Canton, Massachusetts · Saved source text
Official Statement dated May 7, 2020
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Source page 81
The following represents the Town’s summarized budgets for each of the next five years:
2020 2021 2022 2023 2024
Revenues and Other Sources
Real Estate and Personal Property Taxes $ 79,166,862 $ 82,024,499 $ 85,210,689 $ 87,908,061 $ 90,703,375
State Aid 9,379,033 9,379,033 8,957,001 8,957,000 8,922,728
Local Receipts 7,378,804 7,385,025 7,391,400 7,397,935 7,404,634
Transfers and Other Sources 3,169,138 2,889,003 2,922,464 2,902,106 2,940,590
Total Revenues 99,093,837 101,677,560 104,481,554 107,165,102 109,971,327
Expenditures and Other Uses
Education Budget 44,114,362 45,243,337 46,615,933 47,964,860 49,431,579
Municipal Budget 21,777,124 22,331,654 23,006,364 23,672,100 24,395,970
Fixed Costs 30,070,814 31,363,923 31,989,646 32,526,791 32,809,893
State and County Charges 1,218,884 1,238,646 1,269,611 1,301,351 1,333,885
Capital costs and special appropriations 3,135,000 1,500,000 1,600,000 1,700,000 2,000,000
Total Expenditures 100,316,184 101,677,560 104,481,554 107,165,102 109,971,327
Surplus/(Deficit) $ (1,222,347) $ - $ - $ - $ -
Capital Improvements and Financing
The Town continues to invest in infrastructure improvements such as roads, sewers, and water supply
facilities, as well as various municipal and school facility upgrades. These include: Town Hall, Library,
Public Safety facilities, Public Works, Recreational facilities and School building improvement projects.
Recently, the Town began construction on a proposed $10 million ice rink as well as $6 million in
renovations to the Town pool. These are anticipated to be substantially completed in fiscal year 2020.
In addition, the Town has completed the construction of two new water filtration plants. These water
filtration plants will provide state of the art water filtration capabilities and allow for the use of local
source water to reduce operating costs, improve water availability (including redundancy) and filtrate
water for customers with the most technologically advanced system available today.
Recently the Town completed renovations of a former Knights of Columbus Hall and turned it into the
new Senior Center located at 500 Pleasant Street to address the growing, aging population in need of
expanded and updated senior services.
In addition, the Town completed repairs to Shepard Pond dam which was classified by the state as being a
Significant Hazard Dam in poor condition. To help fund this repair project, the Town received a grant
award of $665,000 from the Commonwealth and a $335,000 low interest loan from the Executive Office
of Environmental Affairs.
Construction of an eight-classroom addition to the Lt. Peter M. Hansen Elementary School was also
completed recently. This addition has alleviated increasing enrollment concerns while enabling more
children to attend an elementary school in their neighborhood.
As part of the annual budget process, the Capital Planning Committee (CPC) recommends the capital
budget for the upcoming year and prepares a five-year plan to address the long-term capital needs of the
Town. The capital spending plan for the five-year period from fiscal year 2020 through fiscal year 2024
has an estimated cost of $30.3 million, with $8.3 million to be funded from estimated revenues with the
remainder to be funded from the issuance of bonds. The CPC’s capital plan has allocated $7.4 million for
Town of Canton, Massachusetts Page 9 of 130 Comprehensive Annual Financial ReportSource page 82
municipal departments, $6.3 million for the school department, $12.8 million for the water enterprise
fund, and $3.8 million for the sewer enterprise fund.
The Town’s target set aside to finance its capital plan is 5% of recurring revenues. A portion of its annual
capital plan funds smaller capital projects on a pay-as-you-go basis through recurring revenues while
larger capital projects are financed through borrowing.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awards a
Certificate of Achievement for Excellence in Financial Reporting. This is a very prestigious award and
in order to be awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized comprehensive annual financial report. This report must satisfy both generally
accepted accounting principles and applicable legal requirements.
The GFOA awarded this Certificate of Achievement for Excellence in Financial Reporting to the Town of
Canton for its comprehensive annual financial report for the fiscal year ended June 30, 2018. This was the
thirteenth year that the Town has achieved this prestigious award.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report will meet the Certificate of Achievement Program’s requirements,
and we are submitting it to the GFOA to determine its eligibility for this certificate.
The publication of this CAFR represents an important achievement in the ability of the Town of Canton
to provide enhanced financial information and accountability to its citizens, elected and appointed
officials, and investors. The preparation of this report would not have been possible without the efficient
and dedicated services of the entire staff of the Finance Office.
Special thanks also go to the certified public accounting firm of Roselli, Clark and Associates for their
advice and assistance in the preparation of this report.
Respectfully submitted,
Charles J. Aspinwall
Town Administrator
James R. Murgia
Finance Director
Town of Canton, Massachusetts Page 10 of 130 Comprehensive Annual Financial ReportSource page 83
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Canton
Text38:
Massachusetts
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2018
Executive Director/CEO
Town of Canton, Massachusetts Page 11 of 130 Comprehensive Annual Financial ReportSource page 84
TOWN OF CANTON, MASSACHUSETTS ORGANIZATIONAL CHART Z Town Board Planning Cletks Board of Health Board Office of Selectmen Board of Selectmen Board of Library Appointed Multiple Authority Trustees Town Meeting Member Bodies Town Canton Director Town Town Town Director of || Executive Library a ees Moderator | | Representative || Public Health Planner Clerk Administrator Assessing || Director Director -Zoning Board.of Appeals -Water/Sewer Rate Policy Finance Commission Committee race. | Executive “Touth Coniens sion Town Counsel -Historical Commission Assistant -Fair Housing Committee Personnel Cable Advisory Committee Adv. Board Town Planner Administrative Beautification Committee Secretary -Conservation Commission Building ae Council on Aging bc eteaias Sealer of Weights Sehactial Develan’ - and Measures Secretary Financing Authority Committee -Local Emergency Planning Capital Committee Outlay -Traffic Study Committee . - -Industrial Development Committee Commission Building & Veteran's Building Police Fire Dept. of Human Department Council Recreation Conservation Zoning Maintenance De. ee ens Resource of Finance i a Bik Denaituent Office Department partm Department | | Public Works | | nenartment on Aging Commission Commission Building Veteran's Police Fire Superintendent} Human Finance CoA Recreation Conservation ae 2 ‘ of Resource 2 ; : Commission Commissioner] | Director Chief Chief Public Works | | Administrator Director Director Director Kgent Town of Canton, Massachusetts Page 12 of 130 Comprehensive Annual Financial Report [Original embedded text, retained for comparison] Town of Canton, Massachusetts Page 12 of 130 Comprehensive Annual Financial Report
Source page 85
CANTON PUBLIC SCHOOLS
CANTON SCHOOL COMMITTEE
ADMINISTRATIVE ASSISTANT TO THE
SUPERINTENDENT/SCHOOL COMMITTEE
SUPERINTENDENT OF SCHOOLS
DIRECTOR .OF CURRICULUM SCHOOL BUSINESS
BUILDING PRINCIPALS DIRECTOR OF
and INSTRUCTION ADMINISTRATOR
STUDENT SERVICES
WIDE AREA EDUCATIONAL SCHOOL
NETWORK TECHNOLOGY SECRETARIES ASSISTANT
SCHOOL COUNCIL SECRETARIES
ADM. ADM.. PRINCIPALS ADMINISTRATIVE ASST.
CAPT.
SPED
K-5 READING PARENT GROUPS
PARENT
BUILDING SPECIALISTS SPECIAL EDUCATION, ADVISORY
TECHNOLOGY DISTRICT ACCOUNTS
FACULTY BUILDING 504, ALT. ED. COUNCIL PAYROLL
SPECIALISTS DEPARTMENT PAYABLE
AND STAFF DEPARTMENT STUDENT SERVICES
COORDINATORS
COORDINATORS FACULTY AND STAFF
COMPUTER PROFESSIONAL
DIRECTOR OF
TEACHERS DEVELOPMENT
CHARMSS FOOD SERVICES
COMMITTEE
CUSTODIANS COLLABORATIVE
FACILITIES
PRIVATE SCHOOLS
DIRECTOR
CAFETERIA
MANAGERS/
CUSTODIANS/ WORKERS
MAINTENANCE
TRANSPORTATION
COORDINATOR
HEALTH
SERVICES
Town of Canton, Massachusetts Page 13 of 130 Comprehensive Annual Financial ReportSource page 86
PRINCIPAL TOWN OFFICIALS
Elected Officials
Board of Selectmen Christopher J. Connolly, Chairman
John J. Connolly, Vice Chairman
Thomas W. Theodore, Clerk
Mark J. Porter, Member
Michael C. Loughran, Member
School Committee Kristin Mirliani, Chairperson
Reuki Schutt, Vice Chairperson
Nichola Gallagher, Secretary
Kristian Merenda, Member
Maureen Moran, Member
Principal Executive Officers
Town Administrator Charles J. Aspinwall
Finance Director James R. Murgia
Town Accountant Kathy Dooley Butters
Superintendent of Schools Jennifer Fischer-Mueller
School Business Administrator Barry Nectow
Police Chief Kenneth N. Berkowitz
Fire Chief Charles E. Doody
DPW Superintendent Michael T. Trotta
Town of Canton, Massachusetts Page 14 of 130 Comprehensive Annual Financial ReportSource page 87
Financial Section Architectural rendering provided by Thorndike Development Over 200 condominiums are planned to be constructed adjacent to the Paul Revere Heritage Site to be called Copperworks as a homage to Paul Revere’s copper mill which was formerly located on this property. Town of Canton, Massachusetts Page 15 of 130 Comprehensive Annual Financial Report
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INDEPENDENT AUDITOR’S REPORT
Honorable Board of Selectmen
Town of Canton, Massachusetts
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the Town of Canton,
Massachusetts, (the “Town”) as of and for the year ended June 30, 2019, and the related notes to the
financial statements, which collectively comprise the Town’s basic financial statements as listed in the
table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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Town of Canton
Page Two
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund
and the aggregate remaining fund information of the Town, 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.
Restatement of Prior Year Ending Balances
As more fully described in Note IV, a restatement of prior year ending net position balances was made to
the Town’s governmental activities, business-type activities and each Enterprise Fund. Our opinion was
not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, and the schedules listed under the required supplementary information section in
the accompanying table of contents be presented to supplement the basic financial statements. Such
information, although not part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements, and statistical section are presented for purposes of additional
analysis and are not a required part of the basic financial statements. The combining and individual
nonmajor fund financial statements are the responsibility of management and were derived from and
relate directly to the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the
combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in
relation to the basic financial statements as a whole. The introductory and statistical sections have not
Town of Canton, Massachusetts Page 18 of 130 Comprehensive Annual Financial ReportSource page 91
Town of Canton
Page Three
been subjected to the auditing procedures applied in the audit of the basic financial statements and,
accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required By Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated December 15,
2019, on our consideration of the Town of Canton, Massachusetts’ internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
Roselli, Clark and Associates
Certified Public Accountants
Woburn, Massachusetts 01801
December 15, 2019
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Management’s Discussion and Analysis Town of Canton, Massachusetts Page 21 of 130 Comprehensive Annual Financial Report
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MANAGEMENT’S DISCUSSION AND ANALYSIS
As the management of the Town, we offer readers of the accompanying financial statements this narrative
overview and analysis of the financial activities of the Town for the fiscal year ended June 30, 2019.
Financial Highlights
During the year ended June 30, 2019 the Town completed an actuarial valuation of its net OBEB
liability with a valuation date as of July 1, 2018. Upon completion of this actuarial valuation, it was
determined that the net OPEB liability reported at June 30, 2018 was incorrectly stated. The impact
of properly recording the net OPEB liability at June 30, 2018 resulted in a prior period adjustment to
reduce Governmental Activities and Business-type Activities net position over $6.8 million and $0.1
million respectively. All discussions in the Management Discussion and Analysis are based on the
restated amounts.
The assets and deferred outflows of the Town exceeded its liabilities and deferred inflows at the close
of the most recent fiscal year by over $28.8 million (total net position).
The government’s total net position increased by over $1.7 million. This consisted primarily of a
decrease in governmental activities’ net position by almost $0.8 million and an increase in Business -
type activities’ net position of almost $2.5 million. Details of these changes are discussed in later
sections of the Management Discussion and Analysis.
The Town’s Unassigned Fund Balance reported in the General Fund was almost $17.5 million (17.0%
of General Fund expenditures). Total Fund Balance in the General Fund was almost $20.3 million
(19.7% of General Fund expenditures).
The Town reported a total deficit in its Capital Project Fund of over $1.0 million. This was made up
of over $0.2 million as restricted, and a deficit of almost $1.3 million as unassigned. This deficit was
funded from short term borrowings and will be cured at the time the short-term borrowings are
refinanced to long-term.
The Town reported total fund balances of over $14.4 million in the Combined Nonmajor
Governmental Funds. Almost $13.9 million in Restricted Fund Balances, combined with over $0.5
million in Nonspendable Fund Balances made up this amount.
The Town’s total debt decreased by almost $2.3 million during the fiscal year. Detail of this net
decrease is discussed in the debt section of this Management Discussion and Analysis.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Town’s basic financial
statements.
The Town’s basic financial statements comprise three components:
1) government-wide financial statements,
2) fund financial statements, and
3) notes to the financial statements.
This report also contains other supplementary information in addition to the basic financial statements
themselves.
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The layout and relationship of the financial statements and supplementary information is visually
illustrated as follows:
Required Supplementary Management Discussion and Analysis
Information
Government-wide Financial Statements
Governmental Fund Financial Statements
Basic Proprietary Fund Financial Statements
Financial Statements
Fiduciary Fund Financial Statements
Notes to the Basic Financial Statements
Required Supplementary
Information – Budgetary Reporting with Notes, Pension and
Other than MD&A Other Postemployment Benefits
Other Supplementary
Combining Fund Financial Statements/Schedules
Information
Government-wide Financial Statements – The government-wide financial statements are designed to
provide readers with a broad overview of the Town’s finances, in a manner similar to a private-sector
business. The statement of position presents information on all of the Town’s assets, deferred outflows,
liabilities and deferred inflows, with the net result reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position of the Town is
improving or deteriorating. The statement of activities presents information showing how the
government’s net position changed during the most recent fiscal year. All changes in net position are
reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation
leave.)
The government-wide financial statements consist of two classifications; (1) those whose activities are
principally supported by taxes and intergovernmental revenue (governmental activities), and (2) those
whose activities are intended to recover all or a significant portion of their costs through user fees and
charges (business-type activities).
The governmental activities of the Town include general government, public safety, highways and streets,
sanitation, education, economic development, debt service, fringe benefits and culture and recreation.
The business-type activities of the Town are comprised of water, sewer and rink enterprise funds.
Town of Canton, Massachusetts Page 23 of 130 Comprehensive Annual Financial ReportSource page 96
Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The Town, like other state
and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements. All of the funds of the Town can be divided into three categories: governmental
funds, proprietary funds, and fiduciary funds.
Accounting guidelines distinguish fund balance between amounts that are considered nonspendable, such
as fund balance associated with inventories, and other amounts that are classified based on the relative
strength of the constraints that control the purposes for which specific amounts can be spent. Beginning
with the most binding constraints, fund balance amounts will be reported in the following classifications:
• Restricted—amounts constrained by external parties, constitutional provision, or enabling
legislation
• Committed—amounts constrained by a government using its highest level of decision-making
authority
• Assigned—amounts a government intends to use for a particular purpose
• Unassigned—amounts that are not constrained at all will be reported in the general fund or in
other major funds if negative
Governmental funds – Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By doing
so, readers may better understand the long-term impact of the government’s near-term financing
decisions.
The Town maintains numerous individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the General Fund and Capital Projects Fund, which are considered to be
major funds. Data from the other governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these Nonmajor governmental funds is provided in the
form of combining statements.
The Town adopts an annual appropriated budget for its general fund and its enterprise fund. A budgetary
comparison schedule has been provided for the general fund to demonstrate compliance with this budget.
Proprietary funds – The Town maintains two types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements. The Town uses an enterprise fund to account for its water, sewer and rink enterprise funds.
Internal service funds are used to report activities that service all other Town Departments. The Town
uses internal service funds to account for self-insured health insurance claims.
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Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial statement because
the resources of those funds are not available to support the Town’s own programs. The accounting used
for fiduciary funds is much like that used for proprietary funds.
Notes to the Financial Statements - The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Other Information - In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information which includes the schedules of the Town’s
proportionate share of the net pension liability, contributions to the pension plan, the Commonwealth’s
share of the net pension liability of the Massachusetts Teacher’s Retirement System, the funding progress
and contribution funding of its obligation to provide other postemployment benefits to its employees as
well as the Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual –
General Fund and notes to this schedule.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. In the case of the Town, assets exceeded liabilities by over $28.8 million at the close of the
most recent fiscal year.
Condensed net position data is presented as follows:
Governmental Activities Business-Type Activities Total
June 30, June 30, June 30, June 30, June 30, June 30,
2019 2018 2019 2018 2019 2018
Assets
Currrent and other assets $ 52,931,937 $ 51,592,851 $ 13,960,712 $ 13,322,720 $ 66,892,649 $ 64,915,571
Capital assets, net 111,324,094 106,723,246 46,255,361 45,556,757 157,579,455 152,280,003
Total assets 164,256,031 158,316,097 60,216,073 58,879,477 224,472,104 217,195,574
Deferred outflows of resources 9,563,391 12,068,807 646,689 591,772 10,210,080 12,660,579
Liabilities
Long-term liabilities 150,113,570 146,883,727 25,851,607 27,974,324 175,965,177 174,858,051
Other liabilities 16,312,941 11,682,048 4,256,232 3,055,097 20,569,173 14,737,145
Total liabilities 166,426,511 158,565,775 30,107,839 31,029,421 196,534,350 189,595,196
Deferred inflows of resources 8,962,726 5,800,278 356,654 391,682 9,319,380 6,191,960
Net Position
Net investment in capital assets 85,225,980 81,317,923 23,248,847 20,603,290 108,474,827 101,921,213
Restricted 10,431,283 10,880,921 - - 10,431,283 10,880,921
Unrestricted (97,227,078) (86,179,993) 7,149,422 7,446,856 (90,077,656) (78,733,137)
Total Net Position $ (1,569,815) $ 6,018,851 $ 30,398,269 $ 28,050,146 $ 28,828,454 $ 34,068,997
By far, the largest portion (almost $108.5 million) of the Town’s net position reflects its investment in
capital assets (e.g. land, buildings, infrastructure, machinery, and equipment) less any related debt used to
acquire those assets that is still outstanding. The Town uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the Town’s
investment in its capital assets is reported net of related debt, the resources needed to repay this debt must
Town of Canton, Massachusetts Page 25 of 130 Comprehensive Annual Financial ReportSource page 98
be provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
An additional portion (over $10.4 million) of the Town’s net position represents resources that are subject
to external restrictions on how they may be used. Unrestricted net position is reported as a deficit of over
$90.0 million due to the recognition of net pension and other postemployment liabilities that continue to
be significant.
Condensed changes in net position data is presented as follows:
Governmental Activities Business-Type Activities Total
June 30, June 30, June 30, June 30, June 30, June 30,
2019 2018 2019 2018 2019 2018
Revenues
Program revenues:
Charges for services $ 7,907,770 $ 7,521,265 $ 13,430,669 $ 14,330,135 $ 21,338,439 $ 21,851,400
Operating grants and contributions 20,992,327 19,405,225 - - 20,992,327 19,405,225
Capital grants and contributions 795,169 2,293,126 450,000 5,625 1,245,169 2,298,751
General revenues:
Property taxes and tax liens 76,504,860 74,151,256 - - 76,504,860 74,151,256
Unrestricted grants and contributions 2,255,103 2,180,123 - - 2,255,103 2,180,123
Other 7,069,289 6,735,302 195,048 98,038 7,264,337 6,833,340
Total Revenues 115,524,518 112,286,297 14,075,717 14,433,798 129,600,235 126,720,095
Expenses
General government 6,597,325 5,578,489 - - 6,597,325 5,578,489
Public safety 20,028,852 19,250,042 - - 20,028,852 19,250,042
Education 72,945,712 70,396,176 - - 72,945,712 70,396,176
Public works 8,254,354 7,911,117 - - 8,254,354 7,911,117
Health and human services 1,598,126 1,635,120 - - 1,598,126 1,635,120
Culture and recreation 4,763,997 3,768,025 - - 4,763,997 3,768,025
Debt service 595,390 659,834 - - 595,390 659,834
Water - - 6,656,972 7,105,456 6,656,972 7,105,456
Sewer - - 6,415,007 6,275,549 6,415,007 6,275,549
Rink - - 15,301 13,498 15,301 13,498
Total Expenses 114,783,756 109,198,803 13,087,280 13,394,503 127,871,036 122,593,306
Change in net position before transfers 740,762 3,087,494 988,437 1,039,295 1,729,199 4,126,789
Transfers (1,500,000) (500,000) 1,500,000 500,000 - -
Change in net position (759,238) 2,587,494 2,488,437 1,539,295 1,729,199 4,126,789
Net position, beginning of year 6,018,851 32,339,217 28,050,146 27,690,953 34,068,997 60,030,170
Restatement for net OPEB liability (6,829,428) (28,907,860) (140,314) (1,180,102) (6,969,742) (30,087,962)
Net position, beginning of year,
as restated (810,577) 3,431,357 27,909,832 26,510,851 27,099,255 29,942,208
Net position, end of year $ (1,569,815) $ 6,018,851 $ 30,398,269 $ 28,050,146 $ 28,828,454 $ 34,068,997
Town of Canton, Massachusetts Page 26 of 130 Comprehensive Annual Financial ReportSource page 99
Governmental Activities – The governmental activities decreased net position by almost $0.8
million. Revenues were over $3.2 million greater than the previous year. Expenses were almost $5.6
million greater than the prior year and other financing uses were $1.0 million greater than the prior
year.
Revenues
Major fluctuations in revenues were from:
1. Property taxes, which at 66.2% of total revenues represents the largest revenue. The increase
over the prior year of almost $2.4 million is due to the levy limit being assessed at the legally
allowable limit under
proposition 2 ½ combined
with modest new growth in
developmental activity.
2. Operating grants and
contributions which represent
18.2% of total revenues
increased by almost $1.6
million over the prior year.
Gifts, School Chapter 70 Aid,
State special purpose
reporting for GASB 68 and
School special revenue grants
all experienced increased activity and contributed to this increase by similar amounts.
3. Capital grants and contributions which represents a very small (less than 1%) portion of total
revenues decreased by about $1.5 million due to the prior year including greater capital activity in
projects that were eligible for State funding.
4. Other revenues were minor in amount or consistent with the prior year.
Expenses
Major fluctuations in expenses were from:
1. General Government which represented 5.7% of total expenses increased approximately $1.0
million due to spending in green communities grant and increased allocations of pension and
OPEB costs to salaried departments.
2. Public Safety which represented 17.4% of total expenses increased approximately $0.8 million
due to a new dispatch center placed in operation, increased salaries, and increased allocations of
pension and OPEB costs.
3. Education which represented
63.6% of total expenses and
is by far the largest expense
category increased almost
$2.6 million or about 4%
over the prior year. This is
consistent with the Town’s
prior history of increasing
education effort by about 5%
year to year.
4. Culture and recreation costs
represent about 4.2% of
Town of Canton, Massachusetts Page 27 of 130 Comprehensive Annual Financial ReportSource page 100
total expenses and increased by almost $1.0 million. The Town recently completed construction
on its rink. This construction led to a collateral impact on other expenses as some expenses did
not meet the capitalization threshold and were expensed as maintenance. In addition, insurance
costs increased significantly to this function.
5. Other expenses were minor in amount or consistent with the prior year.
Other Financing Uses
1. Transfers increased by $1.0 million. This related 100% to the amounts subsidized for rink
construction from general fund operations.
Business-type Activities – Net position of the business-type activities increased almost $2.5 million over
the prior year. Prior year operations reflected increases in user charge rates that contributed to healthy
operations; this continued into the current year. In addition, in the current year, a $1.5 million subsidy
from general fund operating surplus to the rink enterprise fund for capital purposes bolstered an already
robust position.
Fund-wide Financial Analysis of the Government’s Funds
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Governmental funds – The focus of the Town’s governmental funds is to provide information on near-
term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
Town’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of
a government’s net resources available for spending at the end of the fiscal year.
As of the close of the current fiscal year, the Town’s governmental funds balance sheet reported a
combined ending fund balance of almost $33.7 million, a decrease of over $1.1 million over the prior
year.
Town of Canton, Massachusetts Page 28 of 130 Comprehensive Annual Financial ReportSource page 101
The following is a discussion of the more significant areas:
General Fund
The General Fund ended the year with an unassigned fund balance of approximately $17.5 million and a
total fund balance of about $20.3 million. Both were consistent with the prior year amounts.
General Fund revenues were approximately $2.9 million ahead of forecast and were paced by strong
performances in motor vehicle excise, building permits and departmental revenues all of which exceeded
forecasts. The continued robust economy continues to have this impact on local receipts.
General fund expenditures beat budget by almost $0.8 million. This was spread ratably across all
expenditure functions. The Town continues to manage all aspects of budgeting and procures products and
services in a competitive manner,
Offsetting these favorable conditions were appropriations for capital purposes from unassigned fund
balance of about $2.1 million and overlay surplus of $1.5 million. This caused the overall General Fund
result to be flat as compared to the prior year.
Capital Projects
The Capital projects fund ended the year in a deficit position of about $1.0 million. This was made up of
almost $1.3 million in unassigned deficit offset by over $0.2 million in restricted. Capital expenditures
over $5.2 million were offset by bond proceeds, premiums and transfers of $2.7 million. The deficit was
funded by a short-term bond anticipation note of $1.5 million. The deficit will be cured at a later date
when the short-term note is refinanced to long-term.
Combined Nonmajor Funds
The remainder of governmental fund balances are included as Combined Nonmajor Fund Balances and
are classified as either (1) non-spendable, due to being the corpus of an endowment in the amount of
approximately $0.5 million; and (2) restricted due to constraints placed externally by third-parties of
almost $14.0 million.
Revenues and expenditures in this category of funds are typically designed to offset, however, due to the
timing of receipts and disbursements, specifically in school grants, fund balances increase by about $1.0
million.
Proprietary funds – The Town’s proprietary funds are made up of (1) the Water, Sewer and Rink
Enterprise Funds which provides the same type of information found in the government-wide financial
statements under business-type activities, and discussed in that section but in more detail; and (2) the
Town’s Internal Service Fund which accounts for the Town’s Health Claims Fund.
The Health Claims Fund has a Net Position balance of about $5.0 million. This was a decrease of almost
$1.4 million as claims exceeded revenues due to a catastrophic event.
Town of Canton, Massachusetts Page 29 of 130 Comprehensive Annual Financial ReportSource page 102
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget included revisions to the following
line items:
Approximately $0.1 million in increases allocated to public safety.
Approximately $0.4 million in decreases allocated to general government.
Approximately $0.2 million in increases allocated to public works.
Approximately $0.1 million in decreases to benefits.
In addition, other financing uses, or transfers out increased by $2.5 million.
All of the amendments were between operating line items in the original budget and were for operating
purposes. The overall bottom line final budget increased $2.5 million from the original budget.
Major budget to actual differences on the revenue side included property tax and excise, which exceeded
budget by approximately $1.3 million, licenses and permits which exceeded budget by $0.4 million and
departmental revenues which exceeded budget by $0.7 million.
On the expenditure side, numerous net minor favorable variances which in total approximated $0.8
million existed.
Further detail of budget to actual comparisons may be reviewed as part of the Required Supplementary
Information following the footnotes to the report.
Capital Asset and Debt Administration
Capital Assets – The Town’s investment in capital assets for its governmental and business type
activities as of June 30, 2019 amounts to approximately $157.6 million (net of accumulated depreciation)
an increase from the previous year’s balance of approximately $5.3 million as current year additions
exceeded the annual depreciation provision.
Major capital asset additions included, roadway improvements, a land acquisition, construction on the
skating rink and infrastructure.
Additional information on the Town’s capital assets can be found in Note II subsection D.
Long-term Debt – State statutes limit the amount of general obligation debt a governmental entity may
issue to 5.0 % of its total assessed valuation. The current debt limitation for the Town is approximately
$255.6 million, which is significantly in excess of the Town’s outstanding general obligation debt
classified as inside the debt limit.
At the end of the current fiscal year, the Town had total debt outstanding including premiums of almost
$48.8 million. The entire amount comprises debt backed by the full faith and credit of the government.
Town of Canton, Massachusetts Page 30 of 130 Comprehensive Annual Financial ReportSource page 103
The Town’s total debt decreased by over $2.3 million during the fiscal year detailed as follows:
Issuances of debt
Governmental Activities $ 5,368,300
Business-Type Activities 2,906,700
Debt payments:
Governmental Activities (5,268,421)
Business-Type Activities (5,781,471)
Premium from issuance debt:
Governmental Activities 510,063
Business-Type Activities 323,184
Amortization of premium:
Governmental Activities (277,772)
Business-Type Activities (105,614)
$ (2,325,031)
The Town’s most recent credit evaluation resulted in the Town maintaining its “AAA” rating from
Standard and Poor‘s Investment Services for its general obligation debt. This is the highest investment
grade given by this agency.
The Town also holds a proportionate share of debt of other governmental units that provide services
within the Town’s boundaries. The debt service from such arrangements is assessed annually to the
Town.
Additional information on the Town’s short-term and long-term debt can be found in Note II under
subsections F and G.
Economic Factors and Next Year’s Budgets and Rates
Consistent with both State and National work force trends, the Town’s unemployment rates improved
dramatically and are now exceeding historical unemployment rate data dating back almost 40 years.
The Town’s property tax base is made up predominantly of residential real estate taxes, which
comprise about 61% of the Town’s property tax base. The Town also relies heavily on its
commercial and industrial property tax base, which in aggregate comprise about 39% of the Town’s
property tax base. The Town uses a split rate in assessing taxes, thus commercial, industrial and
personal property tax rates are just over double the residential rate. In addition, Chapter 580 of the
Acts of 1980, more commonly referred to as Proposition 2 ½, limits the Town’s ability to increase
taxes in any one year by more than two and one-half percent (2 ½%) of the previous year tax levy.
Consistent with both State and National indices, the Town’s housing market experienced a downward
trend from 2005 – 2010. Housing prices began to stabilize during fiscal year 2011 and in recent years
are in an upward trend. During 2019, houses in the Town continued selling at greater than their
assessed values, as a result, the Town expects its housing market to continue to maintain or slightly
Town of Canton, Massachusetts Page 31 of 130 Comprehensive Annual Financial ReportSource page 104
outpace National indices. In addition, The Town has residential developments in various stages of
completion. These are expected to be completed in the near future.
The Town has responded well to the recent economic challenges. Reductions in local revenue,
primarily interest income and other reductions in revenue have caused the Town to aggressively seek
other revenue producing initiatives in order to maintain appropriations in ways that preserved local
service levels. The Town has been very successful in that regard.
All of the above items were considered when the Town developed its budget for fiscal year 2020. The
budget was adopted in May 2019 and the Town’s tax rate was certified in December 2019.
Requests for Information
This financial report is designed to provide a general overview of the Town’s finances for all those with
an interest in the government’s finances. Questions concerning any of the information provided in this
report or request for additional financial information should be addressed to the Office of the Finance
Director, 801 Washington Street, Canton, Massachusetts 02021.
Town of Canton, Massachusetts Page 32 of 130 Comprehensive Annual Financial ReportSource page 105
Basic Financial Statements Town of Canton, Massachusetts Page 33 of 130 Comprehensive Annual Financial Report
Source page 106
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2019
Primary Government
Governmental Business-Type
Activities Activities Total
Assets
Cash and cash equivalents $ 34,044,171 $ 10,600,023 $ 44,644,194
Investments 13,475,926 - 13,475,926
Receivables, net:
Property taxes 159,209 - 159,209
Tax liens 1,312,844 31,186 1,344,030
User fees - 3,329,503 3,329,503
Departmental and other 1,064,306 - 1,064,306
Intergovernmental 2,812,072 - 2,812,072
Prepaid items 1,609 - 1,609
Deposit held by third party 61,800 - 61,800
Capital assets not being depreciated 14,889,380 2,766,888 17,656,268
Capital assets, net of accumulated depreciation 96,434,714 43,488,473 139,923,187
Total Assets 164,256,031 60,216,073 224,472,104
Deferred Outflows of Resources
Related to net pension liability 9,542,362 645,939 10,188,301
Related to net other postemployment benefits liability 21,029 750 21,779
Total Deferred Outflows of Resources 9,563,391 646,689 10,210,080
Liabilities
Warrants and accounts payable 3,766,042 496,164 4,262,206
Accrued payroll and withholdings 4,170,571 27,177 4,197,748
Retainage payable 61,675 44,472 106,147
Tax refunds payable 968,747 - 968,747
Health claims incurred but not reported Accrued 884,633 - 884,633
interest 191,830 147,419 339,249
Other liabilities 36,243 8,597 44,840
Bond anticipation notes payable 1,500,000 1,000,000 2,500,000
Noncurrent liabilities:
Due within one year 4,733,200 2,532,403 7,265,603
Due in more than one year 150,113,570 25,851,607 175,965,177
Total Liabilities 166,426,511 30,107,839 196,534,350
Deferred Inflows of Resources Related
to net pension liability 1,154,601 78,157 1,232,758
Related to net other postemployment benefits liability 7,808,125 278,497 8,086,622
Total Deferred Inflows of Resources 8,962,726 356,654 9,319,380
Net Position
Net investment in capital assets 85,225,980 23,248,847 108,474,827
Restricted for:
Nonexpendable permanent funds 533,994 - 533,994
Expendable permanent funds 756,678 - 756,678
Debt service 929,952 - 929,952
Federal and State grants 2,360,208 - 2,360,208
Community preservation 2,207,989 - 2,207,989
Gift funds 2,871,202 - 2,871,202
Other specific purposes 771,260 - 771,260
Unrestricted (97,227,078) 7,149,422 (90,077,656)
Total Net Position $ (1,569,815) $ 30,398,269 $ 28,828,454
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 34 of 130 Comprehensive Annual Financial ReportSource page 107
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2019
Program Revenues Net (Expenses) Revenues and Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-Type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total
Primary government:
Governmental activities:
General government $ 6,597,325 $ 1,072,993 $ 876,121 $ - $ (4,648,211) $ (4,648,211)
Public safety 20,028,852 3,553,243 432,638 - (16,042,971) (16,042,971)
Education 72,945,712 2,402,968 19,214,047 7,055 (51,321,642) (51,321,642)
Public works 8,254,354 293,344 26,147 677,627 (7,257,236) (7,257,236)
Health and human services 1,598,126 95,143 362,332 - (1,140,651) (1,140,651)
Culture and recreation 4,763,997 490,079 36,432 110,487 (4,126,999) (4,126,999)
Interest expense 595,390 - 44,610 - (550,780) (550,780)
Total governmental activities 114,783,756 7,907,770 20,992,327 795,169 (85,088,490) (85,088,490)
Business-type activities:
Water 6,656,972 6,631,764 - - $ (25,208) (25,208)
Sewer 6,415,007 6,798,905 - - 383,898 383,898
Rink 15,301 - - 450,000 434,699 434,699
Total business-type activities 13,087,280 13,430,669 - 450,000 793,389 793,389
Total Primary Government $ 127,871,036 $ 21,338,439 $ 20,992,327 $ 1,245,169 (85,088,490) 793,389 (84,295,101)
General Revenues:
Property taxes 76,504,860 - 76,504,860
Tax liens 218,223 - 218,223
Motor vehicle and other excise 4,913,963 - 4,913,963
Hotel and meals taxes 617,748 - 617,748
Payments in lieu of taxes 242,736 - 242,736
Grants and contributions not restricted
to specific programs 2,255,103 - 2,255,103
Penalties and interest on taxes 284,011 - 284,011
Unrestricted investment income 792,608 195,048 987,656
Transfers (net) (1,500,000) 1,500,000 -
Total general revenues and transfers 84,329,252 1,695,048 86,024,300
Change in Net Position (759,238) 2,488,437 1,729,199
Net Position:
Beginning of year, as restated (see Note IV) (810,577) 27,909,832 27,099,255
End of year $ (1,569,815) $ 30,398,269 $ 28,828,454
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 35 of 130 Comprehensive Annual Financial ReportSource page 108
TOWN OF CANTON, MASSACHUSETTS
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2019
Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Assets
Cash and cash equivalents $ 17,572,420 $ 1,438,500 $ 12,505,609 $ 31,516,529
Investments 7,788,023 - 1,390,360 9,178,383
Receivables, net of allowance for uncollectibles:
Property taxes 158,381 - 828 159,209
Tax liens 1,309,397 - 3,447 1,312,844
Motor vehicle excise 390,130 - - 390,130
Intergovernmental 1,500,585 - 1,311,487 2,812,072
Departmental and other - - 449,781 449,781
Prepaid items 1,609 - - 1,609
Due from other funds 668,748 - - 668,748
Total Assets 29,389,293 1,438,500 15,661,512 46,489,305
Deferred Outflows of Resources - - - -
Total Assets and Deferred Outflows of Resources $ 29,389,293 $ 1,438,500 $ 15,661,512 $ 46,489,305
Liabilities
Warrants and accounts payable $ 1,381,801 $ 897,384 $ 213,456 $ 2,492,641
Accrued payroll and withholdings 4,114,932 937 54,702 4,170,571
Retainage payable - 61,675 - 61,675
Tax refunds payable 968,747 - - 968,747
Other liabilities 35,693 - 550 36,243
Due to other funds - - 668,748 668,748
Bond anticipation notes payable - 1,500,000 - 1,500,000
Total Liabilities 6,501,173 2,459,996 937,456 9,898,625
Deferred Inflows of Resources
Unavailable revenues - property taxes 1,311,503 - 4,275 1,315,778
Unavailable revenues - excise taxes 390,130 - - 390,130
Unavailable revenues - intergovernmental 929,952 - - 929,952
Unavailable revenues - other - - 301,694 301,694
Total Deferred Inflows of Resources 2,631,585 - 305,969 2,937,554
Fund Balances
Nonspendable 1,609 - 532,385 533,994
Restricted 110,803 239,480 13,885,702 14,235,985
Committed 976,324 - - 976,324
Assigned 1,680,982 - - 1,680,982
Unassigned 17,486,817 (1,260,976) - 16,225,841
Total Fund Balances 20,256,535 (1,021,496) 14,418,087 33,653,126
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances $ 29,389,293 $ 1,438,500 $ 15,661,512 $ 46,489,305
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 36 of 130 Comprehensive Annual Financial ReportSource page 109
TOWN OF CANTON, MASSACHUSETTS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION
JUNE 30, 2019
Total Governmental Fund Balances $ 33,653,126
Capital assets used in governmental activities are not financial resources and therefore are
not reported in the funds. 111,324,094
Other long-term assets are unavailable to pay current-period expenditures 2,937,554
Deferred outflows and inflows of resources to be recognized in future fiscal years
are not available resources and, therefore, are not reported in the funds:
Deferred outflows related to net pension liability 9,542,362
Deferred outflows related to net other postemployment benefits liability 21,029
Deferred inflows related to net pension liability (1,154,601)
Deferred inflows related to net other postemployment benefits liability (7,808,125)
Net effect of reporting deferred outflows and inflows of resources 600,665
Assets, deferred outflows of resources and liabilities and deferred inflows of resources of the
Town's internal service funds are included in the Statement of Net Position, but are not
reported in the governmental funds. 4,953,346
In the Statement of Activities, interest is accrued on outstanding long-term debt
whereas in the governmental funds interest is not reported until due. (191,830)
Long-term liabilities are not due and payable in the current period and therefore are not
reported in the government funds:
Bonds and notes payable (25,214,122)
Unamortized premiums on bonds (1,279,107)
Capital leases payable (21,713)
Compensated absences (2,021,640)
Net pension liability (45,716,162)
Net other postemployment benefits liability (80,594,026)
Net effect of reporting long-term liabilities (154,846,770)
Net Position of Governmental Activities $ (1,569,815)
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 37 of 130 Comprehensive Annual Financial ReportSource page 110
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED JUNE 30, 2019
Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Revenues:
Property taxes $ 76,035,207 $ - $ 615,225 $ 76,650,432
Tax liens 220,536 - - 220,536
Intergovernmental 18,501,717 7,055 4,936,157 23,444,929
Motor vehicle and other excises 4,903,303 - - 4,903,303
Hotel and meals taxes 617,748 - - 617,748
Licenses and permits 1,257,881 - - 1,257,881
Penalties and interest on taxes 284,011 - - 284,011
Payments in lieu of taxes 242,736 - - 242,736
Fines and forfeitures 87,062 - - 87,062
Charges for services - - 2,034,480 2,034,480
Departmental and other revenue 1,559,811 - 3,067,283 4,627,094
Investment income 660,397 - 64,064 724,461
Contributions and donations - - 1,009,365 1,009,365
Total Revenues 104,370,409 7,055 11,726,574 116,104,038
Expenditures:
Current:
General government 4,268,732 - 351,185 4,619,917
Public safety 11,928,326 867,457 1,614,462 14,410,245
Education 44,480,684 1,725,185 5,627,915 51,833,784
Public works 5,801,184 2,611,907 688,042 9,101,133
Health and human services 977,434 - 148,195 1,125,629
Culture and recreation 2,192,102 - 3,689,541 5,881,643
Pension benefits 14,173,028 - - 14,173,028
Employee benefits 13,014,350 - 55,659 13,070,009
State and county assessments 1,230,700 - - 1,230,700
Debt service:
Principal 3,786,421 - - 3,786,421
Interest 874,950 24,851 - 899,801
Total Expenditures 102,727,911 5,229,400 12,174,999 120,132,310
Excess (Deficiency) of Revenues Over (Under) Expenditures 1,642,498 (5,222,345) (448,425) (4,028,272)
Other Financing Sources (Uses):
Issuance of bonds and notes - 2,121,000 1,849,000 3,970,000
Premiums from bonds and notes 83,700 133,000 293,363 510,063
Issuance of refunding bonds 1,398,300 - - 1,398,300
Payments on refunding bonds (1,482,000) - - (1,482,000)
Transfers in 1,477,213 447,610 803,509 2,728,332
Transfers out (2,744,727) - (1,483,605) (4,228,332)
Total Other Financing Sources (Uses) (1,267,514) 2,701,610 1,462,267 2,896,363
Net Change in Fund Balances 374,984 (2,520,735) 1,013,842 (1,131,909)
FUND BALANCES - Beginning of year 19,881,551 1,499,239 13,404,245 34,785,035
FUND BALANCES - End of year $ 20,256,535 $ (1,021,496) $ 14,418,087 $ 33,653,126
See acompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 38 of 130 Comprehensive Annual Financial ReportSource page 111
TOWN OF CANTON, MASSACHUSETTS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2019
Net Change in Fund Balances - Total Governmental Fund Balances $ (1,131,909)
Governmental funds report capital outlays as expenditures. However, in the Statement of
Activities the cost of those assets is allocated over their estimated useful lives and
reported as depreciation expense. The net amounts are reflected here as reconciling items:
Capital outlays 10,233,283
Disposal of capital assets (27,693)
Depreciation expense (5,604,742)
Net effect of reporting capital assets 4,600,848
In the Statement of Activities, Internal Service Funds established to administer the Town's
health insurance and worker's compensation activities are included within the Statement of
activities whereas these activities are not presented in the Statement of Revenues,
Expenditures and Changes in Fund Balances. (1,363,410)
The issuance of long-term debt provides current financial resources to governmental funds,
while the repayment of the principal of long-term debt consumes the financial resources of
governmental funds. Neither has any effect on net position. Also governmental funds report
the effect of issuance costs, premiums, discounts, and similar items when debt is first issued,
whereas these amounts are amortized in the Statement of Activities. The net amounts are
reflected here as reconciling items:
Issuance of general obligation bonds and notes (3,970,000)
Premiums from bonds and notes (510,063)
Issuance of refunding bonds (1,398,300)
Payments on refunding bonds 1,482,000
Amortization of premiums on bonds and notes payable 277,772
Payments on capital leases 21,273
Repayments of debt 3,786,421
Net effect of reporting long-term debt (310,897)
Revenues in the Statement of Activities that do not provide current financial resources are
unavailable in the Statement of Revenues, Expenditures and Changes in Fund Balances.
Therefore, the recognition of revenue for various types of accounts receivable differ between
the two statements. The amount presented represents the difference in unavailable revenue. (647,667)
In the Statement of Activities, interest is accrued on outstanding long-term debt;
whereas in governmental funds interest is not reported until due. The net
amount presented here as a reconciling item represents the difference in
accruals between this year and the prior year. 26,639
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and therefore are not reported as expenditures in the governmental funds:
Compensated absences (104,778)
Pension benefits (1,011,190)
Other postemployment benefits (816,874)
Net effect of reporting long-term liabilities (1,932,842)
Change in Net Position of Governmental Activities $ (759,238)
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 39 of 130 Comprehensive Annual Financial ReportSource page 112
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2019
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Assets
Current assets:
Cash and cash equivalents $ 3,245,145 $ 3,762,518 $ 3,592,360 $ 10,600,023 $ 2,527,642
Investments - - - - 4,297,543
Receivables (net):
User charges 1,675,772 1,653,731 - 3,329,503 -
Tax liens 15,592 15,594 - 31,186 -
Departmental and other - - - - 224,395
Deposit held by third party - - - - 61,800
Total current assets 4,936,509 5,431,843 3,592,360 13,960,712 7,111,380
Noncurrent assets:
Nondepreciable capital assets 1,290,628 - 1,476,260 2,766,888 -
Depreciable capital assets (net of depreciation) 30,075,119 13,413,354 - 43,488,473 -
Total noncurrent assets 31,365,747 13,413,354 1,476,260 46,255,361 -
Total Assets 36,302,256 18,845,197 5,068,620 60,216,073 7,111,380
Deferred Outflows of Resources
Related to net pension liability 327,045 260,820 58,074 645,939 -
Related to net other postemployment benefit liability 517 199 34 750 -
Total Deferred Outflows of Resources 327,562 261,019 58,108 646,689 -
Liabilities
Current liabilities:
Warrants and accounts payable 211,789 8,724 275,651 496,164 1,273,401
Accrued payroll and withholdings 18,481 8,696 - 27,177 -
Retainage payable - - 44,472 44,472 -
Health claims incurred but not reported - - - - 884,633
Accrued interest 99,264 48,155 - 147,419 -
Other liabilities 8,597 - - 8,597 -
Bond anticipation notes payable 1,000,000 - - 1,000,000 -
Compensated absences 1,764,996 7,876 - 1,772,872 -
Bonds and notes payable 21,762 737,769 - 759,531 -
Total current liabilities 3,124,889 811,220 320,123 4,256,232 2,158,034
Noncurrent liabilities:
Compensated absences 65,285 23,629 - 88,914 -
Net other postemployment benefit liability 1,982,877 762,554 129,158 2,874,589 -
Net pension liability 1,566,826 1,249,556 278,221 3,094,603 -
Bonds and notes payable 15,302,534 4,490,967 - 19,793,501 -
Total noncurrent liabilities 18,917,522 6,526,706 407,379 25,851,607 -
Total Liabilities 22,042,411 7,337,926 727,502 30,107,839 2,158,034
Deferred Inflows of Resources
Related to net pension liability 39,571 31,558 7,028 78,157 -
Related to net other postemployment benefit liability 192,106 73,878 12,513 278,497 -
Total Deferred Outflows of Resources 231,677 105,436 19,541 356,654 -
Net Position
Net investment in capital assets 13,632,441 8,184,618 1,431,788 23,248,847 -
Unrestricted 723,289 3,478,236 2,947,897 7,149,422 4,953,346
Total Net Position $ 14,355,730 $ 11,662,854 $ 4,379,685 $ 30,398,269 $ 4,953,346
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 40 of 130 Comprehensive Annual Financial ReportSource page 113
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2019
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Operating Revenues:
Charges for services $ 6,631,764 $ 6,798,905 $ - $ 13,430,669 $ -
Employee contributions - - - - 3,990,806
Employer contributions - - - - 11,650,823
Stop loss reimbursements - - - - 3,252,099
Total Operating Revenues 6,631,764 6,798,905 - 13,430,669 18,893,728
Operating Expenses:
Operating costs 3,094,669 1,230,230 15,181 4,340,080 -
Massachusetts Water Resources Authority assessment 1,884,292 4,433,841 - 6,318,133 -
Contractual services - - - - 450,000
Depreciation 1,190,875 618,421 - 1,809,296 -
Employee benefits - - - - 19,875,285
Total Operating Expenses 6,169,836 6,282,492 15,181 12,467,509 20,325,285
Operating Income (Loss) 461,928 516,413 (15,181) 963,160 (1,431,557)
Nonoperating Revenues (Expenses):
Investment income 64,741 65,436 64,871 195,048 68,147
Interest expense (487,136) (132,515) (120) (619,771) -
Total Nonoperating Revenues (Expenses) (422,395) (67,079) 64,751 (424,723) 68,147
Income Before Capital Contributions
and Transfers 39,533 449,334 49,570 538,437 (1,363,410)
Capital contributions - - 450,000 450,000 -
Transfers in - - 1,500,000 1,500,000 -
Total Capital Contributions and Transfers - - 1,950,000 1,950,000 -
Change in Net Position 39,533 449,334 1,999,570 2,488,437 (1,363,410)
Total Net Position - Beginning of the Year,
as restated (see Note IV) 14,316,197 11,213,520 2,380,115 27,909,832 6,316,756
Total Net Position - End of the Year $ 14,355,730 $ 11,662,854 $ 4,379,685 $ 30,398,269 $ 4,953,346
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 41 of 130 Comprehensive Annual Financial ReportSource page 114
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2019
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Cash Flows from Operating Activities:
Receipts from users $ 6,948,398 $ 6,911,383 $ - $ 13,859,781 $ -
Receipts from interfund services provided - - - - 18,897,227
Payments to employees (884,896) (309,042) - (1,193,938) -
Payments to vendors (3,886,038) (5,287,201) 211,544 (8,961,695) -
Payments for interfund services used - - - - (19,151,364)
Net Cash Provided by (Used in) Operating
Activities 2,177,464 1,315,140 211,544 3,704,148 (254,137)
Cash Flows from Noncapital Financing Activities:
Transfers in - - 1,500,000 1,500,000 -
Net Cash Provided by Noncapital
Financing Activities - - 1,500,000 1,500,000 -
Cash Flows from Capital and Related Financing Activities:
Proceeds from capital contributions - - 450,000 450,000 -
Proceeds from the issuance of bonds and notes 1,000,000 - - 1,000,000 -
Proceeds from the issuance of refunding bonds 2,783,100 123,600 - 2,906,700 -
Premiums from the issuance of bonds and notes 323,184 - - 323,184 -
Payments of refunded bonds (3,060,000) (128,000) - (3,188,000) -
Acquisition and construction of capital assets (1,008,246) (109,329) (1,345,853) (2,463,428) -
Principal payments on bonds and notes (1,661,700) (925,771) (6,000) (2,593,471) -
Interest payments on bonds and notes (612,773) (154,184) (120) (767,077) -
Net Cash Used in Capital and Related
Financing Activities (2,236,435) (1,193,684) (901,973) (4,332,092) -
Cash Flows from Investing Activities:
Investment income 64,741 65,436 64,871 195,048 68,147
Investment of operating cash - - - - (103,622)
Net Cash Provided by (Used in) Investing Activities 64,741 65,436 64,871 195,048 (35,475)
Net Change in Cash and Cash Equivalents 5,770 186,892 874,442 1,067,104 (289,612)
Cash and Cash Equivalents:
Beginning of the year 3,239,375 3,575,626 2,717,918 9,532,919 2,817,254
End of the year $ 3,245,145 $ 3,762,518 $ 3,592,360 $ 10,600,023 $ 2,527,642
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used in) Operating Activities:
Operating Income (Loss) $ 461,928 $ 516,413 $ (15,181) $ 963,160 $ (1,431,557)
Adjustments to reconcile operating income (loss) to net
cash provided by (used in) operating activities:
Depreciation 1,190,875 618,421 - 1,809,296 -
Changes in assets, deferred outflows of resources,
liabilities and deferred inflows of resources:
Receivables 316,634 112,478 - 429,112 3,499
Prepaid items - - - - 41,962
Deferred outflows of resources (24,480) (24,160) (6,277) (54,917) -
Accounts payable and accrued expenses 153,291 32,475 219,261 405,027 1,131,959
Net other postemployment liability (190,658) (76,696) (12,670) (280,024) -
Net pension liability 236,711 188,779 42,032 467,522 -
Deferred inflows of resources 33,163 (52,570) (15,621) (35,028) -
Net Cash Provided by (Used in) Operating
Activities $ 2,177,464 $ 1,315,140 $ 211,544 $ 3,704,148 $ (254,137)
Noncash capital and related financing activities:
Amortization of bond premium $ 89,934 $ 15,680 $ - $ 105,614 $ -
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 42 of 130 Comprehensive Annual Financial ReportSource page 115
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2019
Other Private
Postemployment Purpose Agency
Benefits Trust Fund Trust Funds Funds
Assets
Cash and cash equivalents $ 14,518 $ 77,522 $ 1,024,486
Investments:
Equity mutual funds 3,783,258 - -
Bond mutual funds 1,421,718 - -
Total Assets 5,219,494 77,522 1,024,486
Liabilities
Warrants payable - 5,000 25,385
Agency liabilities - - 999,101
Total Liabilities - 5,000 1,024,486
Net Position
Restricted for other postemployment benefits 5,219,494 - -
Held in trust for private purposes - 72,522 -
Total Net Position $ 5,219,494 $ 72,522 $ -
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 43 of 130 Comprehensive Annual Financial ReportSource page 116
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FISCAL YEAR ENDED JUNE 30, 2019
Other Private
Postemployment Purpose
Benefits Trust Fund Trust Funds
Additions
Contributions:
Employer $ 4,523,578 $ -
Other - 2,500
Total contributions 4,523,578 2,500
Investment income:
Interest and dividends 241,701 2,170
Net appreciation in fair value of investments 35,731 -
Less - investment management fees (13,732) -
Net investment earnings 263,700 2,170
Other income - -
Total Additions 4,787,278 4,670
Deductions
Education - scholarships - 17,500
Retiree benefits 3,723,578 -
Total Deductions 3,723,578 17,500
CHANGE IN NET POSITION 1,063,700 (12,830)
NET POSITION AT BEGINNING OF YEAR 4,155,794 85,352
NET POSITION AT END OF YEAR $ 5,219,494 $ 72,522
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 44 of 130 Comprehensive Annual Financial ReportSource page 117
TOWN OF CANTON, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2019
I. Summary of Significant Accounting Policies
The accompanying basic financial statements of the Town have been prepared in conformity with
generally accepted accounting principles (GAAP) as applied to state and local governments. GAAP
is prescribed by the Governmental Accounting Standards Board (GASB), which is the primary
standard-setting body for state and local government entities. The following is a summary of the more
significant policies and practices used by the Town:
A. Reporting Entity
The Town is located in Norfolk County, fifteen miles southwest of Boston and was incorporated
as a Town in 1797. An elected five-member Board of Selectmen (“Selectmen”) governs the
Town and an appointed Town Administrator oversees the Town’s daily executive and
administrative duties. The Town follows the open town meeting form of government. The Town
provides governmental services for the territory within its boundaries, including police and fire
protection, disposal of garbage and rubbish, public education in grades K-12, water and sewer
services, street maintenance, parks and recreational facilities.
Component units, while separate entities, are in substance part of the governmental operations if
the significance of their operations and/or financial relationship with the Town meet certain
criteria. Pursuant to these criteria there are no component units required to be included in the
financial statements.
The Town is a member community of the Blue Hills Regional Technical School that provides
educational services to nine area communities. This joint venture assesses each community its
share of operational and debt service costs based on student population and other factors. In
fiscal year 2019, the Town’s share of the operating and debt service expenses was $1,207,788.
There is no equity interest reported in these financial statements. Complete audited financial
statements can be obtained directly from the District’s administrative office located at 800
Randolph Street, Canton, Massachusetts 02021.
B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of
activities) report information on all of the non-fiduciary activities of the primary government and
its component units. For the most part, the effect of interfund activity has been removed from
these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely
primarily on fees and charges for support.
Separate financial statements are provided for governmental funds, proprietary funds and
fiduciary funds, even though the fiduciary funds are excluded from the government-wide
financial statements. Major individual government funds and major individual enterprise funds
are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated
and presented in a single column.
Town of Canton, Massachusetts Page 45 of 130 Comprehensive Annual Financial ReportSource page 118
Major Fund Criteria – Major funds must be reported if both of the following criteria are met:
1) The total assets and deferred outflows, liabilities and deferred inflows, revenues, or
expenditures/expenses of an individual governmental or enterprise fund are at least ten
percent of the corresponding element (assets and deferred outflows, liabilities and
deferred inflows, etc.) for all funds of that category or type (total governmental or total
enterprise funds), and
2) The total assets and deferred outflows, liabilities and deferred inflows, revenues, or
expenditures/expenses of the individual governmental fund or enterprise fund are at least
five percent of the corresponding element for all governmental and enterprise funds
combined.
Additionally, any other governmental or enterprise fund that management believes is particularly
significant to the basic financial statements may be reported as a major fund.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Under this method, revenues are
recorded when earned and expenses are recorded when a liability is incurred. Property taxes are
recognized as revenues in the fiscal year for which they are levied. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the provider are met.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include: 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment and 2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
The governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized when
susceptible to accrual (i.e. measurable and available). Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay liabilities of
the current period. Expenditures are recorded when the related fund liability is incurred, except
for unmatured interest on general long-term debt which is recognized when due, certain
compensated absences, claims and judgments which are recognized when the obligations are
expected to be liquidated with current expendable available resources.
The Town considers property tax revenues to be available if they are material and collected
within 60 days after the end of the fiscal year. Investment income associated with the current
fiscal period is susceptible to accrual and has been recognized as revenue of the current fiscal
period. All other revenue items are considered to be measurable and available only when the
cash is received and are recognized as revenue at that time.
Town of Canton, Massachusetts Page 46 of 130 Comprehensive Annual Financial ReportSource page 119
The government reports the following major Governmental Funds:
General Fund – is the government’s primary operating fund. It accounts for all financial
resources of the general government except those required to be accounted for in another
fund.
Capital Projects Fund – is used to account for financial resources that are restricted,
committed or assigned to expenditures for capital outlays.
Nonmajor Governmental Funds – consist of special revenue, capital projects and permanent
funds that are aggregated and presented in the Nonmajor Governmental Funds column on the
Governmental Funds financial statements. The following describes the general use of these
fund types:
The Special Revenue Funds are used to account for the proceeds of specific revenue sources
that are restricted or committed to expenditures for specified purposes other than debt service
or capital projects.
The Permanent Funds are used to account for financial resources that are restricted to the
extent that only earnings, not principal, may be used for purposes that support the
governmental programs.
The proprietary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Under this method, revenues are
recognized when earned and expenses are recorded when the liabilities are incurred.
Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues are user charges and fees, while operating expenses consist of
salaries, ordinary maintenance, assessments, indirect costs and depreciation. All revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.
The government reports the following major proprietary funds:
Water Enterprise Fund – is used to account for the operation of the Town’s water activities.
Costs associated with maintaining the related infrastructure and providing services to the
general public on a continuing basis, including depreciation, are financed or recovered
primarily through user charges.
Sewer Enterprise Fund – is used to account for the operation of the Town’s sewer activities.
Costs associated with maintaining the related infrastructure and providing services to the
general public on a continuing basis, including depreciation, are financed or recovered
primarily through user charges.
Rink Enterprise Fund – is used to account for the operation of the Town’s ice skating rink
activities.
Town of Canton, Massachusetts Page 47 of 130 Comprehensive Annual Financial ReportSource page 120
Additionally, the following proprietary fund type is reported:
Internal Service Fund – is used to account for the Town’s self-insured health insurance,
workers’ compensation, unemployment claims and building insurance activities. Because
these services primarily benefit governmental rather than business-type activities, they have
been included within governmental activities in the government-wide financial statements.
Fiduciary fund financial statements are reported using the economic resources measurement focus
and use the accrual basis of accounting. Fiduciary funds are used to account for assets held in a
trustee capacity and cannot be used to support the governmental programs.
The government reports the following fiduciary funds:
Other Postemployment Benefits Trust Fund – is used to accumulate funds for future payments
of other post-employment benefits for retirees such as health and life insurance.
Private-Purpose Trust Fund – is used to account for trust arrangements under which principal
and income benefit individuals, private organizations or other governments. This fund is
used for educational scholarships.
Agency Fund – is used to account for assets held in a purely custodial capacity. The Town’s
agency funds consist primarily of student activities and escrow and other deposits. Agency
funds apply the accrual basis of accounting but do not have a measurement focus.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Equity
Deposits and Investments – The Town’s cash and cash equivalents are considered to be cash on
hand, demand deposits, and short-term investments with original maturities of three months or
less from the date of acquisition.
Investments of the Town are recorded at fair value in accordance with GASB Statement No. 72,
Fair Value Measurement and Application. Accordingly, the change in fair value of investments
is recognized as an increase or decrease to investment assets and investment income.
Receivables – Real estate and personal property taxes are assessed on January 1 every year. Bills
are sent quarterly and are due on August 1, November 1, February 1, and May 1, or thirty days
subsequent to the mailing date. Interest accrues on delinquent taxes at the rate of 14% per
annum. Motor vehicle excise are billed annually for each vehicle registered in the Town based on
vehicles reported to the Town by the Commonwealth of Massachusetts. Water and sewer user
fees are billed quarterly based on individual meter readings and are subject to interest and
penalties if not paid by the respective due dates. Property taxes, motor vehicle excise taxes and
water and sewer user fees are recorded as receivables in the fiscal year of the levy.
Real estate taxes and water and sewer user fees are secured through a lien process within 60 days
after the due date and are considered 100% collectible. Accordingly, an allowance for
uncollectible balances for these receivables is not reported. All personal property tax and excise
tax receivables are shown net of an allowance for uncollectible balances comprised of those
outstanding amounts greater than five years old. Other departmental receivables are shown net of
an allowance for uncollectible balances based on historical trends and specific account analysis.
Town of Canton, Massachusetts Page 48 of 130 Comprehensive Annual Financial Report