HomeMy WebLinkAbout2020 Annual Report - Appendix D Financial StatementsAPPENDIX D Financial Statements
398
TOWN OF READING, MASSACHUSETTS
Annual Financial Statements
For the Year Ended June 30, 2020
399
(This page intentionally left blank.)
400
CONTENTS
Paze
INDEPENDENT AUDITORS' REPORT
1
MANAGEMENT'S DISCUSSION AND ANALYSIS
5
BASIC FINANCIAL STATEMENTS:
Government -Wide Financial Statements:
Statement of Net Position
13
Statement of Activities
15
Fund Financial Statements:
Governmental Funds:
Balance Sheet
17
Reconciliation of Total Governmental Fund Balances to
Net Position of Governmental Activities in the Statement
of Net Position
18
Statement of Revenues, Expenditures, and Changes in Fund Balances
19
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds to
the Statement of Activities
20
Proprietary Funds:
Statement of Net Position
21
Statement of Revenues, Expenses, and Changes in Fund _
Net Position
22
Statement of Cash Flows
23
Fiduciary Funds:
Statement of Fiduciary Net Position
24
Statement of Changes in Fiduciary Net Position
25
Notes to Financial Statements
26
Electric Division Notes to the Financial Statements 71
aot
Page
REQUIRED SUPPLEMENTARY INFORMATION:
Budget and Actual:
Schedule of Revenues and Other Sources, and Expenditures
and Other Uses - Budget and Actual - General Fund
100
Pension:
Schedule of Proportionate Share of the Net Pension Liability
102
Schedule of Pension Contributions
103
OPEB:
Schedule of Changes in the Net OPEB Liability
104
Schedules of the Net OPEB Liability, Contributions, and Investment Returns
105
Electric Division Schedule of Proportionate Share of the Net Pension Liability
106
Electric Division Schedule of Pension Contributions
107
Electric Division Schedule of Changes in the Net OPEB Liability
108
Electric Division Schedules of the Net OPEB Liability, Contributions,
and Investment Returns
109
SUPPLEMENTARY INFORMATION:
Comparison Balance Sheet —General Fund
111
Comparison Statement of Revenues, Expenditures, and Changes in
Fund Balance—General Fund
112
Combining Balance Sheet- Nonmajor Governmental Funds
114
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances- Nonmajor Governmental Funds
118
Combining Statement of Net Position - Nonmajor Proprietary Funds
122
Combining Statement of Revenues, Expenses, and Changes
in Fund Net Position - Nonmajor Proprietary Funds
123
Combining Statement of Cash Flows - Nonmajor Proprietary Funds
124
ao2
MELANSON
INDEPENDENT AUDITORS' REPORT
To the Select Board
Town of Reading, Massachusetts
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of the
Town of Reading, Massachusetts (the Town), as of and for the year ended June 30, 2020, (except
for the Reading Contributory Retirement System and Electric Division, which are as of and for the
year ended December 31, 2019) and the related notes to the financial statements, which
collectively comprise the Town's basic financial statements as listed in the Table of Contents.
Management's Responsibility for the Financial Statements
The Town's 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.
Auditors' 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 from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors'
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
Merrimack, New Hampshire
Andover, Massachusetts
Greenfield, Massachusetts
Ellsworth, Maine 900.262.2440 1 melansoncpas.r4&jn
MELANSON
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
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, each
major fund, and the aggregate remaining fund information of the Town of Reading,
Massachusetts, as of June 30, 2020 (except for the Reading Contributory Retirement System and
Electric Division, which are as of and for the year ended December 31, 2019), and the respective
changes in financial position and, where applicable, the cash flows thereof for the year then
ended in accordance with accounting principles generally accepted in the United States of
America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that
Management's Discussion and Analysis, the budgetary comparison for the general fund, and
certain Pension and OPEB schedules be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic 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 nor provide any assurance on the
information because the limited procedures do not provide us with evidence sufficient to express
an opinion or provide any assurance.
800.282.2440 1 melansoncpas.com
404
It M ELANSON
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 accompanying supplementary
information appearing on pages 111 through 124 is presented for purposes of additional analysis
and is not a required part of the basic financial statements. Such information is the responsibility
of management and was derived from and relates directly to the underlying accounting and other
records used to prepare the financial statements. The information has been subjected to the
auditing procedures applied in the audit of the financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the financial statements or to the financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the information is fairly stated
in all material respects in relation to the financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
February 16, 2021 on our consideration of the Town's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is solely 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 effectiveness of the Town's internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering Town's internal control over
financial reporting and compliance.
Andover, Massachusetts
February 16, 2021 "
s
„� 4
800.282.2440 1 melansoncpas.com
405
This page intentionally left blank.)
406
MANAGEMENTS DISCUSSION AND ANALYSIS
As management of the Town of Reading, Massachusetts (the Town), we offer readers this
narrative overview and analysis of the financial activities of the Town for the fiscal year ended
June 30, 2020 (except for the Reading Contributory Retirement System and Electric Division,
which are as of December 31, 2019).
A. Overview of the Financial Statements
This discussion and analysis is intended to serve as an Introduction to the basic financial
statements. The basic financial statements are comprised of three components:
(1) government -wide financial statements, (2) fund financial statements, and (3) notes to
financial statements. This report also contains required/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 our finances in a manner similar to a private -sector business.
The Statement of Net Position presents information on all assets, deferred outflows of
resources, liabilities, and deferred inflows of resources, with the difference reported as net
position. Over time, increases or decreases in net position may serve as a useful indicator of
whether the Town's financial position is improving or deteriorating.
The Statement of Activities presents information showing how the Town'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 sick leave).
Both of the government -wide financial statements distinguish functions that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other
functions that are intended to recover all or a significant portion of their costs through user
fees and charges (business -type activities). The governmental activities include general
government, public safety, education, public works, facilities, health and human services,
culture and recreation, interest on long-term debt, and intergovernmental expenses. The
business -type activities include electric division operations, water supply and distribution,
sewer disposal, landfill, stormwater, and PEG access operations.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that
have been segregated for specific activities or objectives. Fund accounting is used to ensure
and demonstrate compliance with finance -related legal requirements. All of the funds can be
divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
ON
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
the Town'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
Town's near-term financing decisions. Both the governmental funds balance sheet and the
governmental funds statement of revenues, expenditures, and changes in fund balances
provide a reconciliation to facilitate this comparison between governmental funds and
governmental activities.
Proprietary Funds
Proprietary fund reporting focuses on the determination of operating income, changes in net
position (or cost recovery), financial position, and cash flows. Included in the proprietary fund
category are the Town's enterprise funds.
Enterprise funds are used to report activity for which a fee is charged to external users, and
must be used when one of the following criteria are met: (1) activity is financed with debt
that is secured solely by a pledge of the net revenues from fees and charges, (2) laws or
regulations require the activity's costs of providing services be recovered with fees and
charges, or (3) the pricing policies of the activity establish fees and charges designed to
recover its costs, including capital costs such as depreciation or debt service. The primary
focus on these criteria is on fees charged to external users. Enterprise funds are used to report
the same functions presented as business -type activities in the government -wide financial
statements, only in more detail. Specifically, enterprise funds are used to account for electric
division, water, sewer, landfill, stormwater, and PEG access operations, of which electric
division, water, and sewer operations are considered to be major funds.
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the
Town. Fiduciary funds are not reflected in the government -wide financial statements 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 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.
408
Required/Other Supplementary Information (Other than MD&A)
In addition to the basic financial statements and accompanying notes, this report also
presents certain required supplementary information which is required to be disclosed by
accounting principles generally accepted in the United States of America.
B. Financial Highlights
• As of the close of the current fiscal year, net position in governmental activities was
$51,406,154, a change of $431,749, and net position in business -type activities was
$154,143,718, a change of $6,908,914, as further discussed on page S.
• As of the close of the current fiscal year, governmental funds reported combined ending
fund balances of $46,639,973, a change of $8,051,239 in comparison to the prior year.
• At the end of the current fiscal year, unassigned fund balance for the general fund was
$18,313,633, a change of $(467,599) in comparison to the prior year.
C. Government -Wide Financial Analysis
The following is a summary of condensed government -wide financial data for the current and
prior fiscal years:
NET POSITION
Guvemmental
Busiress-Type
EC4YVSS
Ad.abc,
Tonal
jQjQ
jQtj'
2020
2019
2020
2019
Ganem and dlrer, rise.
$ 56,414,702 $
46,056,674 $
88,903,036 $
09,945,473 $
145,323,738 $
136,8@.17
Capital assets
122,785,942
124,352,767
110,220.177
106,388.736
233014119
230.741.506
TOM Offsets
179,200,644
171,209,441
199,137,213
196,334,209
378,337,857
367,543,650
netened OUNlcass ot Resources
10,004,796
17,946,348
8,733,671
6,975,287
18,738,467
24,921,635
lon, term liabilities
118,502,727
124,258679
40,313,581
38,738,50
158,816,308
162,908,729
Other liabilities
8,413,702
7,406,494
10,928,663
14,878,859
19,342,365
22.285.353
Total tiabilines
126,916,429
131,657,173
51,242,244
53,616,909
178,158,673
105,274,82
Oefened lnfloxs of Reswrces
10,882,857
6,524K1
2,484.922
2,457,783
13,367,779
8,981,994
Net inuestmers in capital assets
103,158,023
102,789,291
too,59o,904
96,748,349
203,748,927
199,537,640
Restricted
13,804,746
13,452,691
15,246,985
12,98455]
29,51,731
26,437243
Unstriated
165,556,6151
165,267.5771
38.305.829
37,501,903
1272507861
(27,765,674)
Total Net Posiocn
$ 51,406,154 $
50,974,406 $
154,143,718 $
147,234,804 $
205,549,072 $
198.209,209
As noted earlier, net position may serve over time as a useful indicator of the Town's financial
position. At the close of the most recent fiscal year, total net position was $205,549,872, a
change of $7,340,663, or 3.70% in comparison to the prior year.
The largest portion of net position, $203,748,927, reflects our investment in capital assets (e.g.,
land, buildings, machinery, and equipment); less any related debt used to acquire those assets
that is still outstanding. These capital assets are used to provide services to citizens; consequently,
these assets are not available for future spending. Although the investment in capital assets is
409
reported net of related debt, it should be noted that the resources needed to repay this debt must
be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
An additional portion of net position, $29,051,731, represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net
position reflects a deficit of $(27,250,786) primarily resulting from unfunded pension and
OPEB liabilities.
Governmental Activities
Governmental activities for the year resulted in a change in net position of $431,749, or 0.85%.
While the Town largely had break-even results, the key elements of the overall change include
410
CHANGES IN NET
POSITION
Gwemmental
Burmess-Type
Axtryties
Activities
Total
2020
2019
M20
2019,
2010
zB19r
Revenues
Program
CNrges for semices $
9,355,801 $
10,611,027 $
104,384,50 $
64,391,661 5
113,740,308 $
15,073688
Operaling'rim. and cmtridNom
28580,752
25,408,684
173,550
-
28,754,302
25,400,684
Capital grants and contrbutlam
716,874
717,683
371,772
081,395
11088646
1,599,078
General renninnues.
PrMrmy taxes
75,922,827
73,560941
-
-
75,922,827
73,560,941
Excises
4,218,416
4,4b,09
-
4,218,416
4,43.079
Penalties, interest, and
Mber tares
561,676
599,869
561,676
599,869
Gants and cmbiMRiom not
restricted to specific progmr-
3,672,476
3,613,974
-
-
3,672,476
3,613,974
Investment income
11011,013
2,399,713
1,211,136
612,502
3,022,149
3,012,295
Other
242,029
427,149
812,910
380,168
1,054,939
00,317
Total Nevenues
125,091,864
121,773,119
108953,875
66,265,806
232,035,739
180,038,925
Expense
General gwemment
6,424,156
6,437,591
-
-
6,424,156
6,431
Public safety
17,961
17.233,365
-
-
17,965,897
17,233.365
Education
00,699,019
79,111111
-
0,698819
79,667,962
Public works
9,974,610
9,729,267
-
-
9,974,610
9,729,267
Facilities
3,786,497
4,116,162
-
-
3,786,497
4,116,162
Heald and human services
967,514
1,(94,414
-
967,514
1,01 14
Culture and recreation
5,242,893
5,291,728
-
-
5,242,893
5,291,728
interest m long term debt
871,303
874,077
-
871,303
874,077
Inhrgwemmental
1,197,932
1,143,2
-
-
1,197,932
1,143,082
Electric division operations
-
-
83,806,431
45,085.315
83,806,431
45,095,315
Water operators
-
-
5.912,70
5,744,137
5,912,762
5,74.137
Muer operations
-
-
6,922,120
6,618484
6,922,120
6,618,484
Nonmajor operations
923,142
357,872
923,142
357,872
Total Expenses
127,130,621
125,50,638
97 Si
57,805.808
224,695,06
183,393,446
Cnaugein net pcsidon
before transfers
12.048,757)
(3,814,519)
9,389,420
8,459,998
7,340663
4,645,479
Tranhrs in (out)
2,490,506
2,480,506 12,480.5061
11,240,253)
1,240253
Clam in net petition
431.749
(1,334.013)
6,908,914
7,219,745
7,340,663
5.885.732
Potpourri beginning ofyear
50,974,405
52,308,418
147,234,804
140,015,059
198,209,209
192,323.477
Net position- end of year $
51,406,154 $
50.974,405 $
154,143718 $
147,234,804 $
205.549,872 $
198,203,209
Governmental Activities
Governmental activities for the year resulted in a change in net position of $431,749, or 0.85%.
While the Town largely had break-even results, the key elements of the overall change include
410
positive general fund operating results (further discussed in section D), investment in Town
capital assets, softened by the increase to pension and OPEB expenses.
Business -Type Activities
Business -type activities for the year resulted in a change in net position of $6,908,914. Key
elements of this change are as follows:
Revenuesand
Transfers In
Electric division fund' $ 90,606,073
Waterford 7,308,603
Sewer fund 7,753,142
Nonmajor funds 1,286,057
Expensesand
Changein
Transfers Out
Net Position
$ (86,286,937)
$ 4,319,136
(5,912,762)
1,395,841
(6,922,120)
831,022
(923,142)
362,915
Total $ 106,953,875 $ (100,044,961) $ 6,908,914
' Activity for the Electric Division is reported for the year ended December 31, 3019
The change in net position for business -type activities is largely attributable to Electric
Division's sales and other revenues exceeding operating expenses by $4,587,109 (operating
income).
Additional changes in the business -type activities are attributable to the Town's ongoing
investment in capital improvements. These amounts are reported net of related outstanding
debt obligations and are included in net position as net investment in capital assets. Business -
type activities reported net investment in capital assets of $100,590,904, an increase of
$3,842,555, or 3.97%, over the prior year.
D. Financial Analysis of the Town's Funds
As noted earlier, fund accounting is used to ensure and demonstrate compliance with finance -
related legal requirements.
Governmental Funds
The focus of governmental funds is to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing financing
requirements. In particular, unassigned fund balance may serve as a useful measure of the
Town's net resources available for spending at the end of the fiscal year.
General Fund
The general fund is the chief operating fund. At the end of the current fiscal year, unassigned
fund balance of the general fund was $18,313,633, while total fund balance was $28,754,371.
411
As a measure of the general fund's liquidity, it may be useful to compare both unassigned
fund balance and total fund balance to general fund expenditures. Refer to the table below:
General Fund 6/30/20
Unassigned fund balance $ 18,313,633 $
Total fund balance 28,754,371
'Expenditure amounts used to calculate the above percentages have been adjusted to exclude the on -behalf
payment from the Commonwealth to the Massachusetts Teachers Retirement System of $6,261,519.
The total fund balance of the general fund changed by $4,085,735 during the current fiscal
year. Key factors in this change are as follows:
Use of free cash, overlay surplus, and reserve balances
as a funding source $ (3,437,474)
Revenues and transfers in excess of budget 1,064,825
Expenditures less than budget 2,874,773
Expenditures of prior year encumbrances less than current
year encumbrances 3,547,076
Change in stabilization accounts 36,535
Total $ 4,085,735
Included in the total general fund balance are the Town's stabilization accounts with the
following balances:
Fund Balance
6/30/20 6 30 19 Change Classification
General $ 1,706,977 $ 1,670,442 $ 36,535 Unassigned
Smart growth 503,000 503,000 - Committed
Total $ 2,209,977 $ 2,173,442 $ 36,535
Nonmajor Governmental Funds
At the end of the current fiscal year, nonmajor governmental funds had a total fund balance
of $17,885,602, a change of $3,965,504, or 28.49% which is largely attributable to bond
proceeds received in fiscal year 2020. For more detailed information, please refer to the
Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances on
page 19.
10 412
% of Total
General Fund
6/30/19
Change
Expenditures -
18,781,232 $
(467,599)
18.79%
24,668,636
4,085,735
29.51%
'Expenditure amounts used to calculate the above percentages have been adjusted to exclude the on -behalf
payment from the Commonwealth to the Massachusetts Teachers Retirement System of $6,261,519.
The total fund balance of the general fund changed by $4,085,735 during the current fiscal
year. Key factors in this change are as follows:
Use of free cash, overlay surplus, and reserve balances
as a funding source $ (3,437,474)
Revenues and transfers in excess of budget 1,064,825
Expenditures less than budget 2,874,773
Expenditures of prior year encumbrances less than current
year encumbrances 3,547,076
Change in stabilization accounts 36,535
Total $ 4,085,735
Included in the total general fund balance are the Town's stabilization accounts with the
following balances:
Fund Balance
6/30/20 6 30 19 Change Classification
General $ 1,706,977 $ 1,670,442 $ 36,535 Unassigned
Smart growth 503,000 503,000 - Committed
Total $ 2,209,977 $ 2,173,442 $ 36,535
Nonmajor Governmental Funds
At the end of the current fiscal year, nonmajor governmental funds had a total fund balance
of $17,885,602, a change of $3,965,504, or 28.49% which is largely attributable to bond
proceeds received in fiscal year 2020. For more detailed information, please refer to the
Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances on
page 19.
10 412
Proprietary Funds
Proprietary funds provide the same type of information found in the business -type activities
reported in the government -wide financial statements, but in more detail.
Unrestricted net position of the business -type activities at the end of the fiscal year amounted
to $38,305,829, a change of $803,926 in comparison to the prior year primarily driven by the
sewer fund, changing by $673,947, or 8.67%. This change is largely attributable to an increase
in sewer rates by 8.46% over the prior year.
Other factors concerning the finances of proprietary funds have already been addressed in
the entity -wide discussion of business -type activities.
E. General Fund Budgetary Highlights
Differences between the original budget and the final amended budget resulted in an overall
change in appropriations of $1,802,282, or 1.77°%. Major reasons for this increase were for
capital improvements and COVID-19 related expenditures.
Of these increases, $2,051,953 was funded through free cash and $10,521 was funded
through the use of the Town's debt service reserve account. These additional appropriations
were softened by a change to 1) the tax levy of $(87,651), 2) intergovernmental revenues of
$(162,020), and 3) licenses and permits revenues of $(10,521).
F. Capital Asset and Debt Administration
Capital Assets
Total investment in capital assets for governmental and business -type activities at year-end
amounted to $233,014,119 (net of accumulated depreciation), a change of $2,272,616 from
the prior year. This investment in capital assets includes land, land improvements,
infrastructure, buildings and improvements, machinery, equipment, and furnishings.
Major capital asset acquisitions are attributable to the following:
Governmental additions:
1,797,729 forturf improvements
1,021,187 for West Street road improvements
425,548 for building security design
414,379 in public safety radios upgrade
11 413
Business -type additions:
$ 2,036,864 for Main and Mill Street cleaning and lining
1,447,456 for sewer station improvements
295,643 for Charles Street pumping station
233,425 for inflow/infiltration collection improvements
Additional information on capital assets can be found in the Notes to the Financial
Statements.
Credit Rating
During the fiscal year, the Town's S&P credit rating of AAA remain unchanged.
Long -Term Debt
At the end of the current fiscal year, total banded debt outstanding was $36,654,838, all of
which was backed by the full faith and credit of the Town.
Additional information on capital assets and long-term debt can be found in the Notes to the
Financial Statements.
Requests for Information
This financial report is designed to provide a general overview of the Town of Reading's finances
for all those with an interest in the government's finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be
addressed to:
Town Accountant
Town Hall
16 Lowell Street
Reading, MA 01867
12 414
TOWN OF READING, MASSACNUSETrS
Statement of Net Position
June 30, 2020
(Except for the Electric Division Fund which is as of December 31, 2019)
Governmental Business -Type
Activities Activities Total
Assets
Current
Cash and short-term investments
$ 34,122,509
$ 38,887,087
$ 73,009,596
Investments
19,788,298
-
19,788,298
Receivables, net of allowance for uncollectibles:
Property taxes
640,269
-
640,269
Excises
249,161
-
249,161
Userfees
-
12,483,323
12,483,323
Departmental and other
1,002,915
-
1,002,915
Intergovernmental
192,149
-
192,149
Prepaid assets
-
2,433,739
2,433,739
Inventory
1,911,047
1,911,047
Total Current Assets
55,995,301
55,715,196
111,710,497
Noncurrent:
Restricted cash and short-term investments
-
29,569,761
29,569,761
Restricted investments
-
2,659,416
2,659,416
Investment in associated companies
-
802,212
802,212
Receivables, net of allowance for uncollectibles:
Property taxes
419,401
-
419,401
Capital assets depreciable, net
314,579,07
97,447,696
212,026,783
Capital assets non -depreciable
8,206,855
12,780,481
20,987,336
Other assets
162,451
162,451
Total Noncurrent Assets
123,205,343
143,422,017
266,627,360
Total Assets
179,200,644
199,137,213
378,337,857
Deferred Outflows of Resources
Related to pensions
7,041,193
8,212,677
15,253,870
Related to OPER
2,963,603
520,994
3,484,597
Total Deferred Outflows of Resources
10,004,796
8,733,671
18,738,467
(continued)
The accompanying notes are an integral part of these financial statements.
13 415
TOWN OF READING, MASSACHUSETTS
Statement of Net Position
June 30, 2020
(Except for the Electric Division Fund which Is as of December 31, 2019)
(continued)
The accompanying notes are an integral part of these financial statements.
14 416
Governmental
Business -Type
Activities
Activities
Total
Liabilities
Current:
Warrants payable
2,943,365
7,050,133
9,993,498
Accrued liabilities
4,734,912
410,511
5,145,423
Unearned revenues
94,336
-
94,336
Customer advances for construction
-
2,152,241
2,152,241
Customer deposits
-
1,308,651
1,308,651
Other current liabilities
641,089
7,127
648,216
Current portion of long-term liabilities:
Bonds payable
4,648,700
2,233,990
6,882,690
Compensated absences
73,510
24,227
97,737
Total Current Liabilities
13,135,912
13,186,880
26,322,792
Noncurrent:
Bonds payable, net of current portion
19,340,819
10,431,329
29,772,148
Compensated absences
661,586
2,494,793
3,156,379
Net pension liability
28,305,204
16,448,770
44,753,974
Net OPER liability
65,472,908
8,680,472
74,153,380
Total Noncurrent Liabilities
113,780,517
38,055,364
151,835,881
Total Liabilities
126,916,429
51,242,244
178,158,673
Deferred IONOws of Recourfe5
Related to pensions
6,069,316
2,184,872
8,254,188
Related to OPER
4,579,802
300,050
4,879,852
Other
233,739
233,739
Total Deferred Inflows of Resources
10,882,857
2,484,922
13,367,779
Net Position
Net investment in capital assets
103,158,023
100,590,904
203,748,927
Restricted for:
Grants and other statutory restrictions
7,626,120
15,246,985
22,873,105
Permanent funds:
Nonexpendable
3,394,383
-
3,394,383
Expendable
2,784,243
-
2,784,243
Unrestricted
(65,556,615)
38,305,829
(27,250,786(
Total Net Position
$ 51,406,154
$ 154,143,718
$ 205,549,872
The accompanying notes are an integral part of these financial statements.
14 416
TOWN OF READING, MASSACHUSETTS
Statement of Activities
For the Year Ended lune 30, 2020
(Except for the Electric Division Fund which is for the year ended December 31, 2019)
Governmental Activities
General government
Public safety
Education
Public works
Facilities
Health and human services
Culture and recreation
Interest on long-term debt
Intergovernmental
Total Governmental Activities
Business -Type Activities
Electric division operations
Water operations
Sewer operations
Nonmajor operations
Total Business -Type Activities
Total
(continued)
The accompanying notes are an integral part of these financial statements.
15 417
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Net(Expames)
Exp
Services
Contributions
Contributions
Revenues
$ 6,424,156
$ 491,583
$ 213,491
$ -
$ (5,719,081)
17,965,897
3,818,322
357,912
-
(13,789,663)
80,699,819
4,095,485
27,539,905
-
(49,064,429)
9,974,610
152,878
112,670
716,874
(8,992,188)
3,786,497
-
-
-
(3,786.497)
967,514
48,963
288,561
-
(629,990)
5,242,893
748,570
68,213
-
(4,426,110)
871,303
-
-
-
(871,303)
1,197,932
(1,197,932)
127,130,621
9,355,803
28,580,752
716,874
(88,477,194)
83,806,431
88,311,977
173,550
338,448
5,017,544
5,912,762
7,206,669
-
-
1,293,907
6,922,120
7,629,871
-
824
708,575
923,142
1,235,990
32,500
345,348
97,564,455
104,384,507
173,550
371,772
7,365,374
$ 224,695,076
$ 113,740,308
$ 28,754,302
$ 1,088,646
(81,111,820)
(continued)
The accompanying notes are an integral part of these financial statements.
15 417
TOWN OF READING, MASSACHUSETTS
Statement of Activiti es
For the Year Ended lune 30, 2020
(Except for the Electric Division Fund which is for the year ended December 31, 2019)
(continued)
Change in Net Position:
Net (Expenses) Revenues from previous page
General Revenues:
Property taxes
Excises
Penalties, interest, and other taxes
Grants and contributions not
restricted to specific programs
Investment income
Other
Transfers, net
Total General Revenues and Transfers
Change in Net Position
Net Position:
Beginning of yea r
End of year
Governmental
Business -Type
Activities
Activities
791al
$ (88,477,194)
$ 7,365,374
$ (81,111,820)
75,922,827
-
75,922,827
4,218,416
-
4,218,416
561,676
-
561,676
3,672,476
-
3,672,476
1,811,013
1,211,136
3,022,149
242,029
812,910
1,054,939
2,480,506
(2,480,506)
88,908,943
(456,460)
88,452,483
431,749
6,909,914
7,340,663
50,974,405
147,234,804
198,209,209
$ 51,406,154
$ 154,143,718
$ 205,549,872
The accompanying notes are an integral part of these financial statements.
16 418
TOWN OF READING, MASSACHUSETTS
Governmental Funds
Ba I ance Sheet
June 30, 2020
Assets
Cash and short-term investments
Investments
Receivables:
Property taxes
Excises
Departmental and other
Intergovernmental
Total Assets
Liabilities
Warrants payable
Accrued liabilities
Unearned revenue
Other liabilities
Total Liabilities
Deferred Inflows of Resources
Unavailable revenues
Fund Balances
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflom of Resources,
and Fund Balances
The accompanying notes are an integral part of these financial statements.
17 419
Nonmajor
Total
General
Governmental
Governmental
Eund
Fund,
Funds
$ 22,065,900
$
12,056,609
$
34,122,509
13,745,036
6,043,262
19,788,298
1,200,570
-
1,200,570
382,673
-
382,673
387,562
615,353
1,002,915
192,149
192,149
$ 37,781,741
$
18,907,373
$
56,689,114
$ 2,304,032
$
640,845
$
2,944,877
4,351,272
161,559
4,512,831
-
94,336
94,336
641,089
641,089
7,296,393
896,740
8,193,133
1,730,977
125,031
1,856,008
-
3,394,383
3,394,383
25,557
14,771,962
14,797,519
503,000
-
503,000
9,912,181
-
9,912,181
18,313,633
(280,743)
18,032,890
28,754,371
17,885,602
46,639,973
$ 3],]81,741
$
18,90],3]3
$
56,689,114
The accompanying notes are an integral part of these financial statements.
17 419
TOWN OF READING, MASSACHUSETTS
Reconciliation of Total Governmental Fund
Balances to Net Position of Governmental
Activities in the Statement of Net Position
June 30, 2020
Total governmental fund balances $ 46,639,973
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the governmental funds. 122,785,942
Revenues are reported on the accrual basis of accounting
and are not deferred until collection. 1,423,357
Deferred outflows of resources to be recognized as an increase to pension and OPEB
expense in future periods:
Related to pensions
7,041,193
Related to OPEB
2,963,603
Long-term liabilities are not due and payable in the current period and, therefore,
are not reported in the governmental funds:
Bonds payable
(23,989,519)
Compensated absences
(735,096)
Net pension liability
(28,305,204)
Net OPEB liability
(65,472,908)
Deferred inflows of resources to be recognized as a decrease to pension and OPEB
expense in future periods:
Related to pensions
(6,069,316)
Related to OPEB
(4,579,802)
In the Statement of Activities, interest is accrued on outstanding
long-term debt, whereas in governmental funds interest is not
reported until due.
(220,569)
Gains on refunding bonds reported as a deferred inflow of resources
will be recognized as a reduction of interest expense in future years.
(75,500)
Net position of governmental activities
$ 51,406,154
The accompanying notes are an integral part of these financial statements.
18 420
TOWN OF READING, MASSACHUSETTS
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
For the Year Ended June30, 2020
Revenues
Property taxes
Excises
Penalties, interest, and other taxes
Departmental
Ucenses and permits
Fines and forfeitures
Intergovernmental
Investment income
Contributions
Other
Total Revenues
Expenditures
Current:
General government
Public safety
Education
Public works
Facilities
Health and human services
Culture and recreation
Employee benefits
Debtservice:
Principal
Interest
Intergovernmental
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Issuance ofbonds
Premium on issuance of bands
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Change in fund balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
Nonmeor Total
General Governmental Governmental
Lund fund, Funds
$ 75,722,150 $ -
4,101,420 -
561,676 -
2,184,187 6,890,955
151,265 -
86,520 -
20,931,882 4,747,054
1,173,465 219,186
- 288,988
176,915 65,881
105,089,480 12,212,064
4,698,054
153,416
11,878,628
2,491,221
51,887,507
9,265,805
5,381,816
1,032,895
4,132,103
-
615,395
194,181
2,524,691
760,482
16,906,209
-
3,600,000 -
893,862
1,197,932
103,716,197 13,898,000
1,373,283 (1,685,936)
-
5,130,000
60,386
693,000
2,652,066
-
(171,560)
2,712,452
5,651,440
4,085,735
3,965,504
24,668,636
13,920,098
$ 28,754,371
$ 17,885,602
$ 75,722,150
4,101,420
561,676
9,075,142
151,265
86,520
25,678,936
1,392,651
288,988
242.796
117,301,544
4,851,470
14,369,849
61,153,312
6,414,711
4,132,103
809,576
3,285,173
16,906,209
3,600,000
893,862
1,197,932
117,614,197
(312,653)
5,130,000
753,386
2,652,066
(171,560)
8,363,892
8,051,239
38.588.734
$ 46,639,9]3
The accompanying notes are an integral part of these financial statements.
19 421
TOWN OF READING, MASSACHUSETTS
Reconciliation of the Statement of Revenues, Expenditures, and Changes
In Fund Balances of Governmental Funds To the Statement of Activities
For the Year Ended lune 30, 2020
Net changes in fund balances- Total governmental funds
Governmental funds report capital outlays as expenditures. However,
in the Statement of Activities the cost of those assets is allocated
over their estimated useful lives and reported as depreciation expense:
Capital outlay
Depreciation
Revenues in the Statement of Activities that do not provide current
financial resources are fully deferred in the Statement of Revenues,
Expenditures, and Changes in Fund Balances. Therefore, the
recognition of revenue for various types of accounts receivable
(i.e., real estate and personal property, excises, etc.)
differ between the two statements. This amount represents the
net change in unavailable revenue.
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 transaction, however,
has any effect on net position:
Current year premiums on issuance of bonds
Issuance of general obligation bonds
Repayments of general obligation and refunding bonds
In the Statement of Activities, interest is accrued on outstanding
long-term debt, whereas in governmental funds interest is not
reported until due. This amount reflects the change in accrued interest.
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:
Amortization of bond premiums
Change in compensated absences
Change in pension expense from GASB 68
Change in OPEB expense from GASB 75
Change in tax refunds payable
Amortization of gain on refunding bonds
Change in net position of governmental activities
$ 8,051,239
5,874,604
(7,441,429)
347,396
(753,386)
(5,130,000)
3,600,000
7,459
418,362
140,296
(2,889,182)
(1,861,180)
52,470
15,100
$ 431,749
The accompanying notes are an integral part of these financial statements.
20 422
TOWN OF REMNG, M4SSLCNOSETTS
NapieUry Funtls
Sralemem of Neo poSitinn
June 30, 2020
IEarepr for In, Elellril OIN:ion lend vihilh N as of Ceeember 33.20191
The accompanying notes are an integral part of these financial statements.
21 423
Eluln,
role
Olwom
all,
Seem
Norem ys,
Enterprise
I
trend
Fund
Funds
Funds
heels
Curr
Cash and snort let. iancan wl,
$
20,028,398
$ 9,112,352
$ 8,206,418
$
1,539,919
$ 38.00],,48]
User lees, net of allowanee for unmlle ndurs
],114,24]
2,493,915
2,6]1,15]
204,004
12,403,333
Prepaid assets
2,433,739
-
-
3,433,739
Inventory
1,822,376
8;995
4,676
1,911,00]
Total Curren Assets
31,398760
11,690,262
30,802,25]
1]43,933
55,715,1%
Norearrent
Asoncted cash and short term investments
39,569)63
-
29,569,761
Pevntled invesoments
2.659,416
2,659,416
treatment in anoeiatea vumpenee
802,212
-
tt
Capital assets censurable, net
79,014,612
9,161.9%
7.134,045
1,467,049
97,141,696
DOW assets won depresiable
1,265,842
0,589796
2.921
-
13,780.481
Other assets
111
162,451
Total Noncurrent ]mums
113,541,294
18,350.786
/0059888
1,41
143.422,017
TOUTAesNs
144,91,0054
30,011,048
20.942,139
3,210,972
199,137,213
ONfercd OUNIOws 01tmP s
Petaled top rasions
],61
4NC91
]6,0]4
4,W5
8,212,677
themed t0 OPE8
"I
51,196
16,576
4,013
530,991
Tmal Oelerred Om owe of Msaurres
8,103,116
530387
92,650
8,618
8,]33,6]3
uabllNler
Imems
wanants payable
6.400,929
429.505
21
14,2%
7,050,333
MnuM liabifnies
33a184
(1
9.600
2,393
410,511
Cmtomer advances for nnunrnion
3,14,I4l
-
2,152,241
Cu cesped.pamits
1,30$651
-
1,308,651
Other canons Mlles.
7.127
]142]
Caron, porton of longterm hadlities:
eased, and loans payable
-
1,8,0,330
3]6,]52
2,333.990
Comamomad absences
24,227
31
Total Current[iabll'nle,
10,220,232
2,350,997
591,865
H,]06
13,186.880
Non
eontlseand loans payable, rust of arts. pprtion
8,721437
1,M,892
10,431,329
Compensated aheenm
21
38$81
9,062
2,494,793
Net pension fall,
11610,001
1,511,069
30],500
20,200
16,448,]]0
Net OPEN ]water
7,094,569
1,131,036
366,211
88,656
8,6 ,472
Tatal Noncurrent liabd ac
24,151,]1]
11,402,126
2,392,665
108,856
38.055,300
local IstANrts
34,311,949
13,]53.83
3,984,530
132,642
5112,241
Would Inflows of 8esourtes
Related to random,
1,]]5.159
21
27,145
36,317
2,1818]3
Aelac0d as PE0
18911]
]9115
25,617
6,201
3NA50
Total Oeferted Inflows m assomme,
3,964,276
374166
103,362
42,518
3,4,Vct
Net Position
Net mreatmentin npdal assn
80,350.454
9,020,743
8,951
1461
10g59q%4
eestrned for
Oepreriatlm Fund
8,331981
-
8.331,981
amemevuA
6,365,433
-
6,365,131
CapCal pmlms
-
-
546,5]3
546,573
Unrestrleted
21,61
6,622,703
8.41].666
3,5]7,303
38.'0
Total Net moutian
$
116,N8,945
$ 36,443,446
$ 1],946,89]
$
3,044,430
$ lK143JI8
The accompanying notes are an integral part of these financial statements.
21 423
Proprietary Fonds
Statement of 8ermues, Expenses, and Changes In Fund NO Position
Par the Year Ended lune 30, 2020
(Except for the Electric OINSIon Fund whish, s for the ye a r ended Onembe, 31, 2019)
The accompanying notes are an integral part of these financial statements.
22 424
Business -Type kti0ties
Fiwn[
Tasal
pvisian
Water
Server
Non rajor
Enterprise
EWIQ
f1Wd
ELOd
f1001
fundi
Opereti'luse ues
Charges for servl ces
$ 89,05,079
$ 7,206,669
$ ],629,8]1 $
1,235,990
$ 105,547,609
Purchase power adjustments:
Fuel charge adjuSMmt
(1,11],]60)
-
-
-
(1,117,7601
Capacity and Transmission act ustmmt
145,3421
(45,3421
Trial Operating Bennues
88,311,977
7,206,669
],629,8]1
1,235,990
104,384,507
Operating Expences
Personnel
-
1,979,871
]]1,326
174,352
2,925,549
Nan -personnel
-
532,270
264,335
665,109
1,461,713
Intergovernmmbl
1,569,667
2,369,997
5,369,024
-
9,308,688
Oryrciation
4,525,997
801,861
449,818
83,682
5,861,358
Entegy purchases
61 02],184
30,194
27,015
-
61,084,393
Operating
14,529 908
14,529,908
Maintenance
2,072,112
2,072,112
Total Operating Expenses
83,724,868
5,714,199
6,881,518
923,142
97,243,721
Operating income
4,587,109
1,492,476
748,353
312,848
7,140,786
NOnOpegNng assesses (Expenses)
Intergovernmental revenue
173,550
-
-
173,550
Invatmentlncome
969,188
101934
122,447
1],56]
1,211,136
Intcm expense
-
(198$69)
140,602)
1239,171)
Last on disposal of capital a ,e
(81,563)
-
(81,563)
Other
812,910
812,910
TOWl Nonoperad its 8mmvc(Expensn). Net
1,874,085
196,6351
81,845
1]56]
1,876,862
I ncome Bafore Capital Corti ons and Transfers
6,461,194
1395A41
$30,198
330,415
9,017,648
Capital grants and contributions
338,448
824
32,500
3]1,]72
Transfers out
(2,480.5061
(2480,506)
Change In Net Facie on
4,319,136
1,395,841
831,972
362,915
6,908,914
Nat Position at Beginning of Year
112,389,809
15,047,605
1],115.8]5
2,681.515
147.234,804
Net Position at End of Year
$ 116.708,945
$ 16,443,446
$ 1],946,89] $
3,044,430
$ 154,143,718
The accompanying notes are an integral part of these financial statements.
22 424
TOWN OF READING ANANNCNUSMS
Pro prietary Funds
Showerat of Cash slows
Forane Year Endermhe 30, 2020
(Esse eforthe Elmira OMsam Fund xfikh Is forth¢ Year ended ttrember 31, 20191
The accompanying notes are an integral part of these financial statements.
23 425
Eletak
TCU]
Gayion
Water
Sewer
Nonmapr
Enteryrise
iQ
fund
filed
&IDds
Funds
Dan Flows From Operating Attly
gxeies from tuylcmers and users
5 91,1]],144
$ 6,859.183
$ ],156,6]9
$ 1.23131
$ 106A20,606
Ferments to ..it... antl empl%¢eft
Ua'Gr3,ID1)
(2,6]0,690)
n,353A091
191
(0],427,489)
Customer purtfiase pawn, Charge adjuAments
(1.163.1021
-
-
-
11,163,12)
Payments to other gwemments
(2,369997]
(5369,031)
1],]39,0211
Net Cash Prnnded By Operating arthadies
]3916]1
2,010,796
435,246
H9281
1%094,994
Own notes maws, Nanta mal Financial Rabbi
Other
834,1aa
-
-
834,149
Transfer out
(SAND506)
12.48%5061
Net Cash (Used Fall Noncapilal F roarang Assaft les
(1,646357)
-
-
-
11,646,35])
Caeh Fbws Amm Drum and addo d nnading Atliaties
PdnOpal payments on hands
(641,2461
(376773)
-
ILOR,019)
Acquisition and construction of caeital assets
16,04,6991
(2359.%91
(730.739)
121"9331
I9,]8L359)
Cammal grants and mntribulions
22],9]1
8L
32,51
261595
Interaovemmerrtal revenues
153,332
-
MhIT2
merest egrtn5e
119]511
(.b03)
(237,700)
Net Gat(Used For) Capital and gelated Thera, AQwhies
GANAUU
(3,19"3111
(1,147,390)
1181,8321
(10,624,479)
.all Fbus From In., Nadi
IDttrease)in rest@ted cash andirsatments
(69194")
-
(681.94)
I..memmCame
969188
IOL93a
123,40
1],56]
1,211,136
Net GSM1 Provided By Investing astrames
287,244
101,934
123,40
17,567
529,192
Net Change In Cash and Short Term Investments
161,8581
('1077,611)
(589 59])
83,416
(1,646,650)
Cash and Shaft Term Investments. Beginning of Year
49.660,017
10389,963
8]96,015
]4� 5 `7503
7"103.098
Cash and Short Term Investments, End of Year
$ 09,598,159
$ 9.113,352
$ 8,106,418
$ 19919
$ fi8A5fi.848
Remncillallon of 0peratlglncome to Net Cash
Awarded By(Used For) Operating AttFAtley
OPeratinginmme
$ 4587,109
$ 3,493476
$ 74R,353
$ 312,848
$ 7,40)86
Adjustm mss W r¢onale opembas thane to net
sash arrested a.00epling activities:
Oepmciation
1,525.997
..".1
14"818
A".
91161,3511
Changes in assets, liabilities, and dNenM ouUloerinNows:
Uxr fees recewables
1,591,167
(30.1861
(473,192)
H,6A7)
766,099
ImeMory
1335,906)
33,384
0.056)
-
(323,5711)
OlherassNs
(390,792)
-
(3113,793)
Deterred antgaws of reyowrey:
RelMetl to pendans
(2,613,537)
457,775
114366
5,295
13,15,881)
Related 0 OPE0
291,359
11,580
3,70
91
307,497
Deterred inflows of resources:
Related or pension,
(330,401)
1100.60
15,364
(12,0581
(236,448)
gelated to DPEB
10.9117
45,978
14,808
Aft
353,511]
Wanamspayable
13,791,765)
1241,273)
0`2,251)
1142,9741
(4,518,2fi3)
Accrued liahl far
-
t"EBB
],40]
2,3%
25,088
Other Refllilies
110,890.
-
],12]
vitals
Net pension l ability
3,83"182
(31fiA28)
fi4,1]4)
14,1)
3,442,817
Net OPCB family
1279,677)
135,4061
(8,227)
'dUs
(315301)
Net Cash Provided Us operating Activities
$ 7391671
$ 2,018.
$ 435546
$ 24.9.1111
$ ]%.9994
Schedule of ms,"ash DOW and related Remains attionim:
Lornmal 01 am"al assets
5 181563)
$
$
$ -
5 (111,5631
The accompanying notes are an integral part of these financial statements.
23 425
Assets
Cash and short-term investments
Investments:
Certificates of deposit
Domestic corporate bonds
State investment pool
Foreign corporate bonds
Total Investments
Accounts receivable
Other
Total Assets
Liabilities
Warrants payable
Other liabilities
Total Liabilities
Net Position
Restricted for:
Pensions
OPEB
Other purposes
Total Net Position
TOWN OF READING, MASSACHUSETTS
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2020
Pension
and OPER
Trust Funds
$ 15,270,921
147,763,267
147,763,267
44,816
10 },U ry,VV4
Private
Purpose
Trust Funds
$ 117,261
1,456,447
2,336,616
1,423,094
5,216,157
6,362
5,333,418 538,894
Agency
Fund
$ 532,532
424 13,466
_ 525,428
424 $ 538,894
152,908,044 -
10,170,960 -
- 5,332,994
5 163,079,004 $ 5,332,994
The accompanying notes are an integral part of these financial statements.
24 426
TOWN OF READING, MASSACHUSETTS
Fiduciary Funds
Statement of Changes in Fidcuciary Net Position
For the Year Ended lune 30, 2020
The accompanying notes are an integral part of these financial statements.
25 427
Pension
Private
and OPEB
Purpose
Trust Funds
Trust Funds
Additions
Contributions:
Employers
$ 11,651,859
$
Plan members
2,931,130
-
Other
5,025
Total Contributions
14,582,989
5,025
Investment Income:
Increase in fair value of investments
21,006,697
185,889
Less: management fees
(724,426)
Net investment income
20,282,271
185,889
Total Additions
34,865,260
190,914
Deductions
Benefit payments to plan members and beneficiaries
16,539,341
-
Administrative expenses
281,455
-
Scholarship payments
-
17,834
Hospital payments
119,160
Total Deductions
16,820,796
136,994
Net Increase
18,044,464
53,920
Net Position Restricted for Pensions, OPER, and Other
Purposes
Beginning of year
145,034,540
5,279,074
End of year
$ 163,079,004
$ 5,332,994
The accompanying notes are an integral part of these financial statements.
25 427
TOWN OF READING, MASSACHUSETTS
Notes to the Financial Statements
1. Summary of Significant Accounting Policies
The accounting policies of the Town of Reading, Massachusetts (the Town) conform to generally
accepted accounting principles (GAAP) as applicable to governmental units. For information
pertaining to the Electric Division please refer to the Electric Division notes to the financial
statements beginning on page 71. The following is a summary of the more significant
policies:
A. Reporting Entity
The Town is a municipal corporation governed by an elected Select Board. As required
by generally accepted accounting principles, these financial statements present the
Town and applicable component units for which the Town is considered to be
financially accountable.
Fiduciary Component Units
The Reading Contributory Retirement System (the System) was established to provide
retirement benefits primarily to employees and their beneficiaries. The System is
presented usingthe accrual basis of accounting and is reported as a pension trust fund
in the fiduciary fund financial statements. Detailed information about the pension
plan's fiduciary net position is available in the separately issued System financial
report. Additional financial information of the System can be obtained by contacting
the System located at 2 Haven Street, Unit 307, Reading, Massachusetts 01867.
The OPEB Trust Fund (the Fund) was established to accumulate other post -
employment benefits to qualified employees to fund future OPEB costs. The Fund is
presented using the accrual basis of accounting and is reported as an OPEB trust fund
in the fiduciary fund financial statements. A separate financial report is not issued for
the OPEB trust fund.
B. Government -wide and Fund Financial Statements
Government -wide 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 nonfiduciary activities of the
primary government. 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.
26 428
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.
Fund Financial Statements
Separate financial statements are provided for governmental funds, proprietary funds,
and fiduciary funds, even though the latter are excluded from the government -wide
financial statements. Major individual governmental funds and major individual
enterprise funds are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting, and Finoncial Stotement Presentation
Government -wide Financial Statements
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing
of related cash flows. Property taxes are recognized as revenues in the year for which
they are levied. Grants and similar items are recognized as revenue as soon as all eligi-
bility requirements imposed by the provider have been met. As a general rule, the
effect of interfund activity has been eliminated from the government -wide financial
statements.
Amounts reported as program revenues include (1) charges to customers
or applicants for goods, services, or privileges provided, (2) operating grants and
contributions, and (3) capital grants and contributions, including special assessments.
Internally dedicated resources are reported as general revenues rather than as
program revenues. Likewise, general revenues include all taxes and excises.
Fund Financial Statements
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are recognized as soon as they are both 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. For this purpose, the Town
considers property tax revenues to be available if they are collected within 60 days of
the end of the current fiscal period. Revenue from grants, entitlements, and donations
is recognized when all eligibility requirements have been satisfied and they are
measurable and available. All other revenue items are considered to be measurable
and available only when cash is received by the Town. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, certain
27 429
expenditures such as debt service, claims and judgments, compensated absences,
pension, and OPEB are recorded only when payment is due.
The Town reports the following major governmental funds:
The General Fund is the Town's primary operating fund. It accounts for all
financial resources of the Town, except those required to be accounted for in
anotherfund.
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 liabilities are incurred.
Proprietary funds distinguish operating revenues and expenses from nonoperating
items. Operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the enterprise fund are
charges to customers for sales and services. Operating expenses for enterprise funds
include the cost of sales and services, administrative expenses, and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
The Town reports the following major proprietary funds:
• The Electric Division Fund is used to report the Town's electric distribution
enterprise fund operations.
• The Water Fund is used to report the Town's water enterprise fund operations.
• The Sewer Fund is used to report the Town's sewer enterprise fund operations.
In addition, the Town has a Stormwater Fund, Landfill Fund, and a PEG Access Fund
which are reported as nonmajor proprietary funds.
The fiduciary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Underthis method, revenues
are recognized when earned and expenses are recorded when liabilities are incurred.
The Town reports the following fiduciary funds:
• The Pension and OPER Trust Funds are used to accumulate resources for retiree
pension and other post -employment benefits.
• The Private Purpose Trust Funds is used to account for hospital and scholarship
trust arrangements, under which principal and investment income exclusively
benefit individuals, private organizations, or other governments.
28 430
• The Agency Fund accounts for fiduciary assets held by the Town in a custodial
capacity as an agent on behalf of others. This fund is primarily used for private
public safety details, student activity funds, and developer escrow funds.
Agency funds report only assets and liabilities and, therefore, have no
measurement focus.
D. Cash and Investments
Cash balances from all funds, except those required to be segregated by law, are
combined to form a consolidation of cash. Cash balances are invested to the extent
available, and interest earnings are recognized in the general fund. Certain special
revenue, proprietary, and fiduciary funds segregate cash, and investment earnings
become a part of those funds.
Deposits with financial institutions consist primarily of demand deposits, certificates
of deposits, and savings accounts. Generally, a cash and investment pool is maintained
that is available for use by all funds. Each fund's portion of this pool is reflected on the
combined financial statements under the caption "cash and short-term investments".
For purpose of the statement of cash flows, the proprietary funds consider
investments with original maturities of three months or less to be cash equivalents.
Investments, generally, are presented at fair value. Where applicable, fair values are
based on quotations from national securities exchanges, except for certain
investments that are required to be presented using the net asset value (NAV). The
NAV per share is the amount of net assets attributable to each share of capital stock
outstanding at the close of the period investments measured at the NAV for fair value
are not subject to level classification.
The Town's investments in the Massachusetts Municipal Depository Trust (MMDT)
Cash Portfolio, an external investment pool overseen by the Treasurer of the
Commonwealth of Massachusetts. This cash portfolio meets the requirements of
GASB Statement No. 79 Certain External Investment Pools and Pool Participants, and
investments are valued at amortized cost.
State and local statutes place certain limitations on the nature of deposits and
investments available. Deposits in any financial institution may not exceed certain
levels within the financial institution. Non -fiduciary fund investments can be made in
securities issued by or unconditionally guaranteed by the U.S. Government or agencies
that have a maturity of one year or less from the date of purchase and repurchase
agreements guaranteed by such securities with maturity dates of no more than 90
days from the date of purchase. Municipalities having such funds in the custody of the
treasurer in an aggregate amount in excess of two hundred and fifty thousand dollars
may also invest such funds in securities, other than mortgages or collateral loans,
which are legal for the investment of funds of savings banks under the laws of the
29 431
commonwealth; provided, that not more than fifteen percent of any such trust funds
shall be invested in bank stocks and insurance company stocks, nor shall more than
one and one-half percent of such funds be invested in the stock of any one bank or
insurance company.
Investments are carried at fair value, except certificates of deposit which are reported
at cost.
Investments for the Reading Contributory Retirement System, presented in the Town's
fiduciary funds, consist of investments in the Pension Reserves Investment Trust (PRIT).
E. Property Tax Limitations
Legislation known as "Proposition 2W limits the amount of revenue that can be
derived from property taxes. The prior fiscal year's tax levy limit is used as a base and
cannot increase by more than 2.5% (excluding new growth), unless an override or debt
exemption is voted. The actual fiscal year 2020 tax levy reflected an excess capacity of
$70,970. Certain provisions of Proposition 2 % can be overridden by referendum.
F. Inventories
Inventories are valued at cost using the first-in/first-out (FIFO) method. The costs of
governmental fund -type inventories are recorded as expenditures when purchased
rather than when consumed. No significant inventory balances were on hand in
governmental funds.
30 432
G. Capital Assets
Capital assets, which include property, plant,
equipment, and
infrastructure assets are
reported in the applicable governmental or business -type activities columns in the
government -wide financial statements.
Capital assets are defined by the Town as
summarized in the following table:
Minimum
Minimum
Capitalization
Useful
Asset Type
Amount
Ufe(Years)
Equipment
$ 5,000
5
Land
10,000
N/A
Land improvements
10,000
20
Buildings
50,000
40
Building improvements
25,000
20
Plant (Water) (B&I)
50,000
50
Passenger vehicles
5,000
5
Heavy vehicular equipment
5,000
10
Fire apparatus
5,000
20
Equipment
51000
10
Technology equipment
5,000
5
Infrastructure
50,000
20
Capital assets are depreciated using the straight-line method over the estimated
useful lives noted in the previous table.
Such assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at acquisition value at the date of
donation.
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.
Major outlays for capital assets and improvements are capitalized as projects are
constructed.
H. Compensated Absences
It is the Town's polity to permit employees to accumulate earned but unused sick pay
benefits. All vested sick pay is accrued when incurred in the government -wide,
proprietary, and fiduciary fund financial statements. A liability for these amounts is
reported in governmental funds only if they have matured, for example, as a result of
employee resignations and retirements.
31 433
Long -Term Obligations
In the government -wide financial statements, and proprietary fund types in the fund
financial statements, long-term debt, and other long-term obligations are reported as
liabilities in the applicable governmental activities, business -type activities, or
proprietary fund type Statement of Net Position. The general fund and applicable
enterprise funds typically repay these obligations.
J. Fund Equity
Fund equity at the governmental fund financial reporting level is classified as "fund
balance". Fund equity for all other reporting is classified as "net position".
Fund Balance
Generally, fund balance represents the difference between the current assets/deferred
outflows of resources and current liabilities/deferred inflows of resources. The Town
reserves those portions of fund balance that are legally segregated for a specific future
use or which do not represent available, spendable resources and, therefore, are not
available for appropriation or expenditure. Unassigned fund balance indicates that
portion of fund balance that is available for appropriation in future periods.
When an expenditure is incurred that would qualify for payment from multiple fund
balance types, the Town uses the following order to liquidate liabilities: restricted,
committed, assigned, and unassigned.
Net Position
Net position represents the difference between assets/deferred outflows of resources
and liabilities/deferred inflows of resources. Net investment in capital assets consist
of capital assets, net of accumulated depreciation, reduced by the outstanding
balances of any borrowing used for the acquisition, construction, or improvement of
those assets. Net position is reported as restricted when there are limitations imposed
on their use either through the enabling legislation adopted by the Town or through
external restrictions imposed by creditors, grantors, or laws or regulations of other
governments. The remaining net position is reported as unrestricted.
K. Use of Estimates
The preparation of basic financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures 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.
32 434
2. Stewardship, Compliance, and Accountability
A. Budgetary Information
At the annual Town Meeting, the Finance Committee presents an operating and
capital budget for the proposed expenditures of the fiscal year commencing the
following July 1. The budget, as enacted by Town Meeting, establishes the legal level
of control and specifies that certain appropriations are to be funded by particular
revenues. The original budget is amended during the fiscal year at special Town
Meetings as required by changing conditions. In cases of extraordinary or unforeseen
expenses, the Finance Committee is empowered to transfer funds from the Reserve
Fund (a contingency appropriation) to a departmental appropriation. "Extraordinary"
includes expenses which are not in the usual line or are great or exceptional.
"Unforeseen" includes expenses which are not foreseen as of the time of the annual
meeting when appropriations are voted.
Departments are limited to the line items as voted. Certain items may exceed the line
item budget as approved if it is for an emergency and for the safety of the general
public. These items are limited by the Massachusetts General Laws and must be raised
in the next year's tax rate.
Formal budgetary integration is employed as a management control device during the
year for the general fund and proprietary funds. Effective budgetary control is
achieved for all other funds through provisions of the Massachusetts General Laws.
At year-end, appropriation balances lapse, except for certain unexpended capital
items and encumbrances which will be honored during the subsequent year.
B. Excess of Expenditures Over Appropriations
There were no expenditures exceeding appropriations during the current fiscal year.
C. Deficit Fund Equity
The Town reported various special revenue funds reflecting individual deficit account
balances as of lune 30, 2020. It is anticipated that the deficits in these funds will be
eliminated through future intergovernmental and departmental revenues and trans-
fers from other funds.
3. Deposits and Investments
Town (Excluding the Pension Fund)
State statutes (MGL Chapter 44, Section 55) place certain limitation on the nature of
deposits and investments available to the Town. Deposits, including demand deposits,
33 acts
money markets, certificates of deposits in any one financial institution, may not exceed
60% of the capital and surplus of such institution unless collateralized by the institution
involved. Investments may be made in unconditionally guaranteed U.S. government
obligations have maturities of a year or less from the date of purchase, or through
repurchase agreements with maturities of no greater than 90 days in which the underlying
securities consists of such obligations. Other allowable investments include certificates of
deposits having a maturity date of up to 3 years from the date of purchase, national banks,
and Massachusetts Municipal Depository Trust (MMDT). MMDT, which is an external
investment pool overseen by the Treasurer of the Commonwealth of Massachusetts,
meets the criteria established by GASB 79, Certain External Investment Pools and Pool
Participants, to report its investments at amortized cost, which approximates the net asset
value of 1.00 per share. MMDT has a maturity of less than 1 year and is not rated or subject
to custodial credit risk disclosure.
Custodial Credit Risk— Deposits
Custodial credit risk is the risk that in the event of a bank failure, the Town's deposits may
not be returned. The Town does not have formal deposit policies related to custodial
credit risk.
As of lune 30, 2020, $2,408,545 of the Town's bank balances of $64,058,738, were
exposed to custodial credit risk as uninsured and uncollateralized.
Investment Summary
The following is a summary of the Town's investments as of June 30, 2020:
Investment Type
Amount
Certificates of deposits
$ 15,308,806
Corporate equities
2,895,175
Domestic corporate bonds
5,377,380
Foreign corporate bonds
1,423,094
Total investments
$ 25,004,455
A. Custodial Credit Risk - Investments
The custodial credit risk for investments is the risk that, in the event of the failure of
the counterparty (e.g., broker-dealer) to a transaction, the Town will not be able to
recover the value of its investment or collateral securities that are in the possession of
another party. The Town does not have formal investment policies related to custodial
credit risk.
As of lune 30, 2020, the Town did not have any investments exposed to custodial credit
risk as all investments were held in the Town's name.
34 436
Credit Risk — Investments of Debt Securities
Generally, credit risk is the risk that an issuer of an investment will not fulfill its
obligations. The Town does not have formal investment policies related to credit risk.
As of June 30, 2020, the credit quality ratings, as rated by 5&P Global Ratings, of the
Town's debt securities are as follows:
Rating as of Year End
Investment Tvoe Amount AA A BBB Unrinted
Domestic corporate bonds $ 5,3T2,380 $ 605,150 $ 2,00,245 $ 2,484,735 $ 227,250
Foreign corporate bonds 1,423,094 330,202 988,699 104,193
Total $ 6,800,474 $ 935,352 $ 3,048,944 $ 2,588,928 $ 227,250
Concentration of Credit Risk- Investments
Concentration of credit risk is the risk of loss attributable to the magnitude of the
Town's investment in a single issuer. The Town places no limit on the amount the Town
may invest in any one issuer. The Town does not have formal investment policies
related to concentration of credit risk exposure.
As of June 30, 2020, the Town does not have an investment in one issuer greater than
5% of total investments.
Interest Rate Risk — Investments of Debt Securities
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greaterthe sensitivity of its fair value to changes in market interest rates. The Town does
not have formal investment policies limiting investment maturities as a means of
managing its exposure to fair value losses arising from increasing interest rates.
Information about the sensitivity of the fair values of the Town's investments to
market interest rate fluctuations is as follows:
Investment Maturities (in Years)
Less
Investment Type Amount Thant 1-5 6-10
Domestic corporate bonds $ 5,377,380 $ 216,637 $ 3,239,131 $ 1,921,612
Foreign corporate bonds 1,423,094 356,692 535,520 530,872
Total $ 6,800,474 $ 573,329 $ 3,774,651 $ 2,452,484
B. Foreign Currency Risk - Investments
Foreign currency risk is the risk that changes in foreign exchange rates will adversely
affect the fair value of an investment. The Town does not have formal investment
policies related to foreign currency risk.
35 4a7
C. Fair Value
The Town categorizes its fair value measurements within the fair value hierarchy
established by Governmental Accounting Standards Board Statement No. 72, Fair
Value Measurement and Application (GASB 72).
The hierarchy is based on the valuation inputs used to measure the fair value of the
asset and give the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (level 1 measurements) and the lowest priority to
unobservable inputs (level 3 measurements). The hierarchy categorizes the inputs to
valuation techniques used for fair value measurement into three levels as follows:
Level 1— inputs that reflect quoted prices (unadjusted) in active markets for
identical assets or liabilities that the fund has the ability to access at the
measurement date.
• Level 2 — inputs other than quoted prices that are observable for an asset or
liability either directly or indirectly, including inputs in markets that are not
considered to be active. Because they must often be priced on the basis of
transactions involving similar but not identical securities or do not trade with
sufficient frequency, certain directly held securities are categorized as level 2.
is Level 3 — unobservable inputs based on the best information available, using
assumptions in determining the fair value of investments and derivative
instruments.
In instances where inputs used to measure fair value fall into different levels in the fair
value hierarchy, fair value measurements in their entirety are categorized based on
the lowest level input that is significant to the valuation.
The Town has the following fair value measurements as of lune 30, 2020:
Investment Tvce
Investments by fair value level:
Corporate equities
Debt sero ies:
permissible corporate bonds
Fomign corporate bonds
rural
Fair Value Measurements Using:
Quoted prices
1. arrive
markets for
Identical assets
Amount (Level l)
5 2,895,175 5 2,895,175 S
5,377,380
1,423.094
5 9,895,&49
S,,,f, ant
Signifiant
observable
unobservable
inputs
inputs
(Level 21
(Level 31
5,377,3W
1,423,094
Securities classified in Level 1 are valued using prices quoted in active markets for those
securities.
36 438
Debt securities classified in Level 2 are valued using either a bid evaluation or a matrix
pricing technique. Bid evaluations may include market quotations, yields, maturities, call
features, and ratings. Matrix pricing is used to value securities based on the securities
relationship to benchmark quote prices. Level debt securities have non-proprietary
information that was readily available to market participants, from multiple
independent sources, which are known to be actively involved in the market.
4. Investments - Pension Trust Fund (The System)
The following is a summary of the System's investments as of December 31,2019:
Investment Tvoe Amount
State investment pool (PRIT)' $ 147,763,267
'Fair value is the some as the value of the pool share. The Pension Reserves Investment Trust was created
under Massachusetts general law, chapter 32, section 27, in December 1983. The Pension Reserves
Investment Trust is operated under contract with a private investment advisor, approved by the Pension
Reserves Investment Management Board. The Pension Reserves Investment Management Board shall
choose an investment advisor by requesting proposals from advisors and reviewing such proposals based on
criteria adopted under Massachusetts general law, chapter 30B.
A. Custodial Credit Risk
The custodial credit risk for investments is the risk that, in the event of the failure of
the counterparty, (e.g., broker-dealer) to a transaction, a government will not be able
to recover the value of its investment or collateral securities that are in the possession
of another party. The System does not have formal investment policies related to
custodial credit risk.
As of December 31, 2019, none of the System's investments are exposed to custodial
credit risk as investments in external investment pools are not exposed to custodial
credit risk as their existence is not evidenced by securities that exist in physical or book
entry form.
B. Credit Risk— Investments of Debt Securities
Generally, credit risk is the risk that an issuer of an investment will not fulfill its
obligation to the holder of the investment. Massachusetts General Law, Chapter 32,
Section 23, limits the investment of System funds, to the extent not required for
current disbursements, in the PRIT Fund or in securities, other than mortgages or
collateral loans, which are legal for the investment of funds in savings banks under the
laws of the Commonwealth, provided that no more than the established percentage of
assets, is invested in any one security.
37 439
As of December 31, 2019, the entirety of the System's investments of $147,763,267 in the
State investment pool were unrated.
C. Concentration of Credit Risk
Massachusetts General Law Chapter 32, Section 23 limits the amount the System may
invest in any one issuer or security type, with the exception of the PRIT Fund. The
System does not have formal policies related to concentration of credit risk.
As of December 31, 2019, the System did not have any investments subject to
concentration of credit risk as investments in external investment pools are excluded
from concentration of credit risk disclosure.
D. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value to changes in market interest rates. The System
does not have formal investment policies limiting investment maturities as a means of
managing its exposure to fair value losses arising from increasing interest rates.
E. Foreign Currency Risk
Foreign currency risk is the risk that changes in foreign exchange rates will adversely
affect the fair value of an investment. The System does not have formal investment
policies related to foreign currency risk.
F. Fair Value
The System categorizes its fair value measurements within the fair value hierarchy
established by Governmental Accounting Standards Board Statement No. 72 Fair
Value Measurement and Application (GASB 72).
The System has the following fair value measurements as of December 31, 2019:
Redemption
Unfunded Redemption Nmia
Investment Tvce Amount Commitments Facivan� Period
Investments measured at the not asset value (NAV):
State investment pod (PRIT) $ 147,763,167 $ Monthly 30 Wys
The net asset value (NAV) per share is the amount of net assets attributable to each
share of capital stock outstanding at the close of the period. Investments measured at
the NAV for fair value are not subject to level classification.
38 "0
5. Property Taxes and Excises Receivable
Real and personal property taxes are based on market values assessed of each January 1.
By law, all taxable property must be assessed at 100% of fair cash value. Also by law,
property taxes must be levied at least 30 days prior to their due date. Once levied, these
taxes are recorded as receivables, net of estimated uncollectible balances. Property tax
revenues have been recorded using the accrual and modified accrual basis of accounting
on the government -wide and fund basis statements accordingly.
The Town bills and collects its property taxes on a quarterly basis following the January 1
assessment. The due dates for those quarterly tax billings are August 1, November 1,
February 1, and May 1. Property taxes that remain unpaid after the respective due dates
are subject to penalties and interest charges.
Based on the Town's experience, most property taxes are collected during the year in
which they are assessed. Liening of properties on which taxes remain unpaid generally
occurs annually. The Town ultimately has the right to foreclose on all properties where the
taxes remain unpaid.
A statewide property tax limitation known as 'Proposition 2 JS" limits the amount of
increase in the property tax levy in any fiscal year. Generally, Proposition 2 34 limits the
total levy to an amount not greater than 2.5% of the total assessed value of all taxable
property within the Town. Secondly, the tax levy cannot increase by more than 2.5% of
the prior year's levy plus the taxes on the property newly added to the tax rolls.
Motor vehicle excise taxes are assessed annually for every motor vehicle and trailer
registered in the Commonwealth. The Registry of Motor Vehicles annually calculates the
value of all registered motor vehicles for the purpose of excise assessment. The amount
of motor vehicle excise tax due is calculated using a fixed rate of $25 per $1,000 of value.
Property tax and excises receivables at lune 30, 2020 consist of the following,
Gross Allowance Long -
Amount for Doubtful Current Term
fund basisl Accounts Portion Portion
Real estate taxes $ 638,539 $ (82,211) $ 556,328 $ -
Personalpropertytaxes 30,044 (12,089) 17,955
Tax liens 466,001 (46,600) - 419,401
Deferred taxes 65,986 65,986
Total property taxes $ 1,200,570 $ (140,900) $ 640,269 $ 419,401
Motor vehicle excise $ 382,673 $ (133,512) $ 249,161 $ -
39 Oat
6.
7.
User Fees Receivable
The Town provides water, sewer, and stormwater services for its residents. Bills are sent
to residential customers on a quarterly basis, based on usage.
Receivables for water, sewer, and stormwater user charges, liens, and other fees at
June 30, 2020 consist of the following:
Water user charges
Water liens
Other
Total Water
Sewer user charges
Sewer liens
Other
Total Sewer
Stormwater user charges
Stormwater liens
Other
Total Stormwater
Total
Intergovernmental Receivables
Allowance
Gross
for Doubtful
Net
Amount
Accounts
Amount
$ 2,706,136
$ (271,014) $
2,435,122
44,840
(13,452)
31,388
54,810
(27,405)
27,405
2,805,786
(311,871)
2,493,915
2,899,498
(290,150)
2,609,348
40,978
(12,293)
28,685
66,248
(33,124)
33,124
3,006,724
(335,567)
2,671,157
223,159
(22,546)
200,613
2,522
(757)
1,765
3,253
(1,627)
1,626
228,934 (24,930) 204,004
$ 6,041,444 $ 672,368 $ 5,369,076
This balance represents reimbursements requested from Federal and State agencies for
expenditures incurred in fiscal year 2020.
40
aa2
8. Interfund Transfers
The Town reports interfund transfers between many of its funds. The sum of all transfers
presented in the table agrees with the sum of interfund transfers presented in the
governmental fund financial statements. The following is an analysis of interfund transfers
made in fiscal year 2020:
Fund
General Fund
Nonmajor Governmental Funds:
School rentals fund
Recreation fund
Receipts reserved for appropriation:
Sale of cemetery lots
Major Enterprise Funds:
Electric Division fund
Total
To General Fund for:
(1) Operating budget and appropriations
(2)Excess recreation revenues
(3) Payment in lieu of taxes (PILOT)
Transfers In Transfers Out
$ 2,652,066 $ - (1) (2) (3)
100,000 (1)
46,560 (2)
25,000 (1)
2,480,506 (3)
$ 2,652,066 $ 2,652,066
41 443
9. Capital Assets
Capital asset activity for the year ended June 30, 2020 for the Town's Governmental
Activities was as follows:
Governmental Activities
Capital assets, depreciable:
Land improvements
Buildings and improvements
Machinery, equipment, and furnishings
Infrastructure
Total capital assets, depreciable
Less accumulated depreciation for:
Land improvements
Buildings and improvements
Machinery, equipment, and furnishings
Infrastructure
Total accumulated depreciation
Total capital assets, depreciable, net
Capital assets, non depreciable:
Land
Construction in progress
Tatal capital assns, non -depreciable
Governmental activities capital assets, net
Beginning
Ending
Balance
Increases
Decreases
Balance
$ 3,870,299
$ 40,388 $
-
$ 3,910,687
156,219,950
341,345
-
156,561,295
12,085,679
1,391,036
-
13,476,715
32,999,066
2,328,696
35,327,762
205,174,994
4,101,465
-
209,276,459
(1,956,156(
(176,193(
(2,132,349)
(59,327,477(
(4,762,465)
-
(64,089,942)
(6,403,360)
(1,146,378)
-
(7,549,738)
(19,568,950)
(1,356,3931
(20,925,343)
(87,255,943)
(7,441,429)
(94,697,372)
117,919,051
(3,339,964)
-
114,579,087
4,781,386
-
-
4,781,386
1,652,330
2,763,066
(989,927)
3,425,469
6.433,716
2,763,066
(989,927)
8,206,855
$ 124,352,767
$ (574 1 $
(989,927)
$ 122,785,942
Capital asset activity for the year ended lune 30, 2020 for the Town's Business -Type
Activities was as follows:
Water Enterprise Fund
Coastal assets, depreciable:
Land improvements
Buildings and improvements
Machinery, equipment, and furnishings
Infrastructure
Total capital assets, depreciable
Less accumulated depredation for:
Land improvements
BWldm, and improvements
Machinery, equipment, and furnishings
Infrastructure
Total accumulated depreciation
Total capital assets, depreciable, net
Capital assets, nom depreciable:
Land
Construction in progress
Total capital assets, non -depreciable
Water enterprise capital assets, net
Beginning
Balance Increases Decreases
$ 1,410,225 $ - $
497,580
2,024,141 159,987
15,969,327 -
19,901,273 159,987
(659,215) (69,075)
(389,907) (16,244)
(1,521,153) (153,901)
(6,927,054) (562,641)
(9,497,409) (801,861)
10,403,864 (641,874)
121,823
6,26,971 2,200,002
6,388,294 2,200,002
$ 16,792,658 $ 1,558,128 $
42
Ending
Balance
$ 1,410,225
497,580
2,184,128
15,969,327
20,061,260
(728,290)
(406,231)
(1,675,054)
(7,489,695)
(10,299,270)
9,761,990
121,823
8,466,973
8,58,796
$ 18,350)86
444
Depreciation expense was charged to functions of the Town as follows:
Governmental Activities
General government
Beginning
Public safety
613,574
Ending
3,570,245
Balance
Increases
DecreaseBalance
39,841
Sewer Enterprise Fund
1,109,931
,Culture and recreation
74,524
Total governmental activities
Capital assets, depreciable:
Land improvements
$ 26,492
$ - $
-
$ 26,492
Buildings and improvements
176,850
-
-
176,850
Machinery, equipment, and furnishings
1,154,687
129,895
-
1,281
Infrastructure
14,175,805
1,447,456
15,623,261
Total capital assets, depreciable
15,533,834
1,577,351
-
17,111,185
Less accumulated depreciation for:
Land improvements
(19,869)
(663(
-
(20,532)
Buildings and improvements
(132,638)
(4,4211
-
(137,0591
Machinery, equipment, and furnishings
(719,605)
(108,014)
(827,619)
Infrastructure
(8,655,210)
(336,720)
(&991,930)
Taal accumulated depreciation
(9,527,322)
(449,818)
(9,977,140)
Total capital assets, depreciable, net
6,006,512
1,127,533
-
7,134,045
Capital assert, non -depreciable:
Land
61,761
-
-
61,761
Construction in progress
3,710,694
600,844
(1,447,456)
2,864,082
Total capital assets, non -depreciable
3,772,455
604,844
(1,447,456)
2,925,843
Sewer enterprise capital assets,net
$ 9,778,967
$ 1,728,377 $
(1,447,456)
$ 10,059,888
Beginning
Ending
Balance
Increases
Elles
lance
Nonmajor Enterprise Funds
Capital assets, depreciable:
Machinery, equipment, and furnishings
$ 653,406
$ 216,932 $
-
$ 870,338
Infrastructure
1,01
1,022,840
Total capital assets, depreciable
1,676,246
216,932
-
1,893,178
Less accumulated depreciation for:
Machinery, equipment, and furnishings
(292,024)
(57,090)
-
(349,114)
Infrastructure
(50,423)
(26,592)
(77,015)
Total accumulated depreciation
(342,447)
(83,682)
(4262
Total capital assets, depreciable, net
1,333,799
133,250
1,467,049
Nonmajor enterprise capital assets, net
$ 1,333,799
$ 133,250 $
$ 1,467,049
Depreciation expense was charged to functions of the Town as follows:
Governmental Activities
General government
$ 186,110
Public safety
613,574
Education
3,570,245
Public works
1,847,204
Facilities
39,841
Health and human services
1,109,931
,Culture and recreation
74,524
Total governmental activities
$ 7,441,429
43 445
10.
Business -Type Activities
Water Enterprise Fund $ 801,861
Sewer Enterprise Fund 449,818
Nonmajor Enterprise Funds 83,682
Total business -type activities $ 1,335,361
Deferred Outflows of Resources
Deferred outflows of resources represent the consumption of net position by the Town
that is applicable to future reporting periods. Deferred outflows of resources have a
positive effect on net position, similar to assets. Deferred outflows of resources related to
pensions and OPEB, in accordance with GASB Statement No. 68, Accounting and Financial
Reporting for Pensions — an amendment of GASB Statement No. 27 and GASB Statement
No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions are more fully discussed in the corresponding pension and OPEB notes.
IS. Warrants Payable
Warrants payable represent fiscal year 2020 expenditures paid by July 15, 2020.
12. Accrued Liabilities
This balance primarily represents amounts accrued interest and other expenditures
related to fiscal year 2020 paid subsequent to July 15, 2020.
44 4 6
13. Long -Term Debt
A. Long -Term Debt Supporting Activities
The Town issues general obligation bonds and direct borrowings to provide funds for
the acquisition and construction of major capital facilities. General obligation bonds
have been issued for both governmental and business -type activities. General
obligation bonds and direct borrowings currently outstanding are as follows:
Governmental Activities
Amount
Serial
Outstanding
Maturities
Interest
as of
General Obligation Bonds
Throuigh
Rates %
6/30/2
Public offerings:
General Obligation Bonds -2009
08/01/25
3.19
$ 1,650,000
General Obligation Bonds -2012
02/01/24
1.93-2.25
4,885,000
General Obligation Bonds -2015
04/15/25
1.49
6,989,000
General Obligation Bonds -2016
11/01/24
1.26
1,875,000
General Obligation Bonds -2017
06/15/27
4.00
945,000
General Obligation Bonds -2020
11/01/29
4.00
5,130,000
Total governmental activities $ 21,474,000
Water Enterprise Fund
Amount
Serial
Outstanding
Maturities
Interest
as of
General Obligation Bonds
Through
Rates %
6/30/20
Public offerings:
General Obligation Bonds -2016
11/01/25
1.26
$ 690,000
General Obligation Bonds -2017
06/15/27
4.00
2,170,000
General Obligation Bonds -2020
11/01/24
4.00
935,000
Total public offerings
3,795,000
Loans - Direct borrowings:
Massachusetts Clean Water Trust -2011
08/15/21
0.00
410,000
Massachusetts Clean Water Trust -2013
08/12/23
0.00
1,604,800
Massachusetts Clean Water Trust -2015
04/15/27
1.49
1,076,000
Massachusetts Clean Water Trust -2016
11/01/27
1.26
2,870,000
Total loans- direct borrowings
5,960,800
Total Water enterprise
$ 9,755,800
45 047
Sewer Enterprise Fund
Principal
Interest
Amount
2021
Serial
829,858
Outstanding
2022
Maturities
Interest
as of
General Obligation Bonds
Through
Rates %
6/30/20
Public offerings:
4,060,000
355,057
4,415,057
General Obligation Bonds -2017
06/15/25
4.00
$ 1,355,000
Loans- Direct borrowings:
2,815,000
270,300
3,085,300
Massachusetts Clean Water Trust -1998
08/01/20
0.00
1,144
Massachusetts Clean Water Trust -2015
11/15/20
0.00
7,810
Massachusetts Clean Water Trust -2016
08/15/26
0.00
147,700
Massachusetts Clean Water Trust -2017
08/15/27
0.00
168,800
Massachusetts Clean Water Trust -2019
05/15/29
0.00
234,000
Total loans- direct borrowings
610,000
72,200
559,454
Total Sewer enterprise
610,000
47,800
$ 1,914,454
B. Future Debt Service
The annual payments to retire all general obligation long-term debt outstanding,
payable by fiscal year, as of lune 30, 2020 are as follows:
Governmental
Principal
Interest
Total
2021
$ 4,155,000 $
829,858
$ 4,984,858
2022
4,085,000
670,727
4,755,727
2023
4,019,000
511,533
4,530,533
2024
4,060,000
355,057
4,415,057
2025
2,340,000
184,288
2,524,288
2026-2030
2,815,000
270,300
3,085,300
Total
$ 21,474,000 $
2,821,763
$ 24,295,763
Water
Principal
Interest
Total
2021
$ 615,000 $
145,700
$ 760,700
2022
615,000
121,100
736,100
2023
610,000
96,600
706,600
2024
610,000
72,200
682,200
2025
610,000
47,800
657,800
2026-2027
735,000
39,500
774,500
Total
$ 3,795,000 $
522,900
$ 4,317,900
46 4a8
Sewer
Principal
Interest
Total
2021
$ 275,000 $
54,200 $
329,200
2022
270,000
43,200
313,200
2023
270,000
32,400
302,400
2024
270,000
21,600
291,600
2025
270,000
10,800
280,800
Total
$ 1,355,000 $
162,200 $
1,517,200
The Town has issued direct borrowings from the Massachusetts Pollution Abatement
Trust (MWPAT), a state revolving loan fund (SRF) of the Massachusetts Clean Water
Trust (MCWT), a component unit of the Commonwealth of Massachusetts. MCWT
issues special obligation bonds under its SRF programs to provide low cost financing
to Cities, Towns, and other eligible borrowers, primarily for the construction and
improvement of drinking water and wastewater infrastructure. There were no unused
lines of credit or assets pledged as collateral for debt. The Town certified that rates
and charges in the Water and Sewer Enterprise funds have been set at a sufficient level
to cover estimated operating expenses and debt service related to direct borrowings.
In addition, the Town as an "obligated person' with respect to Rule 15c2-12(6)(5)
adopted by the Securities and Exchange Commission under the Securities Exchange
Act of 1934, agrees with MCWT to provide an annual report, not later than 270 days
after the close of each fiscal year, that incorporates the most recently available audited
financial statements to meet continuing disclosure requirements.
The annual payments to retire all state revolving loan direct borrowings outstanding,
payable by fiscal year, as of June 30, 2020 are as follows:
Water
Principal
Interest
Total
2021
$ 1,131,200
$ 135,830 $
1,267,030
2022
1,126,200
116,530
1,242,730
2023
917,200
97,330
1,014,530
2024
916,200
78,250
994,450
2025
515,000
57,650
572,650
2026-2028
1,355,000
62,475
1,417,475
Total
$ 5,960,800
$ 548,065 $
6,508,865
47 449
Sewer
Principal
Interest
Total
2021
$
77,154
$
$
T7,154
2022
68,200
-
68,200
2023
68,200
-
68,200
2024
68,200
-
68,200
2025
68,200
-
68,200
2026-2029
209,500
209,500
Total
$
559,454
$
$
559,454
C. Changes in General Long-Term Liabilities
During the year ended June 30,
2020, the following changes occurred in long-term
liabilities:
Less
Equals
Beginning
Ending
Current
Wng-Term
Balance
Addition
Reactions
Bal-
Auction
Pyrypp
6auernmental Activities
bonds payable'.
Public aHerings $
]9,973,730
$ 5,130,000
$ (3,600,M) $
31,474,008
$ 14,155,0.001 $
17,339,00
Unamartaed bond premiums
2,189,495
83,306
1410,3631
2,515,519
1493,001
2,021,819
Total loWterm debt
22,124,a95
5,883,386
(4.010,362)
23,989.519
14,648,Tm1
19,30,819
Comcensaled absenma
975,392
-
114012961
735,096
(73,5101
661,586
NO pensiar llabdo,
73.307,165
-
16,001,9611
28,305,204
28,305,20
NO OPEB liability
66,943,627
(1,4],]191
65,472,908
65,472,908
Total long-term Fabi@ies $
124,25,679
$ 5,883,386
$ 111,631,3381 5
118,502,727
$ IV22p0 $
113,780,517
less
Equals
Replacing
Ending
Current
Lung'Tecn
ggllarn
Atlyn
Reductions
$31iMg
Portion
Pppg_n
Water Enterprises Fund
Bonds payable:
Public offerings $
3,285,00
$ 935,000
$ 1425,M) $
3)95,08
$ 16ISMl $
3,180,OW
Loans(direct borrowings)
7102100
11,131,201
5,9008
(1,131,20)
4,829,600
Unamort red bond premiums
842,921
77,993
138,039)
822,875
(1311081
711,837
Total lorgtOrn debt
11,219,911
1,012,03
11,654,239)
10.578.675
11,882381
9.721,437
Compensated absences
4assa
15,9701
38.5&
-
38,584
Net pemion liability
1.827,397
-
1316,3281
1,533,09
1.511.069
Net OPER liability
1,156,442
215,106)
1,13t,06
1,131,06
Total balloon liaNblies $
14,248,314
$ 1.012.993
5 ?01,943) $
13,259,364
$ (1,857,238) $
11,40,126
48 450
D. Bond Authorizations
Long-term debt authorizations which have not been issued or rescinded as of June 30,
2020 are as follows:
Date Authorized
Purpose
Amount
November 2018
MWRA sewer I & I phase 12
Cess
E,eW,
MWRA sewer I & I phase 13
1,040,000
Beginning
Turf 11 with lighting
618,000
Ending
Current
WnPTerm
April 2019
Auburn water tank replacement
Balance
Atltlit-
Rene
@(ante
Portion
Portion
Sewer Ertel lend
Rontls payable:
Public aNering,
5
11634000 $
(275,000) 5
1,355,000
5 (275,0001 $
1101010(0
loans deet bonowinge)
636,629
(1,175)
559,454
(77,1541
482,3(0
Unarm i¢d abi premiums
196,788
(24,598)
172,190
(24,5981
147,592
"lal longterm debt
ip63,417
-
1376,773)
2,086,W
(376,752)
1,709,892
Compmsate0 absences
(,793
269
9.062
-
9,062
Net pension liability
371,674
MIMI
30).50)
307500
Net OPER liability
374,38
(8,227)
366,211
366,211
Total longterm Mobilities
$
3j18322 $
269
5 (449,174) $
2,769,17
$ (376,7571 $
2,392,665
Less
Epuals
Beginning
Ending
Current
Willi
Balance
Fd ions
Roidnedgemn
Balanre
senseoP
Nim
Nonmaler Entegaine Funds
Net pension liability
$
25A63 $
$ 4,863f $
20.200
$ - 5
20,201
Net OPEN liability
90,647
11,9311
88,656
(8,656
Total long-term liabilities
$
115,710 $_
_ -
5 16$41 $
1W,fl56
$ 5
109.856
D. Bond Authorizations
Long-term debt authorizations which have not been issued or rescinded as of June 30,
2020 are as follows:
Date Authorized
Purpose
Amount
November 2018
MWRA sewer I & I phase 12
$ 1,040,000
November 2018
MWRA sewer I & I phase 13
1,040,000
April 2019
Turf 11 with lighting
618,000
April 2019
Building security
477,000
April 2019
Auburn water tank replacement
4,500,000
April 2019
Grove street water main improvements
65,000
Total
$ 7,740,000
E. Long -Term Liabilities Supporting Governmental and Business -Type Activities
Bonds and loans issued by the Town for various municipal projects are approved by
Town Meeting and repaid with revenues recorded in the general fund and user fees
recorded in enterprise funds. All other long-term liabilities are repaid from the funds
that the cost relates to, primarily the general fund and enterprise funds.
14. Deferred Inflows of Resources
Deferred inflows of resources refer to the acquisition of net position by the Town that are
applicable to future reporting periods. Deferred inflows of resources have a negative effect
on net position, similar to liabilities. Deferred inflows of resources related to pension and
49
451
OPEB, in accordance with GASB Statement No. 68, Accounting and Financial Reporting for
Pensions — on amendment of GASB Statement No. 27 and GASB Statement No. 75,
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions will
be recognized as decreases in the respective expense in future years and is more fully
described in the corresponding pension and OPEB notes. Unavailable revenues are
reported in the government -wide statement of net position and governmental funds
balance sheet in connection with (1) receivables for which revenues are not considered
available to liquidate liabilities of the current year and (2) property taxes collected in
advance for periods subsequent to the reporting date.
The following is a summary of other deferred inflows of resources balances as of June 30,
2020:
Gains on refunding bonds
Unavailable revenues related to:
Outstanding receivables
Taxes collected in advance
Total deferred inflows of resources
Entity -wide Basis Fund Basis
Governmental Governmental Funds
Activities
75,500
158,239
$ 233,739
General Fund
1,572,738
158,239
$ 1,730,977
Gains on refunding bonds are reported in the government -wide statement of net position
in connection with the unamortized amount of gains resulting from the refunding of long-
term bonds.
15. Governmental Funds - Balances
Fund balances are segregated to account for resources that are either not available for
expenditure in the future or are legally set aside for a specific future use.
The Town implemented GASB Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions (GASB 54), which enhances the usefulness of fund
balance information by providing clearer fund balance classifications that can be more
consistently applied and by clarifying existing governmental fund type definitions.
The following types of fund balances are reported at lune 30, 2020:
Nonspendable
Represents amounts that cannot be spent because they are either (a) not in spendable
form or (b) legally or contractually required to be maintained intact. This fund balance
classification includes governmental fund reserves for the principal portion of permanent
trust funds.
50 452
Restricted
Represents amounts that are restricted to specific purposes by constraints imposed by
creditors, grantors, contributors, or laws or regulations of other governments, or
constraints imposed by law through constitutional provisions or enabling legislation. This
fund balance classification includes general fund restrictions for debt service, various
special revenue funds, capital project funds, and the income portion of permanent trust
funds.
Committed
Represents amounts that can only be used for specific purposes pursuant to constraints
imposed by formal action of the Town's highest level of decision-making authority. This
fund balance classification includes stabilization accounts* set aside by Town Meeting
vote for future capital acquisitions and improvements (now reported as part of the
general fund per GASB 54). A similar action is needed to modify or rescind a commitment.
Assigned
Represents amounts that are constrained by the Town's intent to use these resources for
a specific purpose. This fund balance classification includes general fund encumbrances
that have been established by various Town departments for the expenditure of current
year budgetary financial resources in the subsequent budgetary period and surplus set
aside to be used in the subsequent year's budget voted by Town Meeting.
Unassigned
Represents amounts that are available to be spent in future periods, the Town's general
stabilization account*, and deficit balances.
*Massachusetts General law Ch. 40B Section 5 allows for the establishment of stabilization funds for one
or more different purposes. The creation of a fund requires two-thirds vote of the legislative body and must
clearly define the purpose of the fund. Generally, any change to the purpose of the fund, along with any
additions to or appropriations from the fund, requires a two-thirds vote of the legislative body.
51 453
Following is a breakdown of the Town's fund balances at lune 30, 2020
52 454
Nonmajor
Total
General
Governmental
Governmental
Fund
Funds
Funds
Nonspendable
Permanent funds:
Cemetery
$ -
$ 3,122,218
$ 3,122,218
Other
272,165
272,165
Total Nonspendable
-
3,394,383
3,394,383
Restricted
For high school debt service
25,557
-
25,557
Federal grants
-
16,969
16,969
State grants:
Special education (circuit breaker)
-
1,367,554
1,367,554
State aid to libraries
-
29,858
29,858
Other
-
233,338
233,338
Revolving funds:
Inspection permit
-
924,312
924,312
Extended day program
-
S03,330
503,330
All -day kindergarten program
-
91
946,544
Schoollunch
-
441,641
441,641
Recreation
-
70,984
70,984
RISE preschool program
-
300,577
300,577
Athletic activities
-
188,318
188,318
Special education tuition
-
82,726
82,726
Public health clinics
-
55,864
55,864
Other
-
646,666
646,666
Receipts reserved for appropriation:
Affordable housing fund
-
386,718
386,718
Sale of cemetery lots
-
232,859
232,859
Sale of real estate
-
26,592
26,592
Other
-
43,858
43,858
Gifts and donations
-
1,127,411
1,127,411
Permanent funds:
Cemetery
-
2,294,946
2,294,946
Other
-
489,297
489,297
Town capital project funds:
Building security project
-
3,854,571
3,854,571
West street road improvements
335,895
335,895
Library renovations
-
117,514
117,514
Other
53,620
53,620
Total Restricted
25,557
14,771,962
14,797,519
(continued)
52 454
16. Reading Contributory Retirement System
The Town follows the provisions of GASB Statement No. 68, Accounting and Financial
Reporting for Pensions — an amendment of GASB Statement No. 27, with respect to the
employees' retirement funds.
A. Plan Description
Substantially all employees of the Town (except teachers and administrators under
contract employed by the School Department) and Reading Housing Authority are
members of the Reading Contributory Retirement System (the System), a cost-sharing,
multiple employer public employee retirement system (PERS). Eligible employees must
participate in the System. The pension plan provides pension benefits, deferred
allowances, and death and disability benefits. Chapter 32 of the Massachusetts General
Laws establishes the authority of the System, contribution percentages and benefits
paid. The Reading Contributory Retirement Board does not have the authority to
amend benefit provisions. Additional information is disclosed in the System's annual
financial reports publicly available from the System located at 2 Haven Street, Unit
304, Reading, Massachusetts 01867.
53
455
Nonmajor
Total
General
Governmental
Governmental
Fund
Funds
Funds
(continued(
Committed
Smart growth stabilization account
503,000
503,000
Total Committed
503,000
-
503,000
Assigned
For encumbrances:
General government
409,445
-
409,445
Public safety
913,707
-
913,707
Education
2,389,397
-
2,389,397
Public works
943,185
-
943,185
Facilities
2,024,447
2,024,447
Employee benefits
800,000
-
800,000
For next year's expenditures
2,432,000
2,432,000
Total Assigned
9,912,181
-
9,912,181
Unassigned
Operating fund
16,606,656
-
16,606,656
General stabilization
1,706,977
-
1,706,977
Deficit balances
(280,743)
(280,743(
Total Unassigned
18,313,633
(280,743)
18,032,890
Total Fund Balance
$ 28,754,371
$ 17,885,602
$ 46,639,973
16. Reading Contributory Retirement System
The Town follows the provisions of GASB Statement No. 68, Accounting and Financial
Reporting for Pensions — an amendment of GASB Statement No. 27, with respect to the
employees' retirement funds.
A. Plan Description
Substantially all employees of the Town (except teachers and administrators under
contract employed by the School Department) and Reading Housing Authority are
members of the Reading Contributory Retirement System (the System), a cost-sharing,
multiple employer public employee retirement system (PERS). Eligible employees must
participate in the System. The pension plan provides pension benefits, deferred
allowances, and death and disability benefits. Chapter 32 of the Massachusetts General
Laws establishes the authority of the System, contribution percentages and benefits
paid. The Reading Contributory Retirement Board does not have the authority to
amend benefit provisions. Additional information is disclosed in the System's annual
financial reports publicly available from the System located at 2 Haven Street, Unit
304, Reading, Massachusetts 01867.
53
455
Participant Contributions
Participants contribute a set percentage of their gross regular compensation annually.
Employee contribution percentages are specified in Chapter 32 of the Massachusetts
General Laws. The employee's individual contribution percentage is determined by
their date of entry into the system. In addition, all employees hired on or after
January 1, 1979 contribute an additional 2% on all gross regular compensation over
the rate of $30,000 per year. The percentages are as follows:
Before January 1, 1975 5.00%
January 1, 1975 - December 31, 1983 7.00%
January 1, 1984 -June 30, 1996 8.00%
Beginning July 1, 1996 9.00%
1979 - present Additional 2.00% of salary
in excess of $30,000
Group 1 members hired on or after 6.D0%with 30 or more years
April 2, 2012 of creditable service
For those members entering a Massachusetts System on or after April 2, 2012 in
Group 1, the contribution rate will be reduced to 6% when at least 30 years of
creditable service has been attained.
Participant Retirement Benefits
A retirement allowance consists of two parts: an annuity and a pension. A member's
accumulated total deductions and a portion of the interest they generate constitute
the annuity. The difference between the total retirement allowance and the annuity
is the pension. The average retirement benefit is approximately 80-85% pension and
15-20% annuity.
The System provides for retirement allowance benefits up to a maximum of 80% of a
member's highest 3 -year average annual rate of regular compensation for those hired
prior to April 2, 2012 and the highest 5 -year average annual rate of regular
compensation for those first becoming members of the Massachusetts System on or
after that date. However, per Chapter 176 of the Acts of 2011, for members who retire
on or after April 2, 2012, if in the 5 years of creditable service immediately preceding
retirement, the difference in the annual rate of regular compensation between any
2 consecutive years exceeds 100%, the normal yearly amount of the retirement
allowance shall be based on the average annual rate of regular compensation received
by the member during the period of 5 consecutive years preceding retirement. Benefit
payments are based upon a member's age, length of creditable service, level of
compensation, and group classification.
54 456
There are 4 classes of membership in the retirement system, but one of these classes,
Group 3, is made up exclusively of the Massachusetts State Police. The other three
classes are as follows:
• Group 1—General employees, including clerical, administrative, technical, and
all other employees not otherwise classified.
• Group 2—Certain specified hazardous duty positions.
• Group 4—Police officers, firefighters, and other specified hazardous positions
A retirement allowance may be received at any age, upon attaining 20 years of service.
The plan also provides for retirement at age 55 if the participant was a member prior
to January 1, 1978, with no minimum vesting requirements. If the participant was a
member on or after January 1, 1978 and a member of Groups 1 or 2, then a retirement
allowance may be received if the participant (1) has at least 10 years of creditable
service, (2) is age 55, (3) voluntarily left Town employment on or after that date, and
(4) left accumulated annuity deductions in the fund. Members of Group 4 have no
minimum vesting requirements, however, must be at least age 55. Groups 2 and 4
require that participants perform the duties of the Group position for at least
12 months immediately prior to retirement.
A participant who became a member on or after April 2, 2012 is eligible for a
retirement allowance upon 10 years creditable service and reaching ages 60 or 55 for
Groups 1 and 2, respectively. Participants in Group 4 must be at least age 55. Groups
2 and 4 require that participants perform the duties of the Group position for at least
12 months immediately prior to retirement.
Methods of Payment
A member may elect to receive his or her retirement allowance in one of three forms
of payment as follows:
• Option A — Total annual allowance, payable in monthly installments,
commencing at retirement and terminating at the members death.
• Option B — A reduced annual allowance, payable in monthly installments,
commencing at retirement and terminating at the death of the member,
provided however, that if the total amount of the annuity portion received by
the member is less than the amount of his or her accumulated deductions,
including interest, the difference or balance of his accumulated deductions will
be paid in a lump sum to the retiree's beneficiary or beneficiaries of choice.
• Option C — A reduced annual allowance, payable in monthly installments,
commencing at retirement. At the death of the retired employee, 2/3 of the
allowance is payable to the member's designated beneficiary (who may be the
spouse, or former spouse who has not remarried, child, parent, sister, or
55 457
brother of the employee) forth e life of the beneficiary. For members who retired
on or after January 12, 1988, if the beneficiary pre-deceases the retiree, the
benefit payable increases (or "pops up" to Option A) based on the factor used
to determine the Option C benefit at retirement. For members who retired
prior to January 12, 1988, if the System has accepted Section 288 of Chapter
194 of the Acts of 1998 and the beneficiary pre-deceases the retiree, the
benefit payable "pops up" to Option A in the same fashion. The Option C
became available to accidental disability retirees on November 7, 1996.
Participant Refunds
Employees who resign from service and who are not eligible to receive a retirement
allowance are entitled to request a refund of their accumulated total deductions.
Members voluntarily withdrawing with at least 10 years of service or involuntarily
withdrawing, receive 100% of the regular interest that has accrued on those
accumulated total deductions. Members voluntarily withdrawing with less than 30
years of service get credited interest each year at a rate of 3.00°%.
Employer Contributions
Employers are required to contribute at actuarially determined rates as accepted by
the Public Employee Retirement Administration Commission (PERAC).
The Town's contribution to the System for the year ended lune 30, 2020 was
$4,454,343 which was equal to its annual required contribution.
B. Summary of Significant Accounting Policies
For purposes of measuring the net pension liability, deferred outflows and deferred
inflows of resources related to pensions, and pension expense, information about the
fiduciary net position of the System and additions to/deductions from System's
fiduciary net position have been determined on the same basis as they are reported
by System. For this purpose, benefit payments (including refunds of employee
contributions) are recognized when due and payable in accordance with benefit
terms. Investments are reported at fair value.
C. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
(Inflows) of Resources Related to Pensions
The following disclosures are reported as of June 30, 2020 and do not include the
Electric Division which is reported as of December 31, 2019 with a net pension liability
reported as of December 31, 2018.
At June 30, 2020, the Town reported a liability of $30,143,973 for its proportionate
share of the net pension liability. The net pension liability was measured as of
December 31, 2019, and the total pension liability used to calculate the net pension
56 458
liability was determined by an actuarial valuation as of January 1, 2019. The Town's
proportion of the net pension liability was based on a projection of the Town's long-
term share of contributions to the pension plan relative to the projected contributions
of all participating employers, actuarially determined. At December 31, 2019, the
Town's proportion was 70.89%.
For the year ended lune 30, 2020, the Town recognized pension expense of
$7,609,748. In addition, the Town reported deferred outflows of resources and
deferred (inflows) of resources related to pensions from the following sources:
Differences between expected and actual experience
Changes of assumptions
Net difference between projected and actual earnings on
pension plan investments
Changes in proportion and differences between contributions
and porportionate share of contributions
Total
Deferred
Deferred
Outflows of
(inflows)of
Resources
Resources
$ 5,856,975
$ (305,709)
1,015,302
(2,410,262)
(3,181,900)
728,686 (581,158)
$ 7,600,963 $ (6,479,029)
Amounts reported as deferred outflows (inflows) of resources related to pensions will
be recognized in pension expense as follows:
Fiscal year Ended June 30
2021
$ 818,741
2022
113,874
2023
1,426,935
2024
(1,237,616)
Total
$ 1,121,934
S7 459
D. Actuarial Assumptions
The total pension liability in the January 1, 2019 actuarial valuation was determined
using the following actuarial assumptions, applied to all periods included in the
measurement:
Valuation date
January 1, 2019
Actuarial cost method
Entry age normal
Amortization method:
UAAL:
Increasing dollar amount at 4.00% to reduce
the Unfunded Actuarial Accrued Liability
(URAL) to zero on or before lune 30, 2034.
The annual increase in appropriation is
further limited to 5.75%.
Inflation Rate
2.40%
Salary increases
6.00%- 4.25%, based on service for Groups 1
and 2; 7.00%- 4.75% based on service for
Group 4
Investment rate of return
7.50%, net of pension plan investment
expense, including inflation
Post-retirement cost -of-
3.00% of first $12,000
living adjustment
Mortality Rates:
Pre -retirement,
RP -2000 Mortality table, base year 2009,
retirement, and
projected with fully generational mortality
beneficiary mortality
improvement using Scale BB
Mortality for disabled
RP -2000 Mortality table, base year 2012,
members
projected with fully generational mortality
improvement using Scale BB
E. Target Allocations
The long-term expected rate of return on pension plan investments was selected from
a best estimate range determined using the building block approach. Under this
method, an expected future real return range (expected returns, net of pension plan
investment expense and inflation) is calculated separately for each asset class. These
ranges are combined to produce the long-term expected rate of return by weighting
the expected future real rates of return net of investment expenses by the target asset
allocation percentage and by adding expected inflation. The target allocation and best
58 460
estimates of arithmetic real rates of return for each major class are summarized in the
following table:
Long-term
Total 100.00%
F. Discount Rate
The discount rate used to measure the total pension liability was 7.50%. The
projection of cash Flows used to determine the discount rate assumed that the plan
member contributions will be made at the current contribution rate and that
employer contributions will be made at contractually required rates, actuarially
determined. Based on those assumptions, the pension plan's fiduciary net position
was projected to be available to make all projected future benefit payments to current
active and inactive plan members. Therefore, the long-term expected rate of return on
pension plan investments was applied to all periods of projected benefit payments to
determine the total pension liability.
G. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the
Discount Rate
The following presents the Town's proportionate share of the net pension liability
calculated using the discount rate of 7.50°%, as well as what the Town's proportionate
share of the net pension liability would be if it were calculated using a discount rate
that is one percentage -point lower or one percentage -point higher than the current
rate:
Current
1% Discount 1%
Decrease Rate Increase
6.50% 7.50% 8.50%
$ 45,355,515 $ 30,143,973 $ 17,228,809
59 491
Target
Expected
Asset
Real Rate
Asset Class
Allocation
of Return
Global equity
39.00%
4.68%
Core fixed income
15.00%
0.59%
Private equity
13.00%
8.50%
Portfolio completion (PCS)
11.00%
3.40%
Real estate
10.00%
3.70%
Value-added fixed income
8.00%
4.40%
Timberland
4.00%
4.30%
Total 100.00%
F. Discount Rate
The discount rate used to measure the total pension liability was 7.50%. The
projection of cash Flows used to determine the discount rate assumed that the plan
member contributions will be made at the current contribution rate and that
employer contributions will be made at contractually required rates, actuarially
determined. Based on those assumptions, the pension plan's fiduciary net position
was projected to be available to make all projected future benefit payments to current
active and inactive plan members. Therefore, the long-term expected rate of return on
pension plan investments was applied to all periods of projected benefit payments to
determine the total pension liability.
G. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the
Discount Rate
The following presents the Town's proportionate share of the net pension liability
calculated using the discount rate of 7.50°%, as well as what the Town's proportionate
share of the net pension liability would be if it were calculated using a discount rate
that is one percentage -point lower or one percentage -point higher than the current
rate:
Current
1% Discount 1%
Decrease Rate Increase
6.50% 7.50% 8.50%
$ 45,355,515 $ 30,143,973 $ 17,228,809
59 491
H. Pension Plan Fiduciary Net Position
Detailed information about the pension plan's fiduciary net position is available in the
separately issued System financial report.
17. Massachusetts Teachers' Retirement System (MTRS)
A. Plan Description
The Massachusetts Teachers' Retirement System (MTRS) is a public employee
retirement system (PERS) that administers a cost-sharing multi-employer defined
benefit plan, as defined in Governmental Accounting Standards Board (GASB)
Statement No. 67, Financial Reporting for Pension Plans — an Amendment of GASB
Statement No. 25. MTRS is managed by the Commonwealth on behalf of municipal
teachers and municipal teacher retirees. The Commonwealth is a nonemployer con-
tributor and is responsible for all contributions and future benefit requirements of the
MTRS. The MTRS covers certified teachers in cities (except Boston), towns, regional
school districts, charter schools, educational collaboratives, and Quincy College. The
MTRS is part of the Commonwealth's reporting entity and does not issue a stand-alone
audited financial report.
Management of MTRS is vested in the Massachusetts Teachers' Retirement Board
(MTRB), which consists of seven members—two elected by the MTRS members, one
who is chosen by the six other MTRB members, the State Treasurer (ortheir designee),
the State Auditor (or their designee), a member appointed by the Governor, and the
Commissioner of Education (or their designee), who serves ex -officio as the Chairman
of the MTRB.
B. Benefits Provided
MTRS provides retirement, disability, survivor, and death benefits to members and
their beneficiaries. Massachusetts General Laws (MGL) establish uniform benefit and
contribution requirements for all contributory PERS. These requirements provide for
superannuation retirement allowance benefits up to a maximum of 80% of a
member's highest 3 -year average annual rate of regular compensation. For employees
hired after April 1, 2012, retirement allowances are calculated on the basis of the last
5 years or any S consecutive years, whichever is greater in terms of compensation.
Benefit payments are based upon a member's age, length of creditable service, group
creditable service, and group classification. The authority for amending these
provisions rests with the Legislature.
Members become vested after 10 years of creditable service. A superannuation
retirement allowance may be received upon the completion of 20 years of creditable
service or upon reaching the age of 55 with 10 years of service. Normal retirement for
60 462
most employees occurs at age 65. Most employees who joined the system after April 1,
2012 cannot retire prior to age 60.
The MTRS' funding policies have been established by Chapter 32 of the MGL. The
Legislature has the authority to amend these policies. The annuity portion of the
MTRS retirement allowance is funded by employees who contribute a percentage of
their regular compensation. Costs of administering the plan are funded out of plan
assets.
C. Contributions
Member contributions for MTRS vary depending on the most recent date of
membership:
Membership Date
Before January 1, 1975
January 1, 1975 - December 31, 1983
January 1, 1984 -lune 30, 1996
Beginning July 1, 1996
Beginning July 1, 2001
1979 - present
D. Actuarial Assumptions
% of Compensation
5.00%
7.00%
8.00%
9.00%
11.00% (for teachers who were hired after July
1, 2001 and accept the provisions of Chapter
114 of the Acts of 2000)
Additional 2.00% of salary in excess of
$30,000
The total pension liability for the lune 30, 2019 measurement date was determined
by an actuarial valuation as of January 1, 2019 rolled forward to lune 30, 2019. This
valuation used the following assumptions:
• (a) 7.25% (changed from 7.35%) investment rate of return, (b) 3.50% interest rate
credited to the annuity savings fund and (c) 3.00% cost of living increase on the
first $13,000 per year.
• Salary increases are based on analyses of past experience but range from 4.00% to
7.50% depending on length of service.
• Experience study is dated July 21, 2014 and encompasses the period January 1,
2006 to December 31, 2011, updated to reflect post-retirement mortality through
January 1, 2017.
61 463
Mortality rates were as follows:
Pre -retirement RP -2014 White Collar Employees table projected generationally
with Scale MP -2016 (gender distinct)
Post-retirement RP -2014 White Collar Healthy Annuitant table projected
generationally with Scale MP -2016 (gender distinct)
Disability Assumed to be in accordance with RP -2014 White Collar Healthy
Annuitant Table projected generationally with Scale MP -2016
(gender distinct)
Target Allocations
Investment assets of the MTRS are with the Pension Reserves Investment Trust (PRIT)
Fund. The long-term expected rate of return on pension plan investments was
determined using a building-block method in which best -estimate ranges of expected
future rates of return are developed for each major asset class. These ranges are
combined to produce the long-term expected rate of return by weighting the expected
future rates of return by the target asset allocation percentage. Best estimates of
geometric rates of return for each major asset class included in the PRIT Fund's target
asset allocation as of June 30, 2019 are summarized in the following table:
Discount Rate
The discount rate used to measure the total pension liability was 7.25%. The
projection of cash flows used to determine the discount rate assumed that plan
member contributions will be made at the current contribution rates and the
Commonwealth's contributions will be made at rates equal to the difference between
actuarially determined contribution rates and the member rates. Based on those
assumptions, the net position was projected to be available to make all projected
future benefit payments of current plan members. Therefore, the long-term expected
62 464
Target
Long -Term Expected
Asset Class
Allocation
Real Rate of Return
Global equity
39.00%
4.90%
Portfolio completion strategies
11.00%
3.90%
Core fixed income
15.00%
1.30%
Private equity
13.00%
8.20%
Real estate
10.00%
3.60%
Value-added fixed income
8.00%
4.70%
Timber/natural resources
4.00%
4.10%
Total
100.00%
Discount Rate
The discount rate used to measure the total pension liability was 7.25%. The
projection of cash flows used to determine the discount rate assumed that plan
member contributions will be made at the current contribution rates and the
Commonwealth's contributions will be made at rates equal to the difference between
actuarially determined contribution rates and the member rates. Based on those
assumptions, the net position was projected to be available to make all projected
future benefit payments of current plan members. Therefore, the long-term expected
62 464
rate of return on pension plan investments was applied to all periods of projected
benefit payments to determine the total pension liability.
Sensitivity Analysis
The following illustrates the sensitivity of the collective net pension liability to changes
in the discount rate. In particular, the table presents the MTRS collective net pension
liability assuming it was calculated using a single discount rate that is one percentage -
point lower or one percentage -point higher than the current discount rate (amounts
in thousands):
1% Decrease Current Discount 1% Increase
to 6.25% Rate (7.25%) to 8.25%
31,232,100 $ 25,214,020 $ 20,062,500
Special Funding Situation
The Commonwealth is a nonemployer contributor and is required by statute to make
all actuarial determined employer contributions on behalf of the member employers.
Therefore, these employers are considered to be in a special funding situation as
defined by GASB Statement No. 68, Accounting and Financial Reporting for Pensions —
an Amendment of GASB Statement No. 27 and the Commonwealth is a nonemployer
contributing entity in MTRS. Since the employers do not contribute directly to MTRS,
there is no net pension liability to recognize for each employer.
Town Proportions
In fiscal year 2019 (the most recent measurement period), the Town's proportionate
share of the MTRS' collective net pension liability was approximately $109,355,748
based on a proportionate share of 0.433710%. As required by GASB 68, the Town has
recognized .its portion of the Commonwealth's contribution of approximately
$6,261,516 as both a revenue and expenditure in the general fund, and its portion of
the collective pension expense of approximately $13,261,283 as both a revenue and
expense in the governmental activities.
18. Other Post -Employment Benefits (GASB 74 and 75)
GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans (OPEB), replaces the requirement of Statement No. 43, Financial Reporting
for Postemployment Benefit Plans Other Than Pension Plans. This applies if a trust fund
has been established to fund future OPER costs. In fiscal year 2012, the Town established
a single employer defined benefit OPEB Trust Fund to provide funding for future employee
health care costs. The OPEB Trust Fund does not issue a stand-alone financial report.
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits
Other Than Pensions, replaces the requirements of Statement No. 45, Accounting and
63 465
Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The
Statement establishes standards for recognizing and measuring liabilities, deferred outflows
of resources, deferred inflows of resources, and expense/expenditures. This Statement
identifies the methods and assumptions that are required to be used to project benefit
payments, discounted projected benefit payments to their actuarial present value, and
attribute that present value to periods of employee service.
All the following OPEB disclosures are based on a measurement date of June 30, 2020
(excluding the Electric Division).
A. General Information about the OPEB Plan
Plan Description
The Town provides post -employment healthcare benefits for retired employees
through the Town's plan. The Town provides health insurance coverage through Blue
Cross Blue Shield. The benefits, benefit levels, employee contributions, and employer
contributions are governed by Chapter 32 of the Massachusetts General Laws.
Benefits Provided
The Town provides medical and prescription drug insurance to retirees and their
covered dependents. All active employees who retire from the Town and meet the
eligibility criteria will receive these benefits.
Funding Policy
The Town's funding policy includes financing the implicit subsidy on a pay-as-you-go
basis, as required by statute. Additional contributions are based annual budget
limitations/authorizations.
Plan Membership
At June 30, 2020, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries
currently receiving benefit payments 634
Active employees 526
Total 1,160
B. Investments
The OPEB trust fund assets consist of cash and short-term investments.
Rate of return. For the year ended June 30, 2020, the annual money -weighted rate of
return on investments, net of investment expense, was not available.
64 466
C. Actuarial Assumptions and Other Inputs
The net OPEB liability was determined by an actuarial valuation as of lune 30, 2018,
using the following actuarial assumptions, applied to all periods included in the
measurement, unless otherwise specified:
Inflation
3.00%
Salary increases
6.00% decreasing to 4.25% based on service for
Group 1 and Group 2; 7.00% decreasing to 4.75%
based on service for Group 4; 7.50% decreasing to
4.00% based on service for teachers
Discount rate
7.25%
Healthcare cost trend rates
7.00% decreasing by 0.25% for 10 years to an
ultimate level of 4.50%peryear
Remaining amortization period
27 years from July 1, 2019 for General
Government, 11 years from July 1, 2019 for all
Other Departments
Mortality rates were based on the following:
• Pre -Retirement (Non -Teachers): RP -2014 Blue Collar Employee Mortality Table
projected generationally with Scale MP -2018
• Healthy (Non -Teachers): RP -2014 Blue Collar Healthy Annuitant Mortality Table
projected generationally using Scale MP -2018
• Disabled (Non -Teachers): RP -2014 Healthy Annuitant Mortality Table set
forward one year projected generationally using Scale MP -2018
• Pre -Retirement (Teachers): RP -2014 White Collar Employee Mortality Table
projected generationally with Scale MP -2016
• Healthy (Teachers): RP -2014 White Collar Healthy Annuitant Mortality Table
projected generationally using Scale MP -2016
• Disabled (Teachers): RP -2014 White Collar Healthy Annuitant Mortality Table
projected generationally with Scale MP -2016
D. Target Allocations
The long-term expected rate of return on OPEB plan investments was determined using
a building-block method in which best -estimate ranges of expected future real rates of
return (expected returns, net of investment expense and inflation) are developed for
each major asset class. These ranges are combined to produce the long-term expected
rate of return by weighting the expected future real rates of return by the target asset
allocation percentage and by adding expected inflation. Best estimates of arithmetic
65 467
real rates of return for each major asset class included in theta rget asset allocation as
of June 30, 2020 are summarized in the following table:
E. Contributions
In addition to the implicit subsidy contribution, the Town's policy is to contribute
towards the ADC or amounts provided annually by the budget.
F. Discount Rote
The discount rate used to measure the net OPEB liability was 7.25%. The projection of
cash flows used to determine the discount rate assumed that contributions from plan
members will be made at the current contribution rate.
Based on those assumptions, the OPEB plan fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members.
G. Net OPER Liability
The components of the net OPEB liability, measured as of lune 30, 2020, were as
follows:
Total OPEB liability
Target
Long-term
(6,083,384)
Asset
Expected Real
Asset Class
Allocation
Rate of Return
Domestic equity
21.00%
6.15%
Core fixed income
15.00%
1.11%
International developed markets equity
13.00%
6.78%
Private equity
13.00%
9.99%
Hedge fund, GTAA, risk parity
11.00%
3.19%
Real estate
10.00%
4.33%
High yield fixed income
8.00%
3.51%
International emerging markets equity
5.00%
8.65%
Commodities
4.00%
4.13%
Total
100.00%
E. Contributions
In addition to the implicit subsidy contribution, the Town's policy is to contribute
towards the ADC or amounts provided annually by the budget.
F. Discount Rote
The discount rate used to measure the net OPEB liability was 7.25%. The projection of
cash flows used to determine the discount rate assumed that contributions from plan
members will be made at the current contribution rate.
Based on those assumptions, the OPEB plan fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members.
G. Net OPER Liability
The components of the net OPEB liability, measured as of lune 30, 2020, were as
follows:
Total OPEB liability
$ 73,142,195
Plan fiduciary net position
(6,083,384)
Net OPEB liability
$ 67,058,811
Plan fiduciary net position as a
percentage of the total OPEB liability
8.32%
66 a66
The fiduciary net position has been determined on the same basis used by the OPEB
Plan. For this purpose, the Plan recognizes benefit payments when due and payable.
H. Changes in the Net OPEB Liability
The following summarizes the changes in the net OPEB liability for the past year:
1. Sensitivity of the Net OPER Liability to Changes in the Discount Rate
The following presents the net OPEB liability, as well as what the net OPEB liability
would be if it were calculated using a discount rate that is one percentage -point lower
or one percentage -point higher than the current discount rate:
Current
1% Discount 1%
Decrease Rate Increase
6.25% 7.25% 8.25%
$ 76,114,582 $ 67,058,811 $ 59,537,718
J. Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the net OPEB liability, as well as what the net OPEB liability
would be if it were calculated using healthcare cost trend rates that are one
67 469
Increase (Decrease)
Plan
Total OPEB
Fiduciary
Net OPEB
Liability
Net Position
Liability
Ll
Ll
a - b
Balances, beginning of year
$ 73,776,929
$ 5,211,775 $
68,565,154
Changes for the year:
Service cost
1,620,222
-
1,620,222
Interest
5,339,056
-
5,339,056
Contributions - employer
-
4,356,509
(4,356,509)
Net investment income
-
87,609
(87,609)
Changes in assumptions
or other inputs
(4,021,503)
-
(4,021,503)
Benefit payments
(3,572,509)
(3,572,509)
Net Changes
(634,734)
871,609
(1,506,343)
Balances, end of year
$ 73,142,195
$ 6,083,384 $
67,058,811
1. Sensitivity of the Net OPER Liability to Changes in the Discount Rate
The following presents the net OPEB liability, as well as what the net OPEB liability
would be if it were calculated using a discount rate that is one percentage -point lower
or one percentage -point higher than the current discount rate:
Current
1% Discount 1%
Decrease Rate Increase
6.25% 7.25% 8.25%
$ 76,114,582 $ 67,058,811 $ 59,537,718
J. Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates
The following presents the net OPEB liability, as well as what the net OPEB liability
would be if it were calculated using healthcare cost trend rates that are one
67 469
percentage -point lower or one percentage -point higher than the current healthcare
cost trend rates:
Current
Healthcare
1% Cost Trend 1%
Decrease Rates Increase
$ 57,730,914 $ 67,058,811 $ 78,540,645
K. OPEB Expense and Deferred Outflows of Resources and Deferred (Inflows) of Resources
Related to OPER
For the year ended June 30, 2020, the Town recognized an OPEB expense of
$6,262,773. At lune 30, 2020, the Town reported deferred outflows and deferred
(inflows) of resources related to OPEB from the following sources:
Differences between expected and
actual experience
Changes of assumptions
Net difference between projected and
actual investment earnings on OPEB
plan investments
Total
Deferred
Deferred
Outflows of
(Inflows) of
Resources
Resources
$ - $ (1,473,531)
2,533,185 (3,217,204)
502,203
$ 3,035,388 $ (4,690,735)
Amounts reported as deferred outflows and (inflows) of resources related to OPEB will
be recognized in OPEB expense as follows:
Year Ended lune 30:
2021
2022
2023
2024
Total
$ (290,233)
(290,231)
(334,315)
(740,S68)
$ (1,655,347)
68 470
19. Consolidation of Pension and OPEB Trust Funds
The Reading Contributory Retirement System, the Town of Reading OPEB Trust Fund, and
the Electric Division OPEB Trust Fund, are presented in a single column in the
accompanying fiduciary fund financial statements. Details of the financial position and
changes in net position are as follows:
20. Commitments and Contingencies
COVID-19
The COVID-19 outbreak in the United States (and across the globe) has resulted in
economic uncertainties. There is considerable uncertainty around the duration and scope
of the economic disruption. The extent of the impact of COVID-19 on our operational and
financial performance will depend on certain developments, include the duration and
69 471
Electric
Other
Pension
oivisbn OPER
Post
Trust Fund
Trust Fund
EmM,mdm
Pension
hoof
IM of
Benefits
and OPEB
Oe exi 31. 20191
December 31, 20191
Trust Fund
Trost Fund
MS.
Cash and short-term investments
$ 5,144,777
$ 4,08],5]6
$ 6,083,384
$ 15,315,737
nminuri
State investment pool
147,763,267
147,)0,26]
Total Rssers
152,9WAQ
go8),5]6
6,083,38a
163,OM,0]4
Net Position
Restricted for:
Persians
152,9091
152,908,W4
OPEB
4,087,576
6,083,384
10,170,960
Total Net Position
$ 152,908.01
$ 9.oW.576
$ 61
$ 163,079,W4
Elmtrlc
Other
Pension
hellion OPER
Post
Trust Fund
Trust Fund
Employment
Pension
(for the year mtletl
Nor the six months sended!
Benefits
and OPER
AddNlona
Daembe it Miss
—her al MIST
Trost Fund
Truat Funds
Contributions:
Employers
$ 6,282,942
5 1,012,408
$ 4,356,509
$ 11,651,859
Plan members
2.931.130
2,931130
Total smomb..ons
9,214.072
1,012,408
4,156,509
]4.582,989
Investment Income
Increase(Declease) in fair value of l nbodeard,
20.820}68
90,920
97,609
21,006,697
Loss . marreemenifm
024,4261
024A261
Nninmtmentincome
20.103.742
90,920
87609
20,282,271
Total MEiOon
29.317.814
1,103,328
4pa4,I1B
34,865,260
Deductions
BmNltpaymmts to plan members and benefinanes
12,389.361
57],4]1
3$72,509
16,539,341
Muninisbative npeaes
281,455
MASS
Total Deductions
12,670.816
577,471
3732,509
S6A20,796
Net Change
16,646,998
525,857
871,609
18,044,464
Net position resbNted for pensions annex! OPM
Beginning of year
136261W6
3,561,719
5,211,]]5
145,034,540
End of year
$ 11E9D9044
5 4,087,576
$ 6pB3,384
$ iiii163.079.004
20. Commitments and Contingencies
COVID-19
The COVID-19 outbreak in the United States (and across the globe) has resulted in
economic uncertainties. There is considerable uncertainty around the duration and scope
of the economic disruption. The extent of the impact of COVID-19 on our operational and
financial performance will depend on certain developments, include the duration and
69 471
spread of the outbreak, impact on individuals served by the Town, employees, and
vendors, all of which are uncertain and cannot be predicted. At this point, the extent to
which COVID-19 may impact our financial condition or results of operations is uncertain.
Outstanding Legal Issues
On an ongoing basis, there are typically pending legal issues in which the Town is involved.
The Town's management is of the opinion that the potential future settlement of these
issues would not materially affect its financial statements taken as a whole.
Abatements
There are several cases pending before the Appellate Tax Board in regard to alleged
discrepancies in property assessments. According to Town counsel, the probable outcome
of these cases at the present time is indeterminable, although the Town expects such
amounts, if any, to be immaterial.
Grants
Amounts received or receivable from grantor agencies are subject to audit and
adjustment by grantor agencies, principally the federal government. Any disallowed
claims, including amounts already collected, may constitute a liability of the applicable
funds. The amount 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.
Encumbrances
At year-end the Town's general fund has $7,480,181 in encumbrances that will be honored
in the next fiscal year.
21. New Pronouncements
The Governmental Accounting Standards Board (GASB) has issued Statement No. 84,
Fiduciary Activities, effective for the Town beginning with its fiscal year ending June 30,
2021. This statement establishes guidance on how to address the categorization of
fiduciary activities for financial reporting and how fiduciary activities are to be reported,
and may require reclassification of certain funds.
The Governmental Accounting Standards Board (GASB) has issued Statement No. 87,
Leases, effective for the Town beginning with its fiscal year ending lune 30, 2022. This
statement establishes new reporting and disclosure requirements, including the recording
of various operating leases in the financial statements.
70 472
Town of Reading, Massachusetts Municipal Light Department
Notes to Financial Statements
1. Summary of Significant Accounting Policies
The significant accounting policies of the Town of Reading Municipal Light Department
(the Department) (an enterprise fund of the Town of Reading, Massachusetts) are as
follows:
A. Business Activity - The Department purchases electricity for distribution to more than
70,000 residents within the towns of Reading, North Reading, Wilmington, and Lynnfield
Center.
8. Regulation and Basis of Accounting - Under Massachusetts General Laws, the
Department's electric rates are set by the Municipal Light Board. Electric rates,
excluding the purchase power fuel charge and the purchase power capacity and
transmission charge, cannot be changed more than once every three months. Rate
schedules are filed with the Massachusetts Department of Public Utilities (DPU). W hile
the DPU exercises general supervisory authority over the Department, the
Department's rates are not subject to DPU approval. The Department's policy is to
prepare its financial statements in conformity with generally accepted accounting
principles.
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 liabilities are incurred.
Proprietary funds distinguish operating revenues and expenses from nonoperating
items. Operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the Department's proprietary
fund are charges to customers for electric sales and services. Operating expenses for
the Department's proprietary fund include the cost of sales and services, administrative
expenses and depreciation on capital assets. All revenues and expenses not meeting
this definition are reported as non-operating revenues and expenses.
C. Concentrations -The Department operates within the electric utility industry. In 1998,
the Commonwealth of Massachusetts enacted energy deregulation legislation that
restructured the Commonwealth's electricity industry to foster competition and promote
reduced electric rates. Energy deregulation created a separation between the supply and
delivery portions of electricity service and enabled consumers to purchase their
ara
71
energy from a retail supplier of their choice. Municipal utilities are not currently
subject to this legislation.
D. RetirementTrust- The Reading Municipal Light Department Employees' Retirement Trust
(the "Pension Trust") was established by the Reading Municipal Light Board on
December 30, 1966, pursuant to Chapter 64 of the General Laws of the
Commonwealth of Massachusetts.
The Pension Trust constitutes the principal instrument of a plan established by the
Municipal Light Board to fund the Department's annual required contribution to the
Town of Reading Contributory Retirement System (the System), a cost-sharing, multi-
employer public employee retirement system.
In accordance with Government Accounting Standards Board Statement 68 (GASB 68), the
Retirement Trust was consolidated into the Business-Type Proprietary Fund and is
reflected in net position as "restricted for pension trust"
E. Other Post-Employment Benefits Trust - The Other Post-Employment Benefits Liability
Trust Fund (the "OPEB Trust") was established by the Reading Municipal Light Board
pursuant to Chapter 32B, Section 20 of the General Laws of the Commonwealth of
Massachusetts.
The OPEB Trust constitutes the principal instrument of a plan established by the
Municipal Light Board to fund the Department's annual actuarially determined OPEB
contribution for future retirees.
F. Revenues -Revenues are based on rates established by the Department and filed with
the DPU. Revenues from sales of electricity are recorded on the basis of bills rendered
from monthly meter readings taken on a cycle basis and are stated net of discounts.
Recognition is given to the amount of sales to customers which are unbilled at the end
of the fiscal year.
G. Cash and Short-term Investments - For the purposes of the Statements of Cash Flows,
the Department considers unrestricted cash on deposit with the Town Treasurer to be
cash or short-term investments. For purposes of the Statements of Net Position, both
the proprietary funds and fiduciary funds consider unrestricted and restricted
investments with original maturities of three months or less to be short-term
investments.
H. Investments - State and local statutes place certain limitations on the nature of
deposits and investments available. Deposits in any financial institution may not
exceed certain levels within the financial institution. Non-fiduciary fund investments can
be made in securities issued or unconditionally guaranteed by the U.S. Government or
agencies that have a maturity of one year or less from the date of purchase and
474
72
repurchase agreements guaranteed by such securities with maturity dates of no more
than 90 days from date of purchase.
Investments for the Department and the Pension Trust consist of domestic and foreign
fixed income bonds which the Department intends to hold to maturity. These investments
are reported at fair market value.
I. Inventory - Inventory consists of parts and accessories purchased for use in the utility
business for construction, operation, and maintenance purposes and. is stated at average
cost. Meters and transformers are capitalized when purchased.
J. Capital Assets and Depreciation - Capital assets, which include property, plant,
equipment, and utility plant infrastructure, are recorded at historical cost or estimated
historical cost when purchased or constructed. Donated capital assets are recorded at
estimated fair market value at the date of the donation.
The cost of normal maintenance and repairs that do not add to the value of the asset
or materially extend asset lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as they are acquired or
constructed. Interest incurred during the construction phase of proprietary fund
capital assets is included as part of the capitalized value of the constructed asset.
When capital assets are retired, the cost of the retired asset, less accumulated
depreciation, salvage value and any cash proceeds, is charged to the Department's
unrestricted net position.
Massachusetts General Laws require utility plant in service to be depreciated at a
minimum annual rate of 3%. To change this rate, the Department must obtain approval
from the DPU. Changes in annual depreciation rates may be made for financial factors
relating to cash Flow for plant expansion, rather than engineering factors relating to
estimates of useful lives.
K. Accrued Compensated Absences- Employee vacation leave is vested annually but may
only be carried forward to the succeeding year with supervisor approval and, if
appropriate, within the terms of the applicable Department policy or union contract.
Generally, sick leave may accumulate according to union and Department contracts and
policy and is paid upon normal termination at the current rate of pay. The
Department's policy is to recognize vacation costs at the time payments are made. The
Department records accumulated, unused, vested sick pay as a liability. The amount
recorded is the amount to be paid upon normal termination at the current rate of pay.
L. Long -Term Obligations -The proprietary fund financial statements report long-term debt
and other long-term obligations as liabilities in the Statements of Net Position.
475
73
2.
M. Use of Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assump-
tions that affect the reported amounts of assets and liabilities and disclosures for
contingent assets and liabilities at the date of the financial statements, and the
reported amounts of the revenues and expenses during the fiscal year. Actual results
could vary from estimates that were used.
N. Rate of Return - The Department's rates must be set such that earnings attributable to
electric operations do not exceed 8% of the net cost of plant. The Department's
audited financial statements are prepared in accordance with auditing standards
generally accepted in the United States of America. To determine the net income
subject to the rate of return limitations, the Department performs the following
calculation. Using the net income per the audited financial statements, the return on
investment to the Town of Reading is added back, the fuel charge adjustment is added
or deducted, and miscellaneous debits/credits (i.e., gain/loss on disposal of fixed
assets, etc.) are added or deducted, leaving an adjusted net income figure for rate of
return purposes. Investment interest income is then deducted from this figure to
determine the net income subject to the rate of return. The net income subject to the
rate of return is then subtracted from the allowable 8% rate of return, which is
calculated by adding the book value of net plant and the investment in associated
companies multiplied by 8%. From this calculation, the Municipal Light Board will
determine what cash transfers need to be made at the end of the fiscal year.
Cash and Investments
Total cash and investments as of December 31, 2019 are classified in the accompanying
financial statements as follows:
Proprietary Fund
Unrestricted cash and short-term investments
$ 20,028,398
Restricted cash and short-term investments
29,569,761
Restricted investments
2,659,416
Fiduciary Funds:
Cash and short-term investments - OPEB Trust
4,087,576
Total cash and investments
$ 56,345,151
Total cash and investments at December 31, 2019 consist of the following:
Deposits with financial institutions $ 56,345,151
Total cash and investments $ 56,345,151
74
496
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that the fair value of an investment will be adversely affected by
changes in market interest rates. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value to changes in market interest rates. The Department
manages its exposure to interest rate risk by purchasing a combination of shorter term
and longer-term investments and by timing cash flows from maturities so that a portion
of the portfolio is maturing or coming close to maturity evenly over time as necessary to
provide the cash flow and liquidity needed for operations.
As of December 31, 2019, the Department (including the Pension Trust and OPER Trust) held
cash and short-term investments in pooled investments with the Massachusetts
Municipal Depository Trust (MMDT), FDIC -insured savings accounts, and 90 -day FDIC -
insured bank certificates of deposit. Because of their immediate liquidity and/or short-
term maturity, these funds are classified as cash and short-term investments in the
accompanying financial statements and are not considered to be exposed to significant
interest rate risk.
As of December 31, 2019, the Department and Pension Trust held investments in domestic
and foreign fixed income bonds with varying maturity dates as follows:
Proprietary
Fund
Maturity
Corporate Bonds
.Date
AT&T Inc
$ 448,590
12/01/22
General Electric Cap Corp
422,744
Ol/D9/23
Wells Fargo & Co
424,596
08/15/23
Simon Property
412,312
06/15/27
Rabobank Nederland Bank
522,510
11/09/22
BNP Paribas
428,664
03/03/23
Total
$ 2,659,416
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that the issuer of an investment will not fulfill its obligation
to the holder of the investment. This is measured by the assigning of a rating by a
nationally recognized statistical rating organization. As of December 31, 2019, the
Department and Pension Trust held investments in domestic and foreign fixed income
bonds with varying ratings as follows:
477
75
Concentration of Credit Risk
The Department follows the Town of Reading's investment policy, which does not limit the
amount that can be invested in any one issuer beyond that stipulated by Massachusetts
General Laws. At December 31, 2019, the Department and Pension Trust investments were
held in domestic and foreign fixed income bonds, as detailed in the sections above. Five
of the bonds each individually represent approximately 16% of the Department's and
System's total investments, while the investment in Rabobank Nederland Bank represents
approximately 20%.
Custodial Credit Risk
Custodial Credit Risk for deposits is the risk that, in the event of the failure of a depository
financial institution, the Department will not be able to recover its deposits or will not be
able to recover collateral securities that are in the possession of an outside party. The
custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty (e.g., broker-dealer) to a transaction, the Department will not be able to recover
the value of its investments or collateral securities that are in the possession of another
parry. Massachusetts General Laws, Chapter 44, Section 55, limits deposits "in a bank or
trust company or banking company to an amount not exceeding sixty per cent of the
capital and surplus of such bank or trust company or banking company, unless satisfactory
security is given to it by such bank or trust company or banking company for such excess."
The Department follows the Massachusetts statute as written, as well as the Town of
Reading's deposit policy for custodial credit risk.
Because the Department pools its cash and short-term investments with the Town of
Reading, and bank accounts are maintained in the name of the Town, the amount of the
Department's balance exposed to custodial credit risk at December3l, 2019, cannot be
reasonable determined.
478
76
Proprietary
Fund
Restricted
Moody's
Investment Type
Investments
Rating
Corporate bonds:
AT&T Inc
$ 448,590
BAA2
General Electric Cap Corp
422,744
BAA1
Wells Fargo & Co
424,596
A3
Simon Property
412,312
A2
Rabobank Nederland Bank
522,510
BAA3
BNP Paribas
428,664
AA3
Total
$ 2,659,416
Concentration of Credit Risk
The Department follows the Town of Reading's investment policy, which does not limit the
amount that can be invested in any one issuer beyond that stipulated by Massachusetts
General Laws. At December 31, 2019, the Department and Pension Trust investments were
held in domestic and foreign fixed income bonds, as detailed in the sections above. Five
of the bonds each individually represent approximately 16% of the Department's and
System's total investments, while the investment in Rabobank Nederland Bank represents
approximately 20%.
Custodial Credit Risk
Custodial Credit Risk for deposits is the risk that, in the event of the failure of a depository
financial institution, the Department will not be able to recover its deposits or will not be
able to recover collateral securities that are in the possession of an outside party. The
custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty (e.g., broker-dealer) to a transaction, the Department will not be able to recover
the value of its investments or collateral securities that are in the possession of another
parry. Massachusetts General Laws, Chapter 44, Section 55, limits deposits "in a bank or
trust company or banking company to an amount not exceeding sixty per cent of the
capital and surplus of such bank or trust company or banking company, unless satisfactory
security is given to it by such bank or trust company or banking company for such excess."
The Department follows the Massachusetts statute as written, as well as the Town of
Reading's deposit policy for custodial credit risk.
Because the Department pools its cash and short-term investments with the Town of
Reading, and bank accounts are maintained in the name of the Town, the amount of the
Department's balance exposed to custodial credit risk at December3l, 2019, cannot be
reasonable determined.
478
76
As of December 31, 2019, none of the Department or Pension Trust investments were
exposed to custodial credit risk because the related securities are registered in the
Department's name.
Fair Value
The Department categorizes its fair value measurements within the fair value hierarchy
established by Governmental Accounting Standards Board Statement No. 72 Fair Value
MeosurementandApp/ication (GASB 72). The hierarchy is based on the valuation inputs used
to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets
for identical assets; Level inputs are significant other observable inputs; Level 3 inputs are
significant unobservable inputs.
3. Restricted Cash and Investments
The Department's proprietary fund restricted cash and investment balances represent the
following reserves:
12/31/19
Fair Value Measurements
Using,
Cash Investments
Depreciation fund
quoted prices
-
Deferredfuelreserve
4,067,288
inactive
Significant
Significant
conservation reserve
377,319
markets for
observable
unobservable
—
Reserve for uncollectible
identical assets
inputs
inputs
Description
value
(Level 1)
Mewl 21
(Level 3)
Investments by fair value level:
750,000
-
Customer deposits
1,308,651
Debt securities
Pension trust
5,035,723
1,329,708
Total
Corporate bonds
$ 2,659,416
$ 2,659,416
$ -
$ -
Total
$ 2,659,416
3. Restricted Cash and Investments
The Department's proprietary fund restricted cash and investment balances represent the
following reserves:
479
77
12/31/19
Cash Investments
Depreciation fund
$ 8,334,981 $
-
Deferredfuelreserve
4,067,288
Deferred energy
conservation reserve
377,319
Rate stabilization
8,354,133
—
Reserve for uncollectible
accounts
200,000
-
Sickleavebenefits
1,141,666
1,329,708
Hazardous waste fund
750,000
-
Customer deposits
1,308,651
-
Pension trust
5,035,723
1,329,708
Total
$ 29,569,761 $
2,659,416
479
77
The Department maintains the following reserves:
- Depreciation fund- The Department is normally required to reserve 3.0% of capital
assets each year to fund capital improvements.
Deferred fuel reserve - The Department transfers the difference between the
customers' monthly fuel charge adjustment and actual fuel costs into this account to
be used in the event of a sudden increase in fuel costs.
- Deferred energy conservation reserve - This account is used to reserve monies
collected from a special energy charge added to customer bills. Customers who
undertake measures to conserve and improve energy efficiency can apply for
rebates that are paid from this account.
- Rate stabilization - This represents amounts set aside to help stabilize cost
increases resulting from fluctuations in purchase power costs.
< Reserve for uncollectible accounts - This account was set up to offset a portion of
the Department's bad debt reserve.
- Sick leave benefits - This account is used to offset the Department's actuarially
determined compensated absence liability.
- Hazardous waste fund -This reserve was set up by the Board of Commissioners to
cover the Department's insurance deductible in the event of a major hazardous
materials incident.
- Customer deposits- Customer deposits that are held in escrow.
Pension trust - The principal instrument of a plan established by the Municipal
Light Board to fund the Department's annual required contribution to the Town of
Reading Contributory Retirement System (the System), a cost-sharing, multi-
employer public employee retirement system. Accounts Receivable
480
78
4. Accounts Receivable
Accounts receivable consists of the following
at December 31, 2019:
Customer Accounts:
Billed
$ 2,289,647
Less allowances:
Uncollectible accounts
(200,000)
Sales discounts
(112,133)
Total billed
1,977,514
Unbilled, net
4,927,365
Total customer accounts
6,904,879
Other Accounts:
Liens and other
209,368
Total other accounts
209,369
Total net receivables
$
7,114,247
S. Prepaid Expenses
Prepaid expenses consist of the following:
Insurance and other
$ 1,783,636
Purchase power
(3,329)
NYPA prepayment fund
307,573
WC Fuel - Watson
345,859
Total
$. 2,433,739
6. Inventory
Inventory comprises supplies and materials at December 31, 2019, and is valued using the
average cost method.
7. Investment in Associated Companies
Investment in associated companies consists of the following, at December 31, 2019:
New England Hydro -Transmission (NEH & NHH) $ 266,224
Energy New England 488,233
Black Rock Funding- Saddleback Ridge 47,755
Total $ 802,212
481
79
g.
Under agreements with the New England Hydro -Transmission Electric Company, Inc.
(NEH) and the New England Hydro -Transmission Corporation (NHH), the Department has
made the advances to fund its equity requirements for the Hydro -Quebec Phase II
interconnection. The Department is carrying its investment at fair value, reduced by shares
repurchased. The Department's equity position in the Project is less than one-half of one
percent.
In April 2019, the Department invested in 8.334% shares of Energy New England (ENE).
The Department's equity position at December 31, 2019 is based on ENE's capital,
retained earnings, and the net profit from April through December of 2019.
In December 2013, the Department signed a purchase power agreement with Saddleback
Ridge Wind, LLC for the output of Saddleback Ridge wind located in Carthage, Maine. The
contract for Saddleback Ridge Wind is effective from January 1, 2015 through
December 31, 2035. The Department receives energy plus all attributes for this contract.
The average annual generation is estimated to be approximately 15,820 megawatt -hours
per year
Capital Assets
The following is a summary of the year ended December 31, 2019 activity in capital assets
(in thousands):
80
482
Beginning
Ending
Balance
Increases
Decreases
Balance
Business -Type Activities
Capital assets, being depreciated:
Structures and improvements
$ 20,302
$ 331
$ - $
20,633
Equipment and furnishings
34,907
641
(46)
35,502
Infrastructure
95,657
5,487
(639)
100,505
Total capital assets, being depreciated
150,866
6,459
(685)
156,640
Less accumulated depreciation for:
Structures and improvements
(10,233)
(550)
-.
110,783)
Equipment and furnishings
(22,800)
(917)
46
(23,671)
Infrastructure
140,616)
(3,059)
573
(43,102)
Total accumulated depreciation
(73,649)
(4,526)
619
(77,556)
Total capital assets, being depreciated, net
77,217
1,933
(66)
79,084
Capital assets, not being depreciated:
Land
1,266
1,266
Total capital assets, not being depreciated
1,266
1,266
Capital assets, net
$ 78,483
$ 1,933$
166) $
80,350
80
482
9. Deferred Outflows of Resources
Deferred outflows of resources represent the consumption of net position by the Department
that is applicable to future reporting periods. Deferred outflows of resources have a
positive effect on net position, similar to assets. Deferred outflows of resources related to
pensions and OPER, in accordance with GASB Statements No. 68 and 75, are more fully
discussed in the corresponding pension and OPEB notes.
10. Accounts Payable
Accounts payable represent fiscal 2019 expenses that were paid after December 31, 2019.
31. Accrued Liabilities
Accrued liabilities consist of the following at December 31, 2019:
Accrued payroll $ 234,523
Accrued sales tax 77,200
Other 22,461
Total $ 334,184
12. Customer Deposits
This balance represents deposits received from customers that are held in escrow.
13. Customer Advances for Construction
This balance represents deposits received from vendors in advance for work to be per-
formed by the Department. The Department recognizes these deposits as revenue after the
work is completed.
14. Accrued Employee Compensated Absences
Department employees are granted sick leave in varying amounts. Upon retirement,
normal termination, or death, employees are compensated for unused sick leave (subject to
certain limitations) at their then current rates of pay.
483
81
15. Long -Term Debt
Chances in General Lone -Term Obligations
During the year ended December 31, 2019, the following changes occurred in long-term
obligations (in thousands):
Less
Equals
Beginning
Ending
Current
Long -Term
Balance Additions
Reductions
Balance
Portion
Portion
Net pension liability $ 10,782 $ 3,828
5 - $
14,610
$ -
$ 14,610
Net OPER liability 7,144 -
(49)
7,095
-
7,095
Compensated absences 2,999
526
2,471
24
2,417
Totals $ 20'25 $ 3®828
$ 577 $
24,176..
$ 24
$2®1,. 52
16. Deferred Inflows of Resources
Deferred inflows of resources are the acquisition of net position by the Department that are
applicable to future reporting periods. Deferred inflows of resources have a negative effect
on net position, similar to liabilities. Deferred inflows of resources related to pension and
OPEB will be recognized as expense in future years and is more fully described in the
corresponding pension and OPEB notes.
17. Reading Contributory Retirement System
The Department follows the provisions of GASB Statement No. 68, Accounting and
Financial Reporting forPensions—AnAmendment of GASB Statement No. 27, with respect to
the employees' retirement funds.
A. Plan Description
Substantially all employees of the Department are members of the Town of Reading
Contributory Retirement System (the System), a cost-sharing, multiple -employer
public employee retirement system (PERS). Eligible employees must participate in the
System. The pension plan provides pension benefits, deferred allowances, and death
and disability benefits. Chapter 32 of the Massachusetts General Laws establishes the
authority of the System, as well as contribution percentages and benefits paid. The
System Retirement Board does not have the authority to amend benefit provisions.
Additional information is disclosed in the System's annual financial reports, which are
publicly available from the System's administrative offices located at Reading Town
Hall, 16 Lowell Street, Reading, Massachusetts, 01867.
484
82
Participant Contributions
Participants contribute a set percentage of their gross regular compensation annually.
Employee contribution percentages are specified in Chapter 32 of the Massachusetts
General Laws. The employee's individual contribution percentage is determined by
their date of entry into the system. In addition, all employees hired on or after
January 1, 1979 contribute an additional 2% on all gross regular compensation over
the rate of $30,000 per year. The percentages are as follows:
Before January 1, 1975 5%
January 1, 1975 - December 31, 1983 7%
January 1, 1984 -June 30,1996 8%
Beginning July 1, 1996 9%
For those members entering a Massachusetts System on or after April 2, 2012 in
Group 1, the contribution rate will be reduced to 6% when at least 30 years of
creditable service has been attained.
Participant Retirement Benefits
A retirement allowance consists of two parts: an annuity and a pension. A member's
accumulated total deductions and a portion of the interest they generate constitute the
annuity. The difference between the total retirement allowance and the annuity is the
pension. The average retirement benefit is approximately 80415% pension and 15-20%
annuity.
The System provides for retirement allowance benefits up to a maximum of 80% of a
member's highest 3 -year average annual rate of regular compensation for those hired
prior to April 2, 2012 and the highest 5 -year average annual rate of regular
compensation for those first becoming members of the Massachusetts System on or
after that date. However, per Chapter 176 of the Acts of 2011, for members who retire
on or after April 2, 2012, if in the 5 years of creditable service immediately preceding
retirement, the difference in the annual rate of regular compensation between any 2
consecutive years exceeds 100%, the normal yearly amount of the retirement
allowance shall be based on the average annual rate of regular compensation received
by the member during the period of 5 consecutive years preceding retirement. Benefit
payments are based upon a member's age, length of creditable service, level of
compensation, and group classification.
M5
83
There are four classes of membership in the retirement system, but one of these
classes, Group 3, is made up exclusively of the Massachusetts State Police. The other
three classes are as follows:
• Group l—General employees, including clerical, administrative, technical, and
all other employees not otherwise classified.
• Group 2—Certain specified hazardous duty positions.
• Group4—Police officers, firefighters, and otherspecified hazardous positions.
A retirement allowance may be received at any age, upon attaining 20 years of service.
The plan also provides for retirement at age 55 if the participant was a member prior
to January 1, 1978, with no minimum vesting requirements. If the participant was a
member on or after January 1, 1978 and a member of Groups 1 or 2, then a retirement
allowance may be received if the participant (1) has at least 10 years of creditable
service, (2) is age 55, (3) voluntarily left Department employment on or after that date,
and (4) left accumulated annuity deductions in the fund. Members of Group 4 have no
minimum vesting requirements, however, must be at least age 55. Groups 2 and 4 require
that participants perform the duties of the Group position for at least 12 months
immediately prior to retirement.
A participant who became a member on or after April 2, 2012 is eligible for a retire-
ment allowance upon 10 years creditable service and reaching ages 60 or 55 for
Groups 1 and 2, respectively. Participants in Group 4 must be at least age 55. Groups
2 and 4 require that participants perform the duties of the Group position for at least
12 months immediately prior to retirement.
Methods of Pavment
A member may elect to receive his or her retirement allowance in one of three forms
of payment as follows:
• Option A — Total annual allowance, payable in monthly installments, com-
mencing at retirement and terminating at the members death.
• Option 8 — A reduced annual allowance, payable in monthly installments,
commencing at retirement and terminating at the death of the member,
provided however, that if the total amount of the annuity portion received by
the member is less than the amount of his or her accumulated deductions,
including interest, the difference or balance of his accumulated deductions will
be paid in a lump sum to the retiree's beneficiary or beneficiaries of choice.
• Option C — A reduced annual allowance, payable in monthly installments,
commencing at retirement. At the death of the retired employee, 2/3 of the
allowance is payable to the member's designated beneficiary (who may be the
486
84
spouse, or former spouse who has not remarried, child, parent, sister, or brother
of the employee) for the life of the beneficiary. For members who retired on
or after January 12, 1988, if the beneficiary pre-deceases the retiree, the
benefit payable increases (or "pops up" to Option A) based on the factor used
to determine the Option C benefit at retirement. For members who retired
prior to January 12, 1988, if the System has accepted Section 288 of Chapter
194 of the Acts of 1998 and the beneficiary pre-deceases the retiree, the
benefit payable "pops up" to Option A in the same fashion. The Option C
became available to accidental disability retirees on November 7, 1996.
Participant Refunds
Employees who resign from service and who are not eligible to receive a retirement
allowance are entitled to request a refund of their accumulated total deductions.
Members voluntarily withdrawing with at least 10 years of service or involuntarily
withdrawing, receive 100% of the regular interest that has accrued on those accu-
mulated total deductions. Members voluntarily withdrawing with less than 10 years of
service get credited interest each year at a rate of 3%.
Employer Contributions
Employers are required to contribute at actuarially determined rates as accepted by
the Public Employee Retirement Administration Commission (PERAC).
The Department's contribution to the System for the year ended December 31, 2019
was $1,781,345 which was equal to its annual required contribution.
B. Summary of Significant Accounting Policies
For purposes of measuring the net pension liability, deferred outflows of resources
and deferred inflows of resources related to pensions, and pension expense, infor-
mation about the fiduciary net position of the System and additions to/deductions
from System's fiduciary net position have been determined on the same basis as they
are reported by System. For this purpose, benefit payments (including refunds of
employee contributions) are recognized when due and payable in accordance with
benefit terms. Investments are reported at fair value.
C Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred
(Inflows) of Resources Related to Pensions
At December 31, 2019, the Department reported a liability of $14,610,001 for its
proportionate share of the System's net pension liability. The net pension liability was
measured as of December 31, 2018, and the total pension liability used to calculate
the net pension liability was determined by an actuarial valuation as of January 1,
407
85
2019. The Department's proportion of the net pension liability was based on an
actuarially determined projection of the Department's long-term share of
contributions to the pension plan relative to the projected contributions of all
participating employers. At December 31, 2018, the Department's proportion was
28.35%.
For the year ended December 31, 2019, the Department recognized pension expense of
$2,665,607. In addition, the Department reported deferred outflows of resources and
deferred (inflows) of resources related to pensions from the following sources:
Differences between expected and actual
experience
Changes of assumptions
Net difference between projected and actual
investment earnings on pension plan
Changes in proportion and differences
between employer contributions and
proportionate share of contributions
Contributions subsequent to the
measurement date
Total
Deferred
Deferred
Outflows of
(Inflows) of
Resources
Resources
$ 3,097,261 $ (313,290)
1,040,478 (1,245,759)
1,633,631
100,192 (216,110)
1,781,345 -
$ 7,652,907 $ (1,775,159)
The amountreported as deferred outflows of resources related to pensions resulting from
contributions subsequent to the measurement date and before the end of the fiscal
year will be included as a reduction of the net pension liability in the year ended
December 31, 2020.
Other amounts reported as deferred outflows of resources and deferred (inflows) of
resources related to pensions will be recognized in pension expense as follows:
Year ended December 31
2020
$ 1,538,107
2021
887,482
2022
548,263
2023
1,073,381
2024
49,170
Total
$ 4,096,403
488
86
D. Actuarial Assumptions
The total pension liability was determined by an actuarial valuation as of January 1, 2019
using the following actuarial assumptions, applied to all periods included in the
measurement:
Valuation Date January 1, 2019
Actuarial Cost Method Entry Age Normal Cost Method
Actuarial Assumptions:
Investment rate of return 7.50%, net of pension plan investment
expense, including inflation
Projected salary increases 4.25%-6.00% for Groups 1 and 2
Inflation rate 3.00%Annually
Post-retirement cost -of -living 3.00% of first $12,000
adjustment
Mortality rates were based on the RP -2000 Mortality Table (base year 2009) with full
generational mortality improvement using Scale B8. For disabled members, RP -2000
Mortality Table (base year 2012) with full generational mortality improvement using
Scale 88.
E. Target Allocations
The long-term expected rate of return on pension plan investments was determined
using a building-block method in which best -estimate ranges of expected future real
rates of return (expected returns, net of pension plan investment expense and inflation)
are developed for each major asset class. These ranges are combined to produce the
long-term expected rate of return by weighting the expected future real rates of return
by the target asset allocation percentage and by adding expected inflation. Best
estimates of arithmetic real rates of return for each major asset class included in the
pension plan's target asset allocation as of December 31, 2018 are summarized in the
following table:
489
87
Total 100.00%
F. Discount Rate
The discount rate used to measure the total pension liability was 7.50%. The pro-
jection of cash flows used to determine the discount rate assumed that the plan
member contributions will be made at the current contribution rate and that
employer contributions will be made at contractually required rates, actuarially
determined. Based on those assumptions, the pension plan's fiduciary net position
was projected to be available to make all projected future benefit payments to current
active and inactive plan members. Therefore, the long-term expected rate of return
on pension plan investments was applied to all periods of projected benefit payments
to determine the total pension liability.
G. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the
Discount Rate
The following table presents the Department's proportionate share of the net pension
liability (asset) calculated using the current discount rate of 7.50%, as well as what the
Department's proportionate share of the net pension liability (asset) would be if it
were calculated using a discount rate that is 1 percentage -point lower or
1 percentage -point higher than the current rate:
Current
1% Discount 1%
Decrease Rate Increase
6.50% 7.50% 8.50%
$ 20,461,756 $ 14,610,001 $ 9,640,661
490
88
Long-term
Target
Expected
Asset
Rates
Asset Class
Allocation
of Return
Global equity
39.00%
4.75%
Fixed income
15.00%
1.05%
Private equity
13.00%
8.15%
Hedge funds and portfolio completion
11.00%
3.76%
Real estate
10.00%
3.43%
Value-added fixed income
8.00%
4.58%
Timber/natural resources
4.00%
4.00%
Total 100.00%
F. Discount Rate
The discount rate used to measure the total pension liability was 7.50%. The pro-
jection of cash flows used to determine the discount rate assumed that the plan
member contributions will be made at the current contribution rate and that
employer contributions will be made at contractually required rates, actuarially
determined. Based on those assumptions, the pension plan's fiduciary net position
was projected to be available to make all projected future benefit payments to current
active and inactive plan members. Therefore, the long-term expected rate of return
on pension plan investments was applied to all periods of projected benefit payments
to determine the total pension liability.
G. Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the
Discount Rate
The following table presents the Department's proportionate share of the net pension
liability (asset) calculated using the current discount rate of 7.50%, as well as what the
Department's proportionate share of the net pension liability (asset) would be if it
were calculated using a discount rate that is 1 percentage -point lower or
1 percentage -point higher than the current rate:
Current
1% Discount 1%
Decrease Rate Increase
6.50% 7.50% 8.50%
$ 20,461,756 $ 14,610,001 $ 9,640,661
490
88
H. Pension Plan Fiduciary Net Position
Detailed information about the pension plan's fiduciary net position is available in the
separately issued System financial report.
1. Town of Reading Municipal Light Department Employees Retirement Trust ("Pension
Trust")
The Department has established an irrevocable trust for the purpose of currently
funding its annual required contribution to the' Town of Reading Contributory
Retirement System (RCRS). Annual contributions to the trust are actuarially deter-
mined to be the net normal cost for funding the Department's liability for pension
benefits for covered employees, and both the principal and income of the trust is
restricted for the exclusive benefit of Department employees and their beneficiaries. This
Pension Trust is included in the proprietary fund statements in the Department's basic
financial statements.
As noted in the first paragraph of this section, the Department's proportionate share
of the RCRS net pension liability was determined by an actuarial valuation as of
January 1, 2019. However, the actuarial valuation does not take into account the
fiduciary net position of the Department's Pension Trust at December 31, 2018 (the
measurement date(. As of December 31, 2018, the value of the pension trust was
$5,878,179.
18. Other Post -Employment Benefits (GASB 74 and GASB 75)
GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans (OPEB), replaces the requirements of Statement No. 43, Financial Reporting
for Postemployment Benefit Plans Other Than Pension Plans. This applies if a trust fund
has been established to fund future OPEB costs. In fiscal year 2010, the Department
established an OPEBTrust Fund to provide funding for future employee health care costs.
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits
Other Than Pensions, replaces the requirements of Statement No. 45, Accounting and
Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The
Statement establishes standards for recognizing and measuring liabilities, deferred outflows
of resources, deferred inflows of resources, and expense/expenditures. This Statement
identifies the methods and assumptions that are required to be used to project benefit
payments, discounted projected benefit payments to their actuarial present value, and
attribute that present value to periods of employee service.
All the following OPEB disclosures are based on a measurement date of December 31,
2019.
491
99
A. General Information about the OPER Plan
Plan Description
The Department provides post -employment healthcare benefits for retired employees
through the Department's plan. The Department provides health insurance coverage
through Blue Cross Blue Shield. The benefits, benefit levels, employee contributions, and
employer contributions are governed by Chapter 32 of the Massachusetts General
Laws.
Benefits Provided
The Department provides medical and prescription drug insurance to retirees and
their covered dependents. All active employees who retire from the Department and
meet the eligibility criteria will receive these benefits.
Funding Policv
The Department's funding policy includes financing the implicit subsidy on a pay-as-
you-go basis, as required by statute. Additional contributions are based on actuarially
determined amounts.
Plan Membership
A1June 30, 2018 (Actuarial Valuation date), the following employees were covered by the
benefit terms:
Inactive employees or benefcianes
currently receiving benefit payments 95
Active employees 56
Total 151
B. Investments
The OPEB trust fund assets consist of cash and short-term investments. The plan
expects to invest with the State Retiree Benefit Trust Fund (SRBTF) in the Pension
Reserves Investment Trust (PRIT).
Rate of return. For the year ended December 31, 2019, the annual money -weighted
rate of return on investments, net of investment expense, was not available. The
money -weighted rate of return expresses investment performance, net of investment
expense, adjusted for the changing amounts actually invested.
492
90
C. Actuarial Assumptions and Other Inputs
The net OPEB liability was determined by an actuarial valuation as of lune 30, 2018, using
the following actuarial assumptions, applied to all periods included in the
measurement, unless otherwise specified:
Inflation 3.00%
6.00% decreasing to 4.25% based on service for Group 1
Salary increases and Group 2
Investment rate of return 7.25%
Discount rate 7.25%
Healthcare cost trend rates Medical/Prescription Drug: 7.00% decreasing by 0.25% for
10 years to an ultimate level of 4.50% per year.
Contributions: Retiree contributions are expected to
increase with medical trend.
Participation rate 100% of active employees
Mortality rates were based on:
• Pre -Retirement: RP -2014 Blue Collar Employee Mortality Table projected
generationally using Scale MP -2018
• Healthy: RP -2014 Blue Collar Healthy Annuitant Mortality Table projected
generationally using Scale MP -2018
• Disabled: RP -2014 Blue Collar Healthy Annuitant Mortality Table set forward
one year projected generationally using Scale MP -2018
The actuarial assumptions used in the valuation were based on the results of an
actuarial experience study as of lune 30, 2018.
D. Target Allocations
The long-term expected rate of return on OPEB plan investments was determined
using a building-block method in which best -estimate ranges of expected future real
rates of return (expected returns, net of investment expense and inflation) are
developed for each major asset class. These ranges are combined to produce the long-
term expected rate of return by weighting the expected future real rates of return by
the target asset allocation percentage and by adding expected inflation. Best
estimates of arithmetic real rates of return for each major asset class included in the
target asset allocation as of lune 30, 2018 are summarized in the following table.
493
91
E. Discount Rote
The discount rate used to measure the net OPEB liability was 7.25%. The projection of
cash flows used to determine the discount rate assumed that contributions from plan
members will be made at the current contribution rate.
Based on those assumptions, the OPER plan fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members.
F. Net OPEB Liability
The components of the net OPEB liability, measured as of December 31, 2019, were
as follows:
Total OPER liability $ 11,182,145
Plan fiduciary net position 4,087,576
Net OPEB liability $ 7,094,569
The fiduciary net position has been determined on the same basis used by the OPEB Plan.
For this purpose, the Plan recognizes benefit payments when due and payable.
4s4
92
Target
Long-term
Asset
Expected Real
Asset Class
Allocation
Rate of Return
Domestic equity
17.50%
6.16%
International developed markets equity
15.50%
6.69%
Hedge fund, GTAA, risk parity
13.00%
3.68%
Core fixed income
12.00%
1.89%
Private equity
12.00%
10.00%
High -yield fixed income
10.00%
4.00%
Real estate
10.00%
4.58%
International emerging markets equity
6.00%
9.47%
Commodities
4.00%
4.77%
Total
100.00%
E. Discount Rote
The discount rate used to measure the net OPEB liability was 7.25%. The projection of
cash flows used to determine the discount rate assumed that contributions from plan
members will be made at the current contribution rate.
Based on those assumptions, the OPER plan fiduciary net position was projected to be
available to make all projected future benefit payments of current plan members.
F. Net OPEB Liability
The components of the net OPEB liability, measured as of December 31, 2019, were
as follows:
Total OPER liability $ 11,182,145
Plan fiduciary net position 4,087,576
Net OPEB liability $ 7,094,569
The fiduciary net position has been determined on the same basis used by the OPEB Plan.
For this purpose, the Plan recognizes benefit payments when due and payable.
4s4
92
G. Changes in the Net OPER Liability
The following summarizes the changes in the net OPEB liability for the past year.
Balances, beginning of year
Changes for the year:
Service cost
Interest
Contributions - employer
Net investment income
Differences between expected
and actual experience
Changes in assumptions or
other inputs
Benefit payments
Net Changes
Balances, end of year
Increase (Decrease)
Plan
Total OPEB Fiduciary Net OPEB
Liability Net Position Liability
Lai Ll lal-Ibl
$ 10,705,890 $ 3,561,719 $ 7,144,171
245,905
799,729
260,248
(252,156)
(577,471)
476,255
$ 11,182,145
245,905
799,729
1,012,408 (1,012,408)
90,920 (90,920)
(577,471)
525,857
$ 4,087,576
Change of assumptions and other inputs reflect the following:
260,248
(252,156)
(49,602)
$ 7,094,569
• Change in the discount rate from 7.50% in prior years to 7.25% in calendar year
2019.
• The per capital costs, retiree contributions and trends were updated to reflect
current experience.
• The mortality assumptions were updated based on experience with similar
retirement systems.
• The excise tax on high cost health plans was repealed effective December 20,
2019. The excise tax is not included in the December 31, 2019 accounting
liabilities.
495
93
H. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPER liability, as well as what the net OPEB liability
would be if it were calculated using a discount rate that is one percentage -point lower
or one percentage -point higher than the current discount rate:
Current
1% Discount 1%
Decrease Rate Increase
$ 7,235,457 $ 7,094,569 $ 6,921,895
1. Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cast Trend Rates
The following presents the net OPEB liability, as well as what the net OPEB liability
would be if it were calculated using healthcare cost trend rates that are one
percentage -point lower or one percentage -point higher than the current healthcare cost
trend rates:
Current
Healthcare
1% Cost Trend 1%
Decrease Rates Increase
$ 5,814,020 $ 7,094,569 $ 8,602,787
J. OPEB Expense and Deferred Outflows of Resources and Deferred (Inflows) of Resources
Related to OPEB
For the year ended December 31, 2019, the Department recognized an OPEB expense of
$836,057. At December 31, 2019, the Department reported deferred outflows of
resources related to OPEB from the following sources:
Difference between expected and actual
experience
Change in assumptions
Net difference between projected and
actual OPEB investment earnings
Total
Deferred
Deferred
Outflows of
(inflows)of
Resources
Resources
$ 195,186
$ -
(189,117(
254,023
$ 449,209 $ (189,117)
4%
94
19.
Amounts reported as deferred outflows and (inflows) of resources related to OPEB will
be recognized in OPEB expense as follows:
Year Ended December 31
2020
$ 73,863
2021
73,863
2022
73,862
2023
38,504
Total
$ 260,092
Participation in Massachusetts Municipal Wholesale Electric Company
Town of Reading acting through its Light Department is a Participant in certain Projects of
the Massachusetts Municipal Wholesale Electric Company (MMWEC).
MMWEC is a public corporation and a political subdivision of the Commonwealth of
Massachusetts, created as a means to develop a bulk power supply for its Members and
other utilities. MMWEC is authorized to construct, own or purchase ownership interests
in, and to issue revenue bonds to finance, electric facilities (Projects). MMWEC has
acquired ownership interests in electric facilities operated by other entities and also owns
and operates its own electric facilities. MMWEC operates the Stony Brook Intermediate
Project and the Stony Brook Peaking Project, both fossil -fueled power plants. MMWEC
has the Nuclear Mix No 1 Project, Nuclear Project Three, Nuclear Project Four, Nuclear
Project Five and Project Six, which comprise an 11.6% ownership interest in the Seabrook
Station nuclear generating unit operated by NextEra Energy Seabrook, LLC and a 4.8%
ownership interest in the Millstone Unit 3 nuclear unit, operated by Dominion Nuclear
Connecticut, Inc. The operating license for Seabrook Station extends to March 15, 2050.
The operating license for the Millstone Unit 3 nuclear unit extends to November 25, 2045.
On July 19, 2019, MMWEC sold its 3.7% interest in the W.F. Wyman Unit No. 4 plant, which
is operated and owned by its majority owner, FPL Energy Wyman IV, LLC.
MMWEC sells all of the capability (Project Capability) of each of its Projects to its Members
and other utilities (Project Participants) under Power Sales Agreements (PSAs). The light
Department has entered into PSAs with MMWEC. Under the PSAs the Department is
required to make certain payments to MMWEC payable solely from Municipal Light
Department revenues. Among other things, the PSAs require each Project Participant to
pay its pro rata share of MMWEC's costs related to the Project, which costs include debt
service on the revenue bonds issued by MMWEC to finance the Project. In addition,
should a Project Participant fail to make any payment when due, other Project Participants
of that Project may be required to increase (step-up) their payments and correspondingly
their Participant's share of that Project's Project Capability. Project Participants have
95
497
20.
covenanted to fix, revise and collect rates at least sufficient to meet their obligations
under the PSAs. Each Participant is unconditionally obligated to make payments due to
MMWEC whether or not the Project(s) is completed or operating and notwithstanding the
suspension or interruption of the output of the Project(s).
Pursuant to the PSAs, the MMWEC Project Participants are liable for their proportionate
share of the costs associated with decommissioning the plants, which costs are being
funded through monthly Project billings. Also, the Millstone and Seabrook Project
Participants are liable for their proportionate share of the uninsured costs of a nuclear
incident that might be imposed under the Price -Anderson Act (Act). Originally enacted in
1957, the Act has been renewed several times. In July 2005, as part of the Energy Polity
Act of 2005, Congress extended the Act until the end of 2025.
As of July 1, 2019, MMWEC has no debt service obligations outstanding relating to the
Projects. MMWEC is involved in various legal actions. In the opinion of management, the
outcome of such litigation orclaims will not have a material adverse effect on the financial
position of the company.
The total capital expenditures and annual capacity, fuel and transmission costs (which
include debt service and decommissioning expenses as discussed above) associated with
the Department's Project Capability of the Projects in which it participates for the years
ended December 31, 2019 and 2018, respectively are listed in the table below.
READING MUNICIPAL LIGHT DEPARTMENT
YEARSENDED
TOTAL CAPACITY, FUEL& CAPACITY, FUEL&
CAPITAL TRANSMISSION TRANSMISSION
PERCENTAGE EXPENDITURES BILLED BILLED
PROJECTS SHARE 2019 2019 2018
Stony Brook Peaking Project 19.52% 11,655,859 712,108 906,309
Stony Brook Intermediate Project 15.92% 28,510,622 2,065,782 3,182,035
Nuclear Mix No. 1 -Seabrook 14.72% 1,487,536 80,366 76,204
Nuclear Mix No. 1 -Millstone 14.72% 8,911,367 863,083 997,615
Nuclear Project No. 3 -Millstone 5.26% 7,789,578 620,134 718,976
Nuclear Project No. 4 -Seabrook 12.56% 37,581,471 1,835,491 1,792,507
Nuclear Project No. 5 -Seabrook 6.12% 4,961,078 229,475 224,704
Project No. 6 -Seabrook 0.00%
$100,897,511 $6,606,439 $7,898,350
Renewable Energy Certificates
In 2003, the Massachusetts Department of Energy and Environmental Affairs adopted the
Massachusetts Renewable Energy Portfolio Standard (RPS), a regulation that requires
Investor Owned Utilities (IOUs) to purchase mandated amounts of energy generated by
renewable resources (Green Energy) as a percentage of their overall electricity sales. The
96
498
Massachusetts RPS applies only to IOUs, so the Department is currently exempt from this
mandate.
Energy suppliers meet their annual RPS obligations by acquiring a sufficient quantity of
RPS -qualified renewable energy certificates (RECs) that are created and recorded at the
New England Power Pool (NEPOOL) Generation Information System (GIS). Suppliers can
purchase RECs from electricity generators or from other utilities that have acquired RECs.
As part of its ongoing commitment to Green Energy, the Department has entered into
Purchase Power Agreements (PPAs) with Swift River Hydro LLC and Concord Steam
Corporation to purchase power generated from renewable energy resources. These PPAs
include the Department taking title to RECs, which certify that the energy produced was
the product of a renewable resource. Because the Department is exempt from the RPS
provisions, it has the option of holding these RECs until they expire or selling them through
the NEPOOL GIS.
Information regarding the Department's year ending December 31, 2019 REC activity and
balances is as follows:
REC Holdines at December 31. 2019
Total 15,329 $ 552,832
A projected REC is the Department's estimate of what will be received based on invoices
generated by REC-producing projects that the Department has entitlements to.
Because there is no formal accounting guidance under GAAP or IFRS for RECs and the
Department does not have a formal policy for the future disposition of RECs, the
estimated fair value of the Department's REC holdings at December 31, 2019 are not
recognized as an asset on the proprietary fund Statements of Net Position.
499
97
Projected
Estimated
Certificates
Value
Cf Class l
2,171
$ 86,840
MA Class I & II
3,080
116,145
MA/RI/NHI/ME
2,784
82,128
MA/Cf/RI/NH 1
6,859
267,501
Vi Class
435
218
Total 15,329 $ 552,832
A projected REC is the Department's estimate of what will be received based on invoices
generated by REC-producing projects that the Department has entitlements to.
Because there is no formal accounting guidance under GAAP or IFRS for RECs and the
Department does not have a formal policy for the future disposition of RECs, the
estimated fair value of the Department's REC holdings at December 31, 2019 are not
recognized as an asset on the proprietary fund Statements of Net Position.
499
97
21. Leases
Related Party Transaction -Property Sub -Lease
The Department is the lessor of facilities that are currently sub -leased to the Reading Town
Employees Federal Credit Union. The original sub -lease agreement commenced in
December 2000 and was extended by various amendments through November 30, 2020.
Following is the future minimum rental income to be received by the Department under the
terms of this lease for the year ending December 31:
2020 $ 8,984
Total $ 8,984
Operating Lease - Warehouse
The Department is the lessee of a warehouse facility owned by JCM Real Estate Trust. The
original lease agreement for this facility commenced in December 1998 and was extended
by various amendments through May 31, 2018. Under the terms of the most recent lease
amendment, the Department has exercised the option to extend the lease for an
additional 24 months until May 31, 2020. Following is the future minimum rental expense
to be paid by the Department for the year ending December 31:
2020 $ 67,228
Total $ 67,228
22. Subsequent Events
Management has evaluated subsequent events through July 23, 2020, which is the date
the financial statements were available to be issued.
COVID-19
The COVID-19 outbreak in the United States and across the globe resulted in economic
uncertainties. There is considerable uncertainty around the duration and scope of the
economic disruption. The extent of the impact of COVID-19 on our operational and
financial performance will depend on certain developments, including the duration and
spread of the outbreak, special acts or legislation by the state or federal government, and
the impact on our taxpayers, customers, employees, and vendors, all of which are
uncertain and cannot be predicted. At this point, the extent to which COVID-19 may
impact our financial condition or results of operations is uncertain. Additionally, the
Department has not experienced any disruptions in operations or supply chains as of the
date of the Financial Statements.
98 sop
23. Commitments and Contingencies
Outstanding Legal Issues - On an ongoing basis, there are typically pending legal issues in
which the Department is involved. The Department's management is of the opinion that
the potential future settlement of these issues would not materially affect its financial
statements taken as a whole.
24. New Pronouncements
The Governmental Accounting Standards Board (GASB) has issued Statement No. 84,
Fiduciary Activities, effective for the Department beginning with its calendar year ending
December 31, 2021. This statement establishes guidance on how to address the
categorization of fiduciary activities for financial reporting and how fiduciary activities are
to be reported, and may require reclassification of certain funds.
The Governmental Accounting Standards Board (GASB) has issued Statement No. 87,
Leases, effective for the Department beginning with its calendar year ending December 31,
2022. This statement establishes new reporting and disclosure requirements, including
the recording of various operating leases in the financial statements.
sol
99
TOWN OF READING, MASSACHUSETTS
Required Supplementary Information
General Fund
Schedule of Revenues and Other Sources, and Expenditures and Other Uses - Budge and Actual
Farthe Year Ended June30, 2020
See Independent Auditors' Report.
100 502
Budgeted Amounts
variance with
Final Budget
0nginal
Final
Actual
Positive
Revenues
Flume)
Rude,
Amounts
1I14gi111P)
Propertytaxes
$ 75,440,565
$ 25,352,914
$ 25,222,150
$ 369,236
Excises
4,400,000
4,400,000
4,101,420
(298,580)
Penalties, interest and whertmes
580.000
580,000
561,626
(18,3241
Departmental
1,950,000
1,950,000
2,184,182
234,187
Licenses and permits
120,000
259,429
151,265
(8,214)
Fin. and forfeitures
1001000
100,000
86,520
(13,480)
Intergovernmental
14,826,465
14,214,445
14,620,366
(44,029)
Investment income
450,000
450,000
1,136,930
686,930
Other
138,490
130,490
237,301
98,811
Total Revenues
98,105,520
92,845,328
90,851,815
1,006,482
Expenditures
General government
4,825,910
5,162,060
4,211,023
456,032
Public safety
12,962,740
13,614,240
12,242,618
822,122
Education
42,143,223
47,153,223
46,669,981
483)42
Public works
5,649,025
5,939,025
5,590,563
348,462
Facilities
3,40$445
5,000,445
4,241,882
258,563
Health and human services
825,950
209,888
612,202
92,181
Culture and recreation
2,582,345
2,592,345
2,529,958
62,382
Employee benefits
18,139,050
12,990,050
12,206,231
293,819
Debt service
5,248,414
4,498,414
4,493,862
4,552
Intergovernmental
1,233,646
1,210,840
1,197,932
12,908
Total Expenditures
102,024,248
103.826,530
101,001,752
2,824,223
Excess (Deficiency) of Revenues Over
(Under) Expenditures
(3,968,228)
(6,031,202)
12,149,942)
3,881,260
Other Financing Sources (Uses)
Transfers in
2,593,728
2,593,228
2,652,066
58,338
Use of free cash:
For operati ng budget support
1,000,000
1,165,000
-
11,165,0001
For If nmm res erve fund
-
200,000
-
(200,000)
For gas l ea k a udit
-
35,DDO
-
(35,000)
For payment of PY bi l l s
-
188
-
(188)
Forcapital projects
-
1,651,265
-
(1,651,265)
Use of overlay surplus:
For operating budgetsupport
325,000
325,000
-
(325,000)
Use of debt service reserve
10,521
(10,521)
Total OMer n na or ng Soarces(Use,)
3,968,728
6,031,202
2,652,066
(3,329,136)
Excess of Revenues antl Other Financing Sources
Over (Under) Expenditures and Other Financing Uses
$
$
5 502.124
$ 502,124
See Independent Auditors' Report.
100 502
Notes to Required Supplemental Information
for General Fund Budget
A. Budgetary Basis
The general fund final appropriation appearing on the previous page represents the
final amended budget after all reserve fund transfers and supplemental
appropriations.
B. Budget/GAAP Reconciliation
The budgetary data for the general fund is based upon accounting principles that differ
from generally accepted accounting principles (GAAP). Therefore, in addition to the
GAAP basis financial statements, the results of operations of the general fund are
presented in accordance with budgetary accounting principles to provide a
meaningful comparison to budgetary data.
The following is a summary of adjustments made to the actual revenues, expenditures
and otherfinancing sources/uses, to conform to the budgetary basis of accounting:
General Fund
GAAP Basis
To reverse beginning of year
appropriation carryforwards
from expenditures
To add end -of -year appropriation
carryforwards to expenditures
To reverse the effect of non -
budgeted State contributions for
teachers retirement
To remove effect of combining
stabilization account with general
fund
To reverse the effect of non -
budgeted premiums
Budgetary Basis
See Independent Auditors' Report.
101 503
Other
Financing
Revenues
Expenditures
Sources/Uses
$ 105,089,480
$ 103,716,197 $
2,712,452
-
(3,224,377)
-
-
6,771,453
-
(6,261,516)
(6,261,516)
-
(36,535)
-
-
60,386
-
(60,386)
$ 98,851,815
$ 101,001,757 $
2,652,066
See Independent Auditors' Report.
101 503
TOWN OF READING, MAIG011l5F115
Required Supplementary lnlamtlKa
S[Ledwa of 0.oeqrtin t. Share of the Net P-wnOabiM,
Dmudbml
Schedules are intended to show information for 10 years. Additional years will be displayed as they become available.
See Independent Auditors' Report.
102 504
Proportion
P',oh n t.
oftlm
Slate of
Propomone Share
of
Plan ilduo, Nn Posalon
fa[al
Measu2menl
Par Penpon
Nn Pmelon
Coned
NH Parole, liabdity
a5 a
PercenlaAe of the Total
S$
Z
DaNllh
tabift,
Pull
v of towani Penal
21men ae
Penson tab u
me 30.3 W0
December53 31,}019
]YB9%
$ ID, -3,913
$ W6149146.21%
]BN%
June 30, MM
Oe[ember 31, WIG
7090%
36531,240
1],836,3]5
}pa,Bl%
1.56%
lune 30, 3WA
DeretWo 31, 3017
6998%
15,811
J7,ip,6D]
14801%
7932%
June 30, 3017
Oeumber 31, WIG
6998%
31,391,919
If"PEA,96a
18923%
7313%
June 30 }016
..,.be'3l,.11
71.03%
32133%158
fGau,II0
199"6%
1.1]%
June 30, 1115
December 31,M a
71.03%
11,281,510
14,855.396
1,13$%
79 B5%
Mamcbusetls
TP,ya—,flnl n[Suste
C MrnomRahb of
Total Nor
Proporoonab,
Masu[FuseOi Total
Pnuian
SleeNlbe Plan Factual,
Proportion
PropoM1lmare
WOooniOnMe$hare
Dardn,
Net Pension P.Paut—
ofiM
Share ofthe
athe Net I"P n
Amo fated
Ilabiut,aPeMage of
ual
Mem
eaaleul
IN .,.an
Net on .Y
Inb611 M—lated
wA, Me
Corned
Percentage of that.
Y P,
f
4aIDIRh
1sDYlri
iyvalhO TTOW
Twn
Py' EII
[pee ed'.,ofl Perera, WhOtr
June M. IUD
lune 3%2019
0933710%
5 -
5 ]03.355.748 5
10,355,]40 $
31.56119
- 5195%
Iune 30, 2019
lune ID, 2018
04233[5%
10,371,336
10,311,336
29,729,213
SEEP%
lune 30, I.
Lne 303027
0451014%
-
103,216,357
103,316,357
N,AJ,,W,
- 5435%
lune V, MV
lune 30, 2016
Ot"MIN
-
98,469,030
98469,@1
38,969.111
- 5373%
June 30, 2016
lune I., W15
OdaM aN
69,9P,515
89,91,515
27,835,403
553A%
June 302015
lune30,3014
0,42.%
-
67,583,938
67.543,931
IS, Dee ,O
- 61,64%
Schedules are intended to show information for 10 years. Additional years will be displayed as they become available.
See Independent Auditors' Report.
102 504
TOWN OF READING, MASSACHUSETTS
Required Supplementary Information
Schedule of Pension COMributions
(Unaudited)
Ranh, Contributory Retirement System (Town)
Schedules are intended to show information for 10 years. Additional years will be displayed as they become available.
See Independent Auditors' Report.
103 505
Massachusetts Teachers' Retirement System
Contributions in
Actuanally
Contributions in
Relation to the
Determined
Actuadally
Actuadally
Contribution
Contributions as
Fiscal
Measurement
Determined
Determined
Deficiency
Covered
.Percentage of
Year
Date
cmRdbution
Contribution
IEacess)
Payroll
Covered Payroll
June 30. 2020
December 31, 2019 $
4,454,343 $
4,454,343 $
$
21,725,362
20.50%
June 30, 2019
December 31, 2018
4,228,374
4,228,374
-
17,836,375
23.71%
June 30, 2018
December 31, 2017
3,962,037
3,962,037
-
17,480,607
2267%
June 30, 2017
December 31, 2016
3,91,423
3,791,423
-
16,588,964
22.86%
lune 30, 2016
December 31, 2015
3,682,525
3,682,525
-
16,189,120
2235%
June 30, 2015
December 31, 2014
3,523,949
3,523,949
-
14,855,396
23.72%
Schedules are intended to show information for 10 years. Additional years will be displayed as they become available.
See Independent Auditors' Report.
103 505
Massachusetts Teachers' Retirement System
Actuanally
Contributions in
Determined
Relation to the
Contribution
Actuarially
Contnbufion
Contributions as
Fiscal
Measurement
Provided by
Determined
Deficiency
Coveretl
aPercenu, of
Year
Date
Commonwealth
Conldbution
(Excess)
Payroll
Covered Payroll
June 30, 2020
June 30, 2029
$ 6,261,516
$ 6,261,516
$ - $
31,561,719
19.84%
June 30, 2019
June 30, 2018
5,565,557
5,565,557
-
29,728,213
19.72%
June 30, 2018
June 30, 2017
5,572,348
5,572,348
-
30,625,961
18.19%
June 30. 2017
June 30, 2016
4,952,850
4,952,850
-
28,969,111
17.10%
June 30, 2016
June 30, 2015
4,487,668
4,487,668
-
27,836,403
16.12%
June 30, 2015
June 30, 2014
3,985,303
3,985,303
-
26,068,000
15.29%
Schedules are intended to show information for 10 years. Additional years will be displayed as they become available.
See Independent Auditors' Report.
103 505
TOWN OF RFAOING, MASSACHUSETTS
Required Supplementary Information
Other Post -Employment Benefits (OPEB)
Schedule of Changes in Net OPEB Liability
(Unaudited)
Schedules are intended to show information for 10 years. Additional years will be displayed as they become available.
See notes to the Town's financial statements for summary of significant actuarial methods and assumptions.
See Independent Auditors' Report.
104 506
2020
2019
2018
2017
Total OPEB Liability
Si cost
$ 1,620,222
$ 1,760,928
$ 1,712,929
$ 1,645,248
Interest
5,339,056
5,149,105
4,906,280
4,622,514
Differences between expected and actual experience
-
(2,455,882)
-
-
Changes of assumptions
(4,021,503)
4,221,926
-
-
Benefit payments to plan members and beneficiaries
(3,522,509)
(3,586,0031
(3,214,928)
12,990,677)
Net change in total OPER liability
(634,234)
5,090,119
3,409,281
3,332,085
Total OPEB liability - beginning
23,726,929
68,686,810
65,222,529
61,945,444
T.VJ OPEBliability-ending(a)
23,142,195
73,226,929
68,686,810
65,222,529
Plan Fiduciary Net Position
Contributions -employer
4,356,509
4,466,003
3,290,928
3,566,622
Contributions - member
Net investment income
82,609
86,238
48,311
22,516
Benefit payments to plan members and beneficiaries
(3,522,509)
(3,586,003)
(3,214,928)
(2,990,622)
Net change in plan fiduciary net position
821,609
966,238
624,311
603,516
Plan fiduciary net positionbeginning5,211,225
4,245,532
3,621,226
3,012,210
Plan fiduciary net position - ending(b)
6,083,384
5,211,225
4,245,532
3,621,226
Net OPER liability- ending( a -b)
$ 62,058,811
$ 68,565,154
$ 64,441,223
$ 61,656,303
Schedules are intended to show information for 10 years. Additional years will be displayed as they become available.
See notes to the Town's financial statements for summary of significant actuarial methods and assumptions.
See Independent Auditors' Report.
104 506
TOWN OF READING, MASSACHUSETTS
Required Supplementary Information
Other Post-Emplarment Benefits OPER)
Schedules of Net OPER Liability, Contributions, and Investment Returns
(Unaudited)
Schedule of Net OPER Liability
Total OPEB liability
Plan fiduciary net position
Net OPER liability
Nan fiduciary net position as a
Percentage of the total OPER liability
Covered employee Payroll
Schedule of Contributions
Actuarially determined contribution
Contributions In relation W the actuarially
determined contribution
Contribution deficiency
Schedule of Investment Returns
Annual money weighted rate of return, net of investment eapense
2020 2019 2018 2017
$ 73,142,195 $ 23,776,929 $ 68,686,810 $ 65,2]],529
(6,083,384) (5,211,775) (4,245,532) (3,621,226)
$ 67,058,011 $ 68,565,154 $ 64,441,273 $ 61,656,303
8.32% 206% 6.18% 5.55%
Not available Not available Not available Not available
$ 6,108,384 $ 5,930,470 $ 5,848,324 $ 5,542,136
(4,356,509) (4,466,003) (3,290,928) (3,566,622)
$ 1,251,875 $ 1,464,462 $ 2,052,396 $ 1,980,459
Not available Net available Net available Not available
Schedules are intended to show information for 10 years. Additional years will be displayed as they become available.
See notes to the Town's financial statements for summary of significant actuarial methods and assumptions.
See Independent Auditors' Report.
105 507
TOWN OF FUMING, MASSACHUSETTS, MUNICIPAL LIGHT DEPARTMENT
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PROPORTIONATE SHARE
OF THE NET PENUOR LIABILITY
(unaudited)
Schedule is intended to show information for 10 years. Additional years will be displayed as they become available.
See Independent Auditors' Report.
508
106
Pnpunlon
Propanionate
anne
Me. of the
Praponimate Share or the
Plan NduMrY Net Poufwn
HsOl
Measurement
Net Pension
Net PenSlm
Net Pension GabIlit, as a
PHUnuage Ol the Total
Year
Date'aLbiliry
Liven
Covered Pavmll
Peranaee at Coasted Payroll
Petulant U,Wlily
Oe¢mber 31,2019
0¢embn 31, 118
28.35%
$14,610,001
$6,513,347
224.31%
72.56%
@amber 31,208
December 31, W17
29.15%
$10,781,819
$6,938,05)
155.40%
79.32%
June 30, 2018
December 31, W17
2115%
$10,781,819
$6,938,057
155A0L
79.32%
have 30,2017
Oecember31,2016
2115%
$13,06,538
$6,393,765
200.52%
734396
Jum30,2016
Cecember31,2015
28.25%
$12,862,731
$6,147,851
20122%
72.17%
June 30, Wn
December 31, 2014
28.25%
$8pN,663
$5.908,691
143.26%
79.89%
Schedule is intended to show information for 10 years. Additional years will be displayed as they become available.
See Independent Auditors' Report.
508
106
TOWN OF READING, MASSACHUSETTS, MUNICIPAL LIGHT DEPARTMENT
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PENSION CONTRIBUTIONS (GASB 68)
(Unaudited)
Reading Contributory Retirement System
Contractually
Fiscal
Measurement
Required
Year
.Date.
Contribution
December 31, 2019
December 31, 2018
$ 1,781,345
December 31, 2018
December 31, 2017
$ 1,691,058
June 30, 2018
December31,2017
$ 1,650,416
June 30, 2017
December31,2016
$ 1,579,345
June 30, 2016
December 31, 2015
$ 1,461,650
June 30, 2015
December31,2014
$ 1,401,638
Contributions in
Relation to the
Contractually
Contribution
Contributions as
Required
Deficiency
Covered
a Percentage of
Contribution
Excess
Payroll
Covered Payroll
$ 1,781,345
$ -
$ 6,513,347
27.35%
$ 1,691,058
$ -
$ 6,938,057
24.37%
$ 1,650,416
$ -
$ 6,938,057
23.79%
$ 1,579,345
$ -
$ 6,393,765
24.70%
$ 1,461,650
$
$ 6,147,851
23.77%
$ 1,401,638
$
$ 5,901
23.72%
Schedule is intended to show information for 10 years. Additional years will be displayed os they become available.
See Independent Auditors' Report.
509
107
TOWN OF READING, MASSACHUSETTS
MUNICIPAL LIGHT DEPARTMENT
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POST -EMPLOYMENT BENEFITS (OPER)
SCHEDULE OF CHANGES IN THE NET OPER LIABILITY (GASB 74 AND 75)
(Unaudited)
Total OPER Liability
Service cost
Interest on unfunded liability- time value of $
Differences between expected and actual experience
Changes of assumptions
Benefit payments, including refunds of member contributions
Net change in total OPEB liability
Total OPER liability- beginning
Total OPER liability- ending (a)
Plan Fiduciary Net Position
Contributions - employer
Net investment income
Benefit payments, including refunds of member contributions
Net change in plan fiduciary net position
Plan fiduciary net Position - beginning
Plan fiduciary net position - ending (b)
Net OPEB liability (asset) -ending (a -b)
1019.
2018
2017
$ 245,905
$ 238,384
$ 230,880
799,729
766,539
733,280
260,248
-
-
(252,156)
-
-
(577,471)
1552,3511
(504,91])
476,255
452,572
459,243
10,705,890
10,253,318
9,794,075
11,182,145
10,705,890
10,253,318
1,012,408
1,159,476
813,663
90,920
75,522
35,045
(577,471)
(552,351)
(504,91])
525,857
682,647
343,791
3561,719
2,879,072
2,535,281
4,087,576
3,561,719
2,879,072
$ 7,094,569
$ ],144,1]1
$ 7,374,246
Schedule is intended to show information for 10 years. Additional years will be displayed as they become available.
See notes to the Department's financial statements far summary of significant actuarial methods and assumptions.
See Independent Auditors' Report.
510
108
TOWN OF READING, MASSACHUSETTS
MUNICIPAL LIGHT DEPARTMENT
REQUIRED SUPPLEMENTARY INFORMATION
OTHER POST -EMPLOYMENT BENEFITS (OPER)
SCHEDULES OF NET OPER LIABILITY, CONTRIBUTIONS, AND INVESTMENT RETURNS (GASB 74 AND 75)
(Unaudited)
Schedule of Net OPER Liability
Total OPEB liability
Plan fiduciary net Position
Net OPER liability (asset)
Plan fidutlary net position as a percentage of the total OPER liability
Covered employee payroll
Participating employer net OPER liability (asset)
as percentage of covered employee payroll
Schedule of Contributions
Actuarially determined contribution
Contributions in relation to the actuarially determined contribution
Contribution deficiency (excess)
Schedule of Investment Returns
Annual money weighted rate of return, net of investment expense
2019 2018 2017
$ 11,182,145 $ 10,705,890 $ 10,253,318
4,087,576 3,561,719 7,879,077
$ 7,094,569 $7144171 5 7,374,246
36.55% 33.27% 2808%
$ unavailable $ unavailable unavailable
$ unavailable $ unavailable unavailable
2019 2018 2017
$ 1,145,987 $ 991,048 $ 932,387
1,012,408 1,159,476 813,663
$ 134,579 $__J! 6$4281 $ 118,724
2019 2018 2017
unavailable unavailable unavailable
Schedule is intended to show information for 10 years. Additional years will be displayed as they become available.
See notes to the Department's financial statements for summary of significant actuarial methods and assumptions.
See Independent Auditors' Report.
511
109
(This page intentionally left blank.)
110 512
TOWN OF READING, MASSACHUSETTS
Comparison Balance sheet
General Fund
June 30, 2020 and June 30, 2019
See Independent Auditors' Report.
111 513
Current
Prior
Year
Year
General
General
Fund
Fund
Change
Assets
Cash and short -tern investments
$ 22,065,900
$
11,827,339
$
10,238,561
Investments
13,745,036
17,579,145
(3,834,109(
Receivables:
Property taxes
1,200,570
954,740
245,830
Excises
382,673
244,594
138,079
Departmental and other
387,562
1,831,485
(1,443,923)
Total Assets
$ 37,781,741
$
32,437,303
$
5,344,438
Liabilities
Warrants payable
$ 2,304,032
$
2,011,441
$
292,591
Accrued liabilities
4,351,272
3,805,131
546,141
Other liabilities
641,089
604,136
36,953
Total Liabilities
7,296,393
6,420,708
875,685
Deferred Inflows of Resources
Unavailable revenues
1,730,977
1,347,959
383,018
Fund Balances
Restricted
25,557
36,078
(10,521)
Committed
503,000
503,000
-
Assigned
9,912,181
5,348,326
4,563,855
Unassigned
18,313,633
18,781,232
(467,599)
Total Fund Balances
28,754,371
24,668,636
4,085,735
Total Liabilities, Deferred Inflows of Resources, and
Fund Balances
$ 37,781,741
$
32,437,303
$
5,344,438
See Independent Auditors' Report.
111 513
TOWN OF READING, MASSACHUSETTS
Comparison Statement of Revenues, Expenditures, and Changes in Fund Balance
General Fund
For the Years Ended lune 30, 2020 and lune 30, 2019
Other Financing Sources (Uses)
Premium on issuance of bonds
Current
Prior
60,386
Transfers in
Year
Year
(1,159,576)
Transfers out
General
General
150,921
Total Other Financing Sources (Uses)
Fund
Fund
Change
Revenues
4,085,735
5,862,217 $
(1,776,482)
Property taxes
$ 75,722,150 $
73,440,816
$ 2,281,334
Excises
4,101,420
4,518,208
(416,788)
Penalties, interest, and other taxes
561,676
599,869
(38,193)
Departmental
2,184,187
2,312,514
(128,327)
Licenses and permits
151,265
161,819
(10,554)
Fines and forfeitures
86,520
101,396
(14,876)
Intergovernmental
20,931,882
20,417,819
514,063
Investment income
1,173,465
1,513,149
(339,684)
Other
176,915
212,556
(35,641)
Total Revenues
105,089,480
103,278,146
1,811,334
Expenditures
General government
4,698,054
5,281,210
(583,156)
Public safety
11,878,628
11,498,415
380,213
Education
51,887,507
50,076,779
1,810,728
Public works
5,391,816
4,738,102
643,714
Facilities
4,132,103
3,771,257
360,846
Health and human services
615,395
606,863
8,532
Culture and recreation
2,524,691
2,514,322
10,369
Employee benefits
16,906,209
16,967,755
(61,546)
Debt service
4,493,862
4,478,865
14,997
Intergovernmental
1,197,932
1,143,082
54,850
Total Expenditures
103,716,197
101,076,650
2,639,547
Excess of Revenues
-
Over Expenditures
1,373,283
2,201,496
(828,213)
Other Financing Sources (Uses)
Premium on issuance of bonds
60,386
-
60,386
Transfers in
2,652,066
3,811,642
(1,159,576)
Transfers out
(150,921)
150,921
Total Other Financing Sources (Uses)
2,712,452
3,660,721
(948,269)
Net change in fund balances
4,085,735
5,862,217 $
(1,776,482)
Fund Balance at Beginning of Year
24,668,636
18,806,419
Fund Balance at End of Year
$ 28,754,371 $
24,668,636
See
Independent Auditors' Report.
112
514
(This page intentionally left blank.)
113 515
TOWN OF READING, MASSACHUSETTS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2020
Special Revenue Funds
See Independent Auditors' Report.
114 516
Federal
State
Revolving
Grants
Grants
Funds
Assets
Cash and short-term investments
$
(73,967)
$
1,752,309
$
3,898,821
Investments
-
-
-
Receivables:
Departmental and other
-
-
615,353
Intergovernmental
116,634
75,515
Total Assets
$
42,667
$
1,827,824
$
4,514,174
Liabilities
Warrants payable
$
11,773
$
385,137
$
78,891
Accrued liabilities
106,605
-
54,954
Unearned revenue
94,336
Total Liabilities
118,378
385,137
228,181
Deferred inflows of resources
-
-
125,031
Fund Balances
Nonspendable
-
-
-
Restricted
16,969
1,630,750
4,160,962
Unassigned
92,680
(188,063)
-
Total Fund Balance
(75,711)
1,442,687
4,160,962
Total Liabilities and Fund Balance
$
42,667
$
1,827,824
$
4,514,174
See Independent Auditors' Report.
114 516
Special Revenue Funds
Receipts Gifts and
Reserved Donations Subtotals
$ 690,027 $ 1,128,241 $ 7,395,431
615,353
192,149
$ 690,027 $ 1,128,241 $ 8,202,933
$ - $ 830 $ 476,631
- 161,559
94,336
830 732,526
- 125,031
690,027 1,127,411 7,626,119
(280,743)
690,027 1,127,411 7,345,376
$ 690,027 $ 1,128,241 $ 8,202,933
(continued)
See Independent Auditors' Report.
115 517
(continued)
Assets
Cash and short-term investments
Investments
Receivables:
Departmental and other
Intergovernmental
Total Assets
Liabilities
Warrants payable
Accrued liabilities
Unearned revenue
Total Liabilities
Deferred inflows of resources
Fund Balances
Nonspendable
Restricted
Unassigned
Total Fund Balance
Total Liabilities and Fund Balance
TOWN OF READING, MASSACHUSETTS
COMBINING BALANCE SHEET
NONMAIOR GOVERNMENTAL FUNDS
JUNE 30,2020
Capital Protect Funds
Town School
Capital Capital
Proiect Fund= Pro i ect Funds cnhryly
$ 481,758 $ 4,024,056 $ 4,505,814
$ 481,758 $ 4,024,056 $ 4,505,814
$ - $ 144,214 $ 144,214
144,214 144,214
481,758 3,879,842 4,361,600
481,/58 3,879,842 4,361,600
$ 481,758 $ 4,024,056 $ 4,SO5,814
See Independent Auditors' Report.
116
518
See Independent Auditors' Report.
117 519
Total
Cemetery
Other
Nonmajor
Trust
Trust
Governmental
Funds
Funds
Su4totak
Funds
$ 138,682
$
16,682
$
155,364
$
12,056,609
5,298,482
744,780
6,043,262
6,043,262
-
-
-
615,353
192,149
$ 5,437,164
$
761,462
$
6,198,626
$
18,907,373
$ 20,000
$
-
$
20,000
$
640,845
-
-
-
161,559
94,336
20,000
-
20,000
896,740
-
-
-
125,031
3,122,218
272,165
3,394,383
3,394,383
2,294,946
489,297
2,784,243
14,771,962
(280,743)
5417,164
761,462
6,178,626
17,885,602
$ 5,437,164
$
761,462
$
6,198,fi26
$
18,907,373
See Independent Auditors' Report.
117 519
TOWN OF READING, MASSACHUSETTS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAIOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Special Revenue Funds
See Independent Auditors Report.
118 520
Federal
State
Revolving
Grants
Grants
Funds
Revenues
Departmental
$ -
$ -
$ 6,878,229
Intergovernmental
1,526,649
2,972,012
248,393
Investment Income
-
-
2,468
Contributions
-
-
_
Other
30,881
Total Revenues
1,526,649
2,972,012
7,159,971
Expenditures
Current:
General government
-
52,940
87,888
Public safety
288,550
130,557
2,064,401
Education
1,218,191
1,509,226
4,479,489
Public works
-
871,102
10,532
Health and human services
37,972
119,452
28,643
Culture and recreation
44,276
661,658
Total Expenditures
1,544,713
2,727,553
7,332,611
Excess (Deficiency) of Revenues Over
(Under) Expenditures
(18,064)
244,459
(172,640)
Other Financing Sources(Uses)
Issuance of bonds
-
-
Premiums on issuance of bonds
-
-
-
Transfers out
(146,560)
Total Other Financing Sources (Uses)
(146,560)
Change in Fund Balances
(18,064)
244,459
(319,200)
Fund Balances at Beginning of Year
(57,647)
1,196,228
4,480,162
Fund Balances at End of Year
$ (75,711)
$ 1,442,687
$ 4,160,962
See Independent Auditors Report.
118 520
Special Revenue Funds
Receipts
Reserved
Gifts and
Donations
Subtotals
$ 12,726
$ -
$ 6,890,955
-
-
4,747,054
6,295
614
9,377
-
209,058
209,058
35,000
65,881
54,021
209,672
11,922,325
3,177
9,411
153,416
-
7,713
2,491,221
-
115,741
7,322,647
-
881,634
-
186,067
6,548
712,482
3,177
139,413
11,747,467
50,844
70,259
174,858
125,000)
(171,560)
(25,000)
(171,560)
25,844 70,259
3,298
664,183 1,057,152
7,342,078
$ 690,027 $ 1,127,411
(continued)
See Independent Auditors' Report.
119 521
TOWN OF READING, MASSACHUSETTS
COMBINING STATEMENTOF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30,2020
(continued)
See Independent Auditors' Report.
120 522
Capital Project Funds
Town
School
Capital
Pro i ect Funds
Capital
Pro i ect Funds
Subtotal,
Revenues
Departmental
$ --
Intergovernmental
-
-
-
Investmentincome
-
-
-
Contributions
-
-
-
Other
Total Revenues
-
-
-
Expenditures
Current:
General government
-
-
Public safety
-
-
-
Education
-
1,943,158
1,943,158
Public works
31,261
-
31,261
Health and human services
-
-
-
Culture and recreation
48,000
48,000
Total Expenditures
79,261
1,943,158
2,022,419
Excess (Deficiency) of Revenues Over
(Under) Expenditures
(79,261)
(1,943,158)
(2,022,419)
Other Financing Sources (Uses)
ssuance of bonds
-
5,130,000
5,130,000
Premiums on issuance of bonds
-
693,000
693,000
Transfers out
Total Other Financing Sources (Uses)
5,823,000
5,823,000
Change in Fund Balances
(79,261)
3,879,842
3,800,581
Fund Balances at Beginning of year
561,019
-
561,019
Fund Balances at end ofyear
$ iiiiiiiiii481,758
$ 3,879,842
$ 4,361,600
See Independent Auditors' Report.
120 522
120,000
145,802
8,114
8.114
15,823
120,000
8,114
128.114
161,625
145,802 15,823 161,625
5,271,362 745,639 6,017,001
$ 5,417,164 $ 761,462 $ 6,178,626
See Independent Auditors' Report.
121
153,416
2,491,221
9,265,805
1,032,895
194,181
760.482
13,898,000
(1,685,936)
5,130,000
693,000
(171,560)
5,651,440
3,965,504
13,920,098
$ 17,885.602
523
Permanent Funds
Total
Cemetery
Other
Nonmajor
Trust
Funds
Trust
Funds.
Subtotals
Governmental
Funds.
$
$ - $
-
$ 6,890,955
-
-
-
4,747,054
185,972
23,837
209,809
219,186
79,830
100
79,930
288,988
65.881
265,802
23,937
289,739
12,212,064
120,000
145,802
8,114
8.114
15,823
120,000
8,114
128.114
161,625
145,802 15,823 161,625
5,271,362 745,639 6,017,001
$ 5,417,164 $ 761,462 $ 6,178,626
See Independent Auditors' Report.
121
153,416
2,491,221
9,265,805
1,032,895
194,181
760.482
13,898,000
(1,685,936)
5,130,000
693,000
(171,560)
5,651,440
3,965,504
13,920,098
$ 17,885.602
523
TOWN OF READING, MASSACHIeE98
Norri Proprietary Funds
Combining Statement of Net Postlon
June 30, 2020
See Independent Auditors' Report.
122 524
Business-Tvpe
Activities
landfill
Total
Closure and
Prstclil
Stormwater
Marturement
PEG
Manua
Nonnular
Fnternrise Funds
ASY[S
Current:
Cash and short-term investments
$ 2,127
$ 1,523,349
$ 9,443
$ 1,539,919
User fees, net of allowance for uncollectibles
204,004
204,004
Total Current Assets
7,127
1,727,353
9,443
1,243,923
Noncurrent
Capiul assets being depreciated, net
1,462,049
-
1,467,049
Total Noncurrent Assets
-
1,462,049
-
1,467,049
Deferred Outflows of Resources
Related to pensions
-
4,605
-
4,605
Rel ated to OPEB
4,013
-
4,013
Total Assets and Deferred Outflaws of Resources
7,127
3,203,020
9,443
3,219,590
Embitter
Current'
Warrants payable
-
14,266
-
14,266
Accrued liabilities
-
2,393
-
2,393
Other current liabilities
7127
-
7,127
Total Current Uabilites
2,127
16,659
23,786
Noncurrent
Net pension liability
-
20,200
-
20,200
Net OPEB obligation
-
88,656
-
88,656
Total Noncurrent Liabilities
-
108,856
-
108,856
Deferred Inflows of Resources
Rel alM to pensions
-
36,317
-
36,317
Rel algid to OPEB
6,201
6,201
Total Liabilities and Deferred l nfl ows of Resources
7,127
168,033
-
175,160
Net PosRion
Net investment i n capital assets
-
1,467,049
-
1,467,049
Unrestricted
1,567,938
9,443
1,577,381
Total Net Position
$
$ 3,034,987
$ 9.443
$ 3.044,430
See Independent Auditors' Report.
122 524
TOWN OF READING, MASSACHUSETTS
Nonmajor Proprietary Funds
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
For the Year Ended lune 30, 2020
See Independent Auditors' Report.
123 525
Business -Type
Activities
Landfill
Total
Closure and
Stormwater
Peg
Normal
Pcoulomre
Management
Access
Enterprise Funds
Operating Revenues
Charges for services
$
$ 659,047
$ 576,943
$ 1,235,990
Total Operating Revenues
-
659,047
576,943
1,235,990
Operating Expenses
Personnel expenses
-
173,352
1,000
174,352
Non personnel expenses
-
66,108
591
665,108
Depreciation
83,682
83,682
Total Operating Expenses
323,142
6001000
923,142
Operating income (Ioss
335,905
(23,057)
312,848
Nonpperating Revenues
Capital grants and contributions
32,500
32,500
Investment income
-
1],56]
17,567
Total Nonoperating Revenues
17,567
32,500
50,067
Income Before Transfers
353,472
9,443
362,915
Change in net position
-
353,472
9,413
362,915
Net Position at Beginning of Year
-
2,661,515
2,681,515
Net Position at End of Year
$
$ 3,034,987
$ 9,443
$ 3,4.430
See Independent Auditors' Report.
123 525
TOWN OF READING, MASSACHUSETTS
Nonmajor Proprietary Funds
Combining Statement of Cash Flows
For the Year Ended lune 30, 2020
Cash Flows From Operating Activities
Receipts from customers and users
Payments to vendors and employees
Net Cash Provided By (Used For) Operating Activities
Cash BY. From Capital and Related Financing Activities
Acquisition of capital assets
Capital grants and rontributions
Net Cash Provided by (Used For) Capital and Related Financing Activities
Cash Flows From Investing Activities
Investment income
Net Cash Provided By Investing Activities
Net Change in Cash and Short -Term Investments
Cash and Short Term Investments, Beginning of year
Cash and Short Term Investments, End of Year
Reconciliation of Operating Income (Loss) to Net Cash
Provided By (Used Far) Operating Activities
Operating income (lou)
Adjustments to reconcile operating income(loss)to net
cash provided by (used for) operating activities:
Depreciation
Changes in assets and liabilities:
User fees receNables
Deferred ouUlows of resources:
Related to Farmers
Related to OPEB
Warrants payable
Accrued liabilities
Other liabilities
Net OFFER liability
Net pension liability
Deferred in Bows of resources:
Related to pensions
Related to OPEB
Net Cash Provided By (Used Foci Operating Activities
Business -Type Activities
Landfill
Total
Climate and
Stormwater
PEG
Nonmafor
Prcl s re
Manaeemem
Act-
Enterprise Funds
$ -
$ 654,357
$ 576,943
$ 1,231,300
10,506
321,513
600,000
(982,019)
(10,506)
282,844
(23,0571
249,281
(216,932)
(216,932)
- (216,932)
32,500 32,500
32,500 (184,432)
_ 17,567 17,567
17,567 17,567
(10,506) 83,479 9,443 82,416
17,633 1,439,870 1,457,503
$ 7,127 $ ],523,349 $ 9,443 $ 1,539,919
$ $ 335,905 $ (23,057) 5 312,848
83,682
(4,6901
5,295
BOB
(17,633) f125,341)
- 2,393
7,127 -
(1,991)
(4,863)
(12,058)
3,604
$ (10,506) $ 282,844
See Independent Auditors' Report.
0,682
(4,690)
5,295
908
(142,974)
2,393
7,127
(1,991)
(4,863)
µ2,05B)
3,604
$ (23,057) 249,281
124 526