CANANDAIGUA CITY SCHOOL DISTRICT

BASIC FINANCIAL STATEMENTS

For Year Ended June 30, 2017


TABLE OF CONTENTS

Independent Auditors' Report 1 - 3
Management's Discussion and Analysis (Unaudited) 4 - 13
Basic Financial Statements:
Statement of Net Position 14
Statement of Activities and Changes in Net Position 15
Balance Sheet - Governmental Funds 16
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 17
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to Statement of Activities 18
Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position 19
Notes to the Basic Financial Statements: 20-46
Required Supplementary Information:
Schedule of Funding Progress of Postemployment Benefit Plan (Unaudited) 47
Schedule of the District's Proportionate Share of the Net Pension Liability (Unaudited) 48
Schedule of District Contributions (Unaudited) 49
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget (Non-GAAP Basis) and Actual - General Fund (Unaudited) 50-51
Supplementary Information:
Schedule of Change from Adopted Budget to Final Budget and Real Property Tax Limit - General Fund 52
Schedule of Capital Projects Fund - Project Expenditures and Financing Resources 53
Combined Balance Sheet - Nonmajor Governmental Funds 54
Combined Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 55
Net Investment in Capital Assets 56
Schedule of Expenditures of Federal Awards 57
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 58-59

Raymond F. Wager, CPA, P.C.

Certified Public Accountants

Shareholders: Members of
American Institute of
Raymond F. Wager, CPA
Thomas J.Lauffer, CPA
Thomas C. Zuber, CPA
Certified Public Accountants
and
New York State Society of
Certified Public Accountants

INDEPENDENT AUDITORS' REPORT

To the Board of Education
Canandaigua City School District, New York
Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Canandaigua City School District , New York, as of and for the year ended June 30, 201 7, and the related notes to the financial statements, which collectively comprise the District's basic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements i n accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation , and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement , whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District 's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate i n the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District'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.

1

1020 Lehigh Station Road • Suites 2 & 3 • Henrietta , New York 14467
Tel : (585) 321-5643 • Fax: (585) 321-5644 • E-Mail : theoffice@ raymondfwagercpa.com

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Canandaigua City School District, New York, as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, schedule of funding progress postemployment benefit plan, schedule of the District's proportionate share of the net pension liability, schedule of District contributions, and budgetary comparison information on pages 4-13 and 47-51 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 or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Canandaigua City School District, New York's basic financial statements. The accompanying supplementary information as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The accompanying supplementary information as listed in the table of contents is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary information as listed in the table of contents is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

2

Raymond F. Wager, CPA, P. C.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated September 19,2017 on our consideration of the Canandaigua City School District, New York'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 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 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 Canandaigua City School District, New York's internal control over financial reporting and compliance.

September 19, 2017

3

Raymond F Wager, CPA, P. C.

Canandaigua City School District
Management's Discussion and Analysis

For the Fiscal Year Ended June 30, 2017

The following is a discussion and analysis of the School District's financial performance for the fiscal year ended June 30, 2017. This section is a summary of the School District's financial activities based on currently known facts, decisions, and/or conditions. It is also based on both the government-wide and fund-based financial statements. The results of the current year are discussed in comparison with the prior year, with an emphasis placed on the current year. This section is only an introduction and should be read in conjunction with the School District's financial statements, which immediately follow this section.

Financial Highlights

At the close of the fiscal year, the total assets (what the district owns) exceeded its total liabilities (what the district owes) by $56,464,613 (net position) an increase of $357,018 from the prior year. Of this amount net investment in capital assets increased $6,273,340, restricted funds increased $2,350,395, and unrestricted funds decreased $8,266,717.

General revenues which include Federal and State Aid and Real Property Taxes accounted for $72,277,031 or 94% of all revenues. Program specific revenues in the form of Charges for Services and Operating Grants and Contributions accounted for $4,239,221 or 6% of total revenues.

As of the close of the fiscal year, the School District's governmental funds reported combined fund balances of$16,974,968, a decrease of$7,343,131 in comparison with the prior year.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the School District's basic financial statements. The School District's basic financial statements are comprised of three components: (1) government-wide financial statements, (2) fund financial statements and (3) notes to the financial statements. This report also contains individual fund statements and schedules in addition to the basic financial statements.

Government-Wide Financial Statements

The government-wide financial statements are designed to provide readers with a broad overview of the School District's finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the School District's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the School District is improving or deteriorating.

The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.

4

The governmental activities of the School District include instruction, pupil transportation, cost of food sales, general administrative support, community service, and interest on long-term debt.

The government-wide financial statements can be found on the pages immediately following this section as the first two pages of the basic financial statements.

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The School District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All of the funds of the School District can be divided into two categories: governmental funds and fiduciary 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 School District's near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The School District maintains five individual governmental funds; General Fund, Special Aid Fund, School Lunch Fund, Debt Service Fund and Capital Projects Fund. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the general fund and the capital projects fund which are reported as major funds. Data for the special aid fund, the school lunch fund, and the debt service fund are aggregated into a single column and reported as non-major funds.

The School District adopts and voters approve an annual budget for its General Fund. A budgetary comparison statement has been provided for the General Fund within the basic financial statements to demonstrate compliance with the budget.

The Fiduciary Funds are used to account for assets held by the School District in an agency capacity which accounts for assets held by the School District on behalf of others. Fiduciary funds are not reflected in the government-wide financial statement because the resources of these funds are not available to support the School District's programs.

The financial statements for the governmental and fiduciary funds can be found in the basic financial statement section of this report.

5

Government-Wide Statements Fund Financial Statements
Governmental Funds
Fund Financial Statements
Fiduciary Funds

Scope

Entire District (except fiduciary funds)

The activities of the School District that are not proprietary or fiduciary, such as special education and building maintenance

Instances in which the School District administers resources on behalf of someone else, such as scholarship programs and student activities monies

Required financial statements

Statement of net position Statement of activities

Balance sheet Statement of revenues, expenditures, and changes in fund balance

Statement of fiduciary net position statement of changes in fiduciary net position

Accounting basis and measurement focus

Accrual accounting and economic resources focus

Modified accrual accounting and current financial focus

Accrual accounting and economic resources focus

Type of asset/liability information

All assets and liabilities, both financial and capital, short-term and long-term

Generally, assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets or long-term liabilities included

All assets and liabilities, both short-term and long-term; funds do not currently contain capital assets, although they can.

Type of inflow/outflow information

All revenues and expenses during year, regardless of when cash is received or paid

Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and the related liability is due and payable

All additions and deductions during the year, regardless of when cash is received or paid

Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found following the basic financial statement section of this report.

Government-Wide Statements

The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all the School District's assets and liabilities. All of the current year's revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid.

The two government-wide statements report the District's net position and how they have changed. Net position, the difference between the District's assets and liabilities, is one way to measure the District's financial health or position. Over time, increases or decreases in the District's net position are an indicator of whether its financial position is improving or deteriorating, respectively. Additional non-financial factors such as changes in the District's property tax base and the condition of the school buildings and facilities must also be considered to assess the District's overall health.

6

All of the District's services are reported in the government-wide financial statements as governmental activities. Most of the District's basic services are included here, such as regular and special education, transportation and administration. Property taxes, federal and state aid, and investment earnings finance most of these activities.

Financial Analysis of the School District As a Whole

Net Position

The District's combined net position were larger on June 30, 2017, than they were the year before, increasing to $56,464,613 as shown in table below.


GOVERNMENTAL ACTIVITIES
2017
GOVERNMENTAL ACTIVITIES
2016
Total Percentage Change
ASSETS:
Current and Other Assets $ 31,295,241 $ 46,478,189 -32.67%
Capital Assets 81,890,599 72,960,048 12.24%
Total Assets $ 113,185,840 $ 119,438,237 -5.23%
DEFERRED OUTFLOW OF RESOURCES:
Deferred Outflow of Resources $ 18,739,968 $ 7,942,828 135.94%
LIABILITIES:
Long-Term Debt Obligations $ 61,225,198 $ 60,608,873 1.02%
Other Liabilities 13,275,190 4,394,250 202.10%
Total Liabilities $ 74,500,388 $ 65,003,123 14.61%

DEFERRED INFLOW OF RESOURCES:

Deferred Inflow of Resources $ 960,807 $ 6,270,347 -84.68%
NET POSITION:
Net Investment in Capital Assets $ 47,581,116 $ 41,307,776 15.19%
Restricted For,
Retirement Contribution Reserve 2,976,937 2,472,492 20.40%
Capital Reserves 7,132,107 6,121,719 16.50%
Other Purposes 5,653,688 4,818,126 17.34%
Unrestricted (6,879,235) 1,387,482 -595.81%
Total Net Position $ 56,464,613 $ 56,107,595 0.64%

The District's financial position is the product of many factors.

By far, the largest component of the School District's net position (84%) reflects its investment in capital assets, less any related debt used to acquire those assets that is still outstanding. The School District uses these capital assets to provide services to the students and consequently, these assets are not available for future spending. Although the School District's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

There are three restricted net asset balances Retirement Contribution Reserve, Capital Reserves, and Other Purposes which constitute 28% of total net position. The remaining balance of unrestricted net position was a deficit of ($6,879,235).

7

Changes in Net Position

The District's total revenue increased 4% to $76,516,252. State and federal aid 36% and property taxes 57% accounted for most of the District's revenue. The remaining 7% of the revenue comes from operating grants, charges for services, use of money and property, compensation for loss, and miscellaneous revenues.

The total cost of all the programs and services increased 12% to $76,159,234. The District's expenses are predominately related to education and caring for the students (instruction) 78%. General support which included expenses associated with the operation, maintenance and administration of the District accounted for 12% of the total costs. See table below:


GOVERNMENTAL ACTIVITIES
2017
GOVERNMENTAL ACTIVITIES
2016
Total Percentage Change
Revenues:
Program-
Charges for Services $ 879,527 $ 815,912 7.80%
Operating Grants & Contributions 3,359,694 3,238,150 12.24%
Capital Grants & Contributions
179,583 100.00%
Total Program $ 4,239,221 $ 4,233,645 0.13%
General
Property Taxes $ 43,784,145 $ 43,005,002 1.81%
State and Federal Aid 27,538,305 25,699,039 7.16%
Use of Money and Property 109,629 105,597 3.82%
Compensation for Loss 80,161 50,549 58.58%
Miscellaneous 764,791 447,464 70.92%
Total General $ 72,277,031 $ 69,307,651 4.28%
TOTAL REVENUES $ 76,516,252 $ 73,541,296 4.05%
SPECIAL ITEM:
Revaluation of assets/refunded debt $ 1,535,810 100.00%
EXPENSES:
General Support $ 8,761,566 $ 7,940,361 10.34%
Instruction 59,533,976 52,692,081 12.98%
Pupil Transportation 5,273,832 4,748,688 11.06%
Community Services 73,320 43,273 69.44%
School Lunch 1,464,113 1,441,356 1.58%
Interest on Long-Term Debt 1,052,427 987,954 6.53%
TOTAL EXPENSES $ 76,159,234 $ 67,853,713 12.24%
CHANGE IN NET POSITION $ 357,018 $ 7,223,393 -95.06%

8

Sources of Revenue for 2016-17

pie chart

Investment earnings 0.14%

Compensation for Loss& Miscellaneous 1.11%

Charges for Services 1.15%

Operating Grants & Contributions 4.39%

State and Federal Aid 35.99%

Property Taxes 57.22%

Sources of Revenue for 2015-16

pie chart

Investment earnings 0.14%

Capital Grants & Contributions 0.24%

Compensation for Loss & Miscellaneous 0.68%

Charges for Services 1.11%

Operating Grants & Contributions 4.40%

State and Federal Aid 34.95%

Property Taxes 58.48%

9


Sources of Expenditures for 2016-17

pie chart

Community Services 0.10%

Interest on Long-Term Debt 1.38%

School Lunch 1.92%

Pupil Transportation 6.92%

General Support 11.50%

Instruction 78.18%

Sources of Expenditures for 2015-16

pie chart

Community Services 0.06%

Interest on Long-Term Debt 1.46%

School Lunch 2.12%

Pupil Transportation 7.00%

General Support 11.70%

Instruction 77.66%

10

Financial Analysis of the School District's Funds

The financial performance of the District as a whole is reflected in its governmental funds. As the District completed the year, its governmental funds reported combined fund balances of $16,974,968 which is less than last year's ending fund balance of $24,318,099.

The General Fund is the chief operating fund of the District. At the end of the current year, the total fund balance of the General Fund was $22,920,018. Fund balance for the General Fund increased by $3,166,180 compared with the prior year. See table below:

General Fund Balances: 2017 2016 Variance
Nonspendable $ 2,343,444 $ 1,932,577 $ 410,867
Restricted 15,709,177 13,026,204 2,682,973
Assigned 1,910,341 1,919,800 (9,459)
Unassigned 2,957,056 2,875,257 81,799
Total General Fund Balances $ 22,920,018 $ 19,753,838 $ 3,166,180

The District appropriated funds from the following reserves for the 2017-18 budget:

Retirement Contribution $ 600,000
Unemployment $200,000
Workers' Compensation $300,000
Tax Certiorari $100,000
Total $ 1,200,000

General Fund Budgetary Highlights

The difference between the original budget and the final amended budget was $3,644,467. This change is attributable to $1,650,199 for carry over encumbrances from the prior year, $908,750 for emergency capital project, $731,199 for bus purchases, $300,000 for computer equipment purchases, $16,775 for donations, $16,720 for tax certiorari settlements, $13,680 for BOCES teacher stipends, and 7, 144 for truck repairs from insurance reserve.

The key factors for budget variances in the general fund are listed below along with explanations for each.

Expenditure Items:Budget Variance Original Vs. Amended Explanation for Budget Variance
Programs for Children with Handicapping Conditions($487,375)A prior year encumbrance was adjusted along with less than anticipated students needing BOCES services.
Instructional Media$622,523Funds were used to support Districts 1 : 1 device roll out.
Debt Service-Principal$358,753The District adjusted the budget to pay-off an energy lease contract.
Transfers-Out$1,639,949The Board approved transfers for bus purchases and for an emergency capital project to replace bus lifts.

11

Revenue Items: Budget Variance Amended Vs. Actual Explanation for Budget Variance
Charges for Services $300,846 The District estimates Tuition for non-resident students. Actual data on non-resident students is not available until the school year starts.
Miscellaneous $407,288 The District receives reimbursement for expenses incurred for offering Gemini college credit courses and through a partnership for offering family support services.
State Sources $1,114,726 The District received higher than anticipated state aid, including formula operating aid and tuition aid.
Expenditure Items:
Teaching-Regular School $916,762 The District budgets for a portion of the grants to protect against reduction in grant programs.
Programs for Children with Handicapping Condition $1,221,637 The District did not incur the level of BOCES related service expenditures anticipated.
Pupil Transportation $751,042 The District budgeted for fuel and utilities at a higher rate based on historical costs.
Employee Benefits $972,605 The District continues to see a migration to more cost effective health insurance programs. In addition, the District budgeted a portion of the ERS grant expenditures to protect itself from a reduction in grant programs.

Capital Asset and Debt Administration

Capital Assets

By the end of the 2016-17 fiscal year, the District had invested $81,890,599 in a broad range of capital assets, including land, work in progress, buildings and improvements, and machinery and equipment. The change in capital assets, net of accumulated depreciation, is reflected below:

2017 2016
Land $ 832,449 $ 832,449
Work in Progress 12,378,386 14,441,155
Buildings and Improvements (net) 64,138,105 52,883,678
Machinery and Equipment (net) 4,541,659 4,802,766
Total $ 81,890,599 $ 72,960,048

12

Long-Term Debt

At year end, the District had $61,225,198 in general obligation bonds and other long-term debt outstanding as follows:

Type 2017 2016
Serial Bonds $ 27,305,000 $ 31,260,000
Installment Purchase Debt 380,247
Net Pension Liability 4,331,261 4,578,198
OPEB 28,132,229 22,860,039
Compensated Absences 1,456,708 1,530,389
Total Long-Term Obligations $ 61,225,198 $ 60,608,873

Factors Bearing on the District's Future

  • ² If the Consumer Price Index continues to remain under 2%, it will have a negative impact upon the tax levy cap calculation.
  • ² New and continuing Tax Certiorari cases continue to be received by the District. As a result, the District faces increased legal expenditures and potential reduction on these properties assessment values.
  • ²The annual increase to minimum wage will continue to increase District expenditures. With the tax levy cap limit, this may become unsustainable.
  • ²State Aid funding continues to remain unpredictable from year-to-year making long-term planning and decision making difficult.
  • Contacting the School District's Financial Management

    This financial report is designed to provide the District's citizens, taxpayers, customers, investors, and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the following:

    Canandaigua City School District
    143 North Pearl Street
    Canandaigua, New York 14424

    13

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Statement of Net Position

    June 30, 2017



    Governmental Activities
    ASSETS
    Cash and cash equivalents
    $ 26,904,705
    Accounts Receivable 2,783,132
    Inventories 38,046
    Prepaid Items 1,569,358
    Capital Assets:
    Land 832,449
    Work in Progress 12,378,386
    Other capital assets (net of depreciation) 68,679,764
    TOTAL ASSETS $113,185,840
    DEFERRED OUTFLOWS OF RESOURCES
    Deferred outflows of resources $18,739,968
    LIABILITIES
    Accounts Payable $ 854,419
    Accrued Liabilities 666,471
    Unearned Revenues 51,226
    Due to other governments 680
    Due to teachers' retirement system 3,044,665
    Due to employees' retirement system 373,090
    Bond anticipation notes payable 8,284,639
    Long-Term Obligations:
    Due in one year 4,675,193
    Due in more than one year 56,550,005
    TOTAL LIABILITIES $74,500,388
    DEFERRED INFLOWS OF RESOURCES
    Deferred inflows of resources $ 960,807
    NET POSITION
    Net investment in capital assets $ 47,581,116
    Restricted for:
    Reserve for employee retirement system 2,976,937
    Capital reserves 7, 132, 1 07
    Other purposes 5,653,688
    Unrestricted (6,879,235)
    TOTAL NET POSITION $ 56,464,613

    14

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Statement of Activities and Changes in Net Position
    For Year Ended June 30, 2017
    Functions/Programs
    Primary Government -
    Expenses

    Program Revenues
    Charges for Services

    PROGRAM REVENUES
    Operating Grants and Contributions

    NET (EXPENSE) REVENUE AND CHANGES IN NET POSITION
    Governmental Activities

    General support $ 8,761,566 $ (8,761,566)
    Instruction 59,533,976 $466,846 $2,673,120 (56,394,010)
    Pupil transportation 5,273,832 (5,273,832)
    Community services 73,320 (73,320)
    School lunch 1,464,113 412,681

    686,574 (364,858)
    Interest 1,052,427 (1 ,052,427)
    Total Primary Government $76,159,234 $ 879,527 $ 3,359,694 $ (71,920,013)

    General Revenues:

    Property taxes $ 43,784,145

    State and federal aid $ 27,538,305

    Investment earnings $ 109,629

    Compensation for loss $ 80,161

    Miscellaneous $ 764,791

    Total General Revenues $ 72,277,031

    Changes in Net Position $ 357,018

    Net Position, Beginning of Year $ 56,107,595

    Net Position, End of Year $ 56,464,613

    (See accompanying notes to financial statements)

    15

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Balance Sheet
    Governmental Funds
    June 30, 2017
    Assets General Fund Capital Projects Fund Nonmajor Governmental Funds Total Governmental Funds
    Cash and cash equivalents $ 23,365,961 $ 2,698,616 $ 840,128

    $ 26,904,705
    Receivables 2,328,734 800 453,598 2,783,132
    Inventories 38,046 38,046
    Due from other funds 1,871,515 194,021 31,497 2,097,033
    Prepaid items 1,569,358 1,569,358
    TOTAL ASSETS $ 29,135,568 $ 2,893,437 $ 1,363,269 $ 33,392,274
    Liabilities
    Accounts payable $ 852,647
    $ 1,772 $ 854,419

    Accrued liabilities 548,985
    4,858 553,843
    Notes payable -bond anticipation notes 8,284,639 8,284,639
    Due to other funds 225,452 650,066 1,221,515 2,097,033
    Due to other governments 680 680
    Due to TRS 3,044,665 3,044,665
    Due to ERS 373,090 373,090
    Compensated absences 479,757 479,757
    Unearned revenue 13,000 38,226 51,226
    TOTAL LIABILITIES $ 5,537,596 $ 8,934,705 $ 1,267,051 $ 15,739,352
    Deferred Inflows
    Deferred inflows of resources $ 677,954 $ 677,954
    Fund Balances
    Nonspendable $ 2,343,444 $ 38,046 $ 2,381,490
    Restricted 225,351 53,555 15,988,083
    Assigned 1,910,341 4,617 1,914,958
    Unassigned 2,957,056 ( 6,266,619) (3,309,563)
    TOTAL FUND BALANCE $ 22,920,018 $ {6,041,268} $ 96,218 $ 16,974,968
    TOTAL LIABILITIES AND FUND BALANCES $ 29,135,568 $ 2,893,437 $ 1,363,269

    Amounts reported for governmental activities in the Statement of Net Position are different because:

    Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. $ 81,890,599

    Taxes receivable is deferred for those amounts collected after ninety (90) days on fund basis, while those amounts are recorded as revenue on the full accrual basis.$ 677,954

    Interest is accrued on outstanding bonds in the statement of net position but not in the funds.$ (233,064)

    The following long-term obligations are not due and payable in the current period and therefore are not reported in the governmental funds:
    Serial bonds payable $ (27,305,000)
    OPEB $ (28, 132,229)
    Compensated absences $ (856,515)
    Deferred outflow -pension $ 18,739,968
    Net pension liability $ (4,331,261)
    Deferred inflow -pension $ (960,807)
    Net Position of Governmental Activities $ 56,464,613

    (See accompanying notes to financial statements)

    16

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Statement of Revenues, Expenditures and Changes in Fund Balances

    Governmental Funds

    For Year Ended June 30, 2017

    REVENUES General Fund Capital Projects Fund Non major Governmental Funds Total Governmental Funds
    Real property taxes and tax items $43,789,571 $0 $0 $43,789,571
    Charges for services 466,846 0 0 466,846
    Use of money and property 108,266 0 1,363 109,629
    Sale of property and compensation for loss 80,161 0 0 80,161
    Miscellaneous 549,063 157,723 11,735 718,521
    State sources 27,405,786 0 751,827 28,157,613
    Federal sources 132,519 0 2,607,867 2,740,386
    Sales 0 0 412,681 412,681
    Premium on obligations issued 0 0 46,270 46,270
    TOTAL REVENUES $72,532,212 $157,723 $3,831,743 $76,521,678
    EXPENDITURES
    General support $6,277,296 $0 $0 $6,277,296
    Instruction 36,146,806 0 2,514,283 38,661,089
    Pupil transportation 2,622,725 748,334 99,277 3,470,336
    Community services 73,320 0 0 73,320
    Employee benefits 16,778,834 0 404,296 17,183,130
    Debt service - principal 4,556,463 0 0 4,556,463
    Debt service - interest 1,011,727 0 0 1,011,727
    Cost of sales 0 0 499,287 499,287
    Other expenses 0 0 431,473 431,473
    Capital outlay 0 11,795,688 0 11,795,688
    TOTAL EXPENDITURES $67,467,171 $12,544,022 $3,948,616 $83,959,809
    EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES $5,065,041 $(12,386,299) $(116,873) $(7,438,131)
    OTHER FINANCING SOURCES (USES)
    Transfers - in $380,000 $2,119,949 $158,912 $2,658,861
    Transfers - out (2,278,861) 0 (380,000) (2,658,861)
    BAN's redeemed from appropriations 0 95,000 0 95,000
    TOTAL OTHER FINANCING SOURCES (USES) ${1,898,861} $2,214,949 ${221,088} $95,000
    EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES $3,166,180 $(10,171,350) $(337,961) $(7,343,131)
    FUND BALANCE, BEGINNING OF YEAR 19,753,838 4,130,082 434,179 24,318,099
    FUND BALANCE, END OF YEAR $22,920,018 $(6,041,268) $96,218 $16,974,968

    (See accompanying notes to financial statements)

    17

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in
    Fund Balances of Governmental Funds to Statement of Activities
    For Year Ended June 30, 2017

    NET CHANGE IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS $ (7,343, 131)

    Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The following are the amounts by which capital outlays and additions of assets exceeded depreciation in the current period:

    Capital Outlay $ 11 '795,688

    Additions to Assets, Net $ 948,434

    Depreciation $(3,813,571)

    $ 8,930,551

    Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term obligations in the Statement of Net Position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term obligations in the Statement of Net Position. The following details these items as they effect the governmental activities:

    Debt Repayments $ 4,556,463

    Proceeds from BAN Redemption $(95,000)

    EFC payoff $(126,216)

    $4,335,247

    In the Statement of Activities, interest is accrued on outstanding bonds, whereas in governmental funds, an interest expenditure is reported when due. $(40,700)

    Revenues in the statement of activities that do not provide current financial resources are not reported as revenue in the funds. $(5,426)

    The net OPEB liability does not require the use of current financial resources and, therefore, is not reported as an expenditure in the governmental funds. $(5,272, 189)

    (Increase) decrease in proportionate share of net pension asset/liability reported in the Statement of Activities do not provide for or require the use of current financial resources and therefore are not reported as revenues or expenditures in the governmental funds

    Teachers' Retirement System $67,001
    Employees' Retirement System $(364,399)

    In the Statement of Activities, vacation pay, teachers' retirement incentive and judgments and claims are measured by the amount accrued during the year. In the governmental funds, expenditures for these items are measured by the amount actually paid. The following provides the differences of these items as presented in the governmental activities:

    Compensated Absences $50,064

    CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 357,018

    (See accompanying notes to financial statements)

    18

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Statement of Fiduciary Net Position
    June 30,2017
    ASSETS
    Private Purpose Trust
    Agency Funds
    Cash and cash equivalents $ 78,405 $ 1,044,699
    Investments 296,320
    Receivable from general fund 1,532
    TOTAL ASSETS $ 374,725 $ 1,046,231
    LIABILITIES
    Accounts payable $ 9,252
    Extraclassroom activity balances 144,551
    Other liabilities 892,428
    TOTAL LIABILITIES $ 1,046,231
    NET POSITION
    Restricted for scholarships $ 374,725
    TOTAL NET POSITION $ 374,725

    Statement of Changes in Fiduciary Net Position
    For the Year Ended June 30, 2017

    ADDITIONS
    Private Purpose Trust
    Contributions $ 91,208
    Investment earnings 28,513
    TOTAL ADDITIONS $ 119,721
    DEDUCTIONS
    Other expenses $ 28,334
    TOTAL DEDUCTIONS $ 28,334
    CHANGE IN NET POSITION $ 91,387
    NET POSITION, BEGINNING OF YEAR 283,338
    NET POSITION, END OF YEAR $ 374,725

    (See accompanying notes to financial statements)

    19

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Notes To The Basic Financial Statements
    June 30, 2017

    I. Summary of Significant Accounting Policies

    The financial statements of the Canandaigua City School District, New York (the District) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the District's accounting policies are described below.

    A. Reporting Entity

    The Canandaigua City School District is governed by the laws of New York State. The District is an independent entity governed by an elected Board of Education consisting of nine members. The President of the Board serves as the chief fiscal officer and the Superintendent is the chief executive officer. The Board is responsible for, and controls all activities related to public school education within the District. Board members have authority to make decisions, power to appoint management, and primary accountability for all fiscal matters.

    The reporting entity of the District is based upon criteria set forth by GASB Statement 14, The Financial Reporting Entity, as amended by GASB Statement 39, Component Units. The financial reporting entity consists of the primary government, organizations for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

    The District is not a component unit of another reporting entity. The decision to include a potential component unit in the District's reporting entity is based on several criteria including legal standing, fiscal dependency, and financial accountability. Based on the application of these criteria, the following is a brief review of certain entities included in the District's reporting entity.

    1. Extraclassroom Activity Funds

    The extra classroom activity funds of the District represent funds of the students of the District. The Board of Education exercises general oversight of these funds. The extra classroom activity funds are independent of the District with respect to its financial transactions, and the designation of student management. Separate audited financial statements (cash basis) of the extra classroom activity funds can be found at the District's business office. The District accounts for assets held as an agency for various student organizations in an agency fund.

    20

    (I. ) (Continued)

    B. Joint Venture

    The District is a component of the Ontario, Seneca, Yates, Cayuga and Wayne Counties Board of Cooperative Educational Services (BOCES). The BOCES is a voluntary, cooperative association of school districts in a geographic area that shares planning, services, and programs which provide educational and support activities. There is no authority or process by which a school district can terminate its status as a BOCES component.

    BOCES are organized under § 1950 of the New York State Education Law. A BOCES Board is considered a corporate body. Members of a BOCES Board are nominated and elected by their component member boards in accordance with provisions of§ 1950 of the New York State Education Law. All BOCES property is held by the BOCES Board as a corporation(§ 1950(6)). In addition, BOCES Boards also are considered municipal corporations to permit them to contract with other municipalities on a cooperative basis under §119-n(a) of the New York State General Municipal Law.

    A BOCES' budget is comprised of separate budgets for administrative, program, and capital costs. Each component school district's share of administrative and capital cost is determined by resident public school district enrollment as defined in Education Law, Section 1950(4)(b)(7). In addition, component districts pay tuition or a service fee for programs in which its students participate.

    During the year, the District was billed $5,517,454 for BOCES administrative and program costs.

    The District's share of BOCES aid amounted to $1,248,942.

    Financial statements for the BOCES are available from the BOCES administrative office.

    C. Basis of Presentation

    1. Districtwide Statements

    The Statement of Net Position and the Statement of Activities present financial information about the District's governmental activities. These statements include the financial activities of the overall government in its entirety, except those that are fiduciary. Eliminations have been made to minimize the double counting of internal transactions. Governmental activities generally are financed through taxes, state aid, intergovernmental revenues, and other exchange and non-exchange transactions. Operating grants include operating-specific and discretionary (either operating or capital) grants, while the capital grants column reflects capital specific grants.

    The Statement of Activities presents a comparison between program expenses and revenues for each function of the District's governmental activities. Direct expenses are those that are specifically associated with and are clearly identifiable to a particular function. Indirect expenses, principally employee benefits, are allocated to functional areas in proportion to the payroll expended for those areas. Program revenues include charges paid by the recipients of goods or services offered by the programs, and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

    21

    ( I. ) (Continued)

    2. Fund Statements

    The fund statements provide information about the District's funds, including fiduciary funds. Separate statements for each fund category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds.

    The District reports the following governmental funds:

    a. Major Governmental Funds

    General Fund -This is the District's primary operating fund. It accounts for all financial transactions that are not required to be accounted for in another fund.

    Capital Projects Fund -Used to account for the financial resources used for acquisition, construction, or major repair of capital facilities.

    b. Nonmajor Governmental -The other funds which are not considered major are aggregated and reported as nonmajor governmental funds as follows:

    School Lunch Fund -Used to account for transactions of the District's lunch, breakfast and milk programs.

    Special Aid Fund -This fund accounts for the proceeds of specific revenue sources, such as federal and state grants, that are legally restricted to expenditures for specified purposes. These legal restrictions may be imposed either by governments that provide the funds, or by outside parties.

    Debt Service Fund -This fund accounts for the accumulation of resources and the payment of principal and interest on long-term obligations for governmental activities.

    c. Fiduciary -Fiduciary activities are those in which the District acts as trustee or agent for resources that belong to others. These activities are not included in the District-wide financial statements, because their resources do not belong to the District, and are not available to be used. There are two classes of fiduciary funds:

    Private Purpose Trust Funds -These funds are used to account for trust arrangements in which principal and income benefit annual third party awards and scholarships for students. Established criteria govern the use of the funds and members of the District or representatives of the donors may serve on committees to determine who benefits.

    Agency Funds -These funds are strictly custodial in nature and do not involve the measurement of results of operations. Assets are held by the District as agent for various student groups or extraclassroom activity funds and for payroll or employee withholding.

    22

    ( I. ) (Continued)

    D. Measurement Focus and Basis of Accounting

    Accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.

    The District-Wide and fiduciary fund 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 at the time liabilities are incurred, regardless of when the related cash transaction takes place. Nonexchange transactions, in which the District gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants and donations. On an accrual basis revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

    The fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The District considers all revenues reported in the governmental funds to be available if the revenues are collected within one year after the end of the fiscal year.

    Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources.

    E. Property Taxes

    Real property taxes are levied annually by the Board of Education no later than September 1, and become a lien on August 25, 2016. Taxes are collected during the period October 1 to December 31.

    The City and Counties in which the District is located enforce uncollected real property taxes. An amount representing all uncollected real property taxes must be transmitted by the City to the District within two years from the return of unpaid taxes to the City. Real property taxes receivable expected to be collected within 60 days of year-end, less similar amounts collected during this period in the preceding year are recognized as revenues. Otherwise, deferred revenues offset real property taxes receivable.

    F. Restricted Resources

    When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the District's policy concerning which to apply first varies with the intended use, and with associated legal requirements, many of which are described elsewhere in these notes.

    23

    (I. ) (Continued)

    G. Interfund Transactions

    The operations of the District include transactions between funds. These transactions may be temporary in nature, such as with interfund borrowing. The District typically loans resources between funds for the purpose of providing cash flow. These interfund receivables and payables are expected to be repaid within one year. Permanent transfers of funds include the transfer of expenditures and revenues to provide financing or other services.

    In the District-wide statements, the amounts reported on the Statement of Net Position for interfund receivables and payables represent amounts due between different fund types (governmental activities and fiduciary funds). Eliminations have been made for all interfund receivables and payables between the funds.

    The governmental funds report all interfund transactions as originally recorded. Interfund receivables and payables may be netted on the accompanying governmental funds balance sheet when it is the District's practice to settle these amounts at a net balance based upon the right of legal offset.

    Refer to Note VI for a detailed disclosure by individual fund for interfund receivables, payables, expenditures, and revenues activity.

    H. Estimates

    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are made in a variety of areas, including computation of encumbrances, compensated absences, potential contingent liabilities and useful lives of long-lived assets.

    I. Cash and Cash Equivalents

    The District's cash and cash equivalents consist of cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

    New York State Law governs the District's investment policies. Resources must be deposited in FDIC-insured commercial banks or trust companies located within the State. Permissible investments include obligations of the United States Treasury, United States Agencies, repurchase agreements and obligations of New York State or its localities.

    Collateral is required for demand and time deposits and certificates of deposit not covered by FDIC insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State and its municipalities and Districts.

    Investments are stated at fair value.

    24

    (I. ) (Continued)

    J. Receivables

    Receivables are shown net of an allowance for uncollectible accounts, when applicable.

    No allowance for uncollectible accounts has been provided since it is believed that such allowance would not be material.

    K. Inventory and Prepaid Items

    Inventories of food and/or supplies for school lunch are recorded at cost on a first-in, first-out basis or, in the case of surplus food, at stated value which approximates market. Purchases of inventoriable items in other funds are recorded as expenditures at the time of purchase, and are considered immaterial in amount.

    Prepaid items represent payments made by the District for which benefits extend beyond year end. These payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the District-wide and fund financial statements. These items are reported as assets on the statement of net position or balance sheet using the consumption method. A current asset for the prepaid amounts is recorded at the time of purchase and an expense/expenditure is reported in the year the goods or services are consumed.

    A non-spendable fund balance for these non-liquid assets (inventories and prepaid items) has been recognized to signify that a portion of fund balance is not available for other subsequent expenditures.

    L. Capital Assets

    In the District-wide financial statements, capital assets are accounted for at historical cost or estimated historical cost if actual is unavailable, except for donated capital assets which are recorded at their estimated fair value at the date of donation.

    Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. A capitalization threshold of $5,000 is used to report capital assets. The range of estimated useful lives by type of assets is as follows:


    Class Capitalization Threshold Depreciation Method Estimated Useful Life
    Buildings

    $ 50,000

    SL

    25-50 Years

    Machinery and Equipment

    $ 5,000

    SL

    5-20 Years

    The investment in infrastructure type assets have not been segregated for reporting purposes since all costs associated with capital projects are consolidated and reported as additions to buildings and improvements.

    25

    (I. ) (Continued)

    M. Unearned Revenue

    The District reports unearned revenues on its Statement of Net Position and its Balance Sheet. On the Statement of Net Position, unearned revenue arises when resources are received by the District before it has legal claim to them, as when grant monies are received prior to incurrence of qualifying expenditures. In subsequent periods, when the District has legal claim to resources, the liability for unearned revenue is removed and revenue is recognized.

    N. Deferred Outflows and Inflows of Resources

    In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expenses/expenditure) until then. The government has two items that qualify for reporting in this category. The first item is related to pensions reported in the district-wide Statement of Net Position. This represents the effect of the net change in the District's proportion of the collective net pension asset or liability and difference during the measurement period between the District's contributions and its proportion share of total contributions to the pension systems not included in pension expense. Lastly is the District contributions to the pension systems (TRS and ERS Systems) subsequent to the measurement date.

    In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The District has two items that qualify for reporting in this category. First arises only under a modified accrual basis of accounting and is reported as unavailable revenue-property taxes. The second item is related to pensions reported in the district-wide Statement of Net Position. This represents the effect of the net change in the District's proportion of the collective net pension liability (ERS System) and difference during the measurement periods between the District's contributions and its proportion share of total contributions to the pension systems not included in pension expense.

    0. Vested Employee Benefits

    1. Compensated Absences

    Compensated absences consist of unpaid accumulated annual sick leave, vacation, and sabbatical time.

    Sick leave eligibility and accumulation is specified in negotiated labor contracts, and in individual employment contracts. Upon retirement, resignation or death, employees may contractually receive a payment based on unused accumulated sick leave.

    The District employees are granted vacation in varying amounts, based primarily on length of service and service position. Some earned benefits may be forfeited if not taken within varying time periods.

    26

    (I. ) (Continued)

    Consistent with GASB Statement 16, Accounting for Compensated Absences, the liability has been calculated using the vesting/termination method and an accrual for that liability is included in the District-wide financial statements. The compensated absences liability is calculated based on the pay rates in effect at year end.

    In the funds statements only the amount of matured liabilities is accrued within the General Fund based upon expendable and available financial resources. These amounts are expensed on a pay-as-you-go basis.

    P. Other Benefits

    District employees participate in the New York State Employees' Retirement System and the New York State Teachers' Retirement System.

    In addition to providing pension benefits, the District provides post-employment health coverage to retired employees in accordance with the provision of various employment contracts in effect at the time of retirement. Substantially all of the District's employees may become eligible for these benefits if they reach normal retirement age while working for the District. Health care benefits are provided through plans whose premiums are based on the benefits paid during the year. The cost of providing post-retirement benefits may be shared between the District and the retired employee. The District recognizes the cost of providing health insurance by recording its share of insurance premiums as an expenditure.

    Q. Short-Term Debt

    The District may issue Bond Anticipation Notes (BAN), in anticipation of proceeds from the subsequent sale of bonds. These notes are recorded as current liabilities of the funds that will actually receive the proceeds from the issuance of bonds. State law requires that a BAN issued for capital purposes be converted to long-term financing within five years after the original issue date.

    R. Accrued Liabilities and Long-Term Obligations

    Payables, accrued liabilities, and long-term obligations are reported in the district-wide financial statements. In the governmental funds, payables and accrued liabilities are paid in a timely manner and in full from current financial resources. Claims and judgments, other post employment benefits payable and compensated absences that will be paid from governmental funds are reported as a liability in the funds financial statements only to the extent that they are due for payment in the current year. Bonds and other long-term obligations that will be paid from governmental funds are recognized as a liability in the fund financial statements when due.

    Long-term obligations represent the District's future obligations or future economic outflows. The liabilities are reported as due in one year or due within more than one year in the Statement of Net Position.

    27

    (I.) (Continued)

    S. Equity Classifications

    1. District-Wide Statements

    In the District-wide statements there are three classes of net position:

    a. Net Investment in Capital Assets -consists of net capital assets (cost less accumulated depreciation) reduced by outstanding balances of related debt obligations from the acquisition, constructions or improvements of those assets.

    b. Restricted Net Position -reports net position when constraints placed on the assets or deferred outflows of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or imposed by law through constitutional provisions or enabling legislation.

    On the Statement of Net Position the following balances represent the restricted for other purposes:

    Total Workers' Compensation $ 1,342,372
    Unemployment Costs $ 549,941
    Insurance $ 295,870
    Tax Certiorari $ 1,934,839
    Debt $ 53,555
    Employee Benefits Accrued Liability $ 1,477,111
    Total Net Position -Restricted for Other Purposes $ 5,653,688

    c. Unrestricted Net Position -reports the balance of net position that does not meet the definition of the above two classifications and is deemed to be available for general use by the District.

    2. Fund Statements

    In the fund basis statements there are five classifications of fund balance:

    a. Nonspendable Fund Balance-Includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Nonspendable fund balance includes:

    Total Inventory in school lunch $ 38,046
    Long-term receivable $ 774,086
    Prepaid items $ 1,569,358
    Total Nonspendable Fund Balance $ 2,381,490

    28

    (I. ) (Continued)

    b. Restricted Fund Balances-Includes amounts with constraints placed on the use of resources either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. All encumbrances of funds other than the general fund are classified as restricted fund balance. The District has established the following restricted fund balances:

    Capital Reserve -According to Education Law §3 651, must be used to pay the cost of any object or purpose for which bonds may be issued. The creation of a capital reserve fund requires authorization by a majority of the voters establishing the purpose of the reserve; the ultimate amount, its probable term and the source of the funds. Expenditures may be made from the reserve only for a specific purpose further authorized by the voters. The form for required legal notice for the vote on establishing and funding the reserve and the form of the proposition to be placed on the ballot are set forth in §3651 of the Education Law. The Reserve is accounted for in the General Fund under restricted fund balance. Year end balances are as follows:

    Name of Reserve Maximum Funding Total Funding Provided Total Year to Date Balance
    2014 Vehicle Capital Reserve $ 1,750,000 $ 1,750,000 $ 892,297
    2011 Building Capital Reserve $ 4,500,000 $ 4,500,000 $ 647,649
    2016 Vehicle Capital Reserve $ 6,000,000 $ 532,000 $ 532,600
    2016 Building Capital Reserve $ 10,000,000 $ 4,052,847 $ 4,060,952
    2017 Building and Equipment Capital Reserve $ 5,000,000 $ 998,609 $ 998,609

    Reserve for Debt Service -According to General Municipal Law §6-1, the Reserve for Debt Service must be established for the purpose of retiring the outstanding obligations upon the sale of District property or capital improvement that was financed by obligations that remain outstanding at the time of the sale. Also, earnings on project monies invested together with unused proceeds are reported here.

    Employee Benefit Accrued Liability Reserve -According to General Municipal Law §6-p, must be used for the payment of accrued employee benefits due to an employee upon termination of the employee's service. This reserve may be established by a majority vote of the Board, and is funded by budgetary appropriations and such other reserves and funds that may be legally appropriated.

    29

    (I. ) (Continued)

    Insurance Reserve -According to General Municipal Law §6-n, must be used to pay liability, casualty and other types of losses, except losses incurred for which the following types of insurance may be purchased: life, accident, health, annuities, fidelity and surety, credit, title residual value and mortgage guarantee. In addition, this reserve may not be used for any purpose for which a special reserve may be established pursuant to law (for example, for unemployment compensation insurance). The reserve may be established by Board action, and funded by budgetary appropriation, or such other funds as may be legally appropriated. There is no limit on the amount that may be accumulated in the Insurance Reserve, however, the annual contribution to this reserve may not exceed the greater of $33,000 or 5% of the budget. Settled or compromised claims up to $25,000 may be paid from the reserve without judicial approval.

    Retirement Contribution Reserve -According to General Municipal Law §6-r, must be used financing retirement contributions. The reserve must be accounted for separate and apart from all other funds and a detailed report of the operation and condition of the fund must be provided to the Board.

    Tax Certiorari Reserve -According to General Municipal Law §3651.1-a, must be used to establish a reserve fund for tax certiorari claims and to expend from the fund without voter approval. The monies held in the reserve shall not exceed the amount which might reasonably be deemed necessary to meet anticipated judgments and claims arising out of tax certiorari proceedings. Any resources deposited to the reserve which are not expended for tax certiorari proceeding in the year such monies are deposited must be returned to the General Fund on or before the first day of the fourth fiscal year after deposit of these monies.

    Unemployment Insurance Reserve -According to General Municipal Law §6-m, must be used to pay the cost of reimbursement to the State Unemployment Insurance Fund for payments made to claimants where the employer has elected to use the benefit reimbursement method. The reserve may be established by Board action and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within sixty days after the end of any fiscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding fiscal year's budget. If the District elects to convert to tax (contribution) basis, excess resources in the fund over the sum sufficient to pay pending claims may be transferred to any other reserve fund.

    Workers' Compensation Reserve -According to General Municipal Law §6-j, must be used to pay for compensation benefits and other expenses authorized by Article 2 of the Workers' Compensation Law, and for payment of expenses of administering this self-insurance program. The reserve may be established by Board action, and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within sixty days after the end of any fiscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding fiscal year's budget.

    30

    (I.) (Continued)

    Encumbrances -Encumbrance accounting, under which purchase orders, contracts and other commitments of expenditures are recorded for budgetary control purposes in order to reserve applicable appropriations, is employed as a control in preventing over-expenditure of established appropriations. Open encumbrances are reported as restricted fund balance in all funds other than the General Fund and School Lunch Fund, since they do not constitute expenditures or liabilities and will be honored through budget appropriations in the subsequent year.

    Restricted fund balances include the following:

    General Fund
    Capital $ 7,132,107
    Employee Benefit Accrued Liability $ 1,477,111 Insurance $ 295,870
    Retirement Contribution $ 2,976,937
    Tax Certiorari $ 1,934,839
    Unemployment Insurance $ 549,941
    Workers' Compensation $ 1,342,372
    Capital Fund
    Capital Construction and Acquisition $ 225,351
    Debt Service Fund
    Debt Service $ 53,555
    Total Restricted Funds $ 15,988,083

    The District appropriated and/or budgeted funds from the following reserves for the 201 7-18 budget:

    Retirement Contribution $ 600,000
    Unemployment $ 200,000
    Workers' Compensation $ 300,000
    Tax Certiorari $ 100,000
    Total $ 1,200,000

    c. Assigned Fund Balance -Includes amounts that are constrained by the District's intent to be used for specific purposes, but are neither restricted nor committed. All encumbrances of the General Fund are classified as assigned fund balance. Encumbrances represent purchase commitments made by the District's purchasing agent through their authorization of a purchase order prior to year end. The District assignment is based on the functional level of expenditures.

    Management has determined significant encumbrances for the governmental funds are amounts in excess of $95,000. The following are considered significant encumbrances:

    General Fund Central services $346,260
    Teaching-regular school $274,396
    Instructional media $222,518
    Capital Fund Buses $711,198
    Capital improvements $1,570,757

    31

    (I. ) (Continued)

    Assigned fund balances include the following:

    General Fund-Encumbrances $ 1,155,341
    School Lunch Fund Balance $ 4,617
    Appropriated Fund Balance $ 755,000
    Total Assigned Fund Balance $ 1,914,958

    d. Unassigned Fund Balance-Includes all other general fund amounts that do not meet the definition of the above four classifications and are deemed to be available for general use by the school district and could report a surplus or deficit. In funds other than the general fund, the unassigned classification is used to report a deficit fund balance resulting from overspending for specific purposes for which amounts had been restricted or assigned.

    NYS Real Property Tax Law 1318 limits the amount of unexpended surplus funds a school district can retain to no more than 4% of the District's budget for the general fund for the ensuing fiscal year. Nonspendable and restricted fund balance of the general fund are excluded from the 4% limitation. Amounts appropriated for the subsequent year and encumbrances are also excluded from the 4% limitation.

    3. Order of Use of Fund Balance

    The District's policy is to apply expenditures against nonspendable fund balance, restricted fund balance, committed fund balance, assigned fund balance, and unassigned fund balance at the end of the fiscal year. For all funds, nonspendable fund balances are determined first and then restricted fund balances for specific purposes are determined. Any remaining fund balance amounts for funds other than the general fund are classified as restricted fund balance. In the general fund, the remaining amounts are reported as unassigned. Assignments of fund balance cannot cause a negative unassigned fund balance.

    T. New Accounting Standards

    The District has adopted all current Statements of the Governmental Accounting Standards Board (GASB) that are applicable. At June 30, 2017, the District implemented the following new standards issued by GASB:

    The GASB has issued Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 57, and Amendments to Certain Provisions of GASB Statements 67 and 68, effective for the year ended June 30, 2017.

    The GASB has issued Statement No. 77, Tax Abatement Disclosures, effective for the year ended June 30, 2017.

    The GASB has issued Statement No. 80, Blending Requirements for Certain Component Units-an amendment of GASB Statement No. 14, effective for the year ended June 30, 2017.

    The GASB has issued Statement No. 82, Pension Issues-an amendment of GASB No. 67, No. 68, and No. 73, effective for the year ended June 30,2017.

    32

    (I. ) (Continued)

    U. Future Changes in Accounting Standards

    GASB has issued Statement 75, Accounting and Financial Reporting for Post employment Benefits Other than Pensions, effective for the year ending June 30, 2018. This Statement replaces the requirements of Statements No. 45, Accounting and Financial Reporting by Employers for Post employment Benefits Other Than Pensions, as amended, and Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans, for OPEB. Statement No. 74, Financial reporting for Post employment Benefit Plans Other Than Pension Plans, establishes new accounting and financial reporting requirements for OPEB plans.

    GASB has issued Statement 84, Fiduciary Activities, which will effective for the periods beginning after December 15,2018.

    GASB has issued Statement 85, Omnibus 2017, which will be effective for the periods beginning after June 15, 201 7

    GASB has issued Statement 86, Certain Debt Extinguishment Issues, which will be effective for the periods beginning after June 15, 2017.

    GASB has issued Statement 87, Leases, which will be effective for the periods beginning after December 15,2019.

    The District will evaluate the impact each of these pronouncements may have on its financial statements and will implement them as applicable and when material.

    II. Stewardship, Compliance and Accountability

    By its nature as a local government unit, the District is subject to various federal, state and local laws and contractual regulations. An analysis of the District's compliance with significant laws and regulations and demonstration of its stewardship over District resources follows.

    A. Budgets

    The District administration prepares a proposed budget for approval by the Board of Education for the General Fund.

    The voters of the District approved the proposed appropriation budget.

    Appropriations established by adoption of the budget constitute a limitation on expenditures (and encumbrances) which may be incurred. Appropriations lapse at the end of the fiscal year unless expended or encumbered. Encumbrances will lapse if not expended in the subsequent year. Appropriations authorized for the current year are increased by the planned use of specific reserves, and budget amendments approved by the Board of Education as a result of selected new revenue sources not included in the original budget (when permitted by law). These supplemental appropriations may occur subject to legal restriction, if the Board approves them because of a need which exists which was not determined at the time the budget was adopted. The following supplemental appropriations occurred during the year: $1,650,199 for carry over encumbrances from the prior year, $908,750 for an emergency capital project, $300,000 for the purchase of computer equipment, $16,720 for tax certiorari settlements, $13,680 for BOCES teacher stipends, $7, 144 in appropriations from the insurance reserve, $731,199 for the purchase of buses, and $16,775 for grants, donations, and miscellaneous receipts.

    33

    ( II. ) (Continued)

    Budgets are adopted annually on a basis consistent with GAAP. Appropriations authorized for the year are increased by the amount of encumbrances carried forward from the prior year.

    Budgets are established and used for individual capital projects fund expenditures as approved by a special referendum of the District's voters. The maximum project amount authorized is based primarily upon the cost of the project, plus any requirements for external borrowings, not annual appropriations. These budgets do not lapse and are carried over to subsequent fiscal years until the completion of the projects.

    B. Encumbrances

    Encumbrance accounting is used for budget control and monitoring purposes and is reported as a part of the governmental funds. Under this method, purchase orders, contracts, and other commitments for the expenditure of monies are recorded to reserve applicable appropriations. Outstanding encumbrances as of year end are presented as reservations of fund balance and do not represent expenditures or liabilities. These commitments will be honored in the subsequent period. Related expenditures are recognized at that time, as the liability is incurred or the commitment is paid.

    C. Deficit Fund Balance-Capital Projects Fund

    The Capital Projects Fund had a deficit fund balance of $6,041,268 at June 30, 2017, which is a result of bond anticipation notes which are used as a temporary means of financing capital projects. These proceeds are not recognized as revenue but merely serve to provide cash to meet expenditures. This results in the creation of a fund deficit which will remain until the notes are replaced by permanent financing (i.e., bonds, grants-in-aid, or redemption from current appropriations).

    III. Cash and Cash Equivalents

    Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. While the District does not have a specific policy for custodial credit risk, New York State statutes govern the District's investment policies, as discussed previously in these notes.

    The District's aggregate bank balances (disclosed in the financial statements), included balances not covered by depository insurance at year end, collateralized as follows:

    Uncollateralized $ 0
    Collateralized with securities held by the pledging financial institution $ 14,027,938
    Collateralized within Trust department or agent $ 14,420,583
    Total $ 28,448,521

    Restricted cash represents cash where use is limited by legal requirements. These assets represent amounts required by statute to be reserved for various purposes. Restricted cash as of year end includes $15,988,083 within the governmental funds and $78,405 in the fiduciary funds.

    34

    IV. Investments

    The District adopted the provisions of SFAS No. 157, Fair Value Measurements, which establishes a fair value hierarchy that defines three discrete "levels" of valuation techniques to determine the fair value of investments. Level 1 inputs consist of quoted (unadjusted) prices in active markets for identical assets at the measurement date, Level 2 inputs are inputs other than quoted prices that are observable either directly or indirectly, and Level 3 inputs are unobservable inputs and are to be used only if observable inputs are not available.

    The District values investments in securities and securities sold short that are freely tradable and listed on a national securities exchange or reported on the NASDAQ national market at their last sales price as of the last business day of the year.

    A. Investments -Fair Value Measurement

    The District's investments are recorded at fair value and have been categorized based upon a fair value hierarchy in accordance with SFAS 157.

    The following table presents information about the District's investments measured at fair value as of June 30, 2017:

    2017
    Cost Quoted Prices in Active Market
    for Identical Assets (Level 1)
    Common Stock $ 272,060 $ 296,320

    The following schedule summarizes the investment return and its classification for the year:

    Type 2017
    Unrealized Gains/(Losses) $ 27,773

    V. Receivables

    Receivables at June 30, 2017 for individual major funds and nonmajor funds, including the

    applicable allowances for uncollectible accounts, are as follows:


    Governmental Activities
    Description General Fund Capital Projects Fund Non-Major Funds Total
    Accounts Receivable $ 263,052 $ 800 $ 2,129 $ 265,981
    Taxes Receivable 867,115 867,115
    Due From State and Federal 631,610 451,469 1,083,079
    Due From Other Governments 566,957 566,957
    Total $ 2,328,734 $ 800 $ 453,598 $ 2,783,132

    District management has deemed the amounts to be fully collectible.

    35

    VI. Interfund Receivables, Payables, Revenues and Expenditures

    Interfund Receivables, Payables, Revenues and Expenditures at June 30, 2017 were as follows:


    Interfund
    Receivables Payables Revenues Expenditures
    General Fund $ 1,871,515 $ 225,452 $ 380,000 $ 2,278,861
    Special Aid Fund 31,350 1,095,078 113,698
    School Lunch Fund 81 126,437 45,214
    Debt Service Fund 66
    380,000
    Capital Fund 194,021 650,066 2,119,949
    Total government activities $ 2,097,033 $ 2,097,033 $ 2,658,861 $ 2,658,861

    Interfund receivables and payables between governmental activities are eliminated on the Statement of Net Position. The District typically loans resources between funds for the purpose of mitigating the effects of transient cash flow issues. All interfund payables are not necessarily expected to be repaid within one year.

    Transfers are used to finance certain special aid programs, support capital project expenditures, school lunch programs and debt service expenditures.

    VII. Capital Assets

    Capital asset balances and activity were as follows:

    Type Balance 7/1/2016 Additions Deletions Balance 6/30/2017
    Governmental Activities:
    Capital assets that are not depreciated-
    Land $ 832,449 $ 832,449
    Work in progress 14,441,155 11,795,688 {13,858,457} 12,378,386
    Total Nondepreciable $ 15,273,604 $ 11,795,688 $ {13,858,457} $ 13,210,835
    Capital assets that are depreciated-
    Buildings and improvements $ 91,810,023 $ 13,820,728 $ 105,630,751
    Machinery and equipment 16,521,749 1,035,568 {854,883} 16,702,434
    Total Depreciable $ 108,331,772 $ 14,856,296 $ {854,883} $ 122,333,185
    Less accumulated depreciation-
    Buildings and improvements $ 38,926,345 $ 2,566,301 $ 41,492,646
    Machinery and equipment 11,718,983 1,247,270 {805,478} 12,160,775
    Total accumulated depreciation $ 50,645,328 $ 3,813,571 $ {805,478} $ 53,653,421
    Total capital assets depreciated, net of accumulated depreciation $ 57,686,444 $ 11,042,725 $ (49,405) $ 68,679,764
    Total Capital Assets $ 72,960,048 $ 22,838,413 $ (13,907,862 $ 81,890,599

    Depreciation expense for the period was charged to functions/programs as follows:

    Governmental Activities:

    General government support $ 518,200
    Instruction $ 1,997,493
    Pupil transportation $ 1,068,961
    School lunch $ 228,917
    Total Depreciation Expense $ 3,813,571

    36

    XI. Short-Term Debt

    Transactions in short-term debt for the year are summarized below:

    Type Purpose Maturity Interest Rate Balance 7/1/2016 Issued Redeemed Balance 6/30/2017
    BAN Construction 2017 1.75% $ 7,000,000 $ (7,000,000
    BAN Construction 2018 1.39% $ 8,284,639 $ 8,284,639
    Total Short-Term Debt $ 15,284,639 $ {7,000,000} $ 8,284,639

    A summary of the short-term interest expense for the year is as follows:

    Interest paid $ 99,021
    Plus: interest accrued in the current year $ 320
    Total interest expense $ 99,341

    VIII. Long-Term Debt Obligations

    Long-term liability balances and activity for the year are summarized below:


    Governmental Activities: Balance 7/1/2016 Additions Deletions Balance 6/30/2017 Due Within One Year
    Bonds and Notes Payable
    Serial Bonds $ 31,260,000 $ 3,955,000 $ 27,305,000 $ 4,075,000
    Installment Purchase Debt 380,247 380,247
    Total Bonds and Notes Payable $ 31,640,247 $ 4,335,247 $ 27,305,000 $ 4,075,000
    Other Liabilities
    Net Pension Liability $ 4,578,198 $ 246,937 $ 4,331,261
    OPEB 22,860,039 $ 5,272,190 28,132,229
    Compensated Absences 1,530,389 73,681 1,456,708
    Total Other Liabilities $ 28,968,626 $ 5,272,190 $ 320,618 $ 33,920,198 $ 600,193
    Total Long-Term Obligations $ 60,608,873 $ 5,272,190 $ 4,655,865 $ 61,225,198 $ 4,675,193

    The General Fund has typically been used to liquidate long-term liabilities such as compensated absences.

    Existing serial and statutory bond obligations:


    Purpose

    Original Issue Amount

    Issue Date

    Final Maturity

    Interest Rate

    Amount Outstanding 6/30/2017

    Serial Bonds


    Construction

    $ 8,996,300

    2008

    2022

    3.75%-4.00%

    $ 3,800,000

    Construction

    $ 8,994,176

    2008

    2037

    4.3 75%-4.500%

    235,000

    Construction

    $ 6,177,677

    2008

    2022

    3.375%-3.625%

    2,560,000

    Construction

    $ 6,909,829

    2011

    2026

    1.50%-3.00%

    3,970,000

    Construction

    $ 8,855,000

    2012

    2019

    1.00%-4.00%

    2,675,000

    Construction

    $ 8,995,000

    2012

    2027

    2.00%-2.50%

    6,245,000

    Construction

    $ 8,250,000

    2016

    2037

    2.00%-3.25%

    7,820,000

    Total Serial Bonds

    $ 27,305,000

    37

    (VIII.) (Continued)

    The following is a summary of debt service requirements:

    Serial Bonds
    Year Principal Interest
    2018 $ 4,075,000 $ 762,480
    2019 3,940,000 645,019
    2020 2,675,000 542,232
    2021 2,755,000 462,113
    2022 2,840,000 378,238
    2023-27 6,560,000 1,173,220
    2028-32 2,050,000 562,576
    2033-37 2,410,000 200,691
    Total $ 27,305,000 $ 4,726,569

    In prior years, the District defeased certain general obligations and other bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the District's financial statements. $11,720,000 of bonds outstanding are considered defeased.

    Interest on long-term debt for June 30, 2017 was composed of:

    Interest paid $ 912,706
    Less: interest accrued in the prior year $ (192,364)
    Plus: interest accrued in the current year $ 232,744
    Total interest expense $ 953,086

    IX. Pension Plans

    A. General Information

    The District participates in the New York State Teacher's Retirement System (TRS) and the New York State and Local Employee's Retirement System (ERS). These are cost-sharing multiple employer public employee retirement systems. The Systems offer a wide range of plans and benefits, which are related to years of service and final average salary, vesting of retirement benefits, death, and disability.

    B. Provisions and Administration

    A 10 member Board of Trustees of the New York State Teachers' Retirement Board administers TRS. TRS provides benefits to plan members and beneficiaries as authorized by the Education Law and the New York State Retirement and Social Security Law (NYSRSSL). Membership is mandatory and automatic for all full-time teachers, teaching assistants, guidance counselors and administrators employed in New York Public Schools and BOCES who elected to participate in TRS. Once a public employer elects to participate in the system, the election is irrevocable. The New York State Constitution provides that pension membership is a contractual relationship and plan benefits cannot be diminished or impaired. Benefits can be changed for future members only by enactment of a State statute. TRS issues a publicly available financial report that contains financial statements and required supplementary information. The report may be obtained by writing to NYRS, 10 Corporate Woods Drive, Albany, New York 12211-2395 or by referring to the TRS Comprehensive Annual Financial report, which can be found on the System's website at www.nystrs.org.

    38

    (IX. ) (Continued)

    ERS provides retirement benefits as well as death and disability benefits. The net position of the System is held in the New York State Common Retirement Fund (the Fund), which was established to hold all net assets and record changes in plan net position allocated to the System. The Comptroller of the State of New York serves as the trustee of the Fund and is the administrative head of the System. NYSRSSL govern obligations of employers and employees to contribute, and benefits to employees. Once a public employer elects to participate in the System, the election is irrevocable. The New York State Constitution provides that pension membership is a contractual relationship and plan benefits cannot be diminished or impaired. Benefits can be changed for future members only by enactment of a State statute. The District also participates in the Public Employees' Group Life Insurance Plan (GLIP), which provides death benefits in the form of life insurance. The System is included in the State's financial report as a pension trust fund. ERS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to NYSERS, Office of the State Comptroller, 110 State Street, Albany, New York 12244 or by referring to the ERS Comprehensive Annual Report, which can be found at www.osc.state.ny.us/retire/publications/index.php.

    C. Funding Policies

    The Systems are noncontributory except for employees who joined after July 27, 1976, who contribute 3 percent of their salary for the first ten years of membership, and employees who joined on or after January 1, 2010 who generally contribute 3.0 to 3.5 percent of their salary for their entire length of service. In addition, employee contribution rates under ERS tier VI vary based on a sliding salary scale. For TRS, contribution rates are established annually by the New York State Teachers' Retirement Board pursuant to Article 11 of the Education Law. For ERS, the Comptroller annually certifies the actuarially determined rates expressly used in computing the employers' contributions for the ERS' fiscal year ended March 31. The District paid 100% of the required contributions as billed by the TRS and ERS for the current year and each of the two preceding years.

    The District's share of the required contributions, based on covered payroll paid for the District's year ended June 30, 2017:

    Contributions 2017
    ERS - $ 1,297,713
    TRS - $ 3,044,665

    D. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources related to Pensions

    At June 3 0, 20 17, the District reported the following asset/(liability) for its proportionate share of the net pension asset /(liability) for each of the Systems. The net pension asset/(liability) was measured as of March 31, 2017 for ERS and June 30, 2016 for TRS. The total pension asset/(liability) used to calculate the net pension asset/(liability) was determined by an actuarial valuation. The District's proportion of the net pension asset/(liability) was based on a projection of the District's long-term share of contributions to the Systems relative to the projected contributions of all participating members, actuarially determined. This information was provided by the TRS and ERS Systems in reports provided to the District.

    39

    (IX. ) (Continued)

    ERS TRS
    Measurement date March 31, 2017 June 30, 2016
    Net pension assets/(liability) $ 2,651,191 $ 1,680,070
    District's portion of the Plan's total net pension asset/(liability) 0.02822% 0.15686%

    For the year ended June 30,2017, the District recognized pension expenses of$1,659,558 for ERS and $2,811,192 for TRS. At June 30, 2017 the District's reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

    DEFERRED OF OUTFLOWS RESOURCES
    ERS
    DEFERRED OF OUTFLOWS RESOURCES
    TRS
    DEFERRED OF INFLOWS RESOURCES
    ERS
    DEFERRED OF INFLOWS RESOURCES
    TRS
    Differences between expended and actual experience $ 66,436 $ 402,598 $ 545,781
    Changes of assumptions 905,744 $ 9,570,746
    Net difference between projected and actual earnings on pension plan investments 529,550 3,777,680
    Changes in proportion and differences between the District's contributions and proportionate share of contributions 412,481 202,250 10,047 2,381
    Subtotal $ 1,914,211 $ 13,550,676 $ 412,645 $ 548,162
    District's contributions subsequent to the measurement date 373,090 2,901,991
    Grand Total $ 2,287,301 $ 16,452,667 $ 412,645 $ 548,162

    District contributions subsequent to the measurement date which will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts remained as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

    Year ERS TRS
    2017 $ 1,200,721
    2018 $ 642,712 1,200,721
    2019 642,712 4,134,571
    2020 537,975 3,221,765
    2021 (321,833) 1,495,025
    Thereafter 0 1,749,711
    Total $ 1,501,566 $ 13,002,514

    E. Actuarial Assumptions

    The total pension liability as of the measurement date was determined by using an actuarial valuation as noted in the table below, with update procedures used to roll forward the total pension liability to the measurement date. The actuarial valuations used the following actuarial assumptions:

    40

    (IX. ) (Continued)

    ERS TRS
    Measurement date March 31, 2017 June 30, 2016
    Actuarial valuation date April 1, 2016 June 30, 2015
    Interest rate 7.00% 7.50%
    Salary scale 3.80% 4.01%-10.91%
    Decrement tables April 1, 2010 - March 31, 2015
    System's Experience
    July 1, 2009 - June 30, 2014
    System's Experience
    Inflation rate 2.50% 2.50%
    COLA's 1.30% 1.50%

    For ERS, annuitant mortality rates are based on Society of Actuaries Scale MP-2014 System's experience with adjustments for mortality improvements based on MP-2017. For TRS, annuitant mortality rates are based on plan member experience adjustments for mortality improvements based on Society of Actuaries Scale AA.

    The long term 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 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 each the target asset allocation percentage and by adding expected inflation. Best estimates of the arithmetic real rates of return for each major asset class included in the target asset allocation are summarized as follows:

    Long Term Expected Rate of Return
    ERS TRS
    Measurement Date March 31, 2017 June 30, 2016
    Asset Type-


    Cash -0.25%
    Inflation-index bonds 1.50%

    Domestic equity 4.55% 6.10%
    International equity 6.35% 7.30%
    Real estate 5.80% 5.40%
    Alternative investments 0.00% 9.20%
    Domestic fixed income securities 0.00% 1.00%
    Global fixed income securities 0.00% 0.80%
    Bonds/mortgages 1.31% 3.10%
    Short-term 0.00% 0.01%
    Private equity 7.75%
    Absolute return strategies 4.00%
    Opportunistic portfolios 5.89%
    Real assets 5.54%

    41

    ( IX. ) (Continued)

    F. V Discount Rate

    The discount rate used to calculate the total pension liability was 7% for ERS and 7.5% for TRS. The projection of cash flows used to determine the discount rate assumes that contributions from plan members will be made at the current contribution rates and that contributions from employers will be made at statutorily required rates, actuarially. Based upon the assumptions, the Systems' fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

    G. V Sensitivity of the Proportionate Share of the Net Pension Liability to the Discount Rate Assumption

    The following presents the District's proportionate share of the net pension liability calculated using the discount rate of 7% for ERS and 7.5% for TRS, as well as what the District's proportionate share of the net pension asset/(liability) would be if it were calculated using a discount rate that is 1-percentage point lower (6% for ERS and 6.5% for TRS) or 1 percentage point higher (8% for ERS and 8.5% for TRS) than the current rate :

    ERS
    Employer's proportionate share of the net pension asset (liability)
    1% Decrease {6%) - $ (8,467,378)
    Current Assumption {7%) - $ (2,651,191)
    1 % Increase {8%) - $ 2,266,385

    TRS
    Employer's proportionate share of the net pension asset (liability)
    1 % Decrease {6.5%) - $ (21,920,326)
    Current Assumption {7.5%) - $ (1,680,070)
    1 % Increase {8.5%) - $ 15,296,396

    H. V Pension Plan Fiduciary Net Position

    The components of the current year net pension asset/(liability) of the employers as of the respective valuation dates, were as follows:

    In Thousands
    ERS TRS
    Measurement date March 31, 2017 June 30, 2016
    Employers' total pension liability $ 177,400,586 $ 108,577,184
    Plan net position 168,004,363 107,506,142
    Employers' net pension asset/(liability $ (9,396,223) $ (1,071,042)
    Ration of plan net position to the employers' total pension asset/(liability) 94.70% 99.01%

    42

    (IX. ) (Continued)

    I. Payables to the Pension Plan

    For ERS, employer contributions are paid annually based on the System's fiscal year which ends on March 31 51 • Accrued retirement contributions as of June 30, 2017 represent the projected employer contribution for the period of April 1, 2017 through June 30, 2017 based on paid ERS wages multiplied by the employer's contribution rate, by tier. Accrued retirement contributions as of June 30, 2017 amounted to $373,090.

    For TRS, employer and employee contributions for the fiscal year ended June 30, 2017 are paid to the System in September, October and November 2017 through a state aid intercept. Accrued retirement contributions as of June 30,2017 represent employee and employer contributions for the fiscal year ended June 30, 2017 based on paid TRS wages multiplied by the employer's contribution rate, by tier and employee contributions for the fiscal year as reported to the TRS System. Accrued retirement contributions as of June 30, 2017 amounted to $3,044,665.

    X. Postemployment Benefits

    The District provides postemployment (health insurance, life insurance, etc.) coverage to retired employees in accordance with the provisions of various employment contracts. The benefit levels, employee contributions and employer contributions are governed by the District's contractual agreements.

    The District implemented GASB Statement #45, Accounting and Financial Reporting by employers for Postemployment Benefits Other than Pensions, in the school year ended June 30, 2009. This required the District to calculate and record a net other postemployment benefit obligation at year end. The net other postemployment benefit obligation is basically the cumulative difference between the actually required contribution and the actual contributions made.

    The District recognizes the cost of providing health insurance annually as expenditures in the general fund of the funds financial statements as payments are made. For the year ended June 30, 2017 the District recognized $1 ,843,907 for its share of insurance premiums for currently enrolled retirees.

    The District has obtained an actuarial valuation report as of June 30, 2017 which indicates that the total liability for other postemployment benefits is $86,033,475.

    Annual OPEB Cost and Net OPEB Obligation -The District's annual other postemployment (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), and amount actuarially determined in accordance with the parameters of GASB Statement #45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the District's annual OPEB cost for the year, the amount actually contributed to the Plan, and changes in the District's net OPEB obligation by governmental activities:

    Annual required contribution - $ 7,473,110
    Interest on net OPEB obligation - $ 914,402
    Adjustment to annual required contribution - $ {1,271,4152
    Annual OPEB cost (expense) - $ 7,116,097
    Contributions made - $ 1,843,907
    Increase in net OPEB obligation - $ 5,272,190
    Net OPEB obligation-beginning of year - $ 22,860,039
    Net OPEB obligation-end of year - $ 28,132,229

    43

    (X. ) (Continued)

    The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the fiscal year end 2017 and the two preceding years were as follows:

    Fiscal Year Ended Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation
    6/30/2015 $ 6,884,320 25.64% $ 17,574,744
    6/30/2016 $ 7,159,751 26.18% $ 22,860,039
    6/30/2017 $ 7,116,097 25.91% $ 28,132,229

    Funded Status and Funding Progress -As of June 30, 2017, the most recent actuarial valuation date, the plan was unfunded. The actuarial accrued liability for benefits was $86,033,475, and the actuarial value of assets was $0 resulting in an unfunded actuarial accrued liability of $86,033,475. The covered payroll (annual payroll of active employees covered by the plan) was $35,307,866, and the ratio of the UAAL to the covered payroll was 243.67%.

    Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of the occurrence of events far into the future. Examples include assumptions about future employment, mortality and the healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplemental information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

    Actuarial Methods and Assumptions -Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and includes the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

    In the June 30, 2017 actuarial valuation, the Entry Age Normal Method was used. The discount rate used was 3% with an estimated inflationary rate of2.6%. Because the plan is unfunded, reference to the general assets was considered in the selections of the 3% rate. The annual healthcare cost trend rate is 7.5% initially, reduced by decrements to an ultimate rate of 4.5% in 2022. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at June 30, 20 17, was twenty-one years.

    XI. Risk Management

    A. General Information

    The District is exposed to various risks of loss related to injuries to employees, theft, damages, natural disasters, etc. These risks are covered by commercial insurance purchased from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage for the past two years.

    44

    (XI. ) (Continued)

    B. Workers' Compensation

    The District incurs costs related to the Wayne-Finger Lakes Area School Workers' Compensation Plan (Plan) sponsored by the Board of Cooperative Educational Services, of Ontario, Seneca, Yates, Cayuga and Wayne Counties and its component districts. The Plan's objectives are to furnish workers' compensation benefits to participating districts at a significant cost savings. Membership in the Plan may be offered to any component district of the Ontario, Seneca, Yates, Cayuga and Wayne Counties BOCES with the approval of the Board of Directors. Voluntary withdrawal from the Plan may be effective only once annually on the last day of the Plan year as may be established by the Board of Directors. Notice of the Intention to Withdraw must be given in writing to the Chairman of the Board of Directors and the Treasurer not less than one year prior to the end of the Plan year.

    Plan membership is currently comprised of Wayne-Finger Lakes BOCES and twenty-two districts. If a surplus of participants' assessments exists after the close of a Plan year, the Board may retain from such surplus an amount sufficient to establish and maintain a claim contingency fund. Surplus funds in excess of the amount transferred to or included in such contingency fund shall be applied in reduction of the next annual assessment or to the billing of Plan participants. All monies paid to the Treasurer by participants shall be commingled and administered as a common fund. No refunds shall be made to a participant and no assessments shall be charged to a participant other than the annual assessment. However, if it appears to the Board of Directors that the liabilities of the Plan will exceed its cash assets, after taking into account any "excess insurance", the Board shall determine the amount needed to meet such deficiency and shall assess such amount against all participants prorate per enrollee.

    The Plan purchases, on an annual basis, stop-loss insurance to limit its exposure for claims paid.

    The Plan establishes a liability for both reported and unreported insured events, which includes estimates of both future payments of losses and related claim adjustment expenses. However, because actual claims costs depend on complex factors, the process used in computing claims liabilities does not necessarily result in an exact amount. Such claims are based on the ultimate cost of claims (including future claim adjustment expenses) that have been reported but not settled, and claims that have been incurred but not reported. Adjustments to claims liabilities are charged or credited to expenses in the periods in which they are made. During the year ended June 30, 2017, the Canandaigua City School District, New York incurred premiums or contribution expenditures totaling $502,482. The District has established a workers' compensation reserve totaling $1,342,372 as of June 30, 2017.

    The Plan is audited on an annual basis and is available at the BOCES administrative offices. The most recent audit available for the year ended June 30, 2016, revealed that the Plan was underfunded.

    C. Unemployment

    District employees are entitled to coverage under the New York State Unemployment Insurance Law. The District has elected to discharge its liability to the New York State Unemployment Insurance Fund (the Fund) by the benefit reimbursement method, a dollar-for-dollar reimbursement to the fund for benefits paid from the fund to former employees. The District has established a self insurance fund to pay these claims. The claim and judgment expenditures of this program for the 2016-17 fiscal year totaled $12,511. The balance of the fund at June 30, 2017 was $549,941 and is recorded in the General Fund as an Unemployment Insurance Reserve. In addition, as of June 30, 2017, no loss contingencies existed or were considered probable or estimable for incurred but not reported claims payable.

    45

    XII. Commitments and Contingencies

    A. Litigation

    There are tax certiorari claims requesting reduction of assessments pending. The outcome of the tax certiorari claims are undeterminable at this time.

    B. Grants

    The District has received grants, which are subject to audit by agencies of the State and Federal Governments. Such audits may result in disallowances and a request for a return of funds. Based on prior years' experience, the District's administration believes disallowances, if any, will be immaterial.

    C. Voluntary Employee Benefit Association CVEBA)

    The District has established a VEBA program for eligible employees. The purpose of the plan is to provide employees with certain health care and medical expense benefits in addition to the basic health insurance coverage. The contribution for the 2016-17 fiscal year was $18,000. The account is recorded in the Trust and Agency Fund and the balance as of June 30, 2017 was $832,698.

    XIII. Lease Commitments

    The District leases certain classroom space under the terms of various non-cancelable leases. The terms of the agreement call for fifty-eight (58) months and shall commence on November 1, 2015. The lease was terminated on 811117. Rental expense for the space was $66,540.

    XIV. Tax Abatement

    The County of Ontario IDA, and the District enter into various property tax abatement programs for the purpose of Economic Development. As a result the district property tax revenue was reduced $703,001. The District received payment in lieu of tax (PILOT) payment totaling $350,810 to help offset the property tax reduction, which resulted in a net tax abatement totaling $3 52,191.

    46

    Required Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Schedule of Funding Progress
    of Post Employment Benefit Plan
    (Unaudited)
    For Year Ended June 30, 2017
    Actuarial Valuation Date June 30, (1)
    Actuarial Value of Assets
    (2)
    Actuarial Accrued Liability {AAL}
    (3)
    Funded Ratio
    {1}/{2}
    (4)
    Unfunded Actuarial Accrued Liability (UAAL)
    {2} - {1}
    (5)
    Active Members Covered Payroll
    (6)
    UAAL As a Percentage of Covered Payroll
    {4} / {5}
    2009 $ - $ 26,305,547 0.00% $ 26,305,547 $ 33,184,066 79.27%
    2010 $ - 27,876,760 0.00% 27,876,760 33,652,959 82.84%
    2011 $ - 30,446,013 0.00% 30,446,013 33,305,264 91.42%
    2012 $ - 31,790,585 0.00% 31,790,585 33,700,105 94.33%
    2013 $ - 37,506,345 0.00% 37,506,345 32,854,792 114.16%
    2014 $ - 39,287,847 0.00% 39,287,847 32,854,792 119.58%
    2015 $ - 71,209,937 0.00% 71,209,937 34,383,578 207.10%
    2016 $ - 75,501,418 0.00% 75,501,418 34,376,255 219.63%
    2017 $ - 86,033,475 0.00% 86,033,475 35,307,866 243.67%

    (See Independent Auditors' Report)

    47

    Required Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Schedule of the District's Proportionate Share of the Net Pension Liability
    (Unaudited)
    For Year Ended June 30, 2017
    NYSERS Pension Plan
    2017 2016 2015
    Proportion of the net pension liability (assets) 0.028216% 0.0285241% 0.0277771%
    Proportionate share of the net pension liability (assets) $ 2,651,191 $ 4,578,198 $ 938,379
    Covered-employee payroll $ 8,558,424 $ 8,225,297 $ 8,259,702
    Proportionate share of the net pension liability (assets) as a percentage of its covered-employee payroll 30.978% 55.660% 11.361%
    Plan fiduciary net position as a percentage of the total pension liability 94.70% 90.70% 97.90%

    NYSTRS Pension Plan
    2017 2016 2015
    Proportion of the net pension liability (assets) 0.156863% 0.1603090% 0.1602940%
    Proportionate share of the net pension liability (assets) $ 1,680,070 $ (16,651,012) $ (17,855,784)
    Covered-employee payroll $ 25,171,843 $ 24,389,884 $ 24,669,311
    Proportionate share of the net pension liability (assets) as a percentage of its covered-employee payroll 6.674% -68.270% -72.381%
    Plan fiduciary net position as a percentage of the total pension liability 99.01% 110.46% 111.48%

    (See Independent Auditors' Report)

    48

    Required Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Schedule of District Contributions
    (Unaudited)
    For Year Ended June 30, 2017

    NYSERS Pension Plan
    2017 2016 2015
    Contractually required contributions $ 1,297,713 $ 1,477,436 $ 1,637,692
    Contributions in relation to the contractually required contribution (1,297,713) (1,477,436) (1,637,692)
    Contribution deficiency (excess) 0 0 0
    Covered-employee payroll $ 8,558,424 $ 8,225,297 $ 8,259,702
    Contributions as a percentage of covered-employee payroll 15.16% 17.96% 19.83%

    NYSTRS Pension Plan
    2017 2016 2015
    Contractually required contributions $ 3,044,665 $ 3,390,805 $ 4,473,059
    Contributions in relation to the contractually required contribution (3,044,665) (3,390,805) ( 4,4 73,059)
    Contribution deficiency (excess) 0 0 0
    Covered-employee payroll $ 25,171,843 $ 24,389,884 $ 24,669,311
    Contributions as a percentage of covered-employee payroll 12.10% 13.90% 18.13%

    (See Independent Auditors' Report)

    49

    Required Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Schedule of Revenues, Expenditures and Changes in Fund Balance-
    Budget (Non-GAAP Basis) and Actual-General Fund
    (Unaudited)
    For Year Ended June 30, 2017
    Original Budget Amended Budget Current Year's Revenues Over (Under) Revised Budget
    REVENUES
    Local Sources -
    Real property taxes $ 43,023,522 $ 39,193,595 $ 39,181,965 $(11,630)
    Real property tax items 538,352 4,589,538 4,607,606 18,068
    Charges for services 166,000 166,000 466,846 300,846
    Use of money and property 45,000 45,000 108,266 63,266
    Sale of property and compensation for loss 51,500 51,500 80,161 28,661
    Miscellaneous 125,000 141,775 549,063 407,288
    State Sources -
    Basic formula 24,322,603 19,927,899 20,745,516 817,617
    Lottery aid 0 4,394,704 4,420,513 25,809
    BOCES 1,170,622 1,170,622 1,248,942 78,320
    Textbooks 291,067 214,562 211,098 (3,464)
    All Other Aid -
    Computer software 51,768 106,979 106,979 0
    Library loan 0 21,294 21,294 0
    Handicapped students 380,000 380,000 554,367 174,367
    Other aid 75,000 75,000 97,077 22,077
    Federal Sources 152,000 152,000 132,519 (19,481)
    TOTAL REVENUES $70,392,434 $70,630,468 $ 72,532,212 $ 1,901,744
    Other Sources -
    Transfer -in $ 380,000 $ 380,000 $ 380,000 0
    TOTAL REVENUES AND OTHER SOURCES $ 70,772,434 $ 71,010,468 $ 72,912,212 $ 1,901,744
    Appropriated reserves $ 609,000 $ 864,864
    Appropriated fund balance $ 500,000 $ 2,000,370
    Prior year encumbrances $ 1,650,199 $ 1,650,199
    TOTAL REVENUES AND APPROPRIATED RESERVES/ FUND BALANCE $ 73,531,633 $75,525,901

    (See Independent Auditors' Report)

    50

    Required Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Schedule of Revenues, Expenditures and Changes in Fund Balance-
    Budget (Non-GAAP Basis) and Actual-General Fund
    (Unaudited)
    For Year Ended June 30, 2017
    Original Budget Amended Budget Current Year's Expenditures Encumbrances Unencumbered Balances
    EXPENDITURES
    General Support-
    Board of education $ 73,485 $ 51,025 $ 33,693 $ 1,700 $ 15,632
    Central administration 257,580 338,623 338,623 0 2,418
    Finance 742,208 722,844 654,655 31,546 36,643
    Staff 404,179 446,697 386,269 40,873 19,555
    Central services 4,438,010 4,509,021 3,970,209 346,260 192,552
    Special items 1,005,800 939,630 893,847 0 45,783
    Instructional-
    Instruction, administration and improvement 2,285,792 2,283,063 2,081,797 38,229 163,037
    Teaching-regular school 21,262,621 21,226,513 20,035,355 274,396 916,762
    Programs for children with handicapping conditions 9,541,660 9,054,285 7,781,354 51,294 1,221,637
    Teaching-special schools 98,700 99,321 96,171 0 3,150
    Instructional media 2,673,877 3,296,400 3,029,287 222,518 44,595
    Pupil services 3,300, 158 3,387,896 3,122,842 78,479 186,575
    Pupil Transportation 3,351,978 3,425,658 2,622,725 51,891 751,042
    Community Services 123,494 130,467 73,320 16,486 40,661
    Employee Benefits 17,925,149 17,753,108 16,778,834 1,669 972,605
    Debt service-principal 4,197,711 4,556,464 4,556,463 0 1
    Debt service-interest 1,198,439 1,011,727 1,011,727 0 0
    TOTAL EXPENDITURES $72,880,841 $73,235,160 $ 67,467,171 $ 1,155,341 $ 4,612,648
    Other Uses-
    Transfers -out $ 650,792 $ 2,290,741 $ 2,278,861 $ 11,880
    TOTAL EXPENDITURES AND OTHER USES $ 73,531,633 $75,525,901 $ 69,746,032 $ 1,155,341 $ 4,624,528
    EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES 0 0 $ 3,166,180
    FUND BALANCE, BEGINNING OF YEAR $ 19,753,838 $19,753,838 19,753,838
    FUND BALANCE, END OF YEAR $19,753,838 $19,753,838 $ 22,920,018

    Note to Required Supplementary Information: A reconciliation is not necessary since encumbrances are presented in a separate column on this schedule

    (See Independent Auditors' Report)

    51

    Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Schedule of Change From Adopted Budget To Final Budget
    And The Real Property Tax Limit
    For Year Ended June 30, 2017

    CHANGE FROM ADOPTED BUDGET TO FINAL BUDGET:

    Adopted budget $ 71,881,434

    Prior year's encumbrances $ 1,650,199

    Original Budget $ 73,531,633

    Budget revisions

    Emergency capital project $ 908,750

    Bus purchases $ 731,199

    Computer equipment purchases $ 300,000

    Donations $ 16,775

    Tax certiorari settlements $ 16,720

    BOCES teacher stipends $ 13,680

    Truck repairs from insurance reserve $ 7,144

    FINAL BUDGET $ 75,525,901

    SECTION 1318 OF REAL PROPERTY TAX LAW LIMIT CALCULATION:

    20 1 7-18 voter approved expenditure budget $ 73,926,409

    Unrestricted fund balance:

    Assigned fund balance $ 1,910,341

    Unassigned fund balance $ 2,957,056

    Total Unrestricted fund balance $ 4,867,397

    Less adjustments:

    Appropriated fund balance $ 755,000

    Encumbrances included in assigned fund balance $ 1,155,341

    Total adjustments $ 1,910,341

    General fund fund balance subject to Section 1318 of Real Property Tax Law $ 2,957,056

    ACTUAL PERCENTAGE 4.00%

    (See Independent Auditors' Report)

    52

    Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    CAPITAL PROJECTS FUND
    Schedule of Project Expenditures
    June 30,2017
    Expenditures and Methods of Financing
    Project Title Original Appropriation Revised Appropriation Prior Years Current Year Total Unexpended Balance Obligations Local Sources Total Fund Balance
    2017 Capital Outlay Project $100,000 $100,000 $0 $99,434 $99,434 $566 $0 $100,000 $100,000 $566
    20 1 6 Capital Outlay Project 100,000 100,000 88,695 175 88,870 11,130 0 100,000 100,000 11,130
    2015 Capital Outlay Project 100,000 100,000 84,906 0 84,906 15,094 0 100,100 100,100 15,194
    2015 Renovation & Athletic Fields 13,380,000 13,760,000 *1,282,869 10,374,47 11,657,343 2,102,657 0 5,276,200 5,276,200 (6,381,143)
    20 1 0 Renovation Project 8,430,000 8,430,000 8,166,817 0 8,166,817 263,183 8,070,000 74,039 8,144,039 (22,778)
    2009 Excel Aid Project 9,519,000 9,519,000 9,333,318 0 9,333,318 185,682 7,834,830 1,509,241 9,344,071 10,753
    Emergency Lift Project 908,750 908,750 0 721,043 721,043 187,707 0 908,750 908,750 187,707
    Building Purchase 650,000 650,000 0 600,562 600,562 49,438 0 0 0 (600,562)
    Bus Purchases 2016-17 755,000 755,000 0 748,334 748,334 6,666 0 755,000 755,000 6,666
    Bus Purchases 2017-18 731,199 731,199 0 0 0 731,199 0 731,199 731,199 731,199
    TOTAL $ 34,673,949 $ 35,053,949 $18,956,605 $12,544,022 $31,500,627 $3,553,322 $15,904,830 $9,554,529 $25,459,359 $(6,041,268)

    * Includes $380,000 voter approved transfer from general fund included in the 2016-17 budget vote.

    (See Independent Auditors' Report)

    53

    Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Combined Balance Sheet-Nonmajor Governmental Funds
    June 30, 2017
    Special Revenue Funds:
    Special Aid Fund
    Special Revenue Funds:
    School Lunch Fund
    Debt Service Fund Total
    Nonmajor Governmental
    Funds
    ASSETS
    Cash and cash equivalents $ 689,787 $ 96,852 $ 53,489 $ 840,128
    Receivables 407,954 45,644 0 453,598
    Inventories 0 38,046 0 38,046
    Due from other funds 31,350 81 66 31,497
    TOTAL ASSETS $ 1,129,091 $ 180,623 $ 53,555 $ 1,363,269
    LIABILITIES AND FUND BALANCES
    Liabilities
    Accounts payable $ 1,772 $0 $0 $ 1,772
    Accrued liabilities 0 4,858 0 4,858
    Due to other funds 1,095,078 126,437 0 1,221,515
    Due to other governments 0 680 0 680
    Unearned revenue 32,241 5,985 0 38,226
    TOTAL LIABILITIES $ 1,129,091 $ 137,960 $0 $ 1,267,051
    Fund Balances
    Nonspendable $0 $ 38,046 $0 $ 38,046
    Restricted 0 0 53,555 53,555
    Assigned 0 4,617 0 4,617
    TOTAL FUND BALANCE $0 $ 42,663 $ 53,555 $ 96,218
    TOTAL LIABILITIES AND FUND BALANCES $ 1,129,091 $ 180,623 $ 53,555 $ 1,363,269

    (See Independent Auditors' Report)

    54

    Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Combined Revenues, Expenditures and Changes in Fund Balances
    Nonmajor Governmental Funds
    For Year Ended June 30, 2017
    Special Revenue Funds:
    Special Aid Fund
    Special Revenue Funds:
    School Lunch Fund
    Debt Service Fund Total
    Nonmajor Governmental
    Funds
    REVENUES
    Use of money and property $ 0 $211 $ 1,152 $ 1,363
    Miscellaneous 0 11,735 0 11,735
    State sources 728,639 23,188 0 751,827
    Federal sources 1,944,481 663,386 0 412,681
    Sales 0 412,681 0 46,270
    Premium on obligations issued 0 0 46,270 46,270
    TOTAL REVENUES $ 2,673,120 $ 1,111,201 $ 47,422 $ 3,831,743
    EXPENDITURES
    Instruction $ 2,514,283 $0 $0 $ 2,514,283
    Pupil transportation 99,277 0 0 99,277
    Employee benefits 173,258 231,038 0 404,296
    Cost of sales 0 499,287 0 499,287
    Other expenses 0 431,473 0 431,473
    TOTAL EXPENDITURES $ 2,786,818 $ 1,161,798 $0 $ 3,948,616
    EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES $ (113,698) $ (50,597) $ 47,422 $ (116,873)
    OTHER FINANCING SOURCES (USES)
    Transfers -in $ 113,698 $ 45,214 $0 $ 158,912
    Transfers -out 0 0 (380,000) (380,000)
    TOTAL OTHER FINANCING SOURCES (USES) $ 113,698 $ 45,214 $(380,000) $(221,088)
    EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES AND OTHER FINANCING USES $0 $ (5,383) $ (332,578) $ (337,961)
    FUND BALANCE, BEGINNING OF YEAR 0 48,046 386,133 434,179
    FUND BALANCE, END OF YEAR $0 $ 42,663 $ 53,555 $ 96,218

    (See Independent Auditors' Report)

    55

    Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    Net Investment in Capital Assets
    For Year Ended June 30, 2017

    Capital assets, net $ 81,890,599

    Deduct:

    Short-term portion of bonds payable $ 4,075,000
    Long-term portion of bonds payable $23,230,000
    Assets purchased with short-term financing $7,004,483

    Net Investment in Capital Assets $ 47,581,116

    (See Independent Auditors' Report)

    56

    Supplementary Information

    CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

    SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
    For Year Ended June 30, 2017
    Grantor/ Pass -Through Agency Federal Award Cluster/Program CFDA Number Grantor Number Pass-Through Agency Number Total Expenditures
    U.S. Department of Education:
    Direct Program:
    Elementary and Secondary School Counseling 84.215E S215E 150269 N/A $ 352,139
    Indirect Programs:
    Passed Through NYS Education Department-
    Special Education Cluster IDEA
    Special Education-Grants to States (IDEA, Part B) 84.027 N/A 0032-17-0664 $ 907,194
    Special Education -Preschool Grants (IDEA Preschool) 84.173 N/A 0033-17-0664 28,507
    Total Special Education Cluster IDEA $ 935,701
    Title IIA -Teacher Training 84.367 N/A 0147-17-2175 100,864
    Title IIA -Teacher Training 84.367 N/A 0147-16-2175 7,645
    Title I -Grants to Local Educational Agencies 84.010 N/A 0021-17-2175 543,116
    Title I -Grants to Local Educational Agencies 84.010 N/A 0021-16-2175 5,016
    Total U.S. Department of Education $ 1,944,481
    U.S. Department of Agriculture:
    Indirect Programs:
    Passed Through NYS Education Department
    Child Nutrition Cluster
    National School Lunch Program 10.555 N/A 006905 $ 449,028
    National School Lunch Program-Non-Cash Assistance (Commodities) 10.555 N/A 006905 90,494
    National School Breakfast Program 10.553 N/A 006905 123,864
    Total Child Nutrition Cluster $ 663,386
    Total U.S. Department of Agriculture $ 663,386
    TOTAL EXPENDITURES OF FEDERAL AWARDS $ 2,607,867

    (See Independent Auditors' Report)

    57

    Raymond F. Wager, CPA, P.C.

    Certified Public Accountants

    Shareholders: Members of
    American Institute of
    Raymond F. Wager, CPA
    Thomas J.Lauffer, CPA
    Thomas C. Zuber, CPA
    Certified Public Accountants
    and
    New York State Society of
    Certified Public Accountants

    Report on Internal Control Over Financial Reporting and on Compliance
    and Other Matters Based on an Audit of Financial Statements Performed in
    Accordance With Government Auditing Standards

    Independent Auditors' Report

    To the Board of Education
    Canandaigua City School District, New York

    We have audited, in accordance with the 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Canandaigua City School District, New York, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the Canandaigua City School District, New York's basic financial statements, and have issued our report thereon dated September 19, 2017.

    Internal Control Over Financial Reporting

    In planning and performing our audit of the financial statements, we considered the Canandaigua City School District, New York's internal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Canandaigua City School District, New York's internal control. Accordingly, we do not express an opinion on the effectiveness of the Canandaigua City School District, New York's internal control.

    A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

    Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

    58

    1020 Lehigh Station Road • Suites 2 & 3 • Henrietta, New York 14467
    Tel: (585) 321-5643 • Fax: (585) 321-5644 • E-Mail: theoffice@raymondfwagercpa.com

    Compliance and Other Matters

    As part of obtaining reasonable assurance about whether the Canandaigua City School District, New York's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

    Purpose of this Report

    The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

    September 19,2017

    59

    Raymond F Wager, CPA, PC.