventories and Prepaid Items – Inventories of the Wannacomet Water Enterprise Fund and
Nantucket Memorial Enterprise Fund are valued at the lower of cost or market, with cost
determined on a first-in, first out basis. Certain supplies and small tools are expensed when
purchased.
All other inventories, which are not material to the basic financial statements, are considered to
be expenditures at the time of purchase.
Restricted Assets – Certain assets of the component units are classified as restricted because their
use is restricted by contract covenants.
Capital Assets – Capital assets, which include land, land improvements, buildings and
improvements, machinery and equipment, vehicles and infrastructure (e.g. roads, water and sewer
mains, and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements.
Town of Nantucket, Massachusetts Page 32 of 71 Basic Annual Financial Statements
Capital assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at the estimated fair market value at the date of
donation. Interest incurred during the construction phase of capital assets of business-type
activities is included as part of the capitalized value of the assets constructed.
All purchases and construction costs in excess of $10,000 are capitalized at the date of acquisition
or construction, respectively, with expected lives of greater than one year. The costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend assets lives
are not capitalized.
Capital assets (excluding land and construction-in-process) are depreciated on a straight-line-
basis. The estimated useful lives of capital assets being depreciated are as follows:
Buildings and improvements 33-50 years
Machinery and equipment 5-7 years
Vehicles 5-10 years
Infrastructure 40-70 years
Interfund Balances – Activity between funds that are representative of lending arrangements
outstanding at the end of the fiscal year are referred to as either due to/from other funds or
advances to/from other funds. All other outstanding balances between funds are reported as due
to/from other funds.
Any residual balances outstanding between the governmental activities and business-type
activities are reported in the government-wide financial statements as internal balances.
Interfund Transfers – During the course of its operations, resources are permanently reallocated
between and within funds. These transactions are reported as transfers in and transfers out in the
individual fund statements. Transfers between and within governmental and fiduciary funds are
eliminated from the governmental activities in the statement of activities. Any residual balances
outstanding between the governmental activities and the business –type activities are reported in
the statement of activities as transfers, net.
Investment Income – Excluding the permanent funds, investment income derived from major and
nonmajor governmental funds is legally assigned to the general fund unless otherwise directed by
state law. Investment income of the proprietary funds is voluntarily assigned to the general fund.
Compensated Absences – It is the Town’s policy to permit employees to accumulate earned but
unused sick pay benefits. Vacation time may be carried for a period of 6 months subsequent to
year-end and if not used during this period is lost. Compensated absence liabilities related to both
governmental and business-type activities are normally paid from the funds reporting payroll and
related expenditures. Amounts related to these benefits are accrued when incurred in the
government-wide and proprietary fund financial statements. A liability for these amounts is
reported in Governmental Funds only if they have matured.
Long-term Obligations – Long-term debt is reported as a liability in the government-wide and
proprietary fund statement of net position. Bond premiums and discounts are deferred and
amortized over the life of the bonds using the effective interest method. Bond anticipation notes
payable are reported net of the applicable bond premium or discount.
Town of Nantucket, Massachusetts Page 33 of 71 Basic Annual Financial Statements
In the governmental fund financial statements, the face amount of long-term debt issued is
reported as other financing sources. Premiums received on a debt issuance are reported as other
financing sources while discounts are reported as other financing uses. Issuance costs are
exclusively reported as general government expenditures regardless of whether they are withheld
from the actual proceeds.
Deferred Outflows/Inflows of Resources – In addition to assets, the statement of financial position
will sometimes report a separate section for deferred outflows of resources. This separate
financial statement element, deferred outflows of resources, represents a consumption of net
position that applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The Town does not have any items that qualify for reporting as
a deferred outflow.
In addition to liabilities, the statement of financial position will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element, deferred
inflows of resources, represents an acquisition of net position that applies to a future period(s) and
so will not be recognized as an inflow of resources (revenue) until that time. The Town does not
have any items that qualify for reporting as a deferred inflow.
Net Position – In the government-wide financial statements, net position 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
capital related debt are not considered to be capital related debt.
Net position is reported as restricted when amounts are not available for appropriation or are
legally restricted by outside parties for a specific use. Net position has been restricted for the
following:
Nonexpendable permanent funds represent the endowment portion of donor restricted trusts
that support governmental programs.
Federal and State grants represent assets that have restrictions placed on them from federal
and state granting agencies.
Community preservation represents assets that are restricted by state law for the purposes of
acquiring or developing open space and recreational facilities, historic resources and
affordable housing.
Other purposes represent assets that are restricted by donors for specific governmental
programs and uses.
Fund Equity – In the fund financial statements, fund balance for governmental funds is reported
in classifications that comprise a hierarchy based primarily on the extent in which the Town is
required to honor constraints on the specific purpose for which amounts in the funds can be spent.
Fund balance is reported in five components – non-spendable, restricted, committed, assigned,
and unassigned as described below:
Non-spendable represents amounts that cannot be spent because they are either (a) not in
spendable form (i.e. inventory or prepaid) or (b) legally or contractually required to be
maintained intact such as the corpus of an endowment.
Town of Nantucket, Massachusetts Page 34 of 71 Basic Annual Financial Statements
Restricted represents amounts that have constraints placed either externally by third-parties
(creditors, grantors, contributors, or laws or regulations of other governments) or by law
through constitutional provisions or enabling legislation. Enabling legislation authorizes the
Town to assess, levy, charge or otherwise mandate payment of resources (from external
resource providers) and includes a legally enforceable requirement (compelled by external
parties) that those resources be used only for the specific purposes stipulated in the
legislation.
Committed represents amounts that can only be used for specific purposes pursuant to
formal action of the Town Meeting through Town Meeting Articles, which represent the
most binding constraint that give rise to committed fund balance. Those committed amounts
cannot be used for any other purpose unless the Town Meeting removes or changes the
specified use by taking the same type of action (through Town Meeting Articles) it
employed previously to commit those amounts.
Assigned represents amounts that are constrained by the Town’s intent to be used for
specific purposes, but are neither restricted nor committed. The Town has by ordinance
authorized the Town Accountant to assign fund balance. The Town Meeting may also
assign fund balance as it does when appropriating fund balance to cover a gap between
estimated revenue and appropriations in the subsequent year’s appropriated budget.
Unassigned represents amounts that have not been restricted, committed or assigned to
specific purposes within the general fund. The general fund is the only fund that reports a
positive unassigned fund balance amount. Other governmental funds besides the general
fund can only report a negative unassigned fund balance amount.
When both restricted and unrestricted resources are available for use, it is the Town’s policy to
use restricted resources first, then unrestricted resources (committed, assigned and unassigned) as
they are needed. When unrestricted resources (committed, assigned and unassigned) are available
for use it is the Town’s policy to use committed resources first, then assigned, and then
unassigned as they are needed.
The Town has not established financial policies with respect to maintaining minimum fund
balance amounts.
Stabilization Fund – The Town maintains a general stabilization fund which may be used for any
municipal purpose upon a two-thirds vote of the Town Meeting. The balance of the fund totals
$3,740,988 at June 30, 2013 and is reported as unassigned fund balance in the General Fund.
Encumbrances – The Town’s encumbrance policy regarding the general fund is to (1) classify
encumbrances that arise from the issuance of purchase orders resulting from normal purchasing
activity approved by the Town Accountant as assigned, and (2) classify encumbrances that result
from an action of the Town Meeting as committed. Encumbrances of funds already restricted, or
committed are included within the classification of those fund balances and not reported
separately. The Town reports $2,547,551 of encumbrances from normal purchasing activity in
the general fund as assigned. There are no encumbrances reported in any other fund.
Town of Nantucket, Massachusetts Page 35 of 71 Basic Annual Financial Statements
The following table reflects the Town’s fund equity categorizations:
E. Excess of Expenditures Over Appropriations
During the fiscal year ended, expenditures did not exceed appropriations for the legally adopted
budget.
F. Use of Estimates
The preparation of basic financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure for contingent assets and liabilities at the date of the basic financial statements and the
reported amounts of the revenues and expenditures/expenses during the fiscal year. Actual results
could vary from estimates that were used.
II. Detailed Notes to All Funds
A. Deposits and Investments
A cash and investment pool is maintained that is available for use by all funds. Each fund type’s
portion of this pool is displayed on the balance sheet as “cash and cash equivalents”. The
deposits and investments of trust funds are held separately from those of other funds.
Town Nonmajor
Capital Governmental
General Projects Funds Total
Nonspendable:
Nonexpendable trust funds -$ -$ 44,305$ 44,305$
Restricted:
General government - - 906,402 906,402
Public safety - - 5,127,986 5,127,986
Education - - 1,858,929 1,858,929
Public works - - 602,513 602,513
Health and human services - - 684,920 684,920
Culture and recreation - - 416,293 416,293
Community preservation - - 6,416,704 6,416,704
Capital outlay - 1,253,482 - 1,253,482
Debt service 1,577,323 - - 1,577,323
Committed:
General government 1,105,828 - - 1,105,828
Education 826,592 - - 826,592
Other purposes 181,798 - - 181,798
Assigned:
Purchase orders 2,547,551 - - 2,547,551
Subsequent years' budget 2,599,084 - - 2,599,084
Unassigned 13,881,601 - - 13,881,601
22,719,777$ 1,253,482$ 16,058,052$ 40,031,311$
Town of Nantucket, Massachusetts Page 36 of 71 Basic Annual Financial Statements
State laws and regulations require the Town to invest funds only in pre-approved investment
instruments which include but are not necessarily limited to bank deposits, money markets,
certificates of deposit, U.S. obligations, repurchase agreements, and State Treasurer’s investment
pool (the Pool). In addition, the statutes impose various limitations on the amount and length of
investments and deposits. Repurchase agreements cannot be for a period of over ninety days, and
the underlying security must be a United States obligation.
The Pool meets the criteria of an external investment pool. The Pool is administered by the
Massachusetts Municipal Depository Trust (the MMDT), which was established by the Treasurer
of the Commonwealth who serves as Trustee. The fair value of the position in the Pool is the
same as the value of the Pool shares.
Custodial Credit Risk: Deposits - In the case of deposits, this is the risk that in the event of a bank
failure, the government’s deposits may not be returned to it. The Town and the County have
adopted a deposit policy which requires that the Treasurer 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 time. The Land Bank does not have a policy regarding
custodial credit risk for deposits.
Primary Government
At year-end, the carrying amount of the Town's deposits was $66,116,985 and the bank balance
was $67,878,910. Of the Town's bank balance, $19,342,549 was covered by federal depository
insurance or the Depositors Insurance Fund (“DIF”), and $48,536,361 was fully collateralized.
Discretely Presented Component Unit – Nantucket County
At year-end, the carrying amount of the County's deposits was $3,120,879 and the bank balance
of $3,120,480 was covered by federal depository insurance or fully collateralized.
Discretely Presented Component Unit – Nantucket Islands Land Bank
At year-end, the carrying amount of the Land Bank’s deposits was $5,935,805, of which
$300,945 was exposed to custodial credit risk.
The Land Bank is required to hold monies in reserve in accordance with certain land acquisitions
and debt service requirements of bond issuances. These reserve funds are included as restricted
cash in the financial statements.
Custodial Credit Risk: Investments – In the case of investments, this is the risk that in the event of
the invested party not being able to provide required payments to investors, ceasing to exist, or
filing of bankruptcy, the Town may not be able to recover the full amount of its principal
investment and/or investment earnings. The Town and the County have adopted an investment
policy regarding custodial credit risk that requires all securities not held directly by the Treasurer
must be held by a third party custodian approved by the Treasurer in the Town/County’s name
and tax identification number. The Land Bank does not have a policy regarding custodial credit
risk for investments.
Town of Nantucket, Massachusetts Page 37 of 71 Basic Annual Financial Statements
Primary Government
The Town’s investments of $4,428,851 in U.S. government obligations and $96,400 in corporate
debt securities are held by a broker-dealer where the Town’s assets are segregated from the
broker-dealer firm assets and are protected up to $500,000 under coverage through the Securities
Investor Protection Corporation (“SIPC”). Additionally, the broker-dealer carries excess
insurance to cover claims over the SIPC limit through Lloyd’s with a firm cap of $1 billion with
no individual client limit. The repurchase agreements consist of overnight sweep agreements
which are invested in U.S. Treasury notes.
Discretely Presented Component Unit – Nantucket County
At year-end, the County’s investments consisted of Certificates of Deposit totaling $42,886 which
were covered by federal depository insurance and were not subject to custodial credit risk.
Discretely Presented Component Unit – Nantucket Islands Land Bank
At year-end, the Land Bank’s investments consisted of Certificates of Deposit totaling
$8,709,391 which were covered by federal depository insurance or DIF and were not subject to
custodial credit risk.
The Land Bank has entered into an agreement with the Town, which requires the Land Bank to
establish a working capital reserve fund. This fund, along with the guarantee of the Town of its
full faith and credit, secures the Series 2007A, Series 2009A and Series 2012A bonds outstanding
as of June 30, 2013. In addition, the Land Bank is prohibited from acquiring additional real estate
at any time that an amount equal to one year’s debt service relating to the bonds in the reserve
fund is not on deposit.
Interest Rate Risk – The Town limits investment maturities as a means of managing its exposure
to fair value losses arising from increasing interest rates. The policy limits investments of
operating funds to one year or less and limits investment maturities of trust funds and other
special funds to periods no longer that seven years, maintaining an average maturity no greater
than three years for the investment portfolio. The Land Bank does not have a formal policy
regarding interest rate risk.
Credit Risk – The Town and County restricts the investment of operating funds to U.S. Treasury
or Agency securities which carry “AAA” ratings. Trust and other special funds which are longer-
term investments may invest in fixed-income securities which are held principally for capital
preservation and income potential and corporate debt that carries a rating of “A” or better by
either Standard and Poor’s or Moody’s rating services. If a security falls below the “A” rating,
the security will be monitored by the Treasurer and advisor and will be noted as an exception to
the policy if held in the investment portfolio. The Treasurer will sell the securities if a decline in
value is expected. The Town’s investments of $4,428,851 in U.S. government obligations are
rated “AAA’ and the $96,400 in corporate debt is rated “BAA3” by Moody’s.
Concentration of Credit Risk – The Town does not place a limit on the amount that may be
invested in any one issuer. The Town has 51% of its investments in United States government
backed securities and 16% in MMDT.
Town of Nantucket, Massachusetts Page 38 of 71 Basic Annual Financial Statements
At June 30, 2013 the Town had the following investments and maturities:
Time Until Maturity (Years)
Fair Less More
Investment Type Value Than 1 1-5 6-10 Than 10
Corporate fixed income securities 96,400$ -$ -$ -$ 96,400$
U.S. government obligations 4,428,851 1,012,319 3,416,532 - -
Total Town investments with maturities 4,525,251 1,012,319$ 3,416,532$ -$ 96,400$
Other Investments:
Repurchase agreements 1,351,547
External investment pool (MMDT)1,766,996
Total Town investments 7,643,794$
B.Receivables
Receivables as of year-end for the Town's individual major and non-major governmental funds
in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Gross Allowance for Net
Amount Uncollectibles Amount
Receivables:
Real estate and personal property taxes 3,356,341$ (222,486)$ 3,133,855$
Tax liens 2,744,183 - 2,744,183
Motor vehicle and other excise taxes 1,100,183 (501,539) 598,644
Departmental and other 280,981 (132,000) 148,981
Intergovernmental 3,369,992 - 3,369,992
Total 10,851,680$ (856,025)$ 9,995,655$
Receivables as of year-end for Town's proprietary funds are as follows:
Gross Allowance for Net
Amount Uncollectibles Amount
Receivables:
Water user charges 582,013$ -$ 582,013$
Sewer user charges 768,390 - 768,390
Sewer privilege fees 273,870 - 273,870
Airport user charges 937,750 (267,100) 670,650
Our Island Home user charges 1,136,274 - 1,136,274
Solid waste user charges 674,116 (168,529) 505,587
Intergovernmental 2,024,182 - 2,024,182
Total 6,396,595$ (435,629)$ 5,960,966$
Town of Nantucket, Massachusetts Page 39 of 71 Basic Annual Financial Statements
Massachusetts Water Pollution Abatement Trust – The Town has entered into numerous loan
agreements with the Massachusetts Water Pollution Abatement Trust (“MWPAT”). It is
expected that the Town will be subsidized by MWPAT on a periodic basis for principal in the
amount of $2,008,469 and interest in the amount of $1,669,700 until the maturity of these
agreements. GAAP requires the recognition of gross debt relative to these agreements; therefore,
a receivable totaling $2,008,469 has been reported in the Sewer Enterprise Fund.
Also, as of June 30, 2013 the Town had yet to receive, from undrawn loan proceeds an amount of
$521,551; however, since the Town is legally obligated for the total amount of the debt, the gross
total amount to be received has been recorded as temporary debt in the accompanying basic
financial statements and the amount not yet received has been recorded as a receivable in the
accompanying basic financial statements within the governmental activities.
Governmental funds report deferred revenue in connection with receivables for revenues that
are not considered to be available to liquidate liabilities of the current period. The following
identifies the components of deferred revenues in the governmental funds:
Other
General Governmental
Fund Funds Total
Receivable type:
Real estate and personal property taxes 1,795,911$ 147,581$ 1,943,492$
Tax liens 2,744,183 - 2,744,183
Motor vehicle and other excise taxes 598,644 - 598,644
Departmental and other 18,236 130,745 148,981
Intergovernmental - 1,694,200 1,694,200
Total 5,156,974$ 1,972,526$ 7,129,500$
C. Interfund Receivables, Payables and Transfers
The composition of interfund balances at June 30, 2013 is as follows:
Internal
General Siasconset Service
Fund Water Sewer Fund Total
General Fund -$ 278,000$ -$ 197,000$ 475,000$
Wannacomet Water 8,342 134,362 526,304 - 669,008
Nantucket Memorial Airport 23,122 - - - 23,122
Total 31,464$ 412,362$ 526,304$ 197,000$ 1,167,130$
The outstanding balances between funds result mainly from the timing differences between the
dates that transactions occur and the transfers of cash to the individual funds are made.
Payable Fund
Receivable Fund
Town of Nantucket, Massachusetts Page 40 of 71 Basic Annual Financial Statements
The composition of interfund transfers for the fiscal year ended June 30, 2013, is as follows:
(1) Transfer to nonmajor funds to fund community school program and waterways. Transfers to
enterprise funds to subsidize operations and capital.
(2) Transfers to general fund to close out unspent capital funds.
(3) Transfers to general fund for indirect costs.
Nonmajor Nantucket Old Internal
General Governmental Siasconset Memorial Island Solid Service
Fund Funds Water Airport Home Waste Fund Total
General Fund -$ 318,895$ 278,000$ 1,150,728$ 2,261,560$ 5,192,450$ 641,709$ 9,843,342$ (1)
Town Capital Projects 20,981 - - - - - - 20,981 (2)
Siasconset Water 16,763 - - - - - - 16,763 (3)
Wannacomet Water 87,220 - - - - - - 87,220 (3)
Sewer 79,235 - - - - - - 79,235 (3)
Nantucket Memorial Airport 196,061 - - - - - - 196,061 (3)
Old Island Home 92,300 - - - - - - 92,300 (3)
Solid Waste 107,868 - - - - - - 107,868 (3)
Total 600,428$ 318,895$ 278,000$ 1,150,728$ 2,261,560$ 5,192,450$ 641,709$ 10,443,770$
Transfers In
Transfers Out
D. Capital Assets
Capital asset activity for governmental activities for the year ended June 30, 2013, was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital assets not being depreciated:
Land 170,414,375$ -$ (104,200)$ 170,310,175$
Construction in process 9,185,447 4,865,158 (426,431) 13,624,174
Total capital assets not being depreciated 179,599,822 4,865,158 (530,631) 183,934,349
Capital assets being depreciated:
Buildings and improvements 52,506,267 825,236 - 53,331,503
Infrastructure 27,692,822 310,979 - 28,003,801
Machinery and equipment 4,228,980 1,040,354 - 5,269,334
Vehicles 8,416,503 440,145 - 8,856,648
Total capital assets being depreciated 92,844,572 2,616,714 - 95,461,286
6,951,241
Less accumulated depreciation for:
Buildings and improvements (17,766,839) (1,306,131) - (19,072,970)
Infrastructure (18,553,787) (827,852) - (19,381,639)
Machinery and equipment (2,403,818) (587,101) - (2,990,919)
Vehicles (6,148,647) (470,732) - (6,619,379)
Total accumulated depreciation (44,873,091) (3,191,816) - (48,064,907)
Total capital assets being depreciated, net 47,971,481 (575,102) - 47,396,379
Total governmental activities capital assets, net 227,571,303$ 4,290,056$ (530,631)$ 231,330,728$
Town of Nantucket, Massachusetts Page 41 of 71 Basic Annual Financial Statements
An overstatement of the capital assets of governmental activities as of June 30, 2012, netting
$2,220,697 was discovered by management during the current year. Accordingly, an adjustment
has been made in these financial statements to restate the net position of governmental activities
as described in Section III, Note I.
An overstatement of the capital assets of business-type activities as of June 30, 2012, netting to
$1,447,762, was discovered by management during the current year. The capital assets of the
Siasconset Water Fund, Wannacomet Water Fund, Sewer Fund and Our Island Home Fund were
overstated by $77,017, $1,012,711, $333,977, and $24,057, respectively. Accordingly, an
adjustment has been made in these financial statements to restate the net position of the business-
type activities activities as described in Section III, Note I.
Capital asset activity for business-type activities for the year ended June 30, 2013, was as follows:
Beginning Ending
Balance Increases Decreases Balance
Business-Type Activities:
Capital assets not being depreciated:
Land 17,833,070$ -$ -$ 17,833,070$
Construction in process 17,087,237 4,815,286 (12,342,504) 9,560,019
Total capital assets not being depreciated 34,920,307 4,815,286 (12,342,504) 27,393,089
Capital assets being depreciated:
Buildings and improvements 13,192,953 85,734 - 13,278,687
Infrastructure 189,600,810 14,129,777 - 203,730,587
Machinery and equipment 22,302,219 137,401 - 22,439,620
Vehicles 4,853,123 274,863 - 5,127,986
Total capital assets being depreciated 229,949,105 14,627,775 - 244,576,880
Less accumulated depreciation for:
Buildings and improvements (4,959,023) (339,594) - (5,298,617)
Infrastructure (41,736,585) (4,610,720) - (46,347,305)
Machinery and equipment (15,596,844) (746,295) - (16,343,139)
Vehicles (4,286,132) (190,773) - (4,476,905)
Total accumulated depreciation (66,578,584) (5,887,382) - (72,465,966)
Total capital assets being depreciated, net 163,370,521 8,740,393 - 172,110,914
Total business-type activities capital assets, net 198,290,828$ 13,555,679$ (12,342,504)$ 199,504,003$
Town of Nantucket, Massachusetts Page 42 of 71 Basic Annual Financial Statements
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities: Siasconset Water
Capital assets not being depreciated:
Land 2,681,127$ -$ -$ 2,681,127$
Construction in process 817,196 130,940 (817,196) 130,940
Total capital assets not being depreciated 3,498,323 130,940 (817,196) 2,812,067
Capital assets being depreciated:
Buildings and improvements 364,855$ -$ -$ 364,855$
Infrastructure 9,002,119 888,048 - 9,890,167
Machinery and equipment 76,796 - - 76,796
Total capital assets being depreciated 9,443,770 888,048 - 10,331,818
Less accumulated depreciation for:
Buildings and improvements (201,407) (9,121) - (210,528)
Infrastructure (755,476) (185,952) - (941,428)
Machinery and equipment (46,969) (3,696) - (50,665)
Total accumulated depreciation (1,003,852) (198,769) - (1,202,621)
Total capital assets being depreciated, net 8,439,918 689,279 - 9,129,197
Total Siasconset Water capital assets, net 11,938,241$ 820,219$ (817,196)$ 11,941,264$
Business-type Activities: Wannacomet Water
Capital assets not being depreciated:
Land 3,388,367$ -$ -$ 3,388,367$
Capital assets being depreciated:
Buildings and improvements 1,792,458 - - 1,792,458
Infrastructure 31,110,093 1,716,421 - 32,826,514
Machinery and equipment 3,691,633 59,649 - 3,751,282
Vehicles 267,998 - - 267,998
Total capital assets being depreciated 36,862,182 1,776,070 - 38,638,252
Less accumulated depreciation for:
Buildings and improvements (339,547) (45,179) - (384,726)
Infrastructure (4,891,343) (640,471) - (5,531,814)
Machinery and equipment (2,831,571) (77,126) - (2,908,697)
Vehicles (254,865) (11,746) - (266,611)
Total accumulated depreciation (8,317,326) (774,522) - (9,091,848)
Total capital assets being depreciated, net 28,544,856 1,001,548 - 29,546,404
Total Wannacomet Water capital assets, net 31,933,223$ 1,001,548$ -$ 32,934,771$
Business-type Activities: Sewer
Capital assets not being depreciated:
Land 6,375,583$ -$ -$ 6,375,583$
Construction in process 7,501,712 2,246,381 (7,228,469) 2,519,624
Total capital assets not being depreciated 13,877,295 2,246,381 (7,228,469) 8,895,207
Capital assets being depreciated:
Buildings and improvements 259,201 12,500 - 271,701
Infrastructure 75,734,522 7,228,469 - 82,962,991
Machinery and equipment 15,500,048 30,197 - 15,530,245
Vehicles 753,357 274,863 - 1,028,220
Total capital assets being depreciated 92,247,128 7,546,029 - 99,793,157
Less accumulated depreciation for:
Buildings and improvements (136,403) (6,552) - (142,955)
Infrastructure (12,529,664) (1,628,826) - (14,158,490)
Machinery and equipment (10,572,777) (441,248) - (11,014,025)
Vehicles (543,380) (47,846) - (591,226)
Total accumulated depreciation (23,782,224) (2,124,472) - (25,906,696)
Total capital assets being depreciated, net 68,464,904 5,421,557 - 73,886,461
Total Sewer capital assets, net 82,342,199$ 7,667,938$ (7,228,469)$ 82,781,668$
Town of Nantucket, Massachusetts Page 43 of 71 Basic Annual Financial Statements
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated:
Land 2,736,587$ -$ -$ 2,736,587$
Construction in process 8,732,612 2,437,965 (4,296,839) 6,873,738
Total capital assets not being depreciated 11,469,199 2,437,965 (4,296,839) 9,610,325
Capital assets being depreciated:
Infrastructure 72,976,593 4,296,839 - 77,273,432
Machinery and equipment 1,594,537 - - 1,594,537
Vehicles 3,741,004 - - 3,741,004
Total capital assets being depreciated 78,312,134 4,296,839 - 82,608,973
Less accumulated depreciation for:
Infrastructure (22,860,368) (2,077,723) - (24,938,091)
Machinery and equipment (1,021,593) (128,577) - (1,150,170)
Vehicles (3,397,123) (131,181) - (3,528,304)
Total accumulated depreciation (27,279,084) (2,337,481) - (29,616,565)
Total capital assets being depreciated, net 51,033,050 1,959,358 - 52,992,408
Total Nantucket Memorial Airport capital assets, net 62,502,249$ 4,397,323$ (4,296,839)$ 62,602,733$
Business-type Activities: Our Island Home
Capital assets not being depreciated:
Construction in process 35,717$ -$ -$ 35,717$
Capital assets being depreciated:
Buildings and improvements 1,347,083 73,234 - 1,420,317
Machinery and equipment 138,269 47,555 - 185,824
Vehicles 90,764 - - 90,764
Total capital assets being depreciated 1,576,116 120,789 - 1,696,905
Less accumulated depreciation for:
Buildings and improvements (907,241) (43,008) - (950,249)
Machinery and equipment (60,266) (18,058) - (78,324)
Vehicles (90,764) - - (90,764)
Total accumulated depreciation (1,058,271) (61,066) - (1,119,337)
Total capital assets being depreciated, net 517,845 59,723 - 577,568
Total Our Island Home capital assets, net 553,562$ 59,723$ -$ 613,285$
Business-type Activities: Solid Waste
Capital assets not being depreciated:
Land 2,651,406$ -$ -$ 2,651,406$
Capital assets being depreciated:
Buildings and improvements 9,429,356 - - 9,429,356
Infrastructure 777,483 - - 777,483
Machinery and equipment 1,300,936 - - 1,300,936
Total capital assets being depreciated 11,507,775 - - 11,507,775
Less accumulated depreciation for:
Buildings and improvements (3,374,425) (235,734) - (3,610,159)
Infrastructure (699,734) (77,748) - (777,482)
Machinery and equipment (1,063,668) (77,590) - (1,141,258)
Total accumulated depreciation (5,137,827) (391,072) - (5,528,899)
Total capital assets being depreciated, net 6,369,948 (391,072) - 5,978,876
Total Solid Waste capital assets, net 9,021,354$ (391,072)$ -$ 8,630,282$
Business-type Activities: Nantucket Memorial Airport
Town of Nantucket, Massachusetts Page 44 of 71 Basic Annual Financial Statements
An understatement of the capital assets of the Nantucket County Discretely Presented Component
Unit as of June 30, 2012, netting to $3,255,383, was discovered by management during the
current year. Accordingly, an adjustment has been made in these financial statements to restate
the net position of Nantucket County as described in Section III, Note I.
Depreciation expense was charged to functions/programs as follows:
Governmental Activities:Business-Type Activities:
General government 131,180$ Water 973,291$
Public safety 1,104,094 Sewer 2,124,472
Education 907,671 Airport 2,337,481
Public works 757,573 Our Island Home 61,066
Health and human services 11,123 Solid waste 391,072
Culture and recreation 280,175 5,887,382$
3,191,816$
Discretely Presented Component Unit - Nantucket County
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated:
Land 3,283,842$ -$ -$ 3,283,842$
Capital assets being depreciated:
Machinery and equipment 211,012 - - 211,012
Less accumulated depreciation for:
Machinery and equipment (144,059) (15,533) - (159,592)
Total capital assets being depreciated, net 66,953 (15,533) - 51,420
Total Nantucket County capital assets, net 3,350,795$ (15,533)$ -$ 3,335,262$
Discretely Presented Component Unit - Nantucket Islands Land Bank
Beginning Ending
Balance Increases Decreases Balance
Capital assets not being depreciated:
Land 240,424,440$ 12,270,500$ (971,700)$ 251,723,240$
Capital assets being depreciated:
Buildings, improvements and equipment 23,139,620 1,465,794 (636,535) 23,968,879
Less: accumulated depreciation (6,638,688) (1,001,297) 71,848 (7,568,137)
Total capital assets being depreciated, net 16,500,932 464,497 (564,687) 16,400,742
Total Nantucket Islands Land Bank
capital assets, net 256,925,372$ 12,734,997$ (1,536,387)$ 268,123,982$
Town of Nantucket, Massachusetts Page 45 of 71 Basic Annual Financial Statements
E. Temporary Debt
The Town is authorized to borrow on a temporary basis to fund the following:
Current Operating Costs – Prior to collection of revenues, expenditures may be financed through
the issuance of revenue or tax anticipation notes (RANS or TANS).
Capital Projects and Other Approved Costs – Projects may be temporarily funded through the
issuance of bond anticipation notes (BANS) or grant anticipation notes (GANS). In certain cases,
prior to the issuance of these temporary notes, the governing body must take the necessary legal
steps to authorize the issuance of the general obligation bonds. Temporary notes may not exceed
the aggregate amount of bonds authorized or the grant award amount.
Temporary notes are general obligations of the Town and carry maturity dates that are limited by
state law. Interest expenditures and expenses for temporary borrowings are accounted for in the
general fund and enterprise funds, respectively. Temporary notes outstanding at June 30, 2013,
are payable as follows:
Short-term (BANs) issued for nonmajor governmental funds were used for septic betterments
($521,551), highway projects ($633,483), and recreational fields ($1,100,000). Those issued for
business-type funds were issued for water projects ($1,300,000), sewer projects ($97,000) and
airport projects ($4,663,895).
The Town has entered into a $1,000,000 no-interest loan agreement with the MWPAT, with
proceeds used to fund the Town’s septic management program. A portion of the loan was
permanently financed during the fiscal year ($478,449), while the remainder ($521,551) will be
recorded as short-term debt until permanently financed.
F. Long–Term Obligations
The Town issues general obligation bonds and notes to provide funds for the acquisition and
construction of major capital facilities. General obligation bonds and notes have been issued for
Interest Maturity July 1,June 30,
Type Rate Date 2012 Additions Retirements 2013
BAN 0.00%N/A 1,000,000$ -$ (478,449)$ 521,551$
BAN 1.25%6/6/14 - 1,100,000 - 1,100,000
BAN 0.70%6/6/14 - 633,483 - 633,483
Total Governmental Notes 1,000,000 1,733,483 (478,449) 2,255,034
BAN 1.25%Matured 8,968,090 - (8,968,090) -
BAN 0.60%Matured - 372,000 (372,000) -
BAN 1.25%6/6/14 - 6,060,895 - 6,060,895
Total Business-Type Notes 8,968,090 6,432,895 (9,340,090) 6,060,895
Total Notes Payable 9,968,090$ 8,166,378$ (9,818,539)$ 8,315,929$
Town of Nantucket, Massachusetts Page 46 of 71 Basic Annual Financial Statements
both governmental and business-type activities. Additionally, the Town incurs various other
long-term obligations relative to associated personnel costs.
State law permits a Town, under the provisions of Chapter 44, Section 10, to authorize
indebtedness up to a limit of 5.0 percent of its equalized valuation. Debt issued in accordance
with this section of the law is designated as being “inside the debt limit.” In addition, a Town
may authorize debt in excess of that limit for specific purposes. Such debt, when issued, is
designated as being “outside the debt limit”.
The following reflects the current year activity in the long-term liability accounts:
Beginning Ending Due within
Balance Additions Deletions Balance one year
Governmental Activities:
Bond and note indebtedness 65,469,516$ 9,163,449$ (14,396,332)$ 60,236,633$ 5,405,946$
Unamortized bond premium 89,791 - (26,882) 62,909 22,543
Workers' compensation 89,510 161,236 (89,510) 161,236 161,236
Compensated absences 1,183,362 237,680 (236,672) 1,184,370 118,437
Other post employment benefits 19,484,035 5,926,200 (2,187,125) 23,223,110 -
Total Governmental Activities 86,316,214$ 15,488,565$ (16,936,521)$ 84,868,258$ 5,708,162$
Business-Type Activities - Siasconset Water:
Bond and note debt 7,950,000$ -$ (575,000)$ 7,375,000$ 590,000$
Unamortized bond premium 85,820 - (5,052) 80,768 5,048
Other post employment benefits 96,944 36,436 (41,001) 92,379 -
Total Siasconset Water 8,132,764 36,436 (621,053) 7,548,147 595,048
Business-Type Activities - Wannacomet Water:
Bond and note debt 22,810,000 1,990,000 (3,545,000) 21,255,000 1,545,000
Unamortized bond premium 693,836 - (66,160) 627,676 65,148
Compensated absences 128,241 30,633 (25,648) 133,226 13,323
Other post employment benefits 387,776 94,085 (22,862) 458,999 -
Total Wannacomet Water 24,019,853 2,114,718 (3,659,670) 22,474,901 1,623,471
Business-Type Activities - Sewer:
Bond and note debt 46,198,993 275,000 (2,218,015) 44,255,978 2,284,019
Unamortized bond premium 299,982 - (34,222) 265,760 33,005
Compensated absences 36,977 13,511 (7,395) 43,093 4,309
Other post employment benefits 266,596 74,843 (64) 341,375 -
Total Sewer 46,802,548 363,354 (2,259,696) 44,906,206 2,321,333
Business-Type Activities - Nantucket Memorial Airport:
Bond and note debt 8,529,000 1,325,000 (619,000) 9,235,000 765,000
Unamortized bond premium 300,964 - (29,861) 271,103 29,496
Compensated absences 270,476 86,645 (54,095) 303,026 30,303
Other post employment benefits 1,599,576 387,675 (132,849) 1,854,402 -
Total Nantucket Memorial Airport 10,700,016 1,799,320 (835,805) 11,663,531 824,799
Business-Type Activities - Our Island Home:
Compensated absences 158,749 60,667 (31,750) 187,666 18,767
Other post employment benefits 2,302,420 657,877 (204,106) 2,756,191 -
Total Our Island Home 2,461,169 718,544 (235,856) 2,943,857 18,767
Business-Type Activities - Solid Waste:
Bond and note debt 645,000 50,000 (160,000) 535,000 40,000
Other post employment benefits 24,236 - (24,236) - -
Landfill closure 4,029,000 2,895,750 - 6,924,750 -
Total Solid Waste 4,698,236 2,945,750 (184,236) 7,459,750 40,000
Total Business-Type Activities 96,814,586$ 7,978,122$ (7,796,316)$ 96,996,392$ 5,423,418$
Town of Nantucket, Massachusetts Page 47 of 71 Basic Annual Financial Statements
The governmental activities liabilities will be liquidated by the general fund. The business-type
liabilities will be liquidated by the respective business-type funds.
The following is a summary of outstanding long-term debt obligations as of June 30, 2013:
Interest Beginning Ending
Description of Issue Rate Balance Additions Maturities Balance
Governmental Activities:
General Obligation Bonds 2.25 - 5.00%34,853,800$ -$ (12,031,800)$ 22,822,000$
Refunding Bonds 1.50 - 5.00%12,754,900 8,685,000 (1,771,000) 19,668,900
USDA Notes 4.13%1,276,500 - (34,500) 1,242,000
Massachusetts Water Pollution Abatement Trust 0.00 - 2.42%16,584,316 478,449 (559,032) 16,503,733
Total Governmental Activities 65,469,516 9,163,449 (14,396,332) 60,236,633
Add: Unamortized bond premium 89,791 - (26,882) 62,909
Total Governmental Activities, net 65,559,307$ 9,163,449$ (14,423,214)$ 60,299,542$
Business-Type Activities - Siasconset Water:
General Obligation Bonds 2.00 - 5.00%7,950,000$ -$ (575,000)$ 7,375,000$
Total Siasconset Water 7,950,000 - (575,000) 7,375,000
Business-Type Activities - Wannacomet Water:
General Obligation Bonds 2.00 - 5.00%22,350,000 - (3,490,000) 18,860,000
Refunding Bonds 1.50 - 5.00%460,000 1,990,000 (55,000) 2,395,000
Total Wannacomet Water 22,810,000 1,990,000 (3,545,000) 21,255,000
Business-Type Activities - Sewer:
General Obligation Bonds 2.00 - 5.00%5,186,200 275,000 (518,200) 4,943,000
Refunding Bonds 2.00 - 5.00%916,100 - (45,000) 871,100
Massachusetts Water Pollution Abatement Trust 0.00 - 5.50%40,096,693 - (1,654,815) 38,441,878
Total Sewer 46,198,993 275,000 (2,218,015) 44,255,978
Business-Type Activities - Nantucket Memorial Airport:
General Obligation Bonds 2.00 - 5.00%8,529,000 1,325,000 (619,000) 9,235,000
Total Nantucket Memorial Airport 8,529,000 1,325,000 (619,000) 9,235,000
Business-Type Activities - Solid Waste:
General Obligation Bonds 2.50 - 5.00%645,000 - (160,000) 485,000
Refunding Bonds 1.50 - 4.00%- 50,000 - 50,000
Total Solid Waste 645,000 50,000 (160,000) 535,000
Total Business-Type Activities 86,132,993 3,640,000 (7,117,015) 82,655,978
Add: Unamortized bond premium 1,380,602 - (135,295) 1,245,307
Total Business-Type Activities, net 87,513,595$ 3,640,000$ (7,252,310)$ 83,901,285$
Town of Nantucket, Massachusetts Page 48 of 71 Basic Annual Financial Statements
Payments on general long-term debt obligation bonds and notes due in future years consist of the following:
Year Ending Principal Interest
June 30 Balance Subsidy Net of Subsidy Balance Subsidy Net of Subsidy Total
Governmental Activities
2014 5,405,946$ -$ 5,405,946$ 1,942,707$ (418)$ 1,942,289$ 7,348,235$
2015 5,478,306 - 5,478,306 1,724,082 (354) 1,723,728 7,202,034
2016 5,498,941 - 5,498,941 1,533,653 (292) 1,533,361 7,032,302
2017 5,583,010 - 5,583,010 1,335,113 (228) 1,334,885 6,917,895
2018 5,099,993 - 5,099,993 1,146,236 (162) 1,146,074 6,246,067
2019 - 2023 15,454,848 - 15,454,848 4,066,367 (128) 4,066,239 19,521,087
2024 - 2028 9,938,131 - 9,938,131 1,866,306 - 1,866,306 11,804,437
2029 - 2033 4,147,038 - 4,147,038 731,510 - 731,510 4,878,548
2034 - 2038 3,250,920 - 3,250,920 288,991 - 288,991 3,539,911
2039 - 2043 172,500 - 172,500 64,040 - 64,040 236,540
2044 - 2048 172,500 - 172,500 28,461 - 28,461 200,961
2049 34,500 - 34,500 1,423 - 1,423 35,923
Total 60,236,633$ -$ 60,236,633$ 14,728,889$ (1,582)$ 14,727,307$ 74,963,940$
Business-Type Activities: Siasconset Water
2014 590,000$ -$ 590,000$ 298,150$ -$ 298,150$ 888,150$
2015 605,000 - 605,000 273,125 - 273,125 878,125
2016 620,000 - 620,000 245,875 - 245,875 865,875
2017 350,000 - 350,000 228,300 - 228,300 578,300
2018 355,000 - 355,000 217,100 - 217,100 572,100
2019 - 2023 1,955,000 - 1,955,000 860,426 - 860,426 2,815,426
2024 - 2028 2,310,000 - 2,310,000 435,436 - 435,436 2,745,436
2029 - 2030 590,000 - 590,000 28,650 - 28,650 618,650
7,375,000$ -$ 7,375,000$ 2,587,062$ -$ 2,587,062$ 9,962,062$
Business-Type Activities: Wannacomet Water
2014 1,545,000$ -$ 1,545,000$ 815,398$ -$ 815,398$ 2,360,398$
2015 1,560,000 - 1,560,000 750,120 - 750,120 2,310,120
2016 1,598,000 - 1,598,000 695,890 - 695,890 2,293,890
2017 1,523,000 - 1,523,000 640,497 - 640,497 2,163,497
2018 1,500,000 - 1,500,000 585,002 - 585,002 2,085,002
2019 - 2023 7,053,000 - 7,053,000 2,066,605 - 2,066,605 9,119,605
2024 - 2028 5,541,000 - 5,541,000 743,730 - 743,730 6,284,730
2029 - 2032 935,000 - 935,000 57,176 - 57,176 992,176
21,255,000$ -$ 21,255,000$ 6,354,418$ -$ 6,354,418$ 27,609,418$
Business-Type Activities: Sewer
2014 2,284,019$ (145,485)$ 2,138,534$ 1,286,000$ (277,430)$ 1,008,570$ 3,147,104$
2015 2,295,524 (155,356) 2,140,168 1,206,074 (252,251) 953,823 3,093,991
2016 2,315,733 (164,747) 2,150,986 1,129,926 (228,350) 901,576 3,052,562
2017 2,363,417 (176,386) 2,187,031 1,046,021 (200,123) 845,898 3,032,929
2018 2,256,131 (184,053) 2,072,078 968,639 (179,364) 789,275 2,861,353
2019 - 2023 11,420,492 (998,574) 10,421,918 3,699,967 (508,605) 3,191,362 13,613,280
2024 - 2028 8,940,992 (183,868) 8,757,124 2,021,936 (21,995) 1,999,941 10,757,065
2029 - 2033 6,403,914 - 6,403,914 1,094,992 - 1,094,992 7,498,906
2034 - 2038 5,975,756 - 5,975,756 367,600 - 367,600 6,343,356
44,255,978$ (2,008,469)$ 42,247,509$ 12,821,155$ (1,668,118)$ 11,153,037$ 53,400,546$
Town of Nantucket, Massachusetts Page 49 of 71 Basic Annual Financial Statements
MWPAT Loan Subsidies – As previously noted in Note I. B., the Town has entered into loan
agreements with the MWPAT. It is expected that the Town will be subsidized by MWPAT on a
periodic basis for principal in the amount of $2,008,469 and interest in the amount of $1,669,700
until the maturity of these agreements.
Refunding Transaction – On March 5, 2013, the Town issued general obligation refunding bonds
of $10,725,000 (par value) with variable interest rates of between 1.5% - 4.0% to advance refund
term bonds with variable interest rates between 2.50% - 4.125% and total values of $10,950,000.
The original bonds had an original maturity date of June 15, 2023 and are callable through
October 1, 2014.
General obligation bonds were issued at par value with a reoffering premium of $998,406; and
after issuance costs of $152,732, the net proceeds were $11,570,674. The net proceeds from the
issuance of the general obligation refunding bonds, and $166,946 of available Town funds, were
used to purchase U.S. government securities and those securities were deposited into an
irrevocable trust with an escrow agent to provide debt service payments until the term bonds are
fully callable through October 15, 2014. This advance refunding met the requirements of an in-
substance defeasance, and the term bonds were removed from the Town’s government-wide
financial statements.
As a result of this refunding, the Town reduced its total debt service requirements by $948,708.
This defeasance resulted in an economic gain (difference between the present value of the debt
service payments on the old and new debt) of $874,857.
Year Ending Principal Interest
June 30 Balance Subsidy Net of Subsidy Balance Subsidy Net of Subsidy Total
Business-Type Activities: Nantucket Memorial Airport
2014 765,000$ -$ 765,000$ 340,712$ -$ 340,712$ 1,105,712$
2015 540,000 - 540,000 321,106 - 321,106 861,106
2016 535,000 - 535,000 306,543 - 306,543 841,543
2017 515,000 - 515,000 290,498 - 290,498 805,498
2018 440,000 - 440,000 273,362 - 273,362 713,362
2019 - 2023 2,250,000 - 2,250,000 1,130,062 - 1,130,062 3,380,062
2024 - 2028 1,715,000 - 1,715,000 728,062 - 728,062 2,443,062
2029 - 2033 1,655,000 - 1,655,000 394,046 - 394,046 2,049,046
2034 - 2036 820,000 - 820,000 80,156 - 80,156 900,156
9,235,000$ -$ 9,235,000$ 3,864,547$ -$ 3,864,547$ 13,099,547$
Business-Type Activities: Solid Waste
2014 40,000$ -$ 40,000$ 20,283$ -$ 20,283$ 60,283$
2015 40,000 - 40,000 18,232 - 18,232 58,232
2016 40,000 - 40,000 17,032 - 17,032 57,032
2017 40,000 - 40,000 15,812 - 15,812 55,812
2018 40,000 - 40,000 14,563 - 14,563 54,563
2019 - 2023 175,000 - 175,000 53,210 - 53,210 228,210
2024 - 2028 160,000 - 160,000 19,412 - 19,412 179,412
535,000$ -$ 535,000$ 158,544$ -$ 158,544$ 693,544$
Town of Nantucket, Massachusetts Page 50 of 71 Basic Annual Financial Statements
In prior years, the Town refunded various bond issues. The Town issued new bonds and the
proceeds were used to purchase U.S. government securities that are held in an irrevocable trust.
The investments are sufficient to fully service the refunded debt until the debt fully matures. For
financial reporting purposes the debt has been considered defeased and has been removed as a
liability from the government-wide financial statements. At June 30, 2013, $1,970,000 of bonds
outstanding from the advanced refunding are considered defeased.
The following represents authorized and unissued debt as of June 30, 2013:
Discretely Presented Component Unit – Nantucket Islands Land Bank
The general obligation bonds are secured by a second priority security interest in the Land Bank’s
present and future transfer fees and unrestricted revenue. The bonds are additionally secured by a
guarantee of the Town.
Project Amount
Governmental:
Title V Septic 1,521,551$
Recreational playing fields 1,100,000
Business-type:
Siasconset water 500,000
Wannacomet water 1,650,000
Sewer 6,402,613
Nantucket Memorial Airport 12,669,414
Solid waste - landfill 1,133,000
Total Authorized and Unissued 24,976,578$
The following reflects the activity in the long-term liability accounts for the Land Bank for the year ended June 30, 2013:
Beginning Ending Due within
Balance Additions Deletions Balance one year
Bond and note indebtedness 34,617,866$ -$ (3,085,403)$ 31,532,463$ 4,078,611$
Other post employment benefits 348,900 - - 348,900 -
Total Land Bank 34,966,766$ -$ (3,085,403)$ 31,881,363$ 4,078,611$
The following is a summary of outstanding long-term debt obligations as of June 30, 2013:
Interest Beginning Ending
Description of Issue Rate Balance Additions Maturities Balance
Notes payable 3.00 - 6.06%4,295,343$ -$ (1,189,125)$ 3,106,218$
General Obligation Bonds 2.00 - 5.00%30,322,523 - (1,896,278) 28,426,245
Total Land Bank 34,617,866$ -$ (3,085,403)$ 31,532,463$
Town of Nantucket, Massachusetts Page 51 of 71 Basic Annual Financial Statements
Payments on general long-term debt obligation bonds and notes due in future years consist of the
following:
III. Other Information
A. Retirement System
Plan Description - The Town and the Nantucket County discretely presented component unit
contribute to the Barnstable County Retirement System (BCRS), a multiple-employer defined
benefit pension plan established under MGL Chapter 32 and is administered by the Barnstable
County Retirement Board (BCRB).
The BCRS provides retirement, disability and death benefits to plan members and beneficiaries.
Chapter 32 of the MGL assigns authority to establish and amend benefit provisions of the plan.
Cost-of-living adjustments granted between 1981 and 1997 and any increase in other benefits
imposed by the Commonwealth’s state law during those years are borne by the Commonwealth
and are deposited into the pension fund directly. Cost-of-living adjustments granted after 1997
must be approved by the BCRB and are borne by the BCRS. The BCRS issues a publicly
available unaudited financial report in accordance with guidelines established by the
Commonwealth of Massachusetts’ Public Employee Retirement Administration Commission
(PERAC) that includes financial statements and required supplementary information. The report
may be obtained by writing to the Barnstable County Retirement System, 750 Attucks Lane,
Hyannis, Massachusetts 02601.
Funding Policy – Plan members are required to contribute to the BCRS at rates ranging from 5%
to 11% of annual covered compensation. The Town and County are required to pay into the
BCRS for its share of the system-wide actuarial determined contribution that is apportioned
among the employers based on active current payroll. The contributions of plan members, the
Town, and the County are governed by Chapter 32 of the MGL. The Town’s contributions to the
BCRS for the fiscal years ended June 30, 2013, 2012, and 2011 were $4,543,194, $4,372,452, and
$4,263,340 respectively, which equaled its required contribution for each year. The County’s
contributions to the BCRS for the fiscal years ended June 30, 2013, 2012, and 2011 were
$40,348, $41,544, and $39,710 respectively, which equaled its required contribution for each
year.
Year Ending
June 30 Principal Interest Total
2014 4,100,315$ 1,083,925$ 5,184,240$
2015 2,475,279 902,651 3,377,930
2016 2,570,736 821,949 3,392,685
2017 2,151,704 738,204 2,889,908
2018 2,226,704 640,167 2,866,871
2019 - 2023 9,308,520 2,166,700 11,475,220
2024 - 2028 7,056,064 865,787 7,921,851
2029 - 2033 1,643,141 104,780 1,747,921
Total 31,532,463$ 7,324,163$ 38,856,626$
Town of Nantucket, Massachusetts Page 52 of 71 Basic Annual Financial Statements
The schedules of funding progress, presented as required supplementary information (RSI)
following the notes to the financial statements, present multi-year trend information about
whether the actuarial values of plan assets are increasing or decreasing over time relative to the
actuarial accrued liability for benefits.
B. Massachusetts Teachers’ Retirement System
Teachers and certain administrative employees of the School Department participate in a
contributory retirement system administered by the Massachusetts Teachers Retirement Board.
Contributions to that system totaled $2,597,468 for the fiscal year and were made entirely by the
Commonwealth of Massachusetts, on behalf of the Town, which does not contribute directly to
this system.
C. Other Post-Employment Benefits (OPEB)
Plan Description – The Town administers a multiple-employer defined benefit healthcare plan
(the “Plan”). The Plan provides health and life insurance benefits to current and future retirees,
their dependents and beneficiaries in accordance with Massachusetts General Law Chapter 32B.
Specific benefit provisions and contribution rates are established by collective bargaining
agreements, state law, and Town ordinance. All benefits are provided through the Town’s self-
funded insurance program described previously. The Plan does not issue a stand–alone financial
report. The number of participants in the Plan consists of 463 active employees and 307 retired
employees for a total of 770.
Funding Policy – The contribution requirements of Plan members and the Town are established
and may be amended by the Town, through negotiation with the Town employee unions.
Retirees contribute 10 – 20 percent of the calculated contribution through pension benefit
deductions. The remainder of the cost is funded by the Town. The Town pays the remainder.
The Town currently contributes enough money to the Plan to satisfy current obligations on a pay-
as-you-go basis. The costs of administering the Plan are paid by the Town.
Annual OPEB Cost and Net OPEB Obligation – The Town’s annual OPEB cost is calculated
based on the annual required contribution “ARC” of the employer, an actuarially determined
amount that is calculated in accordance with GASB Statement #45. The ARC represents a level
of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and
amortize any unfunded liabilities over a period not to exceed thirty years. The following table
reflects the activity regarding the Town’s OPEB obligation:
Annual required contribution (ARC)6,971,692$
Interest on net OPEB obligation 1,086,966
Adjustment to ARC (881,542)
Annual OPEB cost 7,177,116
Contributions made (2,612,243)$
Increase in net OPEB obligation 4,564,873
Net OPEB obligation at beginning of year 24,161,583
Net OPEB obligation at end of year 28,726,456$
Town of Nantucket, Massachusetts Page 53 of 71 Basic Annual Financial Statements
An understatement of the Town’s OPEB liability at June 30, 2012 totaling $95,235 was
discovered by management during the current year. Accordingly, an adjustment has been made
in these financial statements to restate the net position of governmental activities as described in
Section III, Note I.
Trend information regarding annual OPEB cost, the percentage of the annual OPEB cost
contributed and the net OPEB obligation is as follows:
Fiscal Year
Ending
Annual OPEB
Cost
(AOPEBC)
Percentage of
AOPEBC
Contributed
Net OPEB
Obligation
June 30, 2011 $ 5,905,000 37.3% $ 20,513,000
June 30, 2012 $ 6,257,000 40.5% $ 24,161,583
June 30, 2013 $ 7,177,116* 36.4% $ 28,726,456
* Reflected in the Statement of Activities as follows:
The AOPEBC at June 30, 2013 was charged to the following functional programs: General
Government $600,355; Public Safety $1,280,394; Education $3,517,603; Public Works $334,682;
Health and Human Services $116,473; Culture and Recreation $76,693; Siasconset water
$36,436; Wannacomet water $94,085; Sewer $74,843; Airport $387,675; and Old Island Home
$657,877.
Funding Status and Funding Progress – The funded status of the Plan at June 30, 2013, based on
the most recent actuarial valuation performed as of June 30, 2012, was as follows (in millions):
Actuarial
Value of
Assets
(A)
Actuarial
Accrued
Liability
(AAL) Entry
Age Normal
Cost
(B)
Unfunded
AAL
(UAAL)
(B – A)
Funded
Ratio
(A/B)
Covered
Payroll
(C)
UAAL as a
Percentage
of Covered
Payroll
((B-A)/C)
$ - $88.6 $88.6 0.0% 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 into the future. Amounts determined
regarding the funded status of the Plan and the ARC of the employer are subject to continual
revision as estimates are compared to actual results and past expectations. The schedules of
funding progress, presented as required supplementary information (RSI) following the notes to
the financial statements, present multi-year trend information about whether the actuarial values
of plan assets are increasing or decreasing over time relative to the AAL for benefits.
Methods and Assumptions – Projections of benefits for financial reporting purposes are based on
the substantive Plan 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 the Plan members to
that point. The actuarial methods and assumptions used include techniques that are designed to
reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets,
consistent with the long-term perspective of the calculations. The significant methods and
assumptions as of the latest valuation are as follows:
Town of Nantucket, Massachusetts Page 54 of 71 Basic Annual Financial Statements
Valuation date: June 30, 2012
Actuarial cost method Projected Unit Credit
Amortization method 4.0 percent increasing
Remaining amortization period: 30 years (open)
Interest discount rate: 4.5 percent
Inflation rate: 4.0 percent
Healthcare/Medical cost trend rate: 8.0% decreasing by 0.5% for 6 years to an
ultimate level of 5.0% per year
Discretely Presented Component Unit – Nantucket County
Plan Description – Nantucket County’s employees participate in the multiple-employer defined
benefit healthcare plan administered by the Town which was described previously.
Funding Policy – The contribution requirements of Plan members and the County are established
and may be amended by the Town, through negotiation with the County employee unions.
Retirees contribute 10 – 20 percent of the calculated contribution through pension benefit
deductions. The remainder of the cost is funded by the County. The County pays the remainder.
The County currently contributes enough money to the Plan to satisfy current obligations on a
pay-as-you-go basis. The costs of administering the Plan are paid by the Town.
Annual OPEB Cost and Net OPEB Obligation – The County's annual OPEB cost is calculated
based on the annual required contribution (ARC) of the employer, and actuarially determined
amount that is calculated in accordance with GASB Statement #45. The ARC represents a level
of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and
amortize any unfunded liabilities over a period not to exceed thirty years. The following table
reflects the activity regarding the County's OPEB obligation:
An overstatement of the County’s OPEB liability at June 30, 2012 totaling $95,235 was
discovered by management during the current year. Accordingly, an adjustment has been made
in these financial statements to restate the net position of governmental activities as described in
Section III, Note I.
Annual required contribution (ARC)23,433$
Interest on net OPEB obligation 3,654
Adjustment to ARC (3,016)
Annual OPEB cost 24,071
Contributions made (9,789)$
Increase in net OPEB obligation 14,282
Net OPEB obligation at beginning of year 74,417
Net OPEB obligation at end of year 88,699$
Town of Nantucket, Massachusetts Page 55 of 71 Basic Annual Financial Statements
D. 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 years.
Health Insurance – The Town maintains a "reinsured cost reimbursement program" which covers
the group health insurance requirements of a majority of Town employees. The Plan is
essentially a self-insurance program and employee claims in excess of $150,000 are reinsured by
the Plan. The Town accrues an amount representing claims incurred but not reported (IBNR),
which is based on a one month claims paid average. At June 30, 2013, the amount of the liability
for IBNR health insurance claims totaled $667,271. This liability is the best estimate based on
available information. In the fund-wide financial statements, the Town reports these self-insured
activities in the Internal Service Fund where revenues are recorded when earned and expenses are
recorded when the liability is incurred. Changes in the reported liability since July 1, 2011, are as
follows:
Balance at
Beginning
of Year
Claims and
Changes in
Estimates
Claims
Payments
Balance at
End of Year
Current
Portion
Fiscal Year 2013 $ 778,820 $ 12,022,770 $(12,134,319) $ 667,271 $ 667,271
Fiscal Year 2012 729,885 11,207,253 (11,158,288) 778,820 778,820
Workers’ Compensation – The Town is also self-insured for their workers’ compensation
activities. Workers’ compensation claims are administered by a third-party and are funded on a
pay-as-you-go basis from an Internal Service Fund, with annual appropriations being made to the
fund. The estimated future workers’ compensation liability is based on history and injury type.
At June 30, 2013, the amount of the liability for workers’ compensation claims totaled $161,236.
This liability is the best estimate based on available information.
Changes in the reported liability since July 1, 2011:
Balance at
Beginning
of Year
Claims and
Changes in
Estimates
Claims
Payments
Balance at
End of Year
Current
Portion
Fiscal Year 2013 $ 89,510 $ 234,186 $( 162,460) $ 161,236 $ 161,236
Fiscal Year 2012 176,650 102,269 ( 262,133) 89,510 89,510
E. Commitments
The Town is in the process of completing sewer system and Nantucket Memorial Airport
improvements. The Town has entered into contracts to expend approximately $1,700,000 and
$800,000, respectively to complete the projects.
Town of Nantucket, Massachusetts Page 56 of 71 Basic Annual Financial Statements
F. Contingencies
The Town is party to other certain legal claims, which are subject to many uncertainties, and the
outcome of individual litigation matters in these situations cannot be reasonably estimated.
Although the amount of liability, if any, in these situations at June 30, 2013, cannot be
ascertained, management believes that the resulting liability, if any, should not materially affect
the basic financial statements of the Town at June 30, 2013. Other amounts received or
receivable from grantor agencies are subject to audit and adjustment by grantor agencies,
principally the federal and state governments. Any disallowed claims, including amounts already
collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures
which may be disallowed by the grantor cannot be determined at this time although the Town
expects such amounts, if any, to be immaterial.
The Town is subject to certain Federal arbitrage laws in accordance with long-term borrowing
agreements. Failure to comply with the rules could result in the payment of penalties. The Town
does not believe it has failed to comply with any of these agreements.
The Town is contingently liable for 35% of any deficit, including operating and debt service
costs, which may be incurred by the Woods Hole, Martha’s Vineyard and Nantucket Steamship
Authority (the “Authority”). As of December 31, 2012, the Authority’s reserve fund balance
totaled $2,906,251 and bonds outstanding totaled $59,603,922, net of unamortized premiums of
$1,598,069 and a deferred loss on refunding of $119,147. For the fiscal year ended December 31,
2012, the Authority’s revenues exceeded its cost of services by $3,815,195. The Town is not
required to make payments to the Authority unless the amount in the Authority’s reserve fund is
insufficient. Since 1962, the Town has not made any payments to the Authority.
G. Landfill Closure and Post-Closure Care Costs
The Town operates a landfill under an Administrative Consent Order (ACO) with the
Massachusetts Department of Environmental Protection (DEP). The current ACO allows the
Town to mine the current landfill for useable materials through fiscal year 2014. The landfill
consists of five cells, three lined and two unlined. The largest cell is unlined and has been closed
for several years with sections scheduled for excavation under the mining program in fiscal year
2014. Two cells, which are no longer accepting waste, are uncapped and unlined and have been
previously excavated under the mining program. Another cell is inactive, lined but uncapped.
There is one lined cell that is currently accepting waste. The final capping and closure of the
unclosed cells are dependent on construction of new cells and DEP approval of the continuation
of the mining program. The Town has recognized a closure liability of $6,924,750 in the Solid
Waste Enterprise fund. This liability is based on estimates of the cost of all closure and post-
closure care for 30 years. Actual costs may change due to inflation, changes in technology, or
changes in regulations.
H. Implementation of GASB pronouncements
Current Year Implementations –
In November 2010, the GASB issued GASB Statement No. 60, Accounting and Financial
Reporting for Service Concession Arrangements. The objective of this Statement was to improve
financial reporting by addressing issues related to service concession arrangements. The
provisions of GASB 60 became effective for the Town in fiscal year 2013 and did not have a
material effect on its financial statements.
Town of Nantucket, Massachusetts Page 57 of 71 Basic Annual Financial Statements
In November 2010, the GASB issued GASB Statement No. 61, The Financial Reporting Entity:
Omnibus—an amendment of GASB Statements No. 14 and No. 34. The objective of this
Statement was to improve financial reporting for a governmental financial reporting entity. The
requirements of Statement No. 14, The Financial Reporting Entity, and the related financial
reporting requirements of Statement No. 34, Basic Financial Statements—and Management’s
Discussion and Analysis—for State and Local Governments, were amended to better meet user
needs and to address reporting entity issues that have arisen since the issuance of those
Statements. The provisions of GASB 61 became effective for the Town in fiscal year 2013 and
did not have a material effect on its financial statements.
In December 2010, the GASB issued GASB Statement No. 62, Codification of Accounting and
Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA
Pronouncement. The Statement was intended to enhance the usefulness of its Codification by
incorporating guidance that previously could only be found in certain Financial Accounting
Standards Board (“FASB”) and American Institute of Certified Public Accountants (“AICPA”)
pronouncements. The provisions of GASB 62 became effective for the Town in fiscal year 2013
and did not have a material effect on its financial statements.
In June 2011, the GASB issued GASB Statement No. 63, Financial Reporting of Deferred
Outflows of Resources, Deferred Inflows of Resources, and Net Position. The objective of this
Statement was to provide financial reporting guidance for deferred outflows of resources and
deferred inflows of resources. Concepts Statement No. 4, Elements of Financial Statements,
introduced and defined those elements as a consumption of net assets by the government that is
applicable to a future reporting period, and an acquisition of net assets by the government that is
applicable to a future reporting period, respectively. The provisions of GASB 63 became
effective for the Town in fiscal year 2013 and did not have a material effect on its financial
statements.
In June 2011, the GASB issued GASB Statement No. 64, Derivative Instruments: Application of
Hedge Accounting Termination Provisions—an amendment of GASB Statement No. 53. The
objective of this Statement was to clarify whether an effective hedging relationship continues
after the replacement of a swap-counterparty or a swap-counterparty’s credit support provider.
The provisions of GASB 64 became effective for the Town in fiscal year 2013 and did not have a
material effect on its financial statements.
Future Implementations –
In March 2012, the GASB issued GASB Statement No. 65, Items Previously Reported as Assets
and Liabilities. This Statement establishes accounting and financial reporting standards that
reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that
were previously reported as assets and liabilities and recognizes, as outflows of resources or
inflows of resources, certain items that were previously reported as assets and liabilities. This
Statement also provides other financial reporting guidance related to the impact of the financial
statement elements deferred outflows of resources and deferred inflows of resources, such as
changes in the determination of the major fund calculations and limiting the use of the term
deferred in financial statement presentations. The provisions of this Statement are effective for
financial statements for periods beginning after December 15, 2012 (fiscal year 2014). The Town
is currently evaluating whether adoption will have a material impact on the financial statements.
Town of Nantucket, Massachusetts Page 58 of 71 Basic Annual Financial Statements
In March 2012, the GASB issued GASB Statement No. 66, an amendment of GASB Statements
No. 10 and No. 62. The objective of this Statement is to improve accounting and financial
reporting for a governmental financial reporting entity by resolving conflicting guidance that
resulted from the issuance of two pronouncements, Statements No. 54, Fund Balance Reporting
and Governmental Fund Type Definitions, and No. 62, Codification of Accounting and Financial
Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements.
The provisions of this Statement are effective for financial statements for periods beginning after
December 15, 2012 (fiscal year 2014). The Town is currently evaluating whether adoption will
have a material impact on the financial statements.
In June 2012, the GASB issued GASB Statement No. 67, Financial Reporting for Pension Plans.
This Statement replaces the requirements of Statement No. 25, Financial Reporting for Defined
Benefit Pension Plans and Note Disclosures for Defined Contribution Plans and Statement 50 as
they relate to pension plans that are administered through trusts or similar arrangements meeting
certain criteria. This Statement builds upon the existing framework for financial reports of
defined benefit pension plans, which includes a statement of fiduciary net position (the amount
held in a trust for paying retirement benefits) and a statement of changes in fiduciary net position.
Statement 67 enhances note disclosures and RSI for both defined benefit and defined contribution
pension plans. Statement 67 also requires the presentation of new information about annual
money-weighted rates of return in the notes to the financial statements and in 10-year RSI
schedules. The provisions of this Statement are effective for financial statements for periods
beginning after June 15, 2013 (fiscal year 2014). The Town is currently evaluating whether
adoption will have a material impact on the financial statements.
In June 2012, the GASB issued GASB Statement No. 68, Accounting and Financial Reporting
for Pensions — an amendment of GASB Statement No. 27. Statement 68 replaces the
requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental
Employers and Statement No. 50, Pension Disclosures, as they relate to governments that provide
pensions through pension plans administered as trusts or similar arrangements that meet certain
criteria. Statement 68 requires governments providing defined benefit pensions to recognize their
long-term obligation for pension benefits as a liability for the first time, and to more
comprehensively and comparably measure the annual costs of pension benefits. The Statement
also enhances accountability and transparency through revised and new note disclosures and
required supplementary information. The provisions of this Statement are effective for financial
statements for periods beginning after June 15, 2013 (fiscal year 2014). The Town believes the
adoption of this statement will have a material impact on the financial statements.
In January 2013, the GASB issued GASB Statement No. 69, Government Combinations and
Disposals of Government Operations. GASB 69 established accounting and financial reporting
standards to government combinations and disposals of government operations. The provisions
of this Statement are effective for financial reporting periods beginning after December 15, 2013
(fiscal year 2015). The Town is currently evaluating whether adoption will have a material
impact on the financial statements.
In April 2013, the GASB issued GASB Statement No. 70, Accounting and Financial Reporting
for Nonexchange Financial Guarantees. The objective of GASB 70 is to improve accounting and
financial reporting by governments that extend and receive nonexchange financial guarantees.
The provisions of this Statement are effective for financial reporting periods beginning after June
15, 2013 (fiscal year 2014). The Town is currently evaluating whether adoption will have a
material impact on the financial statements.
Town of Nantucket, Massachusetts Page 59 of 71 Basic Annual Financial Statements
I. Restatement of Prior Year Balances
Governmental Business-type Siasconset Wannacomet Our Island
Activities Activities Water Water Sewer Home
Prior year as presented 187,822,790$ 129,816,264$ 4,984,254$ 15,007,073$ 45,875,433$ 2,331,528$
Restate capital assets (2,220,697) (1,447,762) (77,017) (1,012,711) (333,977) (24,057)
Reclassify debt premiums 1,485,417 - - - - -
Reclassify funds to Agency (179,955) - - - - -
Adjust intergovernmental receivables (496,920) - - - - -
Accrue health insurance costs (1,842,430) - - - - -
Adjust OPEB liability (95,235) - - - - -
As restated 184,472,970$ 128,368,502$ 4,907,237$ 13,994,362$ 45,541,456$ 2,307,471$
General Non-major Internal
Fund Governmental Service
Prior year as presented 18,497,831$ 14,897,323$ 1,376,395$
Reclassify debt premiums 1,485,417 -
Reclassify funds to Agency - (179,955)
Adjust to defer receivables - (647,836)
Adjust intergovernmental receivables (496,920)
Accrue health insurance costs (1,842,430)
Accrue workers' compensation
claims as a fund liability (89,510)
As restated 19,983,248$ 13,572,612$ (555,545)$
Discretely Presented Component Unit - Nantucket County
Nantucket
County
Prior year as presented 2,943,279$
Restate capital assets 3,255,383
Reclasify other liabilities (147,779)
Adjust OPEB liability 95,235
As restated 6,146,118$
Town of Nantucket, Massachusetts Page 60 of 71 Basic Annual Financial Statements
Required Supplementary Information
Town of Nantucket, Massachusetts Page 61 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED JUNE 30, 2013
BARNSTABLE COUNTY CONTRIBUTORY RETIREMENT SYSTEM
SCHEDULES OF FUNDING PROGRESS
Retirement System
UAAL as a
Actuarial Actuarial Unfunded Percentage
Actuarial Value of Accrued AAL Funded Covered of Covered
Valuation Assets Liability (AAL)(UAAL)Ratio Payroll Payroll
Date (a)(b)(b-a)(a/b)(c)((b-a)/c)
1/1/2012 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%
1/1/2006 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%
Other Post Employment Benefits
UAAL as a
Actuarial Actuarial Unfunded Percentage
Actuarial Value of Accrued AAL Funded Covered of Covered
Valuation Assets Liability (AAL)(UAAL)Ratio Payroll Payroll
Date (a)(b)(b-a)(a/b)(c)((b-a)/c)
7/1/2012 -$ 88,559,116$ 88,559,116$ 0%N/A N/A
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
BARNSTABLE COUNTY CONTRIBUTORY RETIREMENT SYSTEM
Total Retirement System
(B / A)(B / A)
Annual (A)(B)Town's Percentage (B)County's Percentage
Year Ended Required Actual Percentage Actual of System-Wide Actual of System-Wide
December 31,Contributions Contributions Contributed Contribution Actual Contributions Contribution Actual Contributions
2012 46,702,087$ 46,702,087$ 100%4,543,194$ 9.7%40,348$ 0.1%
2011 43,807,158 43,807,158 100%4,372,452 10.0%41,544 0.1%
2010 41,327,508 41,327,508 100%4,263,340 10.3%39,710 0.1%
Other Post Employment Benefits
Annual (A)
Year Ended Required Actual Percentage
June 30,Contributions Contributions Contributed
2013 6,995,125$ 2,622,032$ 37.5%
2012 5,982,000 2,534,000 42.4%
2011 5,680,000 2,200,000 38.7%
2010 10,647,000 2,587,000 24.3%
2009 10,745,000 2,534,000 23.6%
The Town implemented GASB Statement No. 45 for the fiscal year ending June 30, 2009.
See accompanying independent auditors' report.
SCHEDULES OF CONTRIBUTION FUNDING
Retirement System
Town County
Town of Nantucket, Massachusetts Page 62 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL - GENERAL FUND
YEAR ENDED JUNE 30, 2013
Budgeted Amounts Actual Actual Variance
Original Final Budgetary Budgetary Positive
Budget Budget Amounts Encumbrances Adjusted (Negative)
REVENUES
Real estate and personal property taxes, net 61,733,345$ 62,181,301$ 63,737,465$ -$ 63,737,465$ 1,556,164$
Intergovernmental 1,664,712 1,664,712 1,678,564 - 1,678,564 13,852
Motor vehicle and other excises 1,909,535 1,909,535 1,880,619 - 1,880,619 (28,916)
Hotel and meals taxes 2,749,955 2,749,955 3,129,679 - 3,129,679 379,724
License and permits 1,013,896 1,013,896 1,075,074 - 1,075,074 61,178
Departmental and other revenue 1,643,860 1,643,860 2,098,610 - 2,098,610 454,750
Penalties and interest on taxes 681,150 681,150 677,906 - 677,906 (3,244)
Fines and forfeitures 223,055 223,055 208,503 - 208,503 (14,552)
Investment income 47,509 47,509 90,903 - 90,903 43,394
Total Revenues 71,667,017 72,114,973 74,577,323 - 74,577,323 2,462,350
EXPENDITURES
General government 10,679,423 10,462,637 7,452,340 1,804,052 9,256,392 1,206,245
Public safety 8,975,301 8,936,117 8,571,708 198,742 8,770,450 165,667
Education 23,741,367 23,741,367 21,473,502 2,033,195 23,506,697 234,670
Public works 3,093,094 3,179,114 2,723,317 275,109 2,998,426 180,688
Health and human services 1,058,483 1,037,462 989,186 1,146 990,332 47,130
Culture and recreation 1,139,914 1,171,915 1,155,888 4,052 1,159,940 11,975
State and county tax assessments 546,250 546,250 546,250 - 546,250 -
Pension and other fringe Benefits 11,333,127 12,262,617 12,234,102 - 12,234,102 28,515
Debt service 7,613,980 7,752,371 7,167,817 - 7,167,817 584,554
Total Expenditures 68,180,939 69,089,850 62,314,110 4,316,296$ 66,630,406 2,459,444
OTHER FINANCING SOURCES (USES)
Transfers in 580,919 580,919 600,428 600,428 19,509
Transfers out (8,405,450) (9,201,633) (9,201,633) (9,201,633) -
Total Other Financing Sources (Uses)(7,824,531) (8,620,714) (8,601,205) (8,601,205) 19,509
EXCESS (DEFICIENCY) OF REVENUES AND OTHER
FINANCING SOURCES OVER EXPENDITURES/USE
OF PRIOR YEAR BUDGETARY FUND BALANCE (4,338,453) (5,595,591) 3,662,008$ (654,288)$ 4,941,303$
Other budget items:
Undesignated surplus (free cash)607,264 1,864,402
Overlay deficits (4,756) (4,756)
Prior year encumbrances and carryovers 3,695,945 3,695,945
Other 40,000 40,000
Net budget -$ -$
See accompanying notes to financial statements.
Town of Nantucket, Massachusetts Page 63 of 71 Basic Annual Financial Statements
TOWN OF NANTUCKET, MASSACHUSETTS
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED JUNE 30, 2013
I. Budgetary Basis of Accounting
Budgetary Information – An annual budget is legally adopted for the General Fund and the Enterprise
Funds. The annual budgets are prepared by Town Administration, reviewed and approved by the
Board of Selectmen, recommended by the Finance Committee and voted by citizens at the Annual
Town Meeting. Expenditures may not legally exceed appropriations at the department level, or in the
categories of personnel and non-personnel expenses. Transfers between and within departments
require approval at a Special Town Meeting, unless allowed under Massachusetts General Law. At the
close of each fiscal year, unencumbered appropriation balances lapse and revert to unassigned fund
balance.
The Town Meeting adopts an annual budget for the general fund in conformity with the guidelines
described above. During fiscal year 2013, Town Meeting approved various supplemental budgetary
appropriations which resulted in a net increase of approximately $1,700,000 from the original voted
budget. The appropriations were funded primarily from free cash (unassigned fund balance) for
additional enterprise fund subsidies and contributions for health insurance and other post- employment
benefits trust funds.
The Town Accountant’s Office has the responsibility to ensure that budgetary control is maintained in
the manner in which the appropriations were voted by Town Meeting. Budgetary control is exercised
through the Town’s accounting system.
Budgetary-to-GAAP Reconciliation – The Town’s general fund is prepared on a basis of accounting
other than GAAP to conform to the Uniform Municipal Accounting System basis of accounting as
prescribed by the Massachusetts Department of Revenue. A reconciliation of the budgetary-basis to
GAAP-basis results for the General Fund for the fiscal year ended June 30, 2013, is as follows:
Basis of
Accounting Fund Perspective
Differences Differences Total
Revenues on a budgetary basis 74,577,323$
Stabilization revenue -$ (26,781)$ (26,781)
Change in accruing revenues to GAAP basis (245,373) - (245,373)
On behalf payments 2,597,468 - 2,597,468
Revenues on a GAAP basis 2,597,468$ -$ 76,902,637$
Expenditures on a budgetary basis 62,314,110$
On behalf payments 2,597,468$ -$ 2,597,468
Expenditures on a GAAP basis 2,597,468$ -$ 64,911,578$
Other financing sources (uses) on a budgetary basis (8,601,205)$
Prior year budgetary transfer in current year (641,709)$ -$ (641,709)
Effect of refunding transaction (11,616) - (11,616)
Other financing sources (uses) on a GAAP basis (653,325)$ -$ (9,254,530)$
Town of Nantucket, Massachusetts Page 64 of 71 Basic Annual Financial Statements
Discretely Presented Component Unit -
Nantucket County
Supplementary Schedules
Town of Nantucket, Massachusetts Page 65 of 71 Basic Annual Financial Statements
Discretely Presented Component Unit – Nantucket County
Supplementary Schedules
Narrative
County General Fund -
This fund is the primary operating fund for Nantucket County. It accounts for all financial resources of
the County except those required to be accounted for in another fund.
County Deeds Excise Special Revenue Fund -
This fund accounts for deeds excise tax revenues received by the County and used for the specific
purposes outlined below.
County Administration – accounts for 15% of the deeds excise tax revenue that is required to be
designated for County administration.
Corrections Department – accounts for 75% of the deeds excise tax revenue that is required to be
designated for the County Corrections Department.
Registry of Deeds – accounts for 10% of the deeds excise tax revenue that is required to be designated for
the operations of the Registry of Deeds.
County Other Special Revenue Funds
This fund accounts for the proceeds of specific revenue sources that are restricted for specific purposes by
law or third party grantors and donors. This fund is used to account for sheriff funds, state and federal
grants, license plate funds, escrow funds and donations.
This supplementary information is presented on the modified accrual basis of accounting, which is used
by the County for budgetary and operational purposes. This schedule is not a part of the basic financial
statements but is provided for additional analysis only.
Town of Nantucket, Massachusetts Page 66 of 71 Basic Annual Financial Statements
NANTUCKET COUNTY
BALANCE SHEET
JUNE 30, 2013
Total Other Total
General County Registry of Corrections Deeds Excise Special Nantucket
Fund Administration Deeds Department Fund Revenue Funds County
Assets
Cash and cash equivalents 1,247,117$ 335,237$ 1,017,873$ 1,407$ 1,354,517$ 519,345$ 3,120,979$
Receivables, net:
Intergovernmental 82,321 - - - - - 82,321
Due from other funds 16,200 - - - - - 16,200
Total Assets 1,345,638$ 335,237$ 1,017,873$ 1,407$ 1,354,517$ 519,345$ 3,219,500$
Liabilities and Fund Balances
Liabilities:
Warrants and accounts payable 16,200$ -$ -$ -$ -$ -$ 16,200$
Accrued payroll and withholdings 24,263 - - - - - 24,263
Due to other funds - - 16,200 - 16,200 - 16,200
Total Liabilities 40,463 - 16,200 - 16,200 - 56,663
Fund Balances:
Restricted - 335,237 1,001,673 1,407 1,338,317 519,345 1,857,662
Unassigned 1,305,175 - - - - - 1,305,175
Total Fund Balances 1,305,175 335,237 1,001,673 1,407 1,338,317 519,345 3,162,837
Total Liabilities and Fund Balances 1,345,638$ 335,237$ 1,017,873$ 1,407$ 1,354,517$ 519,345$ 3,219,500$
Deeds Excise Special Revenue Fund
Town of Nantucket, Massachusetts Page 67 of 71 Basic Annual Financial Statements
NANTUCKET COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
FISCAL YEAR ENDED JUNE 30, 2013
Total Other Total
General County Registry of Corrections Deeds Excise Special Nantucket
Fund Administration Deeds Department Fund Revenue Funds County
Revenues:
Intergovernmental 166,050$ -$ -$ -$ -$ -$ 166,050$
Excise taxes - 212,936 141,957 250,000 604,893 - 604,893
Departmental and other revenue 239,131 - - - - 73,569 312,700
Investment income 5,934 - 1,706 - 1,706 - 7,640
Total Revenues 411,115 212,936 143,663 250,000 606,599 73,569 1,091,283
Expenditures:
Current:
County administration 278,099 - - - - - 278,099
Registry of Deeds 356,118 - 11,018 - 11,018 12,307 379,443
Special projects - - - - - 140,644 140,644
Total Expenditures 634,217 - 11,018 - 11,018 152,951 798,186
Excess (Deficiency) of Revenues
Over (Under) Expenditures (223,102) 212,936 132,645 250,000 595,581 (79,382) 293,097
Other Financing Sources (Uses):
Transfers in 306,279 - - - - - 306,279
Transfers out - (28,099) (28,180) (250,000) (306,279) - (306,279)
Total Other Financing Sources (Uses)306,279 (28,099) (28,180) (250,000) (306,279) - -
Net Change in Fund Balances 83,177 184,837 104,465 - 289,302 (79,382) 293,097
FUND BALANCES - Beginning of year, as restated 1,221,998 150,400 897,208 1,407 1,049,015 598,727 2,869,740
FUND BALANCES - End of year 1,305,175$ 335,237$ 1,001,673$ 1,407$ 1,338,317$ 519,345$ 3,162,837$
Deeds Excise Special Revenue Fund
Town of Nantucket, Massachusetts Page 68 of 71 Basic Annual Financial Statements
Additional Information
Town of Nantucket, Massachusetts Page 69 of 71 Basic Annual Financial Statements
Reimbursed Reimbursed Other
Direct Direct Direct Indirect Direct Direct Indirect Total
Labor Costs Costs Costs Labor Costs Costs Expenditures
Expenditures:
Direct Salaries 98,887$ -$ 3,773$ -$ 1,767$ -$ -$ 104,427$
Indirect Salaries - - - 32,797 - - 565 33,362
Payroll taxes 1,655 - - 448 - 36 2,139
Consultants and professional fees - - 9,496 - - 163 - 9,659
Travel - 3,884 877 - - 82 - 4,843
Equipment - 592 - - - 10 - 602
Supplies - - 5,193 - - 89 - 5,282
Advertising - - 2,819 - - 49 - 2,868
Postage - - 778 - - 13 - 791
Printing - 197 82 - - 5 - 284
Conference - 45 333 - - 7 - 385
Dues and subscriptions - - 752 - - 13 - 765
Repairs and maintenance - - 1,186 - - 20 - 1,206
General governance - - 25,857 - 603 - 26,460
Finance and treasurer's office - - - 1,583 - - - 1,583
Information Technology - - - 1,013 - - - 1,013
Utilities - - - 6,578 - - - 6,578
Health insurance 8,037 - - 6,721 - 254 - 15,012
Total expenditures 108,579$ 4,718$ 25,289$ 74,997$ 1,767$ 1,344$ 565$ 217,259$
(a)(a)(b)(b)(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 grant
103,963
108,578
NANTUCKET PLANNING AND ECONOMIC DEVELOPMENT COMMISSION
95.750%=
SCHEDULE OF INDIRECT COST RATE
FISCAL YEAR ENDED JUNE 30, 2013
Highway Planning and
Construction Grant Amounts allocable to 3C Grant
General Fund Unreimbursed
Town of Nantucket, Massachusetts Page 70 of 71 Basic Annual Financial Statements
Highway
Planning and
General Construction
Fund Grant Total
REVENUES:
Federal and State grants -$ 213,582$ 213,582$
General Fund Subsidy 3,677 - 3,677
Total revenues 3,677 213,582 217,259
EXPENDITURES:
Salaries, Direct 1,767 102,660 104,427
Salaries, Indirect 565 32,797 33,361
Payroll taxes 36 2,102 2,139
Consultants and professional fees 163 9,496 9,660
Travel 82 4,761 4,843
Equipment 10 592 602
Supplies 89 5,193 5,282
Advertising 49 2,819 2,868
Postage.13 778 792
Printing 5 280 285
Conferences 7 378 385
Dues and subscriptions.13 752 765
Repairs and maintenance 20 1,186 1,206
Health insurance 254 14,758 15,012
Indirect costs 604 35,030 35,634
Total expenditures 3,677 213,582 217,259
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES -$ -$ -$
NANTUCKET PLANNING AND ECONOMIC DEVELOPMENT COMMISSION
SCHEDULE OF PUBLIC SUPPORT
FISCAL YEAR ENDED JUNE 30, 2013
Town of Nantucket, Massachusetts Page 71 of 71 Basic Annual Financial Statements