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Latest Bond Issuance Report February 2018
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business climate and enhance zoning flexibility to spur additional economic development potential along
this vital commercial roadway.
The Town was also a participant in a
regional planning study to evaluate the
effects of new growth in both
residential and commercial
construction. The study’s focus was to
identify growth related problems such
as transportation, infrastructure,
environmental, and economic
development issues. In addition, a
build-out analysis was completed to
assist and improve public policy
decision-making with regard to growth
and development related to educational
planning. These studies have been
coordinated with other immediate area
communities.
The Town is in the process of evaluating the opportunities and or impacts of the South Coast Rail Project
which is advancing through preliminary and environmental design. The State initiative would provide rail
service from Boston to Fall River/New Bedford via a route now determined by the State, known as the
Stoughton Alternative, which will include impacts in Canton.
In 2010 the Town received a MORE grant in the
amount of $850,000 and completed infrastructure
improvements along Dan Road, an important
commercial area of Town. After much effort, the
Town secured the commitment of Organogenesis, a
bio tech firm, now located on Dan Road, which was
contemplating relocation. The Company’s
commitment to stay in Canton and expand was an
important part of the Town’s success in obtaining
this new funding.
Canton’s Master Plan Initiative required a careful review and analysis of existing conditions balanced
with a vision for the future. The work program is designed to enlist public interest and participation in
shaping the Town’s future. Workshops, neighborhood meetings, leadership interviews and community
surveys were conducted. The Town has conducted an extensive public outreach campaign to better assure
good attendance at workshops and neighborhood focus groups. Existing planning, engineering reports and
documents have been reviewed and a written report, which summarizes their major issues and relevant
recommendations were prepared and remains available. The overall objective of the Master Plan initiative
was to develop a sustainable residential and business development strategy for the Town.
Brightview Canton recently opened its community of 160 apartment homes for seniors which includes
independent living, dedicated assisted living and a specialized program and environment for people living
with Alzheimer’s and other forms of demetia.
Town of Canton, Massachusetts Page 6 of 125 Comprehensive Annual Financial ReportSource page 83
This added to existing residential developments such as Windsor Woods, Indian Woods, Pequit View
and Blue Hill Commons; and provide a nice compliment to commercial developments such as Dunkin
Brands with their worldwide corporate headquarters along with other top Canton companies such as
Meditech, Network Engines, One Beacon, Boston Mutual, Computershare, LoJack and Pepsi.
The Town’s planning focus also includes improvements to the highway system that serves the Town and
the region. Now underway is the Route 128 Add-a-Lane Project, which is federally funded with expected
completion in the near term.
In 2015 the Town entered into a development agreement with Canton holdings LLC to redevelop the
former Plymouth Rubber site. The project will create 272 residential units of which 19 will be townhouse
units and 253 will be garden style units. The developer will also create community open space and will
preserve two historic buildings built by Paul Revere.
Another objective of the Master Plan Initiative was to address the often-conflicting goals of economic
development and resource protection. Sustainable development providing for economic growth that is
compatible with resource protection remains an important Town focus. The Town’s approach includes
promoting economic development that is supported by adequate infrastructure. Thus, the dual objectives
of the Master Plan Initiative remain to provide for economic growth which is (1) compatible with
resource protection and (2) supported by adequate infrastructure. To ensure this, the Town embarked on a
four-town regional planning initiative, which is still ongoing. The Towns of Canton, Dedham, Norwood
and Westwood share a common watershed and an interlinked highway system. The Towns continue to
work together and meet regularly to discuss economic development on a regional basis. This regional
planning initiative encourages and reminds area towns that, despite borders, what happens in another
neighboring community may have an impact, both positive and potentially negative, on one another. The
Towns plan and communicate to shape growth, protect water resources, transportation infrastructure and
to insure support and advocacy for growth in the region - to everyone’s benefit. This group continues to
pursue State and Federal funding for the replacement of the Interstate 95 and Interstate 93 Interchange, a
source of safety concerns and traffic tie-ups.
The Town recently entered into a long-term lease of its capped landfill to be used by a private entity to
install solar panels on fifteen acres of the site at no cost to Canton. The lease provides the Town with
guaranteed payments of $20,000 per acre, per year, while allowing the Town the ability to purchase all
the electricity generated by this 5.6 megawatt facility at a substantial savings. The Pine Street Solar
Facility went online August 15, 2012 (one of the largest in the Northeast) and provided over $100,000 in
net metering credits savings to the Town, along with lease payments totaling $300,000 in new recurring
operating revenue increasing annually by 2.5%.
In summary, Town leaders recognize the importance of maintaining a stable tax situation for its residents.
Development on the commercial side helps accomplish this goal and the Town continues to seek out the
means to maintain vigilance in this area.
Property Taxes The growth of the Town’s main source of revenues, property taxes, is capped by
Proposition 2 ½ and can only be overridden through a ballot by the voters. While revenue increases have
been limited in recent years, fixed costs, including health insurance and pension costs, have increased
more proportionally. As a result, balancing the annual budget is a challenge without an appropriation
from free cash. The Town attempts to mitigate this impact by conservatively forecasting revenues thus
creating free cash in the subsequent year.
Several years ago, the Town’s management made the difficult choice to cut services and raise fees in
order to balance the budget. With more cuts looming in future years, the Town’s voters approved a $4.5
Town of Canton, Massachusetts Page 7 of 125 Comprehensive Annual Financial ReportSource page 84
million Proposition 2 ½ tax override for fiscal year 2009 that allowed for the restoration of most of the
budget cuts from the prior years. The tax override was planned to be phased in over a three year period
with an annual cost to the average residential homeowner of $450. In addition, effective fiscal year
2013, the Town negotiated changes to its health insurance plans that required higher out of pocket costs
from its employees and retirees but stabilized rates. These initiatives have allowed the Town to maintain a
consistent level of reserves from year to year and
Unassigned Fund Balances (Millions)
continue to make contributions to its OPEB Trust
Fund. 16.0
14.0
The Town’s available reserves on a GAAP basis
12.0
represent the amount in unassigned fund balance.
As discussed previously, the Town’s reserves have 10.0
been increasing on an annual basis since the 8.0
stabilization of the recession in 2011. This has 6.0
been a direct result of the initiatives implemented 4.0
by management as discussed in the previous 2011 2012 2013 2014 2015 2016 2017
paragraph.
These strong reserve levels, when combined with the Town’s strong management practices, desirable
location in a strong metropolitan statistical area, assessed valuations and strong wealth factors directly
contributed to an upgrade in the Town’s bond rating from ‘AA+’ to ‘AAA’. This is the highest
investment grade possible. The override and the resulting revenue flexibility to restore lost services and
stabilize budgets in future fiscal years were cited as prominent factors in the upgrade. The Town is
committed to maintaining its reserves at a level expected from communities that engender the highest
bond rating.
Long-term Financial Planning
Several years ago, the Town implemented a policy of preparing rolling projections. The Town believes
this will provide better insight when preparing annual budgets and will also alert the Town to any
potential budgeting issues far ahead of when these situations become real issues.
The following represents the Town’s summarized budgets for each of the next five years:
2018 2019 2020 2021 2022
Revenues and Other Sources
Real Estate and Personal Property Taxes $ 73,102,368 $ 75,418,599 $ 78,043,683 $ 80,769,113 $ 83,551,687
State Aid 8,988,466 8,988,466 8,988,466 8,988,466 8,566,434
Local Receipts 6,571,757 6,474,736 6,480,805 6,487,025 6,493,401
Transfers and Other Sources 2,354,154 2,409,821 2,431,577 2,463,207 2,494,891
Total Revenues 91,016,745 93,291,622 95,944,531 98,707,811 101,106,413
Expenditures and Other Uses
Education Budget 40,221,559 41,307,755 42,388,182 43,523,446 44,719,736
Municipal Budget 19,919,076 20,367,436 20,900,157 21,459,917 22,049,767
Fixed Costs 28,453,392 29,032,767 30,045,437 31,085,924 31,569,923
State and County Charges 1,057,233 1,083,664 1,110,755 1,138,524 1,166,987
Capital costs 1,655,000 1,500,000 1,500,000 1,500,000 1,600,000
Total Expenditures 91,306,260 93,291,622 95,944,531 98,707,811 101,106,413
Surplus/(Deficit) $ (289,515) $ - $ - $ - $ -
Town of Canton, Massachusetts Page 8 of 125 Comprehensive Annual Financial ReportSource page 85
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.
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 2017 through fiscal year 2021
has an estimated cost of $23.6 million, with $8.1 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 $6.9 million for
municipal departments, $6.4 million for the school department, $6.3 million for the water enterprise fund,
and $4.0 million for the sewer enterprise fund.
The Town’s target set aside to finance its capital plan is 5% to 6% 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, 2016. This was the
eleventh 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.
Town of Canton, Massachusetts Page 9 of 125 Comprehensive Annual Financial ReportSource page 86
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 125 Comprehensive Annual Financial ReportSource page 87
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, 2016
Executive Director/CEO
Town of Canton, Massachusetts Page 11 of 125 Comprehensive Annual Financial ReportSource page 88
Board Planning of Health Board TOWN OF CANTON, MASSACHUSETTS ORGANIZATIONAL CHART Board of Selectmen Appointed Multiple Member Bodies Moderator Personnel Adv. Board Building [Renovations Committee Building & Zoning Department Building Commissioner Canton Representative Veteran's Office Veteran's Director Director Public Health -Industrial Development Commission Building Police Fire Dept. of Human Department Council Recreation Conservation Maintenance ‘ Resource of Finance ‘ ws ae Department | [Department | | Public Works Densikwank on Aging | | Commission Commission Police Fire Superintendent Human Finance CoA Recreation Conservation - _ o! Resource 2 , . Commission Chief Chief Public Works | | Administrator Director Director Director Agent Page 12 of 125 Comprehensive Annual Financial Report Town of Canton, Massachusetts an Board Board of Library Clerks y of Selectmen Trustees Office Town Town Town Planner Clerk Administrator Executive Town Counsel Assistant Town Planner Administrative Secretary Sealer of Weights and Measures Secretary Register of Voters Comm. on Disability -Zoning Board.of Appeals -Water/Sewer Rate Policy Commission -Youth Commission -Historical Commission -Fair Housing Committee Cable Advisory Committee Beautification Committee -Conservation Commission Council on Aging -Industrial Develop. Financing Authority -Local Emergency Planning Committee -Traffic Study Committee [Original embedded text, retained for comparison] Town of Canton, Massachusetts Page 12 of 125 Comprehensive Annual Financial Report
Source page 89
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 125 Comprehensive Annual Financial ReportSource page 90
PRINCIPAL TOWN OFFICIALS
Elected Officials
Board of Selectmen John J. Connolly, Chairman
Mark J. Porter, Vice Chairman
Kevin T. Feeney, Clerk
Christopher J. Connolly, Member
Thomas W. Theodore, Member
School Committee Michael Loughran, Chairman
Kristin Mirliani, Vice Chairman
Meg Gannon, Secretary
Reuki Schutt, Member
John Bonnanzio, 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 125 Comprehensive Annual Financial ReportSource page 91
Financial Section Larry Shapiro photo courtesy of E-One Incorporated Canton’s Fire Department purchased a new fully equipped fire engine (Engine 3) which replaced a smaller engine (Engine 7) which was purchased in 1972. Engine 3 now serves as a first line piece of apparatus.
Source page 93
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, 2017, 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.
Town of Canton, Massachusetts Page 15 of 125 Comprehensive Annual Financial ReportSource page 94
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, 2017, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, the schedules of the Town’s proportionate share of net pension liability and the
Town’s contributions to pension plan, the schedule of the Commonwealth’s share of the net pension
liability of the Massachusetts Teacher’s Retirement System, the schedule of changes in net other
postemployment benefits liability and related ratios, the schedules of contributions and investment returns
for other postemployment benefits, the schedules of funding progress and contribution funding for other
postemployment benefits, and budgetary comparison information as listed in the table of contents, be
presented to supplement the basic financial statements. Such information, although not part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The 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
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.
Town of Canton, Massachusetts Page 16 of 125 Comprehensive Annual Financial ReportSource page 95
Town of Canton Page Three Other Reporting Required By Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated November 21, 2017, 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 November 21, 2017
Source page 96
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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, 2017.
Financial Highlights
The assets and deferred outflows of the Town exceeded its liabilities and deferred inflows at the close
of the most recent fiscal year by approximately $60.0 million (total net position).
The government’s total net position increased by approximately $1.9 million. This consisted
primarily of an increase in governmental activities’ net position by over $0.7 million (2.2% of total
governmental activities’ net position) and an increase in Business - type activities’ net position of
approximately $1.2 million (4.5% of Business-type activities).
The Town’s Unassigned Fund Balance reported in the General Fund was over $16.1 million (17.1%of
General Fund expenditures). Total Fund Balance in the General Fund was over $17.9 million
(19.0% of General Fund expenditures). The Town reported total fund balances of over $12.2 million
in the Combined Nonmajor Governmental Funds. Almost $11.9 million in Restricted Fund Balances,
combined with almost $0.5 million in Nonspendable Fund Balances was offset by Unassigned Fund
Deficits of almost $0.2 million.
The Town’s total debt increased by almost $1.6 million during the fiscal year. Detail of this net
increase is illustrated as follows:
Issuances of debt
Governmental Activities $ 7,051,000
Business-Type Activities 3,804,000
Debt payments:
Governmental Activities (5,440,850)
Business-Type Activities (3,834,532)
Premium from issuance debt:
Governmental Activities 305,990
Business-Type Activities 119,872
Amortization of premium:
Governmental Activities (356,493)
Business-Type Activities (76,580)
$ 1,572,407
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Town’s basic financial
statements. The Town’s basic financial statements comprise three components: 1) government-wide
financial statements, 2) fund financial statements, 3) notes to the financial statements. This report also
contains other supplementary information in addition to the basic financial statements themselves.
Town of Canton, Massachusetts Page 21 of 125 Comprehensive Annual Financial ReportSource page 100
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 22 of 125 Comprehensive Annual Financial ReportSource page 101
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 16 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 14 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.
Town of Canton, Massachusetts Page 23 of 125 Comprehensive Annual Financial ReportSource page 102
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.
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 $60.0 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,
2017 2016 2017 2016 2017 2016
Assets
Currrent and other assets $ 48,529,907 $ 45,653,102 $ 13,275,605 $ 13,703,899 $ 61,805,512 $ 59,357,001
Capital assets, net 106,848,112 106,518,180 46,628,168 46,585,494 153,476,280 153,103,674
Total assets 155,378,019 152,171,282 59,903,773 60,289,393 215,281,792 212,460,675
Deferred outflows of resources 4,210,154 6,285,161 284,992 425,452 4,495,146 6,710,613
Liabilities
Long-term liabilities 111,846,584 106,918,110 29,269,298 29,212,130 141,115,882 136,130,240
Other liabilities 12,899,411 16,630,012 3,059,084 4,781,999 15,958,495 21,412,011
Total liabilities 124,745,995 123,548,122 32,328,382 33,994,129 157,074,377 157,542,251
Deferred inflows of resources 2,502,961 3,280,618 169,430 222,070 2,672,391 3,502,688
Net Position
Net investment in capital assets 78,738,423 78,591,436 18,785,822 17,457,708 97,524,245 96,049,144
Restricted 10,642,548 9,006,548 - - 10,642,548 9,006,548
Unrestricted (57,041,754) (55,970,281) 8,905,131 9,040,938 (48,136,623) (46,929,343)
Total Net Position $ 32,339,217 $ 31,627,703 $ 27,690,953 $ 26,498,646 $ 60,030,170 $ 58,126,349
Town of Canton, Massachusetts Page 24 of 125 Comprehensive Annual Financial ReportSource page 103
By far, the largest portion (over $97.5 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
be provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
An additional portion (over $10.6 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
$48.1 million due to the recognition of net pension liabilities of approximately $39.9 million and other
postemployment benefits of approximately $50.7 million.
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,
2017 2016 2017 2016 2017 2016
Revenues
Program revenues:
Charges for services $ 6,500,012 $ 7,571,242 $ 13,489,826 $ 13,601,983 $ 19,989,838 $ 21,173,225
Operating grants and contributions 18,253,254 15,841,950 80,960 2,093 18,334,214 15,844,043
Capital grants and contributions 922,822 1,562,827 - - 922,822 1,562,827
General revenues:
Property taxes and tax liens 72,087,049 67,168,983 - - 72,087,049 67,168,983
Unrestricted grants and contributions 2,099,870 2,013,767 - - 2,099,870 2,013,767
Other 6,300,054 8,099,043 50,296 38,296 6,350,350 8,137,339
Total Revenues 106,163,061 102,257,812 13,621,082 13,642,372 119,784,143 115,900,184
Expenses
General government 5,965,196 5,764,062 - - 5,965,196 5,764,062
Public safety 17,532,705 16,584,359 - - 17,532,705 16,584,359
Education 68,325,037 60,963,021 - - 68,325,037 60,963,021
Public works 7,658,668 7,581,355 - - 7,658,668 7,581,355
Health and human services 1,684,833 1,536,513 - - 1,684,833 1,536,513
Culture and recreation 3,683,115 3,698,331 - - 3,683,115 3,698,331
Debt service 636,035 672,768 - - 636,035 672,768
Water - - 6,141,278 5,692,320 6,141,278 5,692,320
Sewer - - 6,191,663 5,925,780 6,191,663 5,925,780
Rink - - 61,792 79,670 61,792 79,670
Total Expenses 105,485,589 96,800,409 12,394,733 11,697,770 117,880,322 108,498,179
Change in net position before transfers 677,472 5,457,403 1,226,349 1,944,602 1,903,821 7,402,005
Transfers 34,042 (1,824,747) (34,042) 1,824,747 - -
Change in net position 711,514 3,632,656 1,192,307 3,769,349 1,903,821 7,402,005
Net position, beginning of year 31,627,703 27,995,047 26,498,646 22,729,297 58,126,349 50,724,344
Net position, end of year $ 32,339,217 $ 31,627,703 $ 27,690,953 $ 26,498,646 $ 60,030,170 $ 58,126,349
Town of Canton, Massachusetts Page 25 of 125 Comprehensive Annual Financial ReportSource page 104
Governmental Activities – The governmental activities increased net position by over $0.7 million
(2.2% of governmental activities’ net position) as operating results were in line with expectations.
Fiscal Year 2017 Expenses and Program Revenues – governmental activities are graphically presented as
follows:
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
Functional expenses
$20,000,000
Program Revenues
$10,000,000
$0
Major revenue sources of governmental activities consist of revenue from; (1) Operating grants and
contributions which comprised approximately 17.2% of the total governmental activity revenues
represented an increase of $2.4 million over the prior year. This was directly a result of an increase of
over $2.2 million due to nonemployee special funding payments from the Commonwealth reported in a
manner required under GASB
68; (2) Property taxes which Revenues
represented 67.9% of total
revenues represented an increase
2%
over the prior year by $4.9 6%
1% 6%
million this was comprised of
the legally allowed amount Property taxes
17% Operating grants and contributions
under proposition 2 1/2% after
Capital grants and contributions
factoring in the increase in 68% Charges for services
assessment and new growth and Other
a reduction in the allowance for Intergovernmental (unrestricted)
abatements due to cases settled
favorably in favor of the Town;
and (3) Other revenues which
consists mainly of motor vehicle
excise and other local receipts decreased by almost $1.7 million due to the prior year including a one-time
insurance recovery in the amount of about $2.0 million. No other revenue sources exceeded 10% of total
revenues in either fiscal 2017 or 2016.
Town of Canton, Massachusetts Page 26 of 125 Comprehensive Annual Financial ReportSource page 105
Major operating expenses in total increased by approximately $8.7 million. This was primarily due to an
increase in employee benefit related costs. Direct benefits consisting primarily of other postemployment
benefit costs represented health
insurance and pension costs
Expenses
were over $4.8 million greater
than the prior year. An 1%
3%
1%
6%
7%
additional $2.2 million was due 17%
General government
to the expense side of the Public safety
special funding situation Education
described above under revenue. Public works
These costs were spread across Health and human services
all functions that included 65% Culture and recreation
payroll with the most modest Interest expense
increases in public safety and
education which are the
Town’s two most labor
intensive functions. The remaining increases of $1.7 million were due to additional costs spread in minor
amounts across all functions with the largest increases associated with depreciation.
Business-type Activities – Net position of the business-type activities increased almost $1.2 million over
the prior year. The prior year increase was larger due to transfers from governmental funds into the rink
for construction due to a collapsed roof.
Business – type activities
20
15
10
5
User charges Expenses and indirect
charges
Town of Canton, Massachusetts Page 27 of 125 Comprehensive Annual Financial ReportSource page 106
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 $31.5 million, an increase of approximately $7.4 million over
the prior year. The increase was primarily the result of revenues exceeding expenditures in the general
fund due to higher than expected motor vehicle excise, building permit and other local revenues. This
positive situation was a direct result of the continued economic expansion; this was compounded by the
timing of bond proceeds which exceeded capital expenditures in the capital project funds.
Unassigned fund balance in the general fund was approximately $16.1 million or 17.1% of general fund
expenditures. This is available for spending at the government’s discretion. Assigned fund balance, as a
result of encumbrances and amounts budgeted for next fiscal year of almost $0.9 million, and committed
fund balance for carryover articles over $0.9 million bring total fund balance in the general fund to
approximately $17.9 million or 19.0% of general fund expenditures.
The remainder of governmental fund balances are included as Combined Nonmajor Fund Balances and
are classified as either (1) non-spendable, due to being the corpus of an endowment in the amount of
approximately $0.5 million; (2) restricted due to constraints placed externally by third-parties in the
amount of approximately $11.9 million; (3) amounts restricted for capital projects of approximately $1.3
million, or (4) unassigned as they reflect negative balances due to grant deficits of almost $0.2 million.
These are expected to be funded in future years through grant reimbursements.
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 approximately $5.1 million. This was flat with
respect to the prior year as revenues and expenses were approximately the same amount.
Health Claims Fund
15
14
13
12
11
10
Revenues Expenses
Town of Canton, Massachusetts Page 28 of 125 Comprehensive Annual Financial ReportSource page 107
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 $0.3 million in decreases allocated to general government.
Approximately $0.2 million in increases allocated to public works.
Approximately $0.1 million in increases to benefits.
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 $0.2 million from the original budget.
Major budget to actual differences on the revenue side included property tax and excise, which exceeded
budget by approximately $1.8 million, licenses and permits which exceeded budget by $0.3 million and
departmental revenues which exceeded budget by $0.2 million.
On the expenditure side, numerous net minor favorable variances which in total approximated $0.5
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, 2017 amounts to approximately $153.5 million (net of accumulated depreciation)
an increase from the previous year’s balance of approximately $0.4 million as additions exceeded the
annual deprecation provision.
Major capital asset additions included, roadway improvements and water 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
$230.8 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 of almost $56.0 million. The
entire amount comprises debt backed by the full faith and credit of the government.
The Town’s most recent credit evaluation resulted in the Town maintaining its “AAA” rating from
Standard and Poor‘s Investment Services for general obligation debt. This is the highest investment grade
possible.
The Town’s total debt increased by approximately $1.6 million during the fiscal year as previously
detailed.
Town of Canton, Massachusetts Page 29 of 125 Comprehensive Annual Financial ReportSource page 108
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 nearly 63.2% of the Town’s property tax base. The Town also relies heavily on its
commercial and industrial property tax base, which in aggregate comprise 36.8% 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 recently are
beginning to see an upward trend. During 2017, 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 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 2018. The
budget was adopted in May 2017 and the Town’s tax rate will be certified in December 2017.
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 30 of 125 Comprehensive Annual Financial ReportSource page 109
Basic Financial Statements Town of Canton, Massachusetts Page 31 of 125 Comprehensive Annual Financial Report
Source page 110
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Source page 111
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2017
Primary Government
Governmental Business-Type
Activities Activities Total
Assets
Cash and cash equivalents $ 32,474,926 $ 9,100,505 $ 41,575,431
Investments 11,616,982 - 11,616,982
Receivables, net:
Property taxes 505,826 - 505,826
Tax liens and foreclosures 1,310,421 39,060 1,349,481
User fees - 4,136,040 4,136,040
Departmental and other 693,692 - 693,692
Intergovernmental 1,859,008 - 1,859,008
Prepaid items 7,252 - 7,252
Deposit held by third party 61,800 - 61,800
Capital assets not being depreciated 15,443,966 624,852 16,068,818
Capital assets, net of accumulated depreciation 91,404,146 46,003,316 137,407,462
Total Assets 155,378,019 59,903,773 215,281,792
Deferred Outflows of Resources
Deferred pensions 4,210,154 284,992 4,495,146
Total Deferred Outflows of Resources 4,210,154 284,992 4,495,146
Liabilities
Warrants and accounts payable 2,081,058 59,785 2,140,843
Accrued payroll and withholdings 3,804,773 21,107 3,825,880
Retainage payable 22,101 - 22,101
Tax refunds payable 1,170,000 - 1,170,000
Health claims incurred but not reported 878,641 - 878,641
Accrued interest 273,006 210,852 483,858
Other liabilities 43,520 8,522 52,042
Noncurrent liabilities:
Due within one year 4,626,312 2,758,818 7,385,130
Due in more than one year 111,846,584 29,269,298 141,115,882
Total Liabilities 124,745,995 32,328,382 157,074,377
Deferred Inflows of Resources
Deferred pensions 2,502,961 169,430 2,672,391
Total Deferred Inflows of Resources 2,502,961 169,430 2,672,391
Net Position
Net investment in capital assets 78,738,423 18,785,822 97,524,245
Restricted for:
Nonexpendable permanent funds 489,185 - 489,185
Expendable permanent funds 730,086 - 730,086
Debt service 1,740,116 - 1,740,116
Federal and State grants 1,442,536 - 1,442,536
Community preservation 1,929,909 - 1,929,909
Gift funds 2,093,740 - 2,093,740
Other specific purposes 2,216,976 - 2,216,976
Unrestricted (57,041,754) 8,905,131 (48,136,623)
Total Net Position $ 32,339,217 $ 27,690,953 $ 60,030,170
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 33 of 125 Comprehensive Annual Financial ReportSource page 112
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2017
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 $ 5,965,196 $ 563,303 $ 82,136 $ - $ (5,319,757) $ (5,319,757)
Public safety 17,532,705 2,778,390 95,054 - (14,659,261) (14,659,261)
Education 68,325,037 2,328,949 17,133,263 - (48,862,825) (48,862,825)
Public works 7,658,668 267,218 33,225 814,821 (6,543,404) (6,543,404)
Health and human services 1,684,833 101,977 393,142 - (1,189,714) (1,189,714)
Culture and recreation 3,683,115 460,175 445,798 108,001 (2,669,141) (2,669,141)
Interest expense 636,035 - 70,636 - (565,399) (565,399)
Total governmental activities 105,485,589 6,500,012 18,253,254 922,822 (79,809,501) (79,809,501)
Business-type activities:
Water 6,141,278 6,929,539 57,500 - $ 845,761 845,761
Sewer 6,191,663 6,560,287 23,460 - 392,084 392,084
Rink 61,792 - - - (61,792) (61,792)
Total business-type activities 12,394,733 13,489,826 80,960 - 1,176,053 1,176,053
Total Primary Government $ 117,880,322 $ 19,989,838 $ 18,334,214 $ 922,822 (79,809,501) 1,176,053 (78,633,448)
General Revenues:
Property taxes 72,087,049 - 72,087,049
Tax liens 220,189 - 220,189
Motor vehicle and other excise 4,581,480 - 4,581,480
Hotel and meals taxes 593,076 - 593,076
Payments in lieu of taxes 231,040 - 231,040
Grants and contributions not restricted
to specific programs 2,099,870 - 2,099,870
Penalties and interest on taxes 314,625 - 314,625
Unrestricted investment income 359,644 50,296 409,940
Transfers (net) 34,042 (34,042) -
Total general revenues and transfers 80,521,015 16,254 80,537,269
Change in Net Position 711,514 1,192,307 1,903,821
Net Position:
Beginning of year 31,627,703 26,498,646 58,126,349
End of year $ 32,339,217 $ 27,690,953 $ 60,030,170
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 34 of 125 Comprehensive Annual Financial ReportSource page 113
TOWN OF CANTON, MASSACHUSETTS
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2017
Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Assets
Cash and cash equivalents $ 17,575,183 $ 1,466,656 $ 11,360,994 $ 30,402,833
Investments 6,402,782 - 1,112,166 7,514,948
Receivables, net of allowance for uncollectibles:
Property taxes 498,497 - 7,329 505,826
Tax liens and foreclosures 1,307,690 - 2,731 1,310,421
Motor vehicle excise 375,283 - - 375,283
Intergovernmental 1,740,116 - 118,892 1,859,008
Departmental and other - - 255,983 255,983
Prepaid items 7,252 - - 7,252
Total Assets 27,906,803 1,466,656 12,858,095 42,231,554
Deferred Outflows of Resources - - - -
Total Assets and Deferred Outflows of Resources $ 27,906,803 $ 1,466,656 $ 12,858,095 $ 42,231,554
Liabilities
Warrants and accounts payable $ 1,384,589 $ 107,646 $ 282,768 $ 1,775,003
Accrued payroll and withholdings 3,701,991 118 102,664 3,804,773
Retainage payable - 22,101 - 22,101
Tax refunds payable 1,170,000 - - 1,170,000
Other liabilities 39,489 - 4,031 43,520
Total Liabilities 6,296,069 129,865 389,463 6,815,397
Deferred Inflows of Resources
Unavailable revenues - property taxes 1,559,874 - 10,060 1,569,934
Unavailable revenues - motor vehicle excise 375,283 - - 375,283
Unavailable revenues - intergovernmental 1,740,116 - - 1,740,116
Unavailable revenues - other - - 255,983 255,983
Total Deferred Inflows of Resources 3,675,273 - 266,043 3,941,316
Fund Balances
Nonspendable 7,252 - 489,185 496,437
Restricted - 1,336,791 11,869,527 13,206,318
Committed 923,152 - - 923,152
Assigned 876,862 - - 876,862
Unassigned 16,128,195 - (156,123) 15,972,072
Total Fund Balances 17,935,461 1,336,791 12,202,589 31,474,841
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances $ 27,906,803 $ 1,466,656 $ 12,858,095 $ 42,231,554
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 35 of 125 Comprehensive Annual Financial ReportSource page 114
TOWN OF CANTON, MASSACHUSETTS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION
JUNE 30, 2017
Total Governmental Fund Balances $ 31,474,841
Capital assets used in governmental activities are not financial resources and therefore are
not reported in the funds. 106,848,112
Other long-term assets are unavailable to pay current-period expenditures 3,941,316
Deferred outflows and inflows of resources to be recognized in future pension expense
are not available resources and, therefore, are not reported in the funds:
Net difference between projected and actual earnings on pension plan investments 3,418,564
Differences between expected and actual experience 586,496
Changes in assumptions (2,439,438)
Changes in proportion and differences between Town contributions and
proportionate share of contributions 141,571
Net effect of reporting deferred outflows and inflows of resources from pensions 1,707,193
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. 5,113,657
In the Statement of Activities, interest is accrued on outstanding long-term debt
whereas in the governmental funds interest is not reported until due. (273,006)
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 (27,226,176)
Unamortized premiums on bonds (1,081,477)
Capital leases payable (63,827)
Landfill closure (26,000)
Compensated absences (1,704,018)
Net pension liability (37,408,247)
Other postemployment benefits (48,963,151)
Net effect of reporting long-term liabilities (116,472,896)
Net Position of Governmental Activities $ 32,339,217
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 36 of 125 Comprehensive Annual Financial ReportSource page 115
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED JUNE 30, 2017
Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Revenues:
Property taxes $ 71,396,805 $ - $ 546,766 $ 71,943,571
Tax liens 172,988 - - 172,988
Intergovernmental 16,703,291 - 4,082,654 20,785,945
Motor vehicle and other excises 4,505,384 - - 4,505,384
Hotel and meals taxes 593,076 - - 593,076
Licenses and permits 1,142,116 - - 1,142,116
Penalties and interest on taxes 314,625 - - 314,625
Payments in lieu of taxes 231,040 - - 231,040
Fines and forfeitures 92,821 - - 92,821
Charges for services - - 2,028,754 2,028,754
Departmental and other revenue 973,075 18,400 2,548,178 3,539,653
Investment income 268,280 - 33,076 301,356
Contributions and donations - - 857,270 857,270
Total Revenues 96,393,501 18,400 10,096,698 106,508,599
Expenditures:
Current:
General government 3,831,728 - 184,736 4,016,464
Public safety 10,798,668 985,868 867,212 12,651,748
Education 40,294,347 1,977,616 5,036,528 47,308,491
Public works 5,964,554 89,872 685,555 6,739,981
Health and human services 1,146,260 - 147,154 1,293,414
Culture and recreation 1,986,896 - 534,850 2,521,746
Pension benefits 12,480,279 - - 12,480,279
Employee benefits 12,017,203 - 65,846 12,083,049
State and county assessments 995,573 - - 995,573
Debt service:
Principal 3,821,850 - - 3,821,850
Interest 970,237 - - 970,237
Total Expenditures 94,307,595 3,053,356 7,521,881 104,882,832
Excess (Deficiency) of Revenues Over (Under) Expenditures 2,085,906 (3,034,956) 2,574,817 1,625,767
Other Financing Sources (Uses):
Issuance of bonds and notes - 5,455,000 - 5,455,000
Premiums from bonds and notes 44,404 - 261,586 305,990
Issuance of refunding bonds 1,596,000 - - 1,596,000
Payments on refunding bonds (1,619,000) - - (1,619,000)
Transfers in 1,076,977 1,260,000 84,265 2,421,242
Transfers out (944,265) (65,700) (1,377,235) (2,387,200)
Total Other Financing Sources (Uses) 154,116 6,649,300 (1,031,384) 5,772,032
Net Change in Fund Balances 2,240,022 3,614,344 1,543,433 7,397,799
FUND BALANCES - Beginning of year 15,695,439 (2,277,553) 10,659,156 24,077,042
FUND BALANCES - End of year $ 17,935,461 $ 1,336,791 $ 12,202,589 $ 31,474,841
See acompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 37 of 125 Comprehensive Annual Financial ReportSource page 116
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, 2017
Net Change in Fund Balances - Total Governmental Fund Balances $ 7,397,799
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 5,203,195
Depreciation expense (4,873,263)
Net effect of reporting capital assets 329,932
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. (288,828)
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 (5,455,000)
Premiums from bonds and notes (305,990)
Issuance of refunding bonds (1,596,000)
Payments on refunding bonds 1,619,000
Amortization of premiums on bonds and notes payable 356,493
Payments on capital leases 20,419
Repayments of debt 3,821,850
Net effect of reporting long-term debt (1,539,228)
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. (403,826)
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. (22,291)
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:
Landfill closure 26,000
Compensated absences (170,177)
Pension benefits 221,050
Other postemployment benefits (4,838,917)
Net effect of reporting long-term liabilities (4,762,044)
Change in Net Position of Governmental Activities $ 711,514
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 38 of 125 Comprehensive Annual Financial ReportSource page 117
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2017
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Assets
Current assets:
Cash and cash equivalents $ 3,759,337 $ 3,109,918 $ 2,231,250 $ 9,100,505 $ 2,072,093
Investments - - - - 4,102,034
Receivables (net):
User charges 2,127,860 2,008,180 - 4,136,040 -
Tax liens 19,013 20,047 - 39,060 -
Departmental and other - - - - 62,426
Deposit held by third party - - - - 61,800
Total current assets 5,906,210 5,138,145 2,231,250 13,275,605 6,298,353
Noncurrent assets:
Nondepreciable capital assets 624,852 - - 624,852 -
Capital assets (net of depreciation) 31,801,393 14,201,923 - 46,003,316 -
Total noncurrent assets 32,426,245 14,201,923 - 46,628,168 -
Total Assets 38,332,455 19,340,068 2,231,250 59,903,773 6,298,353
Deferred Outflows of Resources
Deferred pensions 144,294 115,075 25,623 284,992 -
Total Deferred Outflows of Resources 144,294 115,075 25,623 284,992 -
Liabilities
Current liabilities:
Warrants and accounts payable 54,199 5,406 180 59,785 306,055
Accrued payroll and withholdings 15,747 4,560 800 21,107 -
Health claims incurred but not reported - - - - 878,641
Accrued interest 150,361 60,491 - 210,852 -
Other liabilities 8,522 - - 8,522 -
Compensated absences 23,451 3,340 - 26,791 -
Bonds and notes payable 1,760,441 964,586 7,000 2,732,027 -
Total current liabilities 2,012,721 1,038,383 7,980 3,059,084 1,184,696
Noncurrent liabilities:
Compensated absences 70,351 10,018 - 80,369 -
Other postemployment benefits 1,016,195 456,947 271,094 1,744,236 -
Net pension liability 1,282,089 1,022,476 227,661 2,532,226 -
Bonds and notes payable 18,731,880 6,174,587 6,000 24,912,467 -
Total noncurrent liabilities 21,100,515 7,664,028 504,755 29,269,298 -
Total Liabilities 23,113,236 8,702,411 512,735 32,328,382 1,184,696
Deferred Inflows of Resources
Deferred pensions 85,784 68,413 15,233 169,430 -
Total Deferred Outflows of Resources 85,784 68,413 15,233 169,430 -
Net Position
Net investment in capital assets 11,783,563 7,002,259 - 18,785,822 -
Unrestricted 3,494,166 3,682,060 1,728,905 8,905,131 5,113,657
Total Net Position $ 15,277,729 $ 10,684,319 $ 1,728,905 $ 27,690,953 $ 5,113,657
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 39 of 125 Comprehensive Annual Financial ReportSource page 118
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2017
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Operating Revenues:
Charges for services $ 6,929,539 $ 6,560,287 $ - $ 13,489,826 $ -
Employee contributions - - - - 3,584,560
Employer contributions - - - - 10,712,761
Stop loss reimbursements - - - - 632,353
Total Operating Revenues 6,929,539 6,560,287 - 13,489,826 14,929,674
Operating Expenses:
Operating costs 2,616,014 1,242,473 20,400 3,878,887 -
Massachusetts Water Resources Authority assessment 1,731,331 4,137,162 - 5,868,493 -
Depreciation 1,225,378 632,903 - 1,858,281 -
Employee benefits - - - - 15,276,790
Total Operating Expenses 5,572,723 6,012,538 20,400 11,605,661 15,276,790
Operating Income (Loss) 1,356,816 547,749 (20,400) 1,884,165 (347,116)
Nonoperating Revenues (Expenses):
Intergovernmental 57,500 23,460 - 80,960 -
Investment income 22,794 16,947 10,555 50,296 58,288
Loss on sale of assets - - (39,852) (39,852) -
Interest expense (568,555) (179,125) (1,540) (749,220) -
Total Nonoperating Revenues (Expenses) (488,261) (138,718) (30,837) (657,816) 58,288
Income (Loss) Before Transfers 868,555 409,031 (51,237) 1,226,349 (288,828)
Transfers in - - 365,958 365,958 -
Transfers out (400,000) - - (400,000) -
Total Transfers (400,000) - 365,958 (34,042) -
Change in Net Position 468,555 409,031 314,721 1,192,307 (288,828)
Total Net Position - Beginning of the Year 14,809,174 10,275,288 1,414,184 26,498,646 5,402,485
Total Net Position - End of the Year $ 15,277,729 $ 10,684,319 $ 1,728,905 $ 27,690,953 $ 5,113,657
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 40 of 125 Comprehensive Annual Financial ReportSource page 119
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2017
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Cash Flows from Operating Activities:
Receipts from users $ 7,003,742 $ 6,390,840 $ - $ 13,394,582 $ -
Receipts from interfund services provided - - - - 15,058,623
Payments to employees (791,147) (281,913) (5,488) (1,078,548) -
Payments to vendors (3,914,019) (5,055,653) (4,647) (8,974,319) -
Payments for interfund services used - - - - (14,939,528)
Net Cash Provided by (Used in) Operating
Activities 2,298,576 1,053,274 (10,135) 3,341,715 119,095
Cash Flows from Noncapital Financing Activities:
Intergovernmental operating grants 57,500 23,460 - 80,960 -
Net Cash Provided by (Used in) Noncapital
Financing Activities (342,500) 23,460 365,958 46,918 -
Cash Flows from Capital and Related Financing Activities:
Proceeds from the issuance of bonds and notes 2,630,000 - - 2,630,000 -
Proceeds from the issuance of refunding bonds 1,109,000 52,000 13,000 1,174,000 -
Premiums from the issuance of bonds and notes 119,872 - - 119,872 -
Payments of refunded bonds (1,138,000) (51,000) (12,000) (1,201,000) -
Acquisition and construction of capital assets (2,000,807) - - (2,000,807) -
Proceeds from the sale of assets - - 60,000 60,000 -
Principal payments on bonds and notes (2,971,400) (956,132) (6,000) (3,933,532) -
Interest payments on bonds and notes (600,860) (208,600) (1,540) (811,000) -
Net Cash Provided by (Used in) Capital and Related
Financing Activities (2,852,195) (1,163,732) 53,460 (3,962,467) -
Cash Flows from Investing Activities:
Investment income 22,794 16,947 10,555 50,296 58,288
Investment of operating cash - - - - (555,264)
Net Cash Provided by (Used in) Investing Activities 22,794 16,947 10,555 50,296 (496,976)
Net Change in Cash and Cash Equivalents (873,325) (70,051) 419,838 (523,538) (377,881)
Cash and Cash Equivalents:
Beginning of the year 4,632,662 3,179,969 1,811,412 9,624,043 2,449,974
End of the year $ 3,759,337 $ 3,109,918 $ 2,231,250 $ 9,100,505 $ 2,072,093
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used in) Operating Activities:
Operating Income (Loss) $ 1,356,816 $ 547,749 $ (20,400) $ 1,884,165 $ (347,116)
Adjustments to reconcile operating income (loss) to net
cash provided by (used in) operating activities:
Depreciation 1,225,378 632,903 - 1,858,281 -
Changes in assets, deferred outflows of resources,
liabilities and deferred inflows of resources:
Receivables 74,203 (169,447) - (95,244) 128,949
Amounts held by insurance carrier - - - - 61,121
Deferred outflows of resources 71,117 56,716 12,627 140,460 -
Accounts payable and accrued expenses (449,195) 2,952 (15,182) (461,425) 138,488
Other liabilities (1,478) - - (1,478) -
Health claims incurred but not reported - - - - 137,653
Other postemployment benefits 100,428 45,159 26,792 172,379 -
Net pension liability (52,041) (41,502) (9,240) (102,783) -
Deferred inflows of resources (26,652) (21,256) (4,732) (52,640) -
Net Cash Provided by (Used in) Operating
Activities $ 2,298,576 $ 1,053,274 $ (10,135) $ 3,341,715 $ 119,095
Noncash capital and related financing activities:
Amortization of bond premium $ 47,592 $ 28,988 $ - $ 76,580 $ -
Disposal of capital assets - - 39,852 39,852 -
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 41 of 125 Comprehensive Annual Financial ReportSource page 120
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2017
Other Private
Postemployment Purpose Agency
Benefits Trust Fund Trust Funds Funds
Assets
Cash and cash equivalents $ 7,551 $ 95,272 $ 1,309,785
Investments:
Equity mutual funds 1,900,282 - -
Bond mutual funds 1,072,538 - -
Total Assets 2,980,371 95,272 1,309,785
Liabilities
Warrants payable - - 27,177
Agency liabilities - - 1,282,608
Total Liabilities - - 1,309,785
Net Position
Held in trust for other postemployment benefits 2,980,371 - -
Held in trust for private purposes - 95,272 -
Total Net Position $ 2,980,371 $ 95,272 $ -
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 42 of 125 Comprehensive Annual Financial ReportSource page 121
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FISCAL YEAR ENDED JUNE 30, 2017
Other Private
Postemployment Purpose
Benefits Trust Fund Trust Funds
Additions
Contributions:
Employee $ 407,666 $ -
Employer 2,031,576 -
Other - 1,500
Total contributions 2,439,242 1,500
Investment income:
Interest and dividends 57,542 962
Net appreciation in fair value of investments 172,880 -
Less - investment management fees (8,592) -
Net investment earnings 221,830 962
Other income - -
Total Additions 2,661,072 2,462
Deductions
Education - scholarships - 7,600
Retiree benefits 1,669,242 -
Total Deductions 1,669,242 7,600
CHANGE IN NET POSITION 991,830 (5,138)
NET POSITION AT BEGINNING OF YEAR 1,988,541 100,410
NET POSITION AT END OF YEAR $ 2,980,371 $ 95,272
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 43 of 125 Comprehensive Annual Financial ReportSource page 122
TOWN OF CANTON, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2017
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 2017, the Town’s share of the operating and debt service expenses was $1,180,767.
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 44 of 125 Comprehensive Annual Financial Report