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Canandaigua City School District
Basic Financial Statements

For Year Ended June 30, 2019

Mengel Metzger Barr & Co. LLP
Raymond F. Wager, CPA, P.C. Division
Table of Contents
Subject Page
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: 20-49
Required Supplementary Information:  
Schedule of Changes in District's Total OPEB Liability and Related Ratio (Unaudited) 50
Schedule of the District's Proportionate Share of the Net Pension Liability (Unaudited) 51
Schedule of District Contributions (Unaudited) 52
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget (Non-GAAP Basis) and Actual - General Fund (Unaudited) 53-54
Supplementary Information:  
Schedule of Change from Adopted Budget to Final Budget and Real Property Tax Limit - General Fund 55
Schedule of Capital Projects Fund - Project Expenditures and Financing Resources 56
Combining Balance Sheet - Nonmajor Governmental Funds 57
Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 58
Net Investment in Capital Assets 59
Schedule of Expenditures of Federal Awards 60
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 61-62

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, 2019, 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 in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 in 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.

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100 Chestnut Street  Suite 1200  Rochester, NY 14604  P 585•423•1860 F 585•423•5966  mengelmetzgerbarr.com

Additional Offices: Elmira, NY • Canandaigua, NY • Hornell, NY

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, 2019, 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 50–54 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 supplemental information as listed in the table of contents and schedule of expenditures of federal awards, as required by the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The accompanying supplemental information as listed in the table of contents and schedule of expenditures of federal awards, as required by the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards 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 supplemental information as listed in the table of contents and schedule of expenditures of federal awards, as required by the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

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Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 1, 2019 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Canandaigua City School District, New York's internal control over financial reporting and compliance.

Rochester, New York
October 1, 2019

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Canandaigua City School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019

The following is a discussion and analysis of the School District’s financial performance for the fiscal year ended June 30, 2019. 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 liabilities plus deferred inflows (what the district owes) exceeded its total assets plus deferred outflows (what the district owns) by ($914,964) (net position) an increase of $2,917,935 from the prior year. Of this amount net investment in capital assets increased $2,179,721, restricted funds increased

$4,093,356, and unrestricted funds decreased $3,355,142.

General revenues which include Federal and State Aid, Real Property Taxes, Investment Earnings, Compensation for Loss, and Miscellaneous accounted for $75,450,320 or 93% of all revenues. Program specific revenues in the form of Charges for Services, Operating Grants and Contributions, and Capital Grants and Contributions accounted for $5,264,325 or 7% of total revenues.

As of the close of the fiscal year, the School District’s governmental funds reported combined fund balances of

$31,868,632, an increase of $4,090,071 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 plus deferred outflow of resources and liabilities plus deferred inflow of resources, 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.

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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 special aid fund which are reported as major funds. Data for the school lunch fund, the debt service fund, and the capital projects 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.

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Major Feature of the District-Wide and Fund Financial Statements

  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 plus deferred outflow of resources and liabilities plus deferred inflow of resources, 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.

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.

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Financial Analysis of the School District As a Whole

Net Position

The District’s combined net position were larger on June 30, 2019, than they were the year before, increasing to ($914,964) as shown in table below.

  Governmental Activities
2019
Governmental Activities
2018
Total
Variance
ASSETS:      
Current and Other Assets $          40,142,511 $          33,835,917 $          6,306,594
Capital Assets             79,372,544 81,533,049             (2,160,505)
Total Assets $        119,515,055 $       115,368,966 $         4,146,089
DEFERRED OUTFLOWS OF RESOURCES:      
Deferred Outflows of Resources $         18,773,412 $       18,856,344 $            (82,932)
LIABILITIES:      
Long-Term Debt Obligations $         127,113,526 $       127,952,770 $          (839,244)
Other Liabilities 4,556,760             3,970,036             586,724
Total Liabilities $      131,670,286 $      131,922,806 $         (252,520)
DEFERRED INFLOWS OF RESOURCES:      
Deferred Inflows of Resources $          7,533,145 $         6,135,403 $         1,397,742
NET POSITION:      
Net Investment in Capital Assets $       52,850,495 $      50,670,774 $          2,179,721
Restricted For,      
Retirement Contribution Reserve 3,286,454 3,181,691 104,763
Capital Reserve 16,033,957 12,268,283 3,765,674
Other Purposes 6,611,020 6,388,101 222,919
Unrestricted (79,696,890) (76,341,748) (3,355,142)
Total Net Position $         (914,964) $        (3,832,899)

$        2,917,935

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

By far, the largest component of the School District's net position 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. The remaining balance of unrestricted net position was a deficit of ($79,696,890).

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Changes in Net Position

The District’s total revenue increased 5% to $80,714,645. State and federal aid 35% and property taxes 57% accounted for most of the District’s revenue. The remaining 8% of the revenue comes from operating grants, capital 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 3% to $77,796,710. The District’s expenses are predominately related to education and caring for the students (instruction) 80%. General support which included expenses associated with the operation, maintenance and administration of the District accounted for 11% of the total costs. See table below:

  Governmental Activities      
2019
Governmental Activities      
2018
Total
Variance
REVENUES:      
Program -
Charges for Service
$     3,199,393       $   872,051 $ 2,327,342
Operating Grants & Contributions 844,622              3,001,298 (2,156,676)
Capital Grants & Contributions 1,220,310   290,676    929,634
Total Program $     5,264,325     $     4,164,025 $ 1,100,300
General -
Property Taxes
$ 46,210,073 $ 45,111,722 $ 1,098,351
State and Federal Aid 28,074,674 26,999,711 1,074,963
Investment Earnings 417,394 124,799 292,595
Compensation for Loss 217,036 60,466 156,570
Miscellaneous 531,143         589,150       (58,007)
Total General $ 75,450,320   $ 72,885,848   $ 2,564,472
TOTAL REVENUES  80,714,645   $ 77,049,873   $ 3,664,772
SPECIAL ITEM:      
Advance Refunding $                       $     145,000 $     145,000
EXPENSES:      
General Support $     8,683,712 $     8,353,102 $      330,610
Instruction 61,919,351 59,827,479 2,091,872
Pupil Transportation 4,965,067 4,807,079 157,988
Community Services 54,675 86,163 (31,488)
School Lunch 1,461,845 1,423,366 38,479
Interest      712,060        808,567       (96,507)
TOTAL EXPENSES $ 77,796,710 $ 75,305,756 $ 2,490,954
INCREASE IN NET POSITION $     2,917,935 $     1,889,117  
NET POSITION, BEGINNING OF YEAR     (3,832,899)      (5,722,016)  
NET POSITION, END OF YEAR $     (914,964) $    (3,832,899)  

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source of revenue for 2018 - 2019 pie chart state  and federal aid 34.78%, investment earnings .52%, compensation for loss an miscellaneous .93%, charges for services 3.96%, operating grants and contributions 1.05%, capital grants and contributions 1.51%, property taxes 57.25%
sources of revenue for 2017-2018 pie chart - state and federal aid 35.04%, investment earnings .16&, compensation for loss and miscellaneous .84%, charges for services 1.13%, operating grants and contributions 3.9%, capital grants and contributions .38%, property taxes 58.55%

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expenses for 2018-19 pie chart - pupil  transportation 6.38%, community services .07%, school lunch 1.88%, interest on long-term debt .92%, general support 11.16%, instruction 79.59%
expenses for 2017-18 pie chart - pupil transportation 6.38%, community services .11%, school lunch 1.89%, interest on long-term debt 1.07%, general support 11.09%, instruction 79.46%

 

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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 $31,868,632 which is more than last year’s ending fund balance of $27,778,561.

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 $30,707,067. Fund balance for the General Fund increased by $4,067,878 compared with the prior year. See table below:

General Fund Balances: 2019 2018 Total
Variance
Nonspendable 1,711,584 1,850,488 (138,904)
Restricted 24,923,369 20,806,525 4,116,844
Assigned 1,017,634 942,331 75,303
Unassigned 3,054,480 3,039,845 14,635
Total General Fund Balances $ 30,707,067 $ 26,639,189 $ 4,067,878

The District appropriated funds from the following reserves for the 2019-20 budget:

Workers' Compensation  $   365,000

Unemployment Costs    20,000

Retirement Contribution     990,000

Tax Certiorari     25,000

Employee Benefit Accrued Liability   100,000

Total   $ 1,500,000

General Fund Budgetary Highlights

The difference between the original budget and the final amended budget was $1,394,390. This change is attributable to $397,331 for carry over encumbrances from the prior year, $708,750 for bus purchases, $159,450 for a insurance recovery, $100,000 for a tax certiorari payment, and $28,859 for donations/miscellaneous.

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
Transfers-Out $727,400 $708,750 for the purchase of Buses

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Revenue Items: Budget Variance Amended Vs.
Actual
Explanation for Budget Variance
State Sources $607,264 $261,597 in BOCES Aid due to increased expenditures in 2017-18. The District received prior year aid of $253,141 at year-end.
Expenditure Items: Budget Variance Amended Vs.
Actual
Explanation for Budget Variance
Teaching-Regular School $733,781 The District budgets for a portion of the grants to protect against reduction in grant programs. The District budgeted for $191,000 for Gemini payments and during the 2018-19 school year the college determined they would no longer require payment for these courses.
Programs for Children with Handicapping Condition $895,570 $423,808 is a result of out-of-district student replacements under budget. $107,626 is a result of a federal grant being used to cover salaries that were not previously covered by a grant.
Employee Benefits $1,562,633 Medicare plans for retirees decreased in expense upon renewal in January 2019 instead of increasing as anticipated. ERS/TRS/FICA are based on budgeted salaries which came in lower than budgeted.

Capital Asset and Debt Administration

Capital Assets

 

By the end of the 2018-19 fiscal year, the District had invested $79,372,544 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:

Asset 2019 2018

Land

$        832,449

$        832,449

Work in Progress

13,639,691

13,594,917

Buildings and Improvements

60,033,362

62,454,514

Machinery and Equipment

         4,867,042

4,651,169

Total Capital Assets

  $ 79,372,544

  $ 81,533,049

More detailed information can be found in the notes to the financial statements.

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Long-Term Debt

At year end, the District had $127,113,526 in general obligation bonds and other long-term debt outstanding as follows:

Type 2019 2018

Serial Bonds

$     26,540,000

$     30,925,000

OPEB

97,189,216

94,649,855

Net Pension Liability

1,892,439

896,708

Compensated Absences

           1,491,871

           1,481,207

Total Long-Term Obligations

  $ 127,113,526

  $ 127,952,770

More detailed information can be found in the notes to the financial statements.

Factors Bearing on the District’s Future

  • The tax cap levy calculation is limited by the Consumer Price Index or 2%, whichever is lower. Due to the cap on the growth of the tax levy, the District is restricted in the amount of additional revenue that can be generated from one year to the next.
  • 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 property assessments.
  • The District continues to see an increase in approved Payment in Lieu of Taxes agreements with values for payments below what payments would be if these properties remained on the tax rolls.
  • The annual increase in minimum wage will continue to increase District expenditures. With the tax levy cap, this may become unsustainable.
  • State Aid funding continues to remain unpredictable and unequal 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

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CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

Statement of Net Position

June 30, 2019

Governmental Activities

ASSETS

Cash and cash equivalents $      32,749,134

Accounts receivable  3,322,344

Inventories  35,552

Prepaid items  1,188,084

Net pension asset  2,847,397

Capital Assets:

Land  832,449

Work in progress  13,639,691

Other capital assets (net of depreciation)  64,900,404

TOTAL ASSETS $  119,515,055

DEFERRED OUTFLOWS OF RESOURCES

Deferred outflows of resources  18,773,412

LIABILITIES

Accounts payable  $    410,230

Accrued liabilities  742,922

Unearned revenues  25,329

Due to other governments  1,531

Due to teachers' retirement system  3,031,756

Due to employees' retirement system  344,992

Long-Term Obligations:

Due in one year  3,688,840

Due in more than one year   123,424,686

TOTAL LIABILITIES  $ 131,670,286

DEFERRED INFLOWS OF RESOURCES   Deferred inflows of resources $ 7,533,145

NET POSITION

Net investment in capital assets  $  52,850,495

Restricted For:

Reserve for employee retirement system  3,286,454

Capital reserves  16,033,957

Other purposes  6,611,020

Unrestricted  (79,696,890)

TOTAL NET POSITION  $ (914,964)

(See accompanying notes to financial statements)

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General Revenues:CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

Statement of Activities

For Year Ended June 30, 2019

Functions/Programs
Primary Government-
Expenses       Program Revenues
Charges for
Services      
Program Revenues
Operating
Grants and
Contributions
Program Revenues
Capital
Grants and
Contributions
Net (Expenses)
Revenue and
Charges in
Net Positions
Governmental
Activities
General support $ 8,683,712 $ $ $ $  (8,683,712)
Instruction     61,919,351      2,793,793 129,224 1,220,310 (57,776,024)
Pupil transportation 4,965,067            (4,965,067)
Community services 54,675          (54,675)
School lunch 1,461,845  405,600 715,398     (340,847)
Interest 712,060          (712,060)
Total Primary Government $ 77,796,710 $ 3,199,393 $ 844,622 $ 1,220,310 $ (72,532,385)
General Revenues:  

Property taxes

$        46,210,073

State and federal aid

28,074,674

Investment earnings

417,394

Compensation for loss

217,036

Miscellaneous

                  531,143

Total General Revenues

  $        75,450,320

Changes in Net Position

$           2,917,935

Net Position, Beginning of Year

              (3,832,899)

Net Position, End of Year

  $            (914,964)

(See accompanying notes to financial statements)

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CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

Balance  Sheet

Governmental  Funds

June 30, 2019

  general Fund Special Aid Fund Nonmajor Governmental Funds Total Governmental Funds

ASSETS

       

Cash and cash equivalents

$              31,519,542

$              143,559 $              1,086,033

$            32,749,134

Receivables

2,154,563

619,903 547,878

3,322,344

Inventories

- - 35,552

35,552

Due from other funds

1,253,572 5,801 22,241

1,281,614

Prepaid items

1,188,084                                

                1,188,084

TOTAL ASSETS

  $            36,115,761 $              769,263 $              1,691,704

$          38,576,728

LIABILITIES AND FUND BALANCES

       

Liabilities -

       

Accounts payable

$              403,415

$                   3,134

$                    3,681

$                 410,230

Accrued liabilities

570,366 880 11,980

583,226

Due to other funds

28,747 765,249 487,618

1,281,614

Due to other governments

- -

1,531

1,531

Due to TRS

3,031,756 - -

3,031,756

Due to ERS

344,992 - -

344,992

Compensated absences

558,840 - -

558,840

Unearned revenue

                                25,329

                    25,329

TOTAL LIABILITIES

  $                4,938,116

  $            769,263

  $                  530,139

  $            6,237,518

Deferred Inflows -

       

Deferred inflows of resources

$              470,578 $              - $              -   $            470,578

Fund Balances -

       

Nonspendable

$              1,711,584 $              - $              35,552 $              1,747,136

Restricted

24,923,369 - 1,148,790 26,072,159

Assigned

1,017,634 - - 1,017,634

Unassigned

3,054,480                                 (22,777                 3,031,703

TOTAL FUND BALANCE

  $            30,707,067                 $              1,161,565 $            31,868,632

TOTAL LIABILITIES AND FUND BALANCES

  $              36,115,761

$              769,263 $              1,691,704  

  

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.                                79,372,544

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.                                                                                    470,578

Interest is accrued on outstanding bonds in the statement of net position but not in the funds.                                                                  (159,696)

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         (26,540,000)

OPEB        (97,189,216)

Compensated absences      (933,031)

Net pension asset       2,847,397

Deferred outflow - pension     16,780,164

Deferred outflow - OPEB      1,993,248

Net pension liability     (1,892,439)

Deferred inflow - pension    (4,300,073)

Deferred inflow - OPEB     (3,233,072)

Net Position of Governmental Activities    $   (914,964)

(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, 2019

  General Fund Special Aid Fund

Nonmajor
Governmental Funds

Total
Governmental Funds

REVENUES:

       

Real property taxes and tax items

$             46,311,008 $                             $                                  $             46,311,008

Charges for services

348,278     348,278

Use of money and property

416,023   1,371 417,394

Sale of property and compensation for loss

217,036     217,036

Miscellaneous

419,425   111,718 531,143

State sources

27,869,442 829,705 1,242,422 29,941,569

Federal sources

205,232 1,745,034 693,,286 2,643,552

Sales

    405,600 405,600

TOTAL REVENUES

$          75,786,444

  $           2,574,739   $           2,454,397 $              80,815,580
EXPENDITURES        
General support $             6,289,807 $                            $                               $              6,289,807
Instruction 38,797,262 2,486,194   41,283,456
Pupil transportation 2,733,119 114,555 697,359 3,545,033
Community services 54,675     54,675
Employee benefits 17,679,378 107,639 217,716 18,004,733
Debt service - principal 4,385,000     4,385,000
Debt service - interest 788,363     788,363
Cost of sales     514,147 514,147
Other expenses     460,145 460,145
Capital outlay                 -                 -                 1,400,150                 1,400,150

TOTAL EXPENDITURES

  $          70,727,604   $           2,708,388   $           3,289,517   $           76,725,509

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES

  $            5,058,840

  $       (133,649)

  $        (835,120)

  $        4,090,071

OTHER FINANCING SOURCES (USES)    

 

 

Transfers - in

$                      -

$              133,649

$           857,313 $              990,962
Transfers - out                 (990,962)                 -                 - (990,962)
TOTAL OTHER FINANCING SOURCES (USES)   $           (990,962) $              133,649 $           857,313   $           -
NET CHANGE IN FUND BALANCE $              4,067,878 $              - $              22,193 $              4,090,071
FUND BALANCE, BEGINNING OF YEAR 26,639,189                 -                 1,139,372                 27,778,561
FUND BALANCE, END OF YEAR $              30,707,067   $           -   $           1,161,565   $           31,868,632

(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, 2019

 

NET CHANGE IN FUND BALANCES -
TOTAL GOVERNMENTAL FUNDS

$ 4,090,071

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 lower than depreciation in the current period:

Capital Outlay   140,967

Additions to Assets, Net   812,412

Depreciation    (3,113,884)

(2,160,505)

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   4,385,000

4,385,000

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

76,303

Revenues in the statement of activities that do not provide current financial resources are not reported as revenue in the funds.
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.

(100,935)

(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

Employees' Retirement System

(3,767,828)

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:

587,115

(175,337)

Compensated Absences

(15,949)

CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES                                                                                                                                                                    2,917,935

(See accompanying notes to financial statements)

18

CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

Statement of Fiduciary Net Position

June 30, 2019

  Private Purpose Trust Agency Funds

ASSETS

   

Cash and cash equivalents

$      52,722

$        828,624

Investments

    328,210

                      -

TOTAL ASSETS

$  380,932

$        828,624

LIABILITIES

   

Accounts payable

$         

$           5,222

Extra classroom activity balances

-

146,932

Other liabilities

            -

         676,470

TOTAL LIABILITIES

  $        -

$        828,624

NET POSITION

   

Restricted for scholarships

  $        380,932  

TOTAL NET POSITION

  $        380,932  

 

Statement of Changes in Fiduciary Net Position
For Year Ended June 30, 2019

Private Purpose Trust

ADDITIONS

Contributions                                        $       8,580

Investment earnings                                    16,724

TOTAL ADDITIONS                              $      25,304

DEDUCTIONS

Other expenses                                       $     28,774

TOTAL DEDUCTIONS                            $     28,774

CHANGE IN NET POSITION                 $     (3,470)

NET POSITION, BEGINNING OF YEAR  384,402

NET POSITION, END OF YEAR            $   380,932

(See accompanying notes to financial statements)

19

CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

Notes To The Basic Financial Statements June 30, 2019

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 and GASB Statement No. 61, The Financial Reporting Entity. 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. Extra classroom 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 $6,189,074 for BOCES administrative and program costs.

The District’s share of BOCES aid amounted to $1,486,597.

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.

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.

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.

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

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 extra classroom 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 23, 2018. 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 inventorial 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 acquisition 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 15-50 Years
Machinery and Equipment

$           1,000

SL 5-25 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.

O.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 postemployment 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:

Workers' Compensation $ 1,246,126

Unemployment Costs  340,699

Retirement Contribution - TRS  512,000

Tax Certiorari    1,839,396

Capital projects  953,767

Debt    54,295

Liability  297,055

Employee Benefit Accrued Liability  1,367,682

Total Net Position - Restricted for Other Purposes  $ 6,611,020

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:

28

( I. ) (Continued)

Inventory in School Lunch $  35,552

Prepaid Items  1,188,084

Noncurrent Receivables  523,500 

Total Nonspendable Fund Balance $ 1,747,136

a.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 §3651, 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 $ 439,478
2011 Building Capital Reserve $ 4,500,000 $ 4,500,000 $ 650,242
2016 Vehicle Capital Reserve $ 6,000,000 $ 1,382,000 $ 1,385,233
2016 Building Capital Reserve $ 10,000,000 $ 9,999,991 $ 10,034,080
2017 Building & Equipment
Capital Reserve
$ 5,000,000 $ 3,520,426 $ 3,524,924

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.

Teachers’ Retirement Reserve – General Municipal Law §6r was amended to include a Teachers’ Retirement Reserve (TRS) sub-fund. The reserve has an annual funding limit of 2% of the prior year TRS salaries and a maximum cumulative total balance of 10% of the previous years TRS salary.

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.

30

I. ) (Continued)

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. 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:
Total General Fund -
Workers' Compensation $ 1 ,246,126
Unemployment Costs 3 40,699
Retirement Contribution - ERS 3 ,286,454
Retirement Contribution - TRS 5 12,000
Tax Certiorari 1 ,839,396
Capital Reserve 1 6,033,957
Liability 2 97,055
Employee Benefit Accrued Liability 1 ,367,682
Capital Fund -
Capital Projects 1 ,094,495
Debt Service Fund -
Debt Service 54,295
Total Restricted Fund Balance $ 26,072,159
The District appropriated and/or budgeted funds from the following reserves for the 2019-20 budget:

Workers' Compensation $ 365,000
Unemployment Costs 20,000
Retirement Contribution 990,000
Tax Certiorari 25,000
Employee Benefit Accrued Liability 100,000
Total $ 1,500,000

31

( I. ) (Continued)

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 General fund are amounts in excess of $100,000. The following are considered significant encumbrances:

General Fund -
General Support $ 336,163
Instructional 369,106
Total General Fund Significant Encumbrances $ 705,269
Capital Projects Fund -
Pupil Transportation $ 702,533
Capital Outlay 112,304
Total Capital Fund Significant Encumbrances $ 814,837
Assigned fund balances include the following:
Total
General Fund - Encumbrances $ 742,634
General Fund - Appropriated for Taxes 275,000
Total Assigned Fund Balance $ 1,017,634

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.

32

( I. ) (Continued)

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, 2019, the District implemented the following new standards issued by GASB:
GASB has issued Statement 83, Certain Asset Retirement Obligations, which will be effective for reporting periods beginning after June 15, 2018.
GASB has issued Statement 88, Certain Disclosures Related to Debt, including Direct Borrowing and Direct Placements, which will be effective for reporting periods beginning after June 15, 2018.

U. Future Changes in Accounting Standards
GASB has issued Statement 84, Fiduciary Activities, which will effective for the periods beginning after December 15, 2018.
GASB has issued Statement 87, Leases, which will be effective for the periods beginning after December 15, 2019.
GASB has issued Statement 89, Accounting for Interest Cost Incurred before the End of a Construction Period, which will be effective for reporting periods beginning after December 15, 2019
GASB has issued Statement No. 90, Majority equity Interests – an amendment of GASB statements No. 14 and No. 61, which will be effective for reporting periods beginning after December 15, 2018.
GASB has issued statement No. 91, Conduit Debt Obligations, which will be effective for reporting periods beginning after December 15, 2020.
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.

33

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: $397,331 for carry over encumbrances from the prior year, $159,450 for insurance recovery, $100,000 for the tax certiorari, $708,750 for bus purchases, and $28,859 for donations and miscellaneous amendments.
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 ($22,777) at June 30, 2019, which is a result of short-term financing or loans from other funds used as a temporary means of financing the capital project. 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).

34

( II. ) (Continued)

D. Deficit Net Position
The District-wide net position had a deficit at June 30, 2019 of $914,964. The deficit is the result of the implementation of GASB Statement 75, “Accounting and Financial Reporting by Employers for Post employment Benefits Other Than Pensions”, which required the recognition of an unfunded liability of $97,189,216 at June 30, 2019. Since New York State Laws provide no mechanism for funding the liability, the subsequent accruals are expected to increase the deficit.

III. Cash and Cash Equivalents

Credit risk: In compliance with the State Law, District investments are limited to obligations of the United States of America, obligations guaranteed by agencies of the Unites States of America where the payment of principal and interest are guaranteed by the United States of America, obligations of the State, time deposit accounts and certificates of deposit issued by a bank or trust company located in, and authorized to do business in,> the State, and obligations issued by other municipalities and authorities within the State. Concentration of Credit risk: To promote competition in rates and service cost, and to limit the risk of institutional failure, District deposits and investments are placed with multiple institutions. The District’s investment policy limits the amounts that may be deposited with any one financial institution. Interest rate risk: The District has an investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from rising interest rates 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 $ -
Collateralized with Securities held by the Pledging Financial Institution   9 ,190,500
Collateralized within Trust Department or Agent   24,101,857
Total $ 33,292,357
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 $26,072,159 within the governmental funds and $57,722 in the fiduciary funds.

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.

35

( IV. ) (Continued)

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, 2019:

2019

  Cost Quoted Prices in
Active Market for
indentical Assets (Level 1)
Common Stock $ 283,528 $ 328,210

The following schedule summarizes the investment return and its classification for the year:
2019
Unrealized Gains/(Losses) $ 44,682

V. Receivables
Receivables at June 30, 2019 for individual major funds and nonmajor funds, including the applicable
allowances for uncollectible accounts, are as follows:

Description

Governmental Activities
General Fund

Governmental Activities
Special Aid Fund

Governmental Activities
Non-Major Funds

Governmental Activities
Total

Accounts Receivable $ 425,380 $ - $ 51,716 $ 477,096
Due From State and Federal 631,789 619,903 496,162 1,747,854
Due From Other Governments 621,594 - - 621,594
Taxed Receivable 470,578 - - 470,578
Due from Trust and Agency 5,222 - - 5,222
Total Receivables $ 2,154,563 $ 619,903 $ 547,878 $ 3,322,344

District management has deemed the amounts to be fully collectible.

36

VI. Interfund Receivables, Payables, Revenues and Expenditures
Interfund Receivables, Payables, Revenues and Expenditures
at June 30, 2019 were as follows:

  Interfund Receivables Interfund Payables Interfund Revenues Interfund Expenditures
General Fund

$ 1,253,572

$ 28,747

$;  -

$ 990,962

Special Aid Fund

5,801

765,249

133,649

-

School Lunch Fund

22,207

87,584

48,563

-

Debt Service Fund

34

-

-

-

Capital Projects Fund

-

400,034

808,750

-

Total

$ 1,281,614

$ 1,281,614

990,962

990,962

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 and school lunch programs.

VII. Capital Assets

Capital asset balances and activity were as follows:

Governmental Activities Balance 7/1/2018 Additions Deletions Balance 6/30/2019

Capital Assets that are not Depreciated -

       

Land

$832,449

$  - $  - $ 832,449

Work in progress

13,594,917

1,400,150 1,355,376 13,639,691

Total Nondepreciable

$14,427,366

1,400,150 1,355,376 $14,472,140

Capital Assets that are Depreciated -

 

     

Buildings and Improvements

$106,462,102

$ 96,193

$  -

$ 106,558,295

Machinery and equipment

17,001,226

902,060

637,853

17,265,433

Total Depreciated Assets

$ 23,463,328

$998,253

$ 637,853

$ 123,823,728

Less Accumulated Depreciation -        

Buildings and Improvements

 

$44,007,588

 

$ 2,517,345

 

$  -

 

$ 46,524,933

Machinery and equipment

12,350,057

596,539

548,205

12,398,391

Total Accumulated Depreciation

$ 56,357,645

$ 3,113,884

$ 548,205

$58,923,324

Total Capital Assets Depreciated, Net of Accumulated Depreciation

 

67,105,683

 

$ (2,115,631)

 

$89,648

 

$ 64,900,404

Total Capital Assets

$ 81,533,049 $ (715,481) $ 1,445,024

$ 79,372,544

37

( VII. ) (Continued)

Depreciation expense for the period was charged to functions/programs as follows:
Governmental Activities:
General Government Support $ 422,043
Instruction 1,802,201
Pupil Transportation 672,995
School Lunch 216,645
Total Depreciation Expense $ 3,113,884
VIII. Long-Term Debt Obligations
Long-term liability balances and activity for the year are summarized below:

Governmental Activities Balance 7/1/2018 Additions Deletions Balance 6/30/2019 Due Within One Year
Bonds and Notes Payable -          

Serial Bonds

$ 30,925,000 $  - $ 4,385,000 $ 26,540,000 $ 3,130,000

Other Liabilities -

         

Net Pension Liability

$ 896,708

$ 995,731

  -   - $  -

OPEB

94,649,855

2,539,361

  -   - $  -

Compensated Absences

1,481,207

10,664

  -   -

558,840

Total Other Liabilities

$ 97,027,770

$ 3,545,756

$  - $ 100,573,526

$558,840

Total Long-Term Obligations

$ 127,952,770

$ 3,545,756

$ 4,385,000 $ 127,113,526

$ 3,688,840

The General Fund has typically been used to liquidate long-term liabilities such as compensated absences.
Existing serial and statutory bond obligations:

Description Original Amount Issue Date Final Maturity Interest Rate Amount Outstanding 6/30/2019

Construction

$    8,995,000

2012

2027

2.0%-2.5%

$     5,085,000

Construction

$    6,909,829

2011

2020

1.5%-3.0%

480,000

Construction

$    8,250,000

2016

2037

200%-3.25%

7,200,000

Construction

$    3,050,000

2018

2022

1.75%-4.00%

2,305,000

Construction

$    2,078,000

2018

2022

1.75%-4.00%

1,584,000

Construction

$    2,472,000

2018

2026

1.75%-4.00%

2,456,000

Construction

$    8,280,000

2018

2033

2.00%

         7,430,000

Total Serial Bonds          $ 26,540,000

38

( VIII. ) (Continued)
The following is a summary of debt service requirements:

Year Serial Bonds Principal Serial Bonds Interest

2020

$ 3,130,000

$ 676,814

2021

3,205,000

585,570

2022

3,280,000

516,427

2023

1,985,000

461,570

2024

2,035,000

410,267

2024-29

7,040,000

1,347,309

2030-34

4,375,000

565,840

2035-37

1,490,000

73,615

Total

$ 26,540,000

4,637,412

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.

$11,820,000 of bonds outstanding are considered defeased.

Interest on long-term debt for June 30, 2019 was composed of:

Interest Paid $ 788,363

Less: Interest Accrued in the Prior Year (235,999)

Plus: Interest Accrued in the Current Year 159,696

Total Long-Term Interest Expense 712,060

IX.Deferred Inflows/Outflows of Resources

The following is a summary of the deferred inflows/outflows of resources:

  Deferred Outflows Deferred Inflows

Pension

$ 16,780,164

$ 4,300,073

OPEB

1,993,248

3,233,072

Total

18,773,412

$ 7,533,145

39

X. Pension Plans

A. General Information
The District participates in the New York State Teachers’ Retirement System (TRS) and the New York State and Local Employees’ 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.

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.

40

X. ) (Continued)

The District’s share of the required contributions, based on covered payroll paid for the District’s year
ended June 30, 2019:

Contributions 2019 - ERS $ 1,321,881 - TRS $ 3,031,756

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

At June 30, 2019, 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, 2019 for ERS and June 30, 2018 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.

  ERS TRS
Measurement date March 31, 2018

June 30, 2018

Net pension assets/(liability)

$(1,892,439)

$2,847,397

District's portion of the Plan's total net pension asset/(liability)

0.0267093%

0.157466%

For the year ended June 30, 2019, the District recognized pension expenses of $1,467,141 for ERS and $2,233,407 for TRS. At June 30, 2019 the District’s reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

 

Deferred Outflows
of Resources
ERS

Deferred Outflows
of Resources
TRS

Deferred Inflows
of Resources
ERS

Deferred Inflows
of Resources
TRS

Differences between expended and actual experience

$ 372,661 $ 2,127,837 $ 127,036

$ 385,434

Changes of assumptions 475,682 9,953,520 - -
Net difference between projected and actual earnings on pension plan - - 485,704 3,160,827
Changes in proportion and differences between the District's contributions and proportionate share of contributions

489,721

-

66,143

74,929

Subtotal

$ 1,338,064

$ 12,249,419

$ 678,883

$ 3,621,190

District's contributions subsequent to the measurement date

344,992

2,847,689

  -

  -

Grand Total

$ 1,683,056

$ 15,097,108

678,883

$ 3,621,190

41

( X.Continued)

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, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Years ERS TRS

2019

$  -

$ 2,877,593

2020

563,729

1,961,280

2021

(252,930)

227,906

2022

49,901

1,954,572

2023

298,481

1,311,353

Thereafter

  -

295,525

Total

659,181

$ 8,628,229

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:

  ERS TRS

Measurement date

March 31, 2019

June 30, 2018

Actuarial valuation date

April 1, 2018

June 30, 2017

Interest rate

7.00%

7.25%

Salary scale

4.20%

4.72%-1.90%

Decrement tables

April 1, 2010-
March 31, 2015
System's Experience

July 1, 2009-
June 30, 2014
System's Experience

Inflation rate

2.50%

2.25%

COLA's

1.30%

1.50%

For ERS, annuitant mortality rates are based on April 1, 2010 – March 31, 2015 System experience with adjustments for mortality improvements based on the Society of Actuaries’ Scale MP-2014. 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:

42

(X. Continued)

Long Term Expected Rate of Return

  ERS TRS

 Measurement date

March 31, 2019

June 30, 2018

Asset Type -    

Domestic equity

4.55%

5.80%

International equity

6.35%

7.30%

Global equity

0.00%

6.70%

Private equity

7.50%

8.90%

Real estate

5.55%

4.90%

Absolute return strategies *

3.75%

0.00%

Opportunistic portfolios

5.68%

0.00%

Real assets

5.29%

0.00%

Bonds and mortgages

1.31%

0.00%

Cash

-0.25%

0.00%

Inflation-indexed bonds

1.25%

0.00%

Private debt

0.00%

6.80%

Real estate debt

0.00%

2.80%

High-yield fixed income securities

0.00%

3.50%

Domestic fixed income securities

0.00%

1.30%

Global fixed income securities

0.00%

0.90%

Short-term

0.00%

0.30%

The real rate of return is net of the long-term inflation assumption of 2.5% for ERS and 2.3% for
TRS.
* Excludes equity-oriented long-only funds. For investment management purposes, these funds are
included in domestic equity and internal equity.
F. Discount Rate
The discount rate used to calculate the total pension liability was 7% for ERS and 7.25% 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.

43

( X. ) (Continued)
G. 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 7.25% 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 6.25% for TRS ) or 1-percentage point higher (8% for ERS and
8.25% for TRS) than the current rate :

ERS 1% Decrease (6%) Current Assumption (7%) 1% Increase (8%)
Employer's proportionate share of the net pension asset (liability) $(8,274,044 $ ( 1,892,439) $ 3,468,562
TRS 1% Decrease (6.25%) Current Assumption (7.25%) 1% Increase (8.25%)
Employer's proportionate share of the net pension asset (liability) $( 19,562,081) $ 2,847,397 $ 21,620,311

H. 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:

  ERS (In Thousands) TRS (In Thousands)

 Measurement date

March 31, 2019

June 30, 2018

Employers' total pension liability

$ 189,803,429

$ 118,107,253

Plan net position

182,718,124

119,915,517

Employers' net pension asset/(liability)

(7,085,305)

1,808,264

Ratio of plan net position to the employers' total pension asset/(liability)

96.27%

101.53%

I. Payables to the Pension Plan
For ERS, employer contributions are paid annually based on the System’s fiscal year which ends on March 31st. Accrued retirement contributions as of June 30, 2019 represent the projected employer contribution for the period of April 1, 2019 through June 30, 2019 based on paid ERS wages multiplied by the employer’s contribution rate, by tier. Accrued retirement contributions as of June 30, 2019 amounted to $344,992.

44

( X. ) (Continued)

For TRS, employer and employee contributions for the fiscal year ended June 30, 2019 are paid to the System in September, October and November 2019 through a state aid intercept. Accrued retirement contributions as of June 30, 2019 represent employee and employer contributions for the fiscal year ended June 30, 2019 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, 2019 amounted to $3,031,756.

XI. Postemployment Benefits

A. General Information About the OPEB Plan
Plan Description – The District’s defined benefit OPEB plan, provides OPEB for all permanent full-time general and public safety employees of the District. The plan is a single-employer defined benefit OPEB plan administered by the District. Article 11 of the State Compiled Statutes grants the authority to establish and amend the benefit terms and financing requirements to the District Board. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement 75.
Benefits Provided – The District provides healthcare and life insurance benefits for retirees and their dependents. The benefit terms are dependent on which contract each employee falls under. The specifics of each contract are on file at the District offices and are available upon request.
Employees Covered by Benefit Terms – At March 31, 2017, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefit payments 387
Active Employees 479
Total 866

B. Total OPEB Liability
The District’s total OPEB liability of $97,189,216 was measured as of June 30, 2019, and was determined by an actuarial valuation as of that date.
Actuarial Assumptions and Other Inputs – The total OPEB liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Inflation 2.60 percent
Salary Increases 2.60 percent, average, including inflation
Discount Rate 3.50 percent
Healthcare Cost Trend Rates 6.1 percent for 2019, decreasing to an ultimate rate of 4.1 percent
Retirees' Share of Benefit-Related Costs 0-25 percent of projected health insurance premiums for retirees

45

( XI. ) (Continued)

The discount rate was based a yield or index rate for 20‐year, tax exempt general obligation municipal bonds with an average rating of AA/Aa or higher. Mortality rates were based on RP-2014, as appropriate, with adjustments for mortality improvements based on Scale AA.

C. Changes in the Total OPEB Liability
Balance at June 30, 2018 $ 94,649,855
Changes for the Year -
Service cost $ 3,468,747
Interest 2,907,476
Differences between expected and actual experience (3,704,263)
Changes in assumptions or other inputs 2,290,748
Benefit payments (2,423,347)
Net Changes $ 2,539,361
Balance at June 30, 2019 $ 97,189,216

Healthcare cost trend rates were updated from an initial rate of 7.50% scaling down to 4.50% over 6 years to an initial rate of 6.10% scaling down to 4.10% over 57 years. Additionally, the salary scale was updated to 2.60% (from 3.00%) and Mortality rate tables were updated to reflect mortality improvement Scale MP-2018 (from MP-2016). Lastly, the participation rate was changed to 95% (from 100%) to better reflect anticipated future experience. This increased liabilities by about $6.2 million (6.5%).

Changes of assumptions and other inputs reflect a change in the discount rate from 3.87 percent in 2017 to 3.50 percent in 2019.

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate – The following presents the total OPEB liability of the District, as well as what the District’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2 percent) or 1-percentage-point higher (4 percent) than the current discount rate:

  1% Decrease (2.5%) Discount Rate (3.5%) 1% Increase (4.5%)
Total OPEB Liability $ 115,883,002 $ 97,189,216 $ 82,473,938

Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates – The following presents the total OPEB liability of the District, as well as what the District’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (6.5 percent) or 1-percentage-point higher (8.5 percent) than the current healthcare cost trend rate:

46

( XI. ) (Continued)

  1% Decrease (5.1% Decreasing to 3.1%) Healthcare Cost Trend Rates (6.1% Decreasing to 4.1%) 1% Increase (7.1% Decreasing to 5.1%)
Total OPEB Liability $ 78,716,076 $ 97,189,216 $ 124,162,849

D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB

For the year ended June 30, 2019, the District recognized OPEB expense of $6,191,175. At June
30, 2019, the District reported deferred outflows of resources and deferred inflows of resources related to
OPEB from the following sources:

  Deferred Outflows of Resources Deferred Inflows of Resources
Differences between expended and actual experience $ (3,233,072) $ -
Changes of assumptions - 1 ,993,248
Contributions after measurement date - -
Total $ (3,233,072) $ 1 ,993,248

Amounts reported as deferred outflows of resources and deferred inflows of resources related to
OPEB will be recognized in OPEB expense as follows:

2020 $ (185,048)
2021 $ (185,048)
2022 $ (185,048)
2023 $ (185,048)
2024 $ (185,048)
Thereafter (314,584)
Total $ (1,239,824)

XII. 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.

47

( XII. ) (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 pro-rata 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, 2019, the Canandaigua City School District, New York incurred premiums or contribution expenditures totaling $408,380. The District has established a workers’ compensation reserve totaling $1,246,126 as of June 30, 2019.

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, 2018, 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 2018-19 fiscal year totaled $6,210. The balance of the fund at June 30, 2019 was $340,699 and is recorded in the General Fund as an Unemployment Insurance Reserve. In addition, as of June 30, 2019, no loss contingencies existed or were considered probable or estimable for incurred but not reported claims payable.

48

XIII. Commitments and Contingencies

A. Litigation
There are tax certiorari claims requesting reduction of assessments and a tort claim. The District has established a Tax Certiorari reserve to help offset any potential liability, in addition the tort claim is believed to be covered by insurance. The District has filed a claim against a capital project contactor which is anticipated to be settled through mediation.

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 (VEBA)
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 2018-19 fiscal year was $13,500. The account is recorded in the Trust and Agency Fund and the balance as of June 30, 2019 was $603,021.

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 $1,155,099. The District received payment in lieu of tax (PILOT) payment totaling $558,894 to help offset the property tax reduction, which resulted in a net tax abatement totaling $596,205.

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 $1,155,099. The District received payment in lieu of tax (PILOT) payment totaling $558,894 to help offset the property tax reduction, which resulted in a net tax abatement totaling $596,205.

49

Required Supplementary Information

CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

Schedule of Changes in District's Total OPEB Liability and Related Ratio
(Unaudited)
For Year Ended June 30, 2019

TOTAL OPEB LIABILITY
  2019 2018

Service cost

$ 3,468,747

$ 3,561,853

Interest

2,907,476

2,786,575

Differences between expected and actual experiences

(3,704,263)

(12,832)

Changes of assumptions or other inputs

2,290,748

-

Benefit payments

(2,423,347)

(2,004,599)

Net Change in Total OPEB Liability

$ 2,539,361

$4,330,997

Total OPEB Liability - Beginning $ 94,649,855 $ 90,318,858
Total OPEB Liability - Ending $ 97,189,216 $ 94,649,855

Covered Employee Payroll

$ 29,270,034

$29,179,160

Total OPEB Liability as a Percentage of Covered Employee Payroll

332.04%

324.37%

10 years of historical information is not available, and will be added each year subsequent to the year of implementation
until 10 years of historical data is present.

(See Independent Auditors' Report)

50

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, 2019

NYSERS Pension Plan

  2019 2018 2017 2016 2015
Proportion of the net pension liability (assets) 0.0267093% 0.027784% 0.028216% 0.0285241% 0.0277771%
Proportionate share of the net pension liability (assets) $ 1,892,439 $ 896,708 $ 2,651,191 $ 4,578,198 $ 938,379
Covered-employee payroll $ 9,114,880 $8,939,320 $ ,558,424 $ 8,225,297 $ 8,259,702
Proportionate share of the net pension liability (assets) as a percentage of its covered-employee payroll

20.762%

10.031%

30.978%

55.660%

11.361%

Plan fiduciary net position as a percentage of the total pension liability

96.27%

98.24%

94.70%

90.70%

97.90%

 

NYSTRS Pension Plan

  2019 2018 2017 2016 2015
Proportion of the net pension liability (assets) 0.157466% 0.156253% 0.156863% 0.1603090% 0.1602940%
Proportionate share of the net pension liability (assets) $ (2,847,397) $ (1,187,681) $ 1,680,070 $ (16,651,012) $ (17,855,784)
Covered-employee payroll $ 26,986,638 $ 25,939,934 $ 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

-10.551%

-4.579%

6.674%

-68.270%

-72.381%

Plan fiduciary net position as a percentage of the total pension liability

101.33%

100.66%

99.01%

110.46%

111.48%

10 years of historical information is not available, and will be added each year subsequent to the year of implementation until 10 years of historical data is present.

(See Independent Auditors' Report)

51

Required Supplementary Information

CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

Schedule of District Contributions
(Unaudited)
For Year Ended June 30, 2019

NYSERS Pension Plan

  2019 2018 2017 2016 2015
Contractually required contributions $ 1,321,881 $ 1,328,536 $ 1,297,713 $ 1,477,436 $ 1,637,692
Contributions in relation to the contractually required contribution (1,321,881) (1,328,536) (1,297,713) (1,477,436) (1,637,692)
Contribution deficiency (excess) $ - $ - $ - $ - $ -
Covered-employee payroll

$ 9,114,880

$ 8,939,320

$ 8,558,424

$ 8,225,297

$ 8,259,702

Contributions as a percentage of covered-employee payroll

14.50%

14.86%

15.16%

17.96%

19.83%

 

NYSTRS Pension Plan

  2019 2018 2017 2016 2015
Contractually required contributions $ 3,031,756 $ 2,688,081 $ 3,044,665 $ 3,390,805 $ 4,473,059
Contributions in relation to the contractually required contribution (3,031,756) (2,688,081) (3,044,665) (3,390,805) (4,473,059)
Contribution deficiency (excess) $ - $ - $ - $ - $ -
Covered-employee payroll

$ 26,986,638

$ 25,939,943

$ 25,171,843

$ 24,389,884

$ 24,669,311

Contributions as a percentage of covered-employee payroll

11.23%

10.36%

12.10%

13.90%

18.13%

10 years of historical information is not available, and will be added each year subsequent to the year of implementation until 10 years of historical data is present.

(See Independent Auditors' Report)

52

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, 2019

Revenues Original Budget Amended Budget Current Year's Revenues Over (Under) Revised Budget

Local Sources -

       

Real property taxes

$ 45,434,119

$ 41,650,108

$ 41,731,642

$ 81,534

Real property tax items

603,326

4,387,337

4,579,366

192,029

Charges for services

160,000

160,000

348,278

188,278

Use of money and property

55,000

55,000

416,023

361,023

Sale of property and compensation for loss

51,500

210,950

217,036

6,086

Miscellaneous

225,000

233,593

419,425

185,832

State Sources -

       

Basic formula

25,197,178

21,158,598

21,396,371

237,773

Lottery aid

-

4,038,580

4,136,751

98,171

BOCES

1,225,000

1,225,000

1,413,659

188,659

Textbooks

288,000

210,661

207,836

(2,825)

All Other Aid -

       

Computer software

52,000

106,585

106,585

-

Library loan

-

22,754

22,754

-

Handicapped students

400,000

400,000

489,771

89,771

Other aid

100,000

100,000

95,715

(4,285)

Federal Sources

130,000

130,000

205,232

75,232

TOTAL REVENUES

$ 73,921,123

$ 74,089,166

$ 75,786,444

$ 1,697,278

Appropriated reserves $ 1,530,000 $ 1,845,000    

Appropriated fund balance

$ 545,000

$1,059,016

   

Prior year encumbrances

$ 397,331

$ 397,331

   

TOTAL REVENUES AND APPROPRIATED RESERVES/FUND BALANCE

$76,393,454

$77,390,513

   

(See Independent Auditors' Report)

 

53

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, 2019

Expenditures Original Budget Amended Budget Current Year's Expenditures Encumbrances Unencumbered Balances

General Support -

         

Board of education

$ 74,810

$ 67,488

$ 34,331

$  -

$ 33,157

Central administration

264,305

271,506

269,647

-

1,859

Finance

819,028

822,687

757,121

12,898

52,668

Staff

440,889

471,789

443,029

-

28,760

Central services

4,237,217

4,419,775

3,702,538

320,352

396,885

Special items

1,173,768

1,211,874

1,083,141

2,913

125,820

Instructional -

 

 

 

 

 

Instruction, administration and improvement

2,454,520

2,490,115

2,315,525

-

174,590

Teaching - regular school

20,365,849

20,303,497

19,563,131

6,585

733,781

Programs for children with handicapping conditions

10,567,431

10,526,607

9,571,950

59,087

895,570

Occupational education

1,112,672

1,099,153

1,092,672

-

6,481

Teaching - special schools

147,500

158,372

154,672

-

3,700

Instructional media

3,136,356

3,134,922

2,805,959

270,760

58,203

Pupil services

3,399,696

3,457,064

3,293,353

32,674

131,037

Pupil Transportation

3,132,415

3,154,313

2,733,119

600

420,594

Community Services

98,200

103,537

54,675

22,975

25,887

Employee Benefits

19,254,185

19,255,801

17,679,378

13,790

1,562,633

Debt service - principal

4,385,000

4,385,000

4,385,000

-

-

Debt service - interest

1,044,613

1,044,613

788,363

-

; 256,250

TOTAL EXPENDITURES

$ 76,108,454

$76,378,113

$ 70,727,604

$ 742,634

$ 4,907,875

Other Uses -

         

Transfers - out

$ 285,000  $1,012,400 $ 990,962 $ - $ 21,438

TOTAL EXPENDITURES AND OTHER USES

$ 76,393,454

$ 77,390,513

$ 71,718,566

$ 742,634

$4,929,313

NET CHANGE IN FUND BALANCE

$ - $ - $ 4,067,878    

FUND BALANCE, BEGINNING OF YEAR

26,639,189 26,639,189 26,639,189    

FUND BALANCE, END OF YEAR

26,639,189 26,639,189 $30,707,067    

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)

54

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, 2019

CHANGE FROM ADOPTED BUDGET TO FINAL BUDGET:
Adopted budget  $75,996,123
Prior year's encumbrances 397,331
Original Budget $76,393,454
Budget revisions -
Bus purchase 708,750
Insurance recovery 159,450
Tax certiorari payment 100,000
Donations/miscellaneous 28,859
FINAL BUDGET $77,390,513

SECTION 1318 OF REAL PROPERTY TAX LAW LIMIT CALCULATION:
2019-20 voter approved expenditure budget $76,361,991
Unrestricted fund balance:
Assigned fund balance $1,017,634
Unassigned fund balance 3,054,480
Total Unrestricted fund balance $4,072,114
Less adjustments:
Appropriated fund balance $275,000
Encumbrances included in assigned fund balance 742,634
Total adjustments $1,017,634
General fund fund balance subject to Section 1318 of Real Property Tax Law 3,054,480
ACTUAL PERCENTAGE 4%

(See Independent Auditors' Report)

55

100,000Supplementary Information

CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK
CAPITAL PROJECTS FUND

Schedule of Project Expenditures
For Year Ended June 30, 2019

Project
Title
Original
Appropriation
Revised
Appropriation
Expenditures
Prior Years
Expenditures
Current Year
Expenditures
Total
Unexpended
Balance
Methods
of Financing
Obligations
Methods
of Financing
Local Sources
Methods
of Financing
State Sources
Methods
of Financing
Total
Fund Balance

2017 Capital Outlay Project

$100,000

$100,000

$99,434

$-

$99,434

$566

$-

$100,000

$-

$100,000

$566

2016 Capital Outlay Project 100,000 100,000 89,185 - 89,185 10,815 - - - - 10,815
2015 Capital Outlay Project 100,000 100,000 84,906 - 84,906 15,094 - 100,100 - 100,100 15,194
2015 Renovation &
Athletic Fields
13,380,000 13,760,000 13,594,917 44,774 13,639,691 120,309 8,284,639 5,485,028 - 13,769,667 129,976
2010 Renovation Project 8,430,000 8,430,000 8,166,817 - 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 - 9,333,318 185,682 7,834,830 1,509,241 - 9,344,071 10,753
Emergency Lift Project 908,750 908,750 723,375 - 723,375 185,375 - 908,750 - 908,750 185,375
Building Purchase 650,000 650,000 608,553 38,873 647,426 2,574 - 650,000 - 650,000 2,574
Bus Purchases 2016-17 755,000 755,000 748,334 - 748,334 6,666 - 755,000 - 755,000 6,666
Bus Purchases 2017-18 731,199 731,199 711,198 - 711,198 20,001 - 731,199 - 731,199 20,001
2018 Capital Outlay Project 100,000 100,000 99,985 - 99,985 15 - 100,000 - 100,000 15
Bus Purchases 2018-19 697,363 697,363 - 697,359 697,359 4 - 697,363 - 697,363 4
Smart Schools Bond Act 2,055,645 2,055,645 290,676 1,220,310 1,510,986 544,659 - - 1,510,986 1,510,986 -
2019 Capital Outlay Project 100,000 100,000 - 96,193 96,193 3,807 - 100,000 - 100,000 3,807
Bus Purchases 2019-20 708,750 708,750 - - - 708,750 - 708,750 - 708,750 708,750
TOTAL $38,715,707 $38,715,707 $34,550,698 $2,097,509 $36,648,207 $2,067,500 $24,189,469 $12,019,470 $1,510,986 $37,719,925 $1,071,718

(See Independent Auditors' Report)

56

Supplementary Information

CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

Combining Balance Sheet - Nonmajor Governmental Funds
June 30, 2019

 

Special Revenue Fund
School Lunch Fund

Debt Service Fund Capital Projects Fund

Total Nonmajor

Governmental Funds

Assets        
Cash and cash equivalents $51,499 $54,261 $980,273 $1,086,033
Receivables 54,827   493,051 547,878
Inventories 35,552     35,552
Due from other funds 22,207 34   22,241
TOTAL ASSETS $164,085 $54,295 $1,473,324 $1,691,704
LIABILITIES AND FUND BALANCES        
Liabilities -        
Accounts payable $2,109 $- $1,572 $3,681
Accrued liabilities 11,980     11,980
Due to other funds 87,584   400,034 487,618
Due to other governments 1,531     1,531
Unearned revenue 25,329     25,329
TOTAL LIABILITIES $128,533 $- $401,606 $530,139
Fund Balances        
Nonspendable $35,552 $- $- $35,552
Restricted   54,295 1,094,495 1,148,790
Unassigned     (22,777) (22,777)
TOTAL FUND BALANCE $35,552 $54,295 $1,071,718 $1,161,565
TOTAL LIABILITIES AND
FUND BALANCES
$164,085 $54,295 $1,473,324 $1,691,704

(See Independent Auditors' Report)

57

Supplementary Information

CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK
Combining Statements of Revenues, Expenditures and Changes in Fund Balances

For Year Ended June 30, 2019
Nonmajor Governmental Funds

 

Special Revenue Fund

School Lunch Fund

Debt Service Fund Capital Projects Fund Total Nonmajor Governmental Funds
REVENUES        
Use of money and property $ 1,184 $ 187 $  -

$1,371

Miscellaneous 11,718 - 100,000

111,718

State sources 22,112 - 1,220,310

1,242,422

Federal sources 693,286 - -

693,286

Sales 405,600 - -

405,600

TOTAL REVENUES

$ 1,133,900

$ 187 $1,320,310

$ 2,454,397

EXPENDITURES        
Pupil transportation $  - $;  -

$697,359

$ 697,359

Employee benefits 217,716 - -

217,716

Cost of sales 514,147 - -

514,147

Other expenses 460,145 - 1,400,150

460,145

Capital outlay - - -

1,400,150

TOTAL EXPENDITURES

$1,192,008

$  - $ 2,097,509

$ 3,289,517

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES

$(58,108)

$ 187 $ (777,199)

$ (835,120)

OTHER FINANCING SOURCES (USES)
Transfers - in
$ 48,563 $  - $ 808,750 $ 857,313
TOTAL OTHER FINANCING
SOURCES (USES)

$48,563

$808,750

$ 857,313

NET CHANGE IN FUND BALANCE

$(9,545)

$ 187

$ 31,551

$ 22,193

FUND BALANCE, BEGINNING OF YEAR

45,097

54,108

1,040,167

1,139,372

FUND BALANCE, END OF YEAR

$ 35,552

$54,295

$1,071,718

$ 1,161,565

(See Independent Auditors' Report)

58

Supplementary Information

CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK

Net Investment in Capital Assets
For Year Ended June 30, 2019

Capital assets, net $79,372,544
Add:
Unspent bond proceeds $40,729
40,729
Deduct:
Short-term portion of bonds payable $3,130,000
Long-term portion of bonds payable 23,410,000
Assets purchased with short-term financing 22,778
26,562,778
Net Investment in Capital Assets $52,850,495

(See Independent Auditors' Report)

59

Supplementary Information

CANANDAIGUA CITY SCHOOL DISTRICT, NEW YORK
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

For Year Ended June 30, 2019

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

S215E150269 N/A $91,660

Indirect Programs:
Passed Through NYS Education Department
Special Education Cluster IDEA -

 

     
Special Education - Grants to States (IDEA, Part B)

84.027

N/A

0032-19-0664

$ 924,425

Special Education - Preschool Grants (IDEA Preschool)

84.173

N/A

0033-19-0664

 29,471

Total Special Education Cluster IDEA      

$953,896

Title IIA - Supporting Effective Instruction State Grant

84.367

N/A

0147-19-2175

124,496

Title IIA - Supporting Effective Instruction State Grant

84.367

N/A

0147-18-2175

10,490

Hurricane Education Recovery - Emergency Impact Aid

84.938

N/A

0080-18-2175

6,750

Title I, Part A - Grants to Local Educational Agencies

84.010

N/A

0021-19-2175

515,633

Title I, Part D - Grants to Local Educational Agencies

84.010

N/A

0016-19-2175

15,035

Title I - Grants to Local Educational Agencies

84.010

N/A

0021-18-2175

 27,074

Total U.S. Department of Education       $1,745,034

U.S. Department of Agriculture:
Indirect Programs:
Passed Through NYS Education Department -
Child Nutrition Cluster -

       
National School Lunch Program

10.555

N/A 006905 $465,336
National School Lunch Program-Non-Cash
Assistance (Commodities)

10.555

N/A 006905

87,395

National School Breakfast Program

10.553

N/A 006905

140,555

Total Child Nutrition Cluster      

693,286

Total U.S. Department of Agriculture      

$693,286

TOTAL EXPENDITURES OF FEDERAL AWARDS       $2,438,320

(See Independent Auditors' Report)

60

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, 2019, 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 October 1, 2019.

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.

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100 Chestnut Street      Suite 1200     Rochester, NY 14604      P 585•423•1860      F 585•423•5966     mengelmetzgerbarr.com

Additional Offices: Elmira, NY • Canandaigua, NY • Hornell, NY

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.

Rochester, New York
October 1, 2019

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