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Fiscal Year 2023 Annual Comprehensive Financial Report pdf file
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Source page 41
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
▪ 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.
▪ The Town’s housing market has been very strong for the past several years. This has been bolstered
by mortgage rates at historic lows. Current actions by the Federal Open Market Committee to soften
the economy due to inflation have caused mortgage rates to spike during fiscal year 2023. Such
trends may have an adverse effect on the housing market, and the Town is monitoring this.
▪ Inflation is peaking near 40-year historic highs. This is having adverse impacts on the Town. Wage
inflation cannot guarantee that the Town will be able to maintain employees without increasing
wages. Energy inflation is causing a spike in energy costs. Price inflation is causing a spike in the
price of the delivery and cost of goods and services. The construction building index is nearing
historic highs which may cause the estimates of major capital projects to increase, in addition to the
financing costs of these projects. The Town continues to monitor this situation
All of the above items were considered when the Town developed its budget for fiscal year 2024. The
budget was adopted in May 2023 and the Town’s tax rate was certified in November 2023.
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 33 of 126 Annual Comprehensive Financial ReportSource page 42
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Basic Financial Statements Town of Canton, Massachusetts Page 35 of 126 Annual Comprehensive Financial Report
Source page 44
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2023
Primary Government
Governmental Business-Type
Activities Activities Total
Assets
Cash and cash equivalents $ 67,197,963 $ 16,647,154 $ 83,845,117
Investments 17,686,450 - 17,686,450
Receivables, net:
Property taxes 741,651 - 741,651
Tax liens 1,670,240 95,456 1,765,696
User fees - 4,063,989 4,063,989
Departmental and other 1,477,552 - 1,477,552
Leases 4,801,273 - 4,801,273
Intergovernmental 292,795 - 292,795
Prepaid items 327,173 - 327,173
Deposit held by third party 61,800 - 61,800
Capital assets not being depreciated 17,559,682 5,826,138 23,385,820
Capital assets, net of accumulated depreciation 99,129,742 54,158,075 153,287,817
Total Assets 210,946,321 80,790,812 291,737,133
Deferred Outflows of Resources
Related to net pension liability 9,184,991 621,747 9,806,738
Related to net other postemployment benefits liability 10,719,792 382,349 11,102,141
Total Deferred Outflows of Resources 19,904,783 1,004,096 20,908,879
Liabilities
Warrants and accounts payable 2,558,917 110,589 2,669,506
Accrued payroll and withholdings 5,734,110 38,004 5,772,114
Tax refunds payable 3,777,791 - 3,777,791
Health claims incurred but not reported 1,295,362 - 1,295,362
Accrued interest 313,104 230,087 543,191
Unearned revenue 3,903,715 - 3,903,715
Other liabilities 1,142,120 10,597 1,152,717
Noncurrent liabilities:
Due within one year 4,799,344 3,812,160 8,611,504
Due in more than one year 162,669,017 34,908,137 197,577,154
Total Liabilities 186,193,480 39,109,574 225,303,054
Deferred Inflows of Resources
Related to leased assets 4,801,273 - 4,801,273
Related to net other postemployment benefits liability 10,502,137 374,586 10,876,723
Total Deferred Inflows of Resources 15,303,410 374,586 15,677,996
Net Position
Net investment in capital assets 88,058,941 35,054,700 123,113,641
Restricted for:
Nonexpendable permanent funds 612,385 - 612,385
Expendable permanent funds 898,013 - 898,013
Federal and State grants 1,295,808 - 1,295,808
Community preservation 2,455,103 - 2,455,103
Gift funds 3,455,225 - 3,455,225
Other specific purposes 1,304,293 - 1,304,293
Unrestricted (68,725,554) 7,256,048 (61,469,506)
Total Net Position $ 29,354,214 $ 42,310,748 $ 71,664,962
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 36 of 126 Annual Comprehensive Financial ReportSource page 45
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2023
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 $ 8,414,945 $ 620,199 $ 2,367,527 $ 47,500 $ (5,379,719) $ (5,379,719)
Public safety 22,240,345 4,136,074 723,439 - (17,380,832) (17,380,832)
Education 84,131,157 1,973,611 22,872,279 - (59,285,267) (59,285,267)
Public works 9,017,362 448,187 81,330 877,935 (7,609,910) (7,609,910)
Health and human services 1,802,950 235,498 427,860 - (1,139,592) (1,139,592)
Culture and recreation 4,554,275 892,702 99,247 275,006 (3,287,320) (3,287,320)
Interest expense 749,150 - 1,183 - (747,967) (747,967)
Total governmental activities 130,910,184 8,306,271 26,572,865 1,200,441 (94,830,607) (94,830,607)
Business-type activities:
Water 7,371,999 8,542,336 - 154,767 $ 1,325,104 1,325,104
Sewer 6,920,834 7,260,942 - 985 341,093 341,093
Rink 723,685 411,450 - - (312,235) (312,235)
Total business-type activities 15,016,518 16,214,728 - 155,752 1,353,962 1,353,962
Total Primary Government $ 145,926,702 $ 24,520,999 $ 26,572,865 $ 1,356,193 (94,830,607) 1,353,962 (93,476,645)
General Revenues:
Property taxes 90,082,372 - 90,082,372
Tax liens 240,526 - 240,526
Motor vehicle and other excise 5,265,734 - 5,265,734
Hotel and meals taxes 1,023,603 - 1,023,603
Payments in lieu of taxes 1,937,379 - 1,937,379
Grants and contributions not restricted
to specific programs 2,541,685 - 2,541,685
Penalties and interest on taxes 313,655 - 313,655
Unrestricted investment income 2,365,442 489,408 2,854,850
Transfers (net) (1,236,622) 1,236,622 -
Total general revenues and transfers 102,533,774 1,726,030 104,259,804
Change in Net Position 7,703,167 3,079,992 10,783,159
Net Position:
Beginning of year 21,651,047 39,230,756 60,881,803
End of year $ 29,354,214 $ 42,310,748 $ 71,664,962
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 37 of 126 Annual Comprehensive Financial ReportSource page 46
TOWN OF CANTON, MASSACHUSETTS
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2023
Nonmajor Total
General ARPA Capital Governmental Governmental
Fund Grant Projects Funds Funds
Assets
Cash and cash equivalents $ 35,405,770 $ 3,907,567 $ 3,717,579 $ 18,218,655 $ 61,249,571
Investments 10,171,559 - - 1,399,460 11,571,019
Receivables, net of allowance for uncollectibles:
Property taxes 741,651 - - - 741,651
Tax liens 1,663,537 - - 6,703 1,670,240
Motor vehicle excise 506,242 - - - 506,242
Intergovernmental - - - 292,795 292,795
Departmental and other - - - 865,733 865,733
Leases 4,801,273 - - - 4,801,273
Total Assets 53,290,032 3,907,567 3,717,579 20,783,346 81,698,524
Deferred Outflows of Resources - - - - -
Total Assets and Deferred Outflows of Resources $ 53,290,032 $ 3,907,567 $ 3,717,579 $ 20,783,346 $ 81,698,524
Liabilities
Warrants and accounts payable $ 1,633,787 $ 3,284 $ 30,067 $ 754,565 $ 2,421,703
Accrued payroll and withholdings 5,662,998 568 - 70,544 5,734,110
Tax refunds payable 3,777,791 - - - 3,777,791
Unearned revenue - 3,903,715 - - 3,903,715
Other liabilities 1,141,795 - - 325 1,142,120
Total Liabilities 12,216,371 3,907,567 30,067 825,434 16,979,439
Deferred Inflows of Resources
Unavailable revenues - property taxes 1,967,232 - - 6,703 1,973,935
Unavailable revenues - excise taxes 506,242 - - - 506,242
Unavailable revenues - other - - - 573,903 573,903
Unavailable revenues - leases 4,801,273 - - - 4,801,273
Total Deferred Inflows of Resources 7,274,747 - - 580,606 7,855,353
Fund Balances
Nonspendable - - - 612,385 612,385
Restricted - - 3,687,512 19,024,606 22,712,118
Committed 4,029,719 - - - 4,029,719
Assigned 4,598,262 - - - 4,598,262
Unassigned 25,170,933 - - (259,685) 24,911,248
Total Fund Balances 33,798,914 - 3,687,512 19,377,306 56,863,732
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances $ 53,290,032 $ 3,907,567 $ 3,717,579 $ 20,783,346 $ 81,698,524
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 38 of 126 Annual Comprehensive Financial ReportSource page 47
TOWN OF CANTON, MASSACHUSETTS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
Total Governmental Fund Balances $ 56,863,732
Capital assets used in governmental activities are not financial resources and therefore are
not reported in the funds. 116,689,424
Other long-term assets that are unavailable to pay current-period expenditures 3,054,080
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 9,184,991
Deferred outflows related to net other postemployment benefits liability 10,719,792
Deferred inflows related to other net postemployment benefits liability (10,502,137)
Net effect of reporting deferred outflows and inflows of resources 9,402,646
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. 11,125,797
In the Statement of Activities, interest is accrued on outstanding long-term debt
whereas in the governmental funds interest is not reported until due. (313,104)
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 (30,925,493)
Unamortized premiums on bonds (2,488,737)
Compensated absences (2,362,425)
Net pension liability (40,844,185)
Net other postemployment benefits liability (90,847,521)
Net effect of reporting long-term liabilities (167,468,361)
Net Position of Governmental Activities $ 29,354,214
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 39 of 126 Annual Comprehensive Financial ReportSource page 48
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED JUNE 30, 2023
Nonmajor Total
General ARPA Capital Governmental Governmental
Fund Grant Projects Funds Funds
Revenues:
Property taxes $ 89,549,944 $ - $ - $ 755,097 $ 90,305,041
Tax liens 222,957 - - - 222,957
Intergovernmental 18,590,809 1,282,199 47,500 9,733,050 29,653,558
Motor vehicle and other excises 5,290,490 - - - 5,290,490
Hotel and meals taxes 1,023,603 - - - 1,023,603
Licenses and permits 1,725,661 - - - 1,725,661
Penalties and interest on taxes 313,655 - - - 313,655
Payments in lieu of taxes 1,937,379 - - - 1,937,379
Fines and forfeitures 58,206 - - - 58,206
Charges for services - - - 1,569,856 1,569,856
Departmental and other revenue 1,567,395 - - 3,571,692 5,139,087
Investment income 1,955,111 - - 176,235 2,131,346
Contributions and donations - - - 694,522 694,522
Total Revenues 122,235,210 1,282,199 47,500 16,500,452 140,065,361
Expenditures:
Current:
General government 4,474,580 588,264 324,582 1,298,902 6,686,328
Public safety 14,364,844 - - 1,872,425 16,237,269
Education 53,052,129 - 1,075,597 9,997,976 64,125,702
Public works 7,784,055 54,652 556,026 4,900,331 13,295,064
Health and human services 1,147,148 - - 202,717 1,349,865
Culture and recreation 2,546,486 60,000 94,681 975,866 3,677,033
Pension benefits 14,084,015 - - - 14,084,015
Employee benefits 13,991,611 - - 120,406 14,112,017
State and county assessments 1,513,485 - - - 1,513,485
Debt service:
Principal 3,815,576 - - 185,000 4,000,576
Interest 949,782 - - 57,240 1,007,022
Total Expenditures 117,723,711 702,916 2,050,886 19,610,863 140,088,376
Excess (Deficiency) of Revenues Over (Under) Expenditures 4,511,499 579,283 (2,003,386) (3,110,411) (23,015)
Other Financing Sources (Uses):
Issuance of bonds and notes - - 1,335,500 6,044,000 7,379,500
Sale of capital assets - - - 216,900 216,900
Premiums from bonds and notes - - 130,500 642,830 773,330
Issuance of refunding bonds - - - - -
Payments on refunding bonds - - - - -
Transfers in 1,291,670 - 740,000 1,362,647 3,394,317
Transfers out (2,101,549) (579,283) - (1,950,107) (4,630,939)
Total Other Financing Sources (Uses) (809,879) (579,283) 2,206,000 6,316,270 7,133,108
Net Change in Fund Balances 3,701,620 - 202,614 3,205,859 7,110,093
FUND BALANCES - Beginning of year 30,097,294 - 3,484,898 16,171,447 49,753,639
FUND BALANCES - End of year $ 33,798,914 $ - $ 3,687,512 $ 19,377,306 $ 56,863,732
See acompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 40 of 126 Annual Comprehensive Financial ReportSource page 49
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, 2023
Net Change in Fund Balances - Total Governmental Fund Balances $ 7,110,093
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 10,424,335
Disposal of capital assets (217,900)
Depreciation expense (5,961,711)
Net effect of reporting capital assets 4,244,724
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. 538,987
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 (7,379,500)
Premiums from bonds and notes (773,330)
Amortization of premiums on bonds and notes payable 388,745
Repayments of debt 4,000,576
Net effect of reporting long-term debt (3,763,509)
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. (449,484)
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. (130,873)
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 (78,494)
Pension benefits 1,274,054
Other postemployment benefits (1,042,331)
Net effect of reporting long-term liabilities 153,229
Change in Net Position of Governmental Activities $ 7,703,167
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 41 of 126 Annual Comprehensive Financial ReportSource page 50
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2023
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Assets
Current assets:
Cash and cash equivalents $ 9,718,937 $ 5,925,196 $ 1,003,021 $ 16,647,154 $ 5,948,392
Investments - - - - 6,115,431
Receivables (net):
User charges 2,367,122 1,696,867 - 4,063,989 -
Tax liens 46,814 48,642 - 95,456 -
Departmental and other - - - - 105,577
Prepaid items - - - - 327,173
Deposit held by third party - - - - 61,800
Total current assets 12,132,873 7,670,705 1,003,021 20,806,599 12,558,373
Noncurrent assets:
Capital assets not being depreciated 5,734,989 91,149 - 5,826,138 -
Capital assets, net of accumulated depreciation 32,470,367 11,618,598 10,069,110 54,158,075 -
Total noncurrent assets 38,205,356 11,709,747 10,069,110 59,984,213 -
Total Assets 50,338,229 19,380,452 11,072,131 80,790,812 12,558,373
Deferred Outflows of Resources
Related to net pension liability 314,797 251,052 55,898 621,747 -
Related to net other postemployment benefit liability 263,742 101,428 17,179 382,349 -
Total Deferred Outflows of Resources 578,539 352,480 73,077 1,004,096 -
Liabilities
Current liabilities:
Warrants and accounts payable 100,774 8,246 1,569 110,589 137,214
Accrued payroll and withholdings 22,461 11,145 4,398 38,004 -
Health claims incurred but not reported - - - - 1,295,362
Accrued interest 207,469 22,618 - 230,087 -
Other liabilities 10,597 - - 10,597 -
Compensated absences 33,356 8,121 - 41,477 -
Bonds and notes payable 3,207,285 504,775 58,623 3,770,683 -
Total current liabilities 3,581,942 554,905 64,590 4,201,437 1,432,576
Noncurrent liabilities:
Compensated absences 100,067 24,363 - 124,430 -
Net other postemployment benefit liability 2,235,148 859,570 145,589 3,240,307 -
Net pension liability 1,399,849 1,116,390 248,571 2,764,810 -
Bonds and notes payable 24,459,156 2,528,269 1,791,165 28,778,590 -
Total noncurrent liabilities 28,194,220 4,528,592 2,185,325 34,908,137 -
Total Liabilities 31,776,162 5,083,497 2,249,915 39,109,574 1,432,576
Deferred Inflows of Resources
Related to net other postemployment benefit liability 258,387 99,368 16,831 374,586 -
Total Deferred Inflows of Resources 258,387 99,368 16,831 374,586 -
Net Position
Net investment in capital assets 18,158,675 8,676,703 8,219,322 35,054,700 -
Unrestricted 723,544 5,873,364 659,140 7,256,048 11,125,797
Total Net Position $ 18,882,219 $ 14,550,067 $ 8,878,462 $ 42,310,748 $ 11,125,797
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 42 of 126 Annual Comprehensive Financial ReportSource page 51
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2023
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Operating Revenues:
Charges for services $ 8,542,336 $ 7,260,942 $ 411,450 $ 16,214,728 $ -
Employee contributions - - - - 4,253,320
Employer contributions - - - - 12,027,870
Stop loss reimbursements - - - - 1,091,866
Total Operating Revenues 8,542,336 7,260,942 411,450 16,214,728 17,373,056
Operating Expenses:
Operating costs 3,511,056 1,337,150 394,180 5,242,386 -
Massachusetts Water Resources Authority assessment 2,033,521 4,905,331 - 6,938,852 -
Depreciation 1,265,042 624,571 282,203 2,171,816 -
Employee benefits - - - - 17,068,165
Total Operating Expenses 6,809,619 6,867,052 676,383 14,353,054 17,068,165
Operating Income (Loss) 1,732,717 393,890 (264,933) 1,861,674 304,891
Nonoperating Revenues (Expenses):
Investment income 287,508 168,125 33,775 489,408 234,096
Interest expense (562,380) (53,782) (47,302) (663,464) -
Total Nonoperating Revenues (Expenses) (274,872) 114,343 (13,527) (174,056) 234,096
Income Before Capital Contributions
and Transfers 1,457,845 508,233 (278,460) 1,687,618 538,987
Capital contributions 154,767 985 - 155,752 -
Transfers in 1,114,764 121,858 - 1,236,622 -
Transfers out - - - - -
Total Capital Contributions and Transfers 1,269,531 122,843 - 1,392,374 -
Change in Net Position 2,727,376 631,076 (278,460) 3,079,992 538,987
Total Net Position - Beginning of the Year 16,154,843 13,918,991 9,156,922 39,230,756 10,586,810
Total Net Position - End of the Year $ 18,882,219 $ 14,550,067 $ 8,878,462 $ 42,310,748 $ 11,125,797
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 43 of 126 Annual Comprehensive Financial ReportSource page 52
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2023
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Cash Flows from Operating Activities:
Receipts from users $ 8,710,202 $ 7,588,508 $ 411,450 $ 16,710,160 $ -
Receipts from interfund services provided - - - - 17,391,821
Payments to employees (1,054,069) (478,192) (35,946) (1,568,207) -
Payments to vendors (4,534,477) (5,816,933) (359,916) (10,711,326) -
Payments for interfund services used - - - - (16,452,776)
Net Cash Provided by (Used in) Operating
Activities 3,121,656 1,293,383 15,588 4,430,627 939,045
Cash Flows from Noncapital Financing Activities:
Transfers in 1,114,764 121,858 - 1,236,622 -
Net Cash Provided by Noncapital
Financing Activities 1,114,764 121,858 - 1,236,622 -
Cash Flows from Capital and Related Financing Activities:
Proceeds from capital contributions 154,767 985 - 155,752 -
Proceeds from the issuance of bonds and notes 3,540,500 - - 3,540,500 -
Premiums from the issuance of bonds and notes 377,666 - - 377,666 -
Acquisition and construction of capital assets (3,817,800) (419,900) - (4,237,700) -
Principal payments on bonds and notes (2,637,200) (478,485) (53,000) (3,168,685) -
Interest payments on bonds and notes (835,324) (85,151) (56,351) (976,826) -
Net Cash Used in Capital and Related
Financing Activities (3,217,391) (982,551) (109,351) (4,309,293) -
Cash Flows from Investing Activities:
Investment income 287,508 168,125 33,775 489,408 234,096
Investment of operating cash - - - - (235,215)
Net Cash Provided by (Used in) Investing Activities 287,508 168,125 33,775 489,408 (1,119)
Net Change in Cash and Cash Equivalents 1,306,537 600,815 (59,988) 1,847,364 937,926
Cash and Cash Equivalents:
Beginning of the year 8,412,400 5,324,381 1,063,009 14,799,790 5,010,466
End of the year $ 9,718,937 $ 5,925,196 $ 1,003,021 $ 16,647,154 $ 5,948,392
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used in) Operating Activities:
Operating Income (Loss) $ 1,732,717 $ 393,890 $ (264,933) $ 1,861,674 $ 304,891
Adjustments to reconcile operating income (loss) to net
cash provided by (used in) operating activities:
Depreciation 1,265,042 624,571 282,203 2,171,816 -
Changes in assets, deferred outflows of resources,
liabilities and deferred inflows of resources:
Receivables 167,866 327,566 - 495,432 18,765
Prepaid items - - - - 380,008
Deferred outflows of resources (217,456) (175,076) (39,063) (431,595) -
Accounts payable and accrued expenses (25,950) (27,682) 4,400 (49,232) (66,903)
Health claims incurred but not reported - - - - 302,284
Net other postemployment liability (60,858) (23,404) (3,964) (88,226) -
Net pension liability 507,838 405,004 90,175 1,003,017 -
Deferred inflows of resources (247,543) (231,486) (53,230) (532,259) -
Net Cash Provided by (Used in) Operating
Activities $ 3,121,656 $ 1,293,383 $ 15,588 $ 4,430,627 $ 939,045
Noncash capital and related financing activities:
Amortization of bond premium $ 328,869 $ 27,046 $ 9,049 $ 364,964 $ -
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 44 of 126 Annual Comprehensive Financial ReportSource page 53
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2023
Other Private
Postemployment Purpose
Benefits Trust Fund Trust Funds
Assets
Cash and cash equivalents $ 61,110 $ 62,546
Investments:
Equities 916,652 -
Equity mutual funds 7,133,457 -
Bond mutual funds 2,423,335 -
Total Assets 10,534,554 62,546
Liabilities
Warrants payable - -
Total Liabilities - -
Net Position
Restricted for other postemployment benefits 10,534,554 -
Held in trust for private purposes - 62,546
Total Net Position $ 10,534,554 $ 62,546
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 45 of 126 Annual Comprehensive Financial ReportSource page 54
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FISCAL YEAR ENDED JUNE 30, 2023
Other Private
Postemployment Purpose
Benefits Trust Fund Trust Funds
Additions
Contributions:
Employer $ 5,447,460 $ -
Other - 2,500
Total contributions 5,447,460 2,500
Investment income:
Interest and dividends 150,719 2,469
Realized gain (loss) on investments (43,320) -
Net appreciation in fair value of investments 678,546 -
Less - investment management fees (21,639) -
Net investment earnings 764,306 2,469
Total Additions 6,211,766 4,969
Deductions
Education - scholarships - 500
Retiree benefits 4,297,460 -
Total Deductions 4,297,460 500
CHANGE IN NET POSITION 1,914,306 4,469
NET POSITION AT BEGINNING OF YEAR 8,620,248 58,077
NET POSITION AT END OF YEAR $ 10,534,554 $ 62,546
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 46 of 126 Annual Comprehensive Financial ReportSource page 55
TOWN OF CANTON, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2023
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 Select Board (“the Board”) 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 2023, the Town’s share of the operating and debt service expenses was $1,570,786.
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 47 of 126 Annual Comprehensive Financial ReportSource page 56
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 48 of 126 Annual Comprehensive Financial ReportSource page 57
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.
ARPA Grant Fund – is used to account for activities of the Town’s ARPA federal grant
program
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 49 of 126 Annual Comprehensive Financial ReportSource page 58
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.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance
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.
The Town’s lease receivable is measured at the present value of lease payments expected to be
received during the lease terms. The payments are recorded as an inflow of resources in the
period the payments are received. Deferred inflows are recorded at the initiation of the leases in
an amount equal to the initial recording of the lease receivable. The deferred inflow of resources
is amortized using the effective interest method over the terms of the leases.
Town of Canton, Massachusetts Page 50 of 126 Annual Comprehensive Financial ReportSource page 59
Inventories – Inventories, which are not material to the basic financial statements, are considered
to be expenditures at the time of purchase.
Capital Assets – Capital assets, which include land, land improvements, buildings and
improvements, machinery and equipment, vehicles and infrastructure (e.g. roads, water and sewer
mains, and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Capital assets are recorded at historical
cost or estimated historical cost if purchased or constructed. Donated capital assets, donated
works of art and similar items, and capital assets received in a service concession arrangement are
reported at acquisition value rather than fair value. Interest incurred during the construction
phase of capital assets of business-type activities is included as part of the capitalized value of the
assets constructed.
All purchases and construction costs in excess of $25,000 are capitalized at the date of acquisition
or construction, respectively, with expected lives of greater than one year. The costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend assets lives
are not capitalized.
Capital assets (excluding land and construction-in-process) are depreciated by the Town on a
straight-line-basis over the following estimated useful lives:
Land improvements 20-50 years
Buildings and improvements 20-50 years
Machinery and equipment 3-20 years
Vehicles 5 years
Infrastructure 40-50 years
Interfund Balances – Activity between funds that are representative of lending arrangements
outstanding at the end of the fiscal year are referred to as either due to/from other funds or
advances to/from other funds. All other outstanding balances between funds are reported as due
to/from other funds.
Any residual balances outstanding between the governmental activities and business-type
activities are reported in the government-wide financial statements as internal balances.
Interfund Transfers – During the course of its operations, resources are permanently reallocated
between and within funds. These transactions are reported as transfers in and transfers out in the
individual fund statements. Transfers between and within governmental and fiduciary funds are
eliminated from the governmental activities in the statement of activities. Any residual balances
outstanding between the governmental activities and the business–type activities are reported in
the statement of activities as transfers, net.
Investment Income – Excluding the permanent endowment funds, investment income derived
from major and nonmajor governmental funds is legally assigned to the general fund unless
otherwise directed by state law. Investment income of the proprietary funds is retained by those
funds. Net appreciation on permanent endowment funds is reported in expendable permanent
funds in the governmental activities.
Compensated Absences – It is the Town’s policy to permit employees to accumulate earned but
unused vacation and sick-pay benefits. Compensated absence liabilities related to both
governmental and business-type activities are normally paid from the funds reporting payroll and
Town of Canton, Massachusetts Page 51 of 126 Annual Comprehensive Financial ReportSource page 60
related expenditures. Amounts related to these benefits are accrued when incurred in the
government-wide and proprietary fund financial statements. A liability for these amounts is
reported in Governmental Funds only if they have matured.
Long-term Obligations – Long-term debt is reported as liabilities in the government-wide and
proprietary fund statement of net position. Bond premiums and discounts are amortized over the
life of the bonds using the effective interest method. Bond anticipation notes payable are reported
net of the applicable bond premium or discount.
In the governmental fund financial statements, the face amount of long-term debt issued is
reported as other financing sources. Premiums received on a debt issuance are reported as other
financing sources while discounts are reported as other financing uses. Issuance costs are
exclusively reported as general government expenditures regardless of whether they are withheld
from the actual proceeds.
Deferred Outflows/Inflows of Resources – In addition to assets, the statement of financial position
will sometimes report a separate section for deferred outflows of resources. This separate
financial statement element, deferred outflows of resources, represent a consumption of net assets
that applies to future periods and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The Town has two types of items that are reported on the
government-wide statement of net position which relate to outflows from changes in the net
pension liability and the other postemployment benefit liability. The deferred pensions will be
recognized in pension expense in future years as more fully described in Note III, subsection A.
The deferred other postemployment benefits will be recognized in employee benefits expense in
future years as more fully described in Note III, subsection C.
In addition to liabilities, the statement of financial position will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element, deferred
inflows of resources, represent an acquisition of net assets that applies to future periods and so
will not be recognized as an inflow of resources (revenue) until that time. The Town has three
items that are reported as deferred inflows of resources. The first arises under a modified accrual
basis of accounting and, accordingly, the item unavailable revenue is reported in the
governmental funds balance sheet. The governmental funds report unavailable revenues from
four sources: property taxes, excise taxes, leases and other. These amounts are deferred and
recognized as an inflow of resources in the period that the amounts become available. The other
items are reported on the government-wide statement of net position and relate to inflows from
leases and changes in the other postemployment benefit liability. The deferred lease revenues
will be recognized in charges for services and investment income in future years as more fully
described in Note II, subsection B. The deferred other postemployment benefits will be
recognized in employee benefits expense in future years as more fully described in Note III,
subsection C.
Net Position – In the government-wide financial statements, net position reported as “net
investment in capital assets” includes capital assets, net of accumulated depreciation, less the
principal balance of outstanding debt used to acquire capital assets. Unspent proceeds of capital
related debt are not considered to be capital related debt.
Net position is reported as restricted when amounts are not available for appropriation or are
legally restricted by outside parties for a specific use. Net position has been restricted for the
following:
Town of Canton, Massachusetts Page 52 of 126 Annual Comprehensive Financial ReportSource page 61
Nonexpendable permanent funds represent the endowment portion of donor restricted trusts
that support governmental programs.
Expendable permanent funds represent the spendable portion of donor restricted trusts that
support governmental programs.
Federal and State grants represent assets that have restrictions placed on them from federal
and state granting agencies.
Community preservation represents assets that are restricted by state law for the purposes of
acquiring or developing open space and recreational facilities, historic resources and
affordable housing.
Gift funds represent assets that are restricted by donors for specific governmental programs
and uses.
Other specific purposes represent assets that are restricted by third parties for specific
governmental programs and uses.
Fund Balance – In the fund financial statements, fund balance for governmental funds is reported
in classifications that comprise a hierarchy based primarily to the extent in which the Town is
required to honor constraints on the specific purpose for which amounts in the funds can be spent.
Fund balance is reported in five components – nonspendable, restricted, committed, assigned, and
unassigned as described below:
Nonspendable represents amounts that cannot be spent because they are either (a) not in
spendable form (i.e. inventory or prepaid) or (b) legally or contractually required to be
maintained intact such as the corpus of an endowment.
Restricted represents amounts that have constraints placed either externally by third-parties
(creditors, grantors, contributors, or laws or regulations of other governments) or by law
through constitutional provisions or enabling legislation. Enabling legislation authorizes the
Town to assess, levy, charge or otherwise mandate payment of resources (from external
resource providers) and includes a legally enforceable requirement (compelled by external
parties) that those resources be used only for the specific purposes stipulated in the
legislation.
Committed represents amounts that can only be used for specific purposes pursuant to
formal action of the Town Meeting through Town Meeting Articles, which represent the
most binding constraint that give rise to committed fund balance. Those committed amounts
cannot be used for any other purpose unless the Town Meeting removes or changes the
specified use by taking the same type of action (through Town Meeting Articles) it
employed previously to commit those amounts.
Assigned represents amounts that are constrained by the Town’s intent to be used for
specific purposes but are neither restricted nor committed. The Select Board has by
ordinance authorized the Finance Director to assign fund balance. The Town Meeting may
also assign fund balance as it does when appropriating fund balance to cover a gap between
estimated revenue and appropriations in the subsequent year’s appropriated budget.
Town of Canton, Massachusetts Page 53 of 126 Annual Comprehensive Financial ReportSource page 62
Unassigned represents amounts that have not been restricted, committed or assigned to
specific purposes within the general fund. The general fund is the only fund that reports a
positive unassigned fund balance amount. Other governmental funds besides the general
fund can only report a negative unassigned fund balance amount.
When both restricted and unrestricted resources are available for use, it is the Town’s policy to
use restricted resources first, then unrestricted resources (committed, assigned and unassigned) as
they are needed. When unrestricted resources (committed, assigned and unassigned) are available
for use it is the Town’s policy to use committed resources first, then assigned, and then
unassigned as they are needed.
The Town has not established financial policies with respect to maintaining minimum fund
balance amounts.
Stabilization Funds – The Town maintains a general stabilization fund, in accordance with
Massachusetts General Law Chapter 40, Section 5B. The fund may be used for any municipal
purpose upon the condition of a two-thirds vote of the Town Meeting. The balance of the fund
totals $10,303,955 at June 30, 2023 and is reported as unassigned fund balance in the General
Fund. Amounts are appropriated into the fund by a majority vote of the Town Meeting. There are
no requirements to make annual contributions to this fund.
The Town maintains a capital stabilization fund, in accordance with Massachusetts General Law
Chapter 40, Section 5B. The fund may be used for any municipal capital purpose upon the
condition of a two-thirds vote of the Town Meeting. The balance of the fund totals $1,025,877 at
June 30, 2023 and is reported as unassigned fund balance in the General Fund. Amounts are
appropriated into the fund by a majority vote of the Town Meeting. There are no requirements to
make annual contributions to this fund.
Encumbrances – The Town’s encumbrance policy regarding the general fund is to (1) classify
encumbrances that arise from the issuance of purchase orders resulting from normal purchasing
activity approved by the Finance Department as assigned, and (2) classify encumbrances that
result from an action of the Town Meeting as committed. Encumbrances of funds already
restricted, or committed are included within the classification of those fund balances and not
reported separately. The Town reports $855,185 of encumbrances from normal purchasing
activity in the general fund as assigned and $4,029,719 of encumbrances from Town Meeting
Articles in the general fund as committed. There are no encumbrances reported in any other fund.
Endowment Funds - The Town's endowment funds consist primarily of the Town's Cemetery
Trust Funds. The Select Board, acting as the Town's Cemetery Commissioners, make all
decisions as allowed under Massachusetts General Laws regarding the spending authority of
investment income. These amounts are reflected as restricted balances in the statement of net
position.
Town of Canton, Massachusetts Page 54 of 126 Annual Comprehensive Financial ReportSource page 63
The following table reflects the Town’s fund balance categorizations:
ARPA Capital Nonmajor
General Grant Projects Governmental Total
Nonspendable:
Nonexpendable trust funds $ - $ - $ - $ 612,385 $ 612,385
Restricted:
Recreation revolving - - - 653,128 653,128
Human services revolving - - - 371,130 371,130
Library revolving - - - 141,364 141,364
Other Town revolving - - - 420,823 420,823
School revolving - - - 3,047,333 3,047,333
General municipal private grants - - - 337,863 337,863
Ambulance receipts reserved - - - 2,451,226 2,451,226
Community preservation - - - 2,448,400 2,448,400
Police grants - - - 214,884 214,884
Other Town grants - - - 238,093 238,093
School grants - - - 807,045 807,045
General municipal donations - - - 2,663,684 2,663,684
School donations - - - 282,551 282,551
District improvement fund - - - 3,113,890 3,113,890
Roadway improvements - - 1,129,048 35,786 1,164,834
Building improvements - - 1,855,153 - 1,855,153
Other capital outlay - - 703,311 331,838 1,035,149
Library trust funds - - - 612,112 612,112
Conservation trust funds - - - 182,114 182,114
Other trust funds - - - 103,787 103,787
Other purposes - - - 567,555 567,555
Committed:
Police 196,804 - - - 196,804
Education 2,390,216 - - - 2,390,216
Infrastructure 683,696 - - - 683,696
Public buildings 390,495 - - - 390,495
Culture and recreation 121,863 - - - 121,863
Other purposes 246,645 - - - 246,645
Assigned:
Purchase orders 855,185 - - - 855,185
Subsequent years' budget 3,743,077 - - - 3,743,077
Unassigned 25,170,933 - - (259,685) 24,911,248
$33,798,914 $ - $ 3,687,512 $19,377,306 $56,863,732
E. Excess of Expenditures Over Appropriations and Deficits
The Town incurred individual fund deficits totaling $259,685 in nonmajor governmental funds.
These deficits will be funded through grants and other available funds in future fiscal years.
F. Use of Estimates
The preparation of basic financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure for contingent assets and liabilities at the date of the basic financial statements and the
reported amounts of the revenues and expenditures/expenses during the fiscal year. Actual results
could vary from estimates that were used.
Town of Canton, Massachusetts Page 55 of 126 Annual Comprehensive Financial ReportSource page 64
II. Detailed Notes to All Funds
A. Deposits and Investments
A cash and investment pool is maintained that is available for use by all funds. Each fund type’s
portion of this pool is displayed on the balance sheet as “cash and cash equivalents”. The
deposits and investments of trust funds are held separately from those of other funds.
State laws and regulations require the Town to invest funds only in pre-approved investment
instruments which include but are not necessarily limited to bank deposits, money markets,
certificates of deposit, U.S. obligations, repurchase agreements, and the State Treasurer’s
investment pool (the Pool). In addition, the statutes impose various limitations on the amount and
length of investments and deposits. Repurchase agreements cannot be for a period of over ninety
days, and the underlying security must be a United States obligation.
The Pool meets the criteria of an external investment pool. The Pool is administered by the
Massachusetts Municipal Depository Trust (the MMDT), which was established by the Treasurer
of the Commonwealth who serves as Trustee. The fair value of the position in the Pool is the
same as the value of the Pool shares.
Custodial Credit Risk: Deposits - In the case of deposits, this is the risk that in the event of a bank
failure, the government’s deposits may not be returned to it. The Town has adopted a policy that
no more than 25% of the Town’s cash may be comprised of unsecured bank deposits, except for a
30 day reprieve during times of heavy collections. The credit worthiness of banks will be tracked
by Veribanc, or other bank credit worthiness reporting systems, and the Treasurer will move or
collateralize deposits as a result of negative reports. At year-end, the carrying amount of the
Town's deposits was $51,146,815 and the bank balance was $52,363,945. Of the Town's bank
balance, $49,120,881 was covered by federal depository insurance or the Depositor’s Insurance
Fund; $1,438,920 was collateralized and the remainder was exposed to custodial credit risk
because it was uninsured and uncollateralized.
Custodial Credit Risk: Investments – In the case of investments, this is the risk that in the event of
the invested party not being able to provide required payments to investors, ceasing to exist, or
filing of bankruptcy, the Town may not be able to recover the full amount of its principal
investment and/or investment earnings. The Town has adopted a policy to review the financial
institutions financial statements and the background of each advisor. All securities not held
directly by the Town will be held in the Town’s name and tax identification number by a third
party custodian and evidenced by safekeeping receipts showing individual CUSIP numbers for
each security. The investments in the MMDT are not exposed to custodial credit risk as their
existence is not evidenced by securities that exist in physical or book form. The Town’s
investment in a repurchase agreement is held by a counterparty, but not in the Town’s name. The
repurchase agreement is fully collateralized with U.S. government securities. The Town’s
investments in negotiable certificates of deposit are fully covered by federal depository insurance.
Fair Value of Investments – The Town reports its investments at fair value. The Town
categorizes its fair value measurements within the fair value hierarchy established by GAAP.
This hierarchy is based on valuation inputs used to measure the fair value of the asset or liability.
Town of Canton, Massachusetts Page 56 of 126 Annual Comprehensive Financial ReportSource page 65
The three levels of the hierarchy are as follows:
• Level 1 – Inputs are quoted prices in active markets for identical investments at the
measurement date.
• Level 2 – Inputs (other than quoted prices included in Level 1) are either directly or
indirectly observable for the investment through correlation with market data at the
measurement date and for the duration of the instrument’s anticipated life.
• Level 3 – Inputs reflect the Town’s best estimate of what market participants would use
in pricing the investment at the measurement date.
The following table presents the Town’s investments carried at fair value on a recurring basis in
the statement of net position at June 30, 2023:
Fair Value Measurements Using
6/30/23 Level 1 Level 2 Level 3
Investments by fair value level
Debt securities:
U.S. government obligations $ 5,511,765 $ 4,645,647 $ 866,118 $ -
Corporate fixed income securities 4,839,054 - 4,839,054 -
Bond mutual funds 3,559,514 - 3,559,514 -
Total debt securities 13,910,333 4,645,647 9,264,686 -
Equity securities:
Common stock 7,116,105 7,116,105 - -
Equity mutual funds 7,133,457 - 7,133,457 -
Total equity securities 14,249,562 7,116,105 7,133,457 -
Total investments by fair value level 28,159,895 $ 11,761,752 $ 16,398,143 $ -
Investments measured at amortized cost
State investment pool 32,821,957
Total investments measured at fair value $ 60,981,852
Debt and equity securities classified in Level 1 are valued using prices quoted in active markets
for those securities. Corporate fixed income securities, U.S. governmental obligations and bond
and equity mutual funds classified in Level 2 are valued using matrix pricing based on the
securities’ relationship to benchmark quoted prices. The State Treasurer’s investment pool
(MMDT) is valued at amortized cost. The MMDT’s investment advisor may value the pool using
an alternative valuation method that more accurately reflects the fair value in accordance with the
pools fair value pricing policies should amortized cost not approximate the fair value of the pool.
There are no restrictions or limits on withdrawals from the pool and no direct fees are charged to
participants.
Interest Rate Risk – The Town limits investment maturities as a means of managing its exposure
to fair value losses arising from increasing interest rates. The Town’s policy limits investments
of operating funds to one year or less.
Town of Canton, Massachusetts Page 57 of 126 Annual Comprehensive Financial ReportSource page 66
At June 30, 2023, the Town had the following investments with maturities:
Maturities in Years
Investments 6/30/23 Less than 1 1-5 6 - 10
Corp. Fixed Income Securities $ 4,839,054 $ 1,569,195 $ 2,950,908 $ 318,951
U.S. government obligations 5,511,765 952,960 4,110,945 447,860
Bond mutual funds 3,559,514 3,559,514 - -
State investment pool 32,821,957 32,821,957 - -
Total investments with maturities $ 46,732,290 $ 38,903,626 $ 7,061,853 $ 766,811
Concentration of Credit Risk – The Town has adopted a policy to limit the amount of investments
that may be invested in a single issuer to 10% of the Town’s investments, except for U.S
government obligations, investments fully collateralized with U.S. government obligations and
the Pool (MMDT). At June 30, 2023, Town has 54% of its investments in the MMDT.
Credit Risk – The Town has adopted a policy to only purchase investment grade securities with a
high concentration in securities rated ‘A’ or better.
At June 30, 2023, the credit quality ratings of investments were as follows:
Corporate U.S. Government
Quality Ratings Fixed Agency
(Moody's) Income Obligations Totals
AAA $ - $ 5,511,765 $ 5,511,765
A1 1,230,594 - 1,230,594
A2 1,017,811 - 1,017,811
A3 244,126 - 244,126
BAA1 630,450 - 630,450
BAA2 1,716,073 - 1,716,073
Totals - All $ 4,839,054 $ 5,511,765 $ 10,350,819
The Town’s investments in bond mutual funds, negotiable certificates of deposit, repurchase
agreements and the MMDT are unrated.
Town of Canton, Massachusetts Page 58 of 126 Annual Comprehensive Financial ReportSource page 67
B. Receivables
Receivables as of year-end for the Town's individual major and non-major governmental funds
in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Gross Allowance for Net
Amount Uncollectibles Amount
Receivables:
Real estate and personal property taxes $ 741,651 $ - $ 741,651
Tax liens and foreclosures 1,663,537 - 1,663,537
Community preservation surcharges 6,703 - 6,703
Motor vehicle and other excise taxes 868,288 (362,046) 506,242
Ambulance fees 1,558,799 (1,042,748) 516,051
Public safety details 382,904 (91,074) 291,830
Street betterments 57,852 - 57,852
Leases 4,801,273 - 4,801,273
Intergovernmental 292,795 - 292,795
Total $ 10,373,802 $ (1,495,868) $ 8,877,934
Receivables as of year-end for Town's proprietary funds are as follows:
Gross Allowance for Net
Amount Uncollectibles Amount
Receivables:
Water user charges $ 2,367,122 $ - $ 2,367,122
Water liens 46,814 - 46,814
Sewer user charges 1,696,867 - 1,696,867
Sewer liens 48,642 - 48,642
Stop loss receivables 105,577 - 105,577
Total $ 4,265,022 $ - $ 4,265,022
Governmental funds report deferred inflows of resources in connection with receivables for revenues
that are not considered to be available to liquidate liabilities of the current period. The following
identifies the components of deferred inflows of resources in the governmental funds:
Other
General Governmental
Fund Funds Total
Receivable type:
Real estate and personal property taxes $ 303,695 $ - $ 303,695
Tax liens and foreclosures 1,663,537 - 1,663,537
Motor vehicle and other excise taxes 506,242 - 506,242
Community preservation surcharges - 6,703 6,703
Ambulance fees - 516,051 516,051
Street betterments - 57,852 57,852
Leases 4,801,273 - 4,801,273
Total $ 7,274,747 $ 580,606 $ 7,855,353
Town of Canton, Massachusetts Page 59 of 126 Annual Comprehensive Financial ReportSource page 68
Leases Receivable
The Town has entered into a lease for a photovoltaic electricity generating facility on Town land.
Under the lease, the tenant pays the Town an annual base rent of $300,000 which increases
annually by 2.5% for the initial term of twenty years, except for a 12.75% increase after year ten.
The tenant has the right to extend the initial term for one five-year period. The lease receivable is
measured as the present value of the future minimum rent payments expected to be received
during the lease term at a discount rate of 2.11%. In fiscal year 2023, the Town recognized
$332,209 of lease revenue and $86,239 of interest revenue under the lease.
The Town has entered into three leases for wireless communications equipment on Town land.
Under the leases, the tenants pay the Town annual base rents between $45,000 and $63,380 which
increases annually by between 2.0% and 3.0% for the initial terms of five to ten years. The
tenants have the right to extend the initial terms for three additional five-year periods. The lease
receivable is measured as the present value of the future minimum rent payments expected to be
received during the lease terms at discount rates between 2.52% and 3.99%. In fiscal year 2023,
the Town recognized $137,776 of lease revenue and $21,231 of interest revenue under these
leases.
Future minimum lease payments as of June 30, 2023, are as follows:
Year Ending
June 30 Principal Interest Total
2024 $ 486,737 $ 101,183 $ 587,920
2025 513,378 90,185 603,563
2026 541,057 78,564 619,621
2027 499,115 66,818 565,933
2028 489,804 59,390 549,194
2029-2033 2,271,182 111,383 2,382,565
Total $ 4,801,273 $ 507,523 $ 5,308,796
C. Interfund Receivables, Payables and Transfers
The composition of interfund transfers for the fiscal year ended June 30, 2023 is as follows:
Transfers In
Capital Nonmajor Water Sewer
General Projects Governmental Enterprise Enterprise
Transfers Out Fund Fund Funds Fund Fund Total
General Fund $ - $ 740,000 $ 1,324,210 $ 27,985 $ 9,354 $ 2,101,549 (1)
ARPA Grant Fund - - - 466,779 112,504 579,283 (2)
Nonmajor Governmental Funds 1,291,670 - 38,437 620,000 - 1,950,107 (3)
Total $ 1,291,670 $ 740,000 $ 1,362,647 $ 1,114,764 $ 121,858 $ 4,630,939
(1) Transfers to capital projects for roadway capital, transfers to nonmajor governmental funds for retirement buyback reserves,
special education, capital outlays and other purposes, transfers to water and sewer enterprise funds for salary increases.
(2) Transfers to water and sewer enterprise funds for capital outlays.
(3) Transfers to general fund to supplement operating budgets, transfers between nonmajor governmental funds for capital
outlays and conservation purposes, transfers to water enterprise fund for capital outlays.
Town of Canton, Massachusetts Page 60 of 126 Annual Comprehensive Financial ReportSource page 69
D. Capital Assets
Capital asset activity for the year ended June 30, 2023, was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital assets not being depreciated:
Land $ 14,310,943 $ - $ - $ 14,310,943
Construction in process 1,046,637 2,664,158 (462,056) 3,248,739
Total capital assets not being depreciated 15,357,580 2,664,158 (462,056) 17,559,682
Capital assets being depreciated:
Land improvements 4,056,918 781,000 - 4,837,918
Buildings 90,133,422 1,545,035 - 91,678,457
Building improvements 33,797,961 - - 33,797,961
Machinery and equipment 13,084,276 1,091,240 - 14,175,516
Vehicles 8,284,659 736,489 - 9,021,148
Infrastructure 35,424,669 3,850,569 - 39,275,238
Total capital assets being depreciated 184,781,905 8,004,333 - 192,786,238
Less accumulated depreciation for:
Land improvements (2,638,760) (152,876) - (2,791,636)
Buildings (37,748,618) (2,103,624) - (39,852,242)
Building improvements (20,702,097) (1,254,377) - (21,956,474)
Machinery and equipment (9,083,458) (854,033) - (9,937,491)
Vehicles (6,971,679) (640,283) - (7,611,962)
Infrastructure (10,550,173) (956,518) - (11,506,691)
Total accumulated depreciation (87,694,785) (5,961,711) - (93,656,496)
Total capital assets being depreciated, net 97,087,120 2,042,622 - 99,129,742
Total governmental activities capital assets, net $ 112,444,700 $ 4,706,780 $ (462,056) $ 116,689,424
Beginning Ending
Balance Increases Decreases Balance
Business-Type Activities:
Capital assets not being depreciated:
Land $ 624,852 $ - $ - $ 624,852
Construction in process 5,912,445 792,570 (1,503,729) 5,201,286
Total capital assets not being depreciated 6,537,297 792,570 (1,503,729) 5,826,138
Capital assets being depreciated:
Buildings 18,758,743 - - 18,758,743
Building improvements 10,944,884 - - 10,944,884
Machinery and equipment * 3,798,523 795,530 - 4,594,053
Vehicles * 1,158,220 65,462 (310,716) 912,966
Infrastructure 62,067,115 4,087,867 - 66,154,982
Total capital assets being depreciated 96,727,485 4,948,859 (310,716) 101,365,628
Less accumulated depreciation for:
Buildings (6,952,554) (439,600) - (7,392,154)
Building improvements (500,538) (282,158) - (782,696)
Machinery and equipment * (2,669,404) (302,115) - (2,971,519)
Vehicles * (1,128,120) (15,146) 310,716 (832,550)
Infrastructure (34,095,837) (1,132,797) - (35,228,634)
Total accumulated depreciation (45,346,453) (2,171,816) 310,716 (47,207,553)
Total capital assets being depreciated, net 51,381,032 2,777,043 - 54,158,075
Total business-type activities capital assets, net $ 57,918,329 $ 3,569,613 $ (1,503,729) $ 59,984,213
* Reclassifications have been made to the prior year balances. There was no impact to net capital assets.
Town of Canton, Massachusetts Page 61 of 126 Annual Comprehensive Financial ReportSource page 70
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities: Water
Capital assets not being depreciated:
Land $ 624,852 $ - $ - $ 624,852
Construction in process 5,912,445 701,421 (1,503,729) 5,110,137
Total capital assets not being depreciated 6,537,297 701,421 (1,503,729) 5,734,989
Capital assets being depreciated:
Buildings 17,495,139 - - 17,495,139
Building improvements 241,742 - - 241,742
Machinery and equipment 2,584,335 466,779 - 3,051,114
Vehicles 847,504 65,462 - 912,966
Infrastructure 31,502,810 4,087,867 - 35,590,677
Total capital assets being depreciated 52,671,530 4,620,108 - 57,291,638
Less accumulated depreciation for:
Buildings (6,395,549) (408,010) - (6,803,559)
Building improvements (80,480) (12,087) - (92,567)
Machinery and equipment (1,954,676) (176,675) - (2,131,351)
Vehicles (817,404) (15,146) - (832,550)
Infrastructure (14,308,120) (653,124) - (14,961,244)
Total accumulated depreciation (23,556,229) (1,265,042) - (24,821,271)
Total capital assets being depreciated, net 29,115,301 3,355,066 - 32,470,367
Total Water capital assets, net $ 35,652,598 $ 4,056,487 $ (1,503,729) $ 38,205,356
Business-type Activities: Sewer
Capital assets not being depreciated:
Construction in process $ - $ 91,149 $ - $ 91,149
Capital assets being depreciated:
Buildings 1,263,604 - - 1,263,604
Buildings and improvements 99,685 - - 99,685
Machinery and equipment * 1,043,029 328,751 - 1,371,780
Vehicles * 310,716 - (310,716) -
Infrastructure 30,564,305 - - 30,564,305
Total capital assets being depreciated 33,281,339 328,751 (310,716) 33,299,374
Less accumulated depreciation for:
Buildings (557,005) (31,590) - (588,595)
Buildings and improvements (22,429) (4,984) - (27,413)
Machinery and equipment * (689,054) (108,324) - (797,378)
Vehicles * (310,716) - 310,716 -
Infrastructure (19,787,717) (479,673) - (20,267,390)
Total accumulated depreciation (21,366,921) (624,571) 310,716 (21,680,776)
Total capital assets being depreciated, net 11,914,418 (295,820) - 11,618,598
Total Sewer capital assets, net $ 11,914,418 $ (204,671) $ - $ 11,709,747
* Reclassifications have been made to the prior year balances. There was no impact to net capital assets.
Town of Canton, Massachusetts Page 62 of 126 Annual Comprehensive Financial ReportSource page 71
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities: Rink
Capital assets being depreciated:
Buildings $ 10,603,457 $ - $ - $ 10,603,457
Machinery and equipment 171,159 - - 171,159
Total capital assets being depreciated 10,774,616 - - 10,774,616
Less accumulated depreciation for:
Buildings (397,629) (265,087) - (662,716)
Machinery and equipment (25,674) (17,116) - (42,790)
Total accumulated depreciation (423,303) (282,203) - (705,506)
Total capital assets being depreciated, net 10,351,313 (282,203) - 10,069,110
Total Rink capital assets, net $ 10,351,313 $ (282,203) $ - $ 10,069,110
Depreciation expense was charged to functions/programs as follows:
Governmental Activities: Business-Type Activities:
General government $ 290,174 Water $ 1,265,042
Public safety 947,651 Sewer 624,571
Education 2,861,897 Rink 282,203
Public works 1,249,812 $ 2,171,816
Health and human services 95,254
Culture and recreation 516,923
$ 5,961,711
E. Temporary Debt
The Town is authorized to borrow on a temporary basis to fund the following:
Current Operating Costs – Prior to collection of revenues, expenditures may be financed through
the issuance of revenue or tax anticipation notes (RANS or TANS).
Capital Projects and Other Approved Costs – Projects may be temporarily funded through the
issuance of bond anticipation notes (BANS) or grant anticipation notes (GANS). In certain cases,
prior to the issuance of these temporary notes, the governing body must take the necessary legal
steps to authorize the issuance of the general obligation bonds. Temporary notes may not exceed
the aggregate amount of bonds authorized or the grant award amount.
Temporary notes are general obligations of the Town and carry maturity dates that are limited by
state law. Interest expenditures and expenses for temporary borrowings are accounted for in the
general fund and enterprise funds, respectively.
There was no temporary note activity during the fiscal year.
Town of Canton, Massachusetts Page 63 of 126 Annual Comprehensive Financial ReportSource page 72
F. Long–Term Obligations and Debt
The Town issues general obligation bonds and notes to provide funds for the acquisition and
construction of major capital facilities. General obligation bonds and notes have been issued for
both governmental and business-type activities. Additionally, the Town incurs various other
long-term obligations relative to associated personnel costs.
State law permits the Town, under the provisions of Chapter 44, Section 10, to authorize
indebtedness up to a limit of 5.0 percent of its equalized valuation. Debt issued in accordance
with this section of the law is designated as being “inside the debt limit.” In addition, the Town
may authorize debt in excess of that limit for specific purposes. Such debt, when issued, is
designated as being “outside the debt limit”.
The following reflects the current year activity in the long-term liability accounts:
Beginning Ending Due within
Balance Additions Deletions Balance one year
Governmental Activities:
General obligation bonds $ 27,306,200 $ 7,379,500 $ (3,984,900) $ 30,700,800 $ 3,791,400
Unamortized bond premium 2,104,152 773,330 (388,745) 2,488,737 401,347
Notes from direct borrowings and placements 240,369 - (15,676) 224,693 15,991
Compensated absences 2,283,931 649,477 (570,983) 2,362,425 590,606
Net pension liability 26,026,726 14,817,459 - 40,844,185 -
Net other postemployment benefits liability 93,321,123 11,762,126 (14,235,728) 90,847,521 -
Total Governmental Activities $ 151,282,501 $ 35,381,892 $ (19,196,032) $ 167,468,361 $ 4,799,344
Business-Type Activities - Water:
General obligation bonds $ 21,171,400 $ 3,540,500 $ (2,156,600) $ 22,555,300 $ 2,398,400
Unamortized bond premium 1,868,944 377,666 (328,869) 1,917,741 328,285
Notes from direct borrowings and placements 3,674,000 - (480,600) 3,193,400 480,600
Compensated absences 140,201 28,272 (35,050) 133,423 33,356
Net pension liability 892,011 507,838 - 1,399,849 -
Net other postemployment benefits liability 2,296,006 289,388 (350,246) 2,235,148 -
Total Water 30,042,562 4,743,664 (3,351,365) 31,434,861 3,240,641
Business-Type Activities - Sewer:
General obligation bonds 1,440,400 - (275,500) 1,164,900 275,200
Unamortized bond premium 120,622 - (27,016) 93,606 22,717
Notes from direct borrowings and placements 1,977,523 - (202,985) 1,774,538 206,858
Compensated absences 31,536 8,832 (7,884) 32,484 8,121
Net pension liability 711,386 405,004 - 1,116,390 -
Net other postemployment benefits liability 882,974 111,290 (134,694) 859,570 -
Total Sewer 5,164,441 525,126 (648,079) 5,041,488 512,896
Business-Type Activities - Rink:
General obligation bonds 1,807,000 - (53,000) 1,754,000 50,000
Unamortized bond premium 104,837 - (9,049) 95,788 8,623
Net pension liability 158,396 90,175 - 248,571 -
Net other postemployment benefits liability 149,553 18,850 (22,814) 145,589 -
Total Rink 2,219,786 109,025 (84,863) 2,243,948 58,623
Total Business-Type Activities $ 37,426,789 $ 5,377,815 $ (4,084,307) $ 38,720,297 $ 3,812,160
Town of Canton, Massachusetts Page 64 of 126 Annual Comprehensive Financial ReportSource page 73
The governmental activities liabilities will be liquidated by the general fund. The business-type
liabilities will be liquidated by the enterprise fund reporting the liabilities.
The following is a summary of outstanding long-term debt obligations as of June 30, 2023:
Interest Beginning Ending
Description of Issue Rate Balance Additions Maturities Balance
Governmental Activities:
General Obligation Bonds 2.00 - 5.00% $ 22,187,500 $ 7,379,500 $ (2,331,500) $ 27,235,500
General Obligation Refunding Bonds 2.00 - 4.00% 5,118,700 - (1,653,400) 3,465,300
Total General Obligation Bonds 27,306,200 7,379,500 (3,984,900) 30,700,800
Add: Unamortized bond premium 2,104,152 773,330 (388,745) 2,488,737
Total General Obligation Bonds, net 29,410,352 8,152,830 (4,373,645) 33,189,537
Massachusetts Clean Water Trust 2.00% 240,369 - (15,676) 224,693
Total notes from direct borrowings and placements 240,369 - (15,676) 224,693
Total Governmental Activities debt $ 29,650,721 $ 8,152,830 $ (4,389,321) $ 33,414,230
Business-Type Activities - Water:
General Obligation Bonds 2.00 - 5.00% $ 13,071,500 $ 3,540,500 $ (1,144,500) $ 15,467,500
General Obligation Refunding Bonds 3.25 - 4.00% 8,099,900 - (1,012,100) 7,087,800
Total General Obligation Bonds 21,171,400 3,540,500 (2,156,600) 22,555,300
Add: Unamortized bond premium 1,868,944 377,666 (328,869) 1,917,741
Total General Obligation Bonds, net 23,040,344 3,918,166 (2,485,469) 24,473,041
Massachusetts Water Resource Authority 0.00% 3,674,000 - (480,600) 3,193,400
Total notes from direct borrowings and placements 3,674,000 - (480,600) 3,193,400
Total Water debt $ 26,714,344 $ 3,918,166 $ (2,966,069) $ 27,666,441
Business-Type Activities - Sewer:
General Obligation Bonds 2.00 - 5.00% $ 366,000 $ - $ (125,000) $ 241,000
General Obligation Refunding Bonds 3.25 - 4.00% 1,074,400 - (150,500) 923,900
Total General Obligation Bonds 1,440,400 - (275,500) 1,164,900
Add: Unamortized bond premium 120,622 - (27,016) 93,606
Total General Obligation Bonds, net 1,561,022 - (302,516) 1,258,506
Massachusetts Water Resource Authority 0.00% 105,923 - (11,274) 94,649
Massachusetts Clean Water Trust 2.00% 1,871,600 - (191,711) 1,679,889
Total notes from direct borrowings and placements 1,977,523 - (202,985) 1,774,538
Total Sewer debt $ 3,538,545 $ - $ (505,501) $ 3,033,044
Business-Type Activities - Rink:
General Obligation Bonds 2.5 - 5.0% $ 1,807,000 $ - $ (53,000) $ 1,754,000
Total General Obligation Bonds 1,807,000 - (53,000) 1,754,000
Add: Unamortized bond premium 104,837 - (9,049) 95,788
Total Rink Debt $ 1,911,837 $ - $ (62,049) $ 1,849,788
Total Business-Type Activities, net $ 32,164,726 $ 3,918,166 $ (3,533,619) $ 32,549,273
Town of Canton, Massachusetts Page 65 of 126 Annual Comprehensive Financial ReportSource page 74
Payments on outstanding bond balances due in future years consist of the following:
Direct Borrowings
Year Ending General Obligation Bonds and Placements
June 30 Principal Interest Principal Interest
Governmental Activities
2024 $ 3,791,400 $ 1,170,694 $ 15,991 $ 4,414
2025 3,204,400 1,024,640 16,311 4,093
2026 2,953,000 887,460 16,641 3,765
2027 2,717,000 763,255 16,974 3,431
2028 2,343,000 642,703 17,315 3,090
2029-2033 7,410,000 2,044,557 91,942 10,085
2034-2038 5,270,000 968,167 49,519 1,495
2039-2042 3,012,000 270,425 - -
Total $ 30,700,800 $ 7,771,901 $ 224,693 $ 30,373
Business-Type Activities - Water
2024 $ 2,398,400 $ 858,965 $ 480,600 $ -
2025 2,265,900 760,149 371,600 -
2026 2,047,000 660,883 371,600 -
2027 1,991,000 576,840 371,600 -
2028 1,942,000 488,125 371,600 -
2029-2033 7,171,000 1,374,289 1,226,400 -
2034-2038 2,850,000 553,544 - -
2039-2042 1,890,000 168,851 - -
Total $ 22,555,300 $ 5,441,646 $ 3,193,400 $ -
Business-Type Activities - Sewer
2024 $ 275,200 $ 37,996 $ 206,858 $ 31,642
2025 199,700 29,881 210,809 27,691
2026 147,000 23,630 214,840 23,660
2027 88,000 18,930 218,953 19,547
2028 90,000 14,530 223,148 15,352
2029-2032 365,000 20,930 699,930 20,026
Total $ 1,164,900 $ 145,897 $ 1,774,538 $ 137,918
Business-Type Activities: Rink
2024 $ 50,000 $ 53,701 $ - $ -
2025 55,000 51,201 - -
2026 58,000 48,451 - -
2027 64,000 45,551 - -
2028 65,000 42,351 - -
2029-2033 369,000 167,056 - -
2034-2038 420,000 116,556 - -
2039-2043 473,000 63,756 - -
2044-2045 200,000 7,875 - -
Total $ 1,754,000 $ 596,498 $ - $ -
Town of Canton, Massachusetts Page 66 of 126 Annual Comprehensive Financial ReportSource page 75
Massachusetts Water Resource Authority (MWRA)
The Town’s has five outstanding notes from direct borrowings and placements issued to the
MWRA on August 19, 2013, August 24, 2020, January 25, 2021, August 15, 2021 and April 15,
2022 for $1,090,000, $2,600,000, $68,150, $1,116,000 and $44,588, respectively. The notes are
payable without interest in ten equal installments. Any imputed interest is immaterial to the water
and sewer enterprise funds.
Massachusetts Clean Water Trust (MCWT)
The Town’s has an outstanding note from direct borrowings and placements issued to the MCWT
under the Commonwealth’s Dam and Seawall Repair and Removal Fund. The note was issued on
February 24, 2015, payable at a 2% interest rate with payments through March 6, 2035.
The Town’s has an outstanding note from direct borrowings and placements issued to the MCWT
under its State Revolving Loan Fund for $3,745,695 with interest payable at 2% and payments
through July 15, 2030. The financing agreement with the MCWT contains a provision that in the
event of default, outstanding amounts due and payable shall be paid from any undisbursed
proceeds on account or be deducted from any state local aid distributions owed to the Town. This
provision also allows the MCWT to declare the entire outstanding principal amount due
immediately.
The following represents authorized and unissued debt as of June 30, 2023:
Project Amount
Governmental:
Building improvements $ 3,205,000
Departmental equipment/vehicles 1,299,500
District improvements 2,250,000
Business-type:
Water projects 3,194,000
Sewer projects 947,603
Total Authorized and Unissued $ 10,896,103
III. Other Information
A. Retirement System
Retirement System Description – The Town contributes to the Norfolk County Retirement System
(the “System”), a cost-sharing multiple-employer defined benefit pension plan. The System was
established under Chapter 32 of the Commonwealth of Massachusetts General Laws (MGL) and
is administered by Norfolk County Retirement Board (the “Board”). Standalone audited financial
statements for the year ended December 31, 2022 were issued and are available at the Norfolk
County Retirement System, 480 Neponset Street, Canton, MA 02021.
The System provides retirement, disability and death benefits to plan members and beneficiaries.
Chapter 32 of the MGL assigns authority to establish and amend benefit provisions of the plan.
Cost-of-living adjustments granted between 1981 and 1997 and any increase in other benefits
Town of Canton, Massachusetts Page 67 of 126 Annual Comprehensive Financial ReportSource page 76
imposed by the Commonwealth’s state law during those years are borne by the Commonwealth
and are deposited into the pension fund directly. Cost-of-living adjustments granted after 1997
must be approved by the Board and are borne by the System.
Contributions Requirements – The System has elected provisions of Chapter 32, Section 22D (as
amended) of Massachusetts General Laws, which require that a funding schedule be established
to fully fund the pension plan by June 30, 2040. Under provisions of this law, participating
employers are assessed their share of the total retirement cost based on the entry age, normal
actuarial cost method. The Town contributed $6,929,184 to the System in fiscal year 2023,
which equaled the actuarially-determined contribution requirement for the fiscal year.
Net Pension Liability – At June 30, 2023, the Town reported a liability of $43,608,995 for its
proportionate share of the net pension liability. The net pension liability was measured as of
December 31, 2022 and the total pension liability used to calculate the net pension liability was
determined by an actuarial valuation as of January 1, 2022. There were no material changes to
the System’s benefit terms since the previous actuarial valuation.
The Town’s proportion of the net pension liability is based on a projection of the Town’s long-
term share of contributions to the System relative to the projected contributions of all employers.
The Town’s proportion was approximately 7.54% at December 31, 2022, which was consistent
with the prior valuation.
Fiduciary Net Position –The System’s fiduciary net position was determined using the accrual
basis of accounting. The System’s accounting records are maintained on a calendar-year basis in
accordance with the standards and procedures established by PERAC. Contributions from
employers and employees are recognized in the period in which they become due pursuant to
formal commitments, statutory or contractual requirements. Benefit payments (including refunds
of employee contributions) are recorded when incurred, regardless of the timing of payment.
Investments are reported at fair value; fair value is determined as the price one would receive in
an orderly transaction between market participants at a measurement date.
Pension Expense – The Town recognized $5,568,887 in pension expense in the statement of
activities in fiscal year 2023; which was allocated to all functional expenses that applied.
Deferred Outflows of Resources and Deferred Inflows of Resources – At June 30, 2023, the
Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Town of Canton, Massachusetts Page 68 of 126 Annual Comprehensive Financial ReportSource page 77
Deferred Outflows Deferred Inflows
of Resources of Resources
Net differences between projected and
actual earnings on pension plan investments $ 8,327,307 $ -
Differences between expected and
actual experience 1,435,487 -
Changes in proportion and differences
between Town contributions and
proportionate share of contributions 43,944 -
Total $ 9,806,738 $ -
The deferred outflows of resources and deferred inflows of resources are expected to be
recognized in the Town’s pension expense as follows:
Year ended June 30,
2023 $ 1,115,131
2024 2,243,289
2025 2,276,424
2026 4,171,894
Total $ 9,806,738
Actuarial Valuation – The measurement of the System’s total pension liability is developed by an
independent actuary. The latest actuarial valuation was performed as of January 1, 2022. The
significant actuarial assumptions used in the actuarial valuation included:
Actuarial cost method Individual entry age normal
Investment rate of return 7.75%
Projected salary increases 3.5% - 5.5%
Inflation 3.00%
Cost of living adjustments 3.0% of the first $18,000 of retirement income
Asset valuation method Market value
Mortality rates: The RP-2014 Blue Collar Mortality with Scale
MP-2014, fully generational
The investment rate of return assumption is a long-term assumption and is based on capital
market expectations by asset class, historical returns and professional judgment. The market
expectations analysis used a building-block approach, which included expected returns by asset
class and the target asset allocation. The target allocation and best estimates of arithmetic real
returns for each major asset class are summarized in the following table:
Town of Canton, Massachusetts Page 69 of 126 Annual Comprehensive Financial ReportSource page 78
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Domestic equity 30.5% 7.0%
International equity 15.5% 7.7%
Fixed income 20.5% 4.3%
Real estate 9.5% 6.9%
Private equity 10.0% 9.4%
Hedge funds 11.5% 8.6%
Real assets 2.5% 8.9%
The System’s investment policy’s total, blended expected rate of return seeks to meet or exceed
the assumed actuarial rate of return.
Discount Rate – The discount rate used to measure the total pension liability in the January 1,
2022 actuarial valuation report was 7.75%, which was consistent with the previous actuarial
valuation. The projection of cash flows used to determine the discount rate assumed plan
member contributions were made at the current contribution rate and that employer contributions
will be made at rates equal to the actuarially-determined contribution rates and the member rate.
Based on those assumptions, the System’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
Sensitivity Analysis – The following presents the Town’s proportionate share of the net pension
liability calculated using the discount rate of 7.75% as well as the Town’s proportionate share of
the net pension liability using a discount rate that is one percentage point lower or one percentage
point higher than the current rate:
Current
1% Decrease Discount 1% Increase
(6.75%) (7.75%) (8.75%)
Town's proportionate share
of net pension liability $ 57,930,978 $ 43,608,995 $ 31,433,508
B. Massachusetts Teachers’ Retirement System
Teachers and certain administrative employees of the School Department participate in the
Massachusetts Teachers’ Retirement System (“MTRS”), a cost-sharing multiple employer
defined benefit pension plan. The MTRS is managed by the Commonwealth on behalf of
municipal teachers and municipal teacher retirees. Like the System, MTRS was established
under Chapter 32 of Massachusetts General Laws. The Commonwealth’s legislature has the
authority to amend or modify the MTRS’s funding policies.
The Commonwealth is a nonemployer contributor to the MTRS and is legally responsible by
statute for all actuarially determined employer contributions and future benefit requirements of
Town of Canton, Massachusetts Page 70 of 126 Annual Comprehensive Financial ReportSource page 79
the MTRS. Therefore, the Town is considered to be in a special funding situation as defined by
GASB Statement No. 68, Accounting and Financial Reporting for Pensions.
For the year ended June 30, 2023, the Commonwealth contributed $7,396,858 to the MTRS on
behalf of the Town. The Town’s proportionate share of the collective MTRS net pension liability
at this reporting date was 0.351461%, which was based on the actual, actuarially determined
contribution made by the Commonwealth on behalf of the Town as a percentage of the total
annual contribution made by the Commonwealth on behalf of all employers.
The table below presents the Town’s proportionate share of the following:
Paid (or assumed)
Commonwealth On Behalf Town
Portion of the Town Portion
Net pension liability $ 90,986,654 $ (90,986,654) $ -
Pension expense 7,484,540 (7,484,540) -
In addition to pension expense reported as previously discussed, the Town has recognized
intergovernmental revenue and pension expense of $7,484,540 associated with this arrangement.
C. Other Postemployment Benefits (OPEB)
The Town administers a single employer defined benefit healthcare plan (the “OPEB Plan”). The
OPEB Plan provides health, dental and life insurance benefits (other postemployment benefits) to
current and future retirees, their dependents and beneficiaries in accordance with Section 20 of
Massachusetts General Law Chapter 32B.
Specific benefit provisions and contribution rates are established by collective bargaining
agreements, state law and Town ordinance. All benefits are provided through the Town’s
premium-based insurance program. The OPEB Plan does not issue a stand-alone financial report
and is presented as a fiduciary fund in the Town’s financial statements.
With respect to OPEB plan reporting, GASB issued GASB Statement No.’s 74, Financial
Reporting for Postemployment Benefit Plans Other Than Pensions, and Statement No, 75,
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.
Reporting requirements for governments who administer an OPEB plan as defined under the
accounting standard are required to present disclosures under both GASB 74 and GASB 75.
GASB 74 requires specific disclosures and required supplementary information that relate
directly to the fiduciary fund in which the OPEB Plan is recorded. GASB 75 address disclosures
related to the net OPEB liability required to be recorded by the government in its applicable
financial statements. A number of these disclosures are identical, especially if the measurement
date under GASB 75 is the same as the plan year-end date. When a different measurement date is
used different assumptions and calculations will result.
For the year ended June 30, 2023, the Town elected to use a measurement date that was the same
as the plan year-end date thus the majority of the same disclosures are used and will not be
repeated.
Town of Canton, Massachusetts Page 71 of 126 Annual Comprehensive Financial ReportSource page 80
GASB Statement No. 75
OPEB Plan disclosures that impact the Town’s net OPEB liability using a measurement date of
June 30, 2023 are summarized as follows:
Employees Covered by Benefit Terms – The following employees were covered by the benefit
terms as of June 30, 2023:
Active employees 733
Inactive employees 630
Total 1,363
Contributions – The contribution requirements of OPEB Plan members and the Town are
established and may be amended by the Town. Retirees contribute 25% of the set premium for
medical, dental and life insurance plans. The remainder of the cost is funded by general revenues
of the Town. The Town currently contributes enough money to the Plan to satisfy current
obligations on a pay-as-you-go basis. The costs of administering the OPEB Plan are paid by the
Town. For the year ended June 30, 2023, the Town’s average contribution rate was 9.9% of
covered payroll.
Net OPEB Liability – The Town’s net OPEB liability was measured as of June 30, 2023 using an
actuarial valuation as of July 1, 2022. The components of the net OPEB liability of the Town as
of June 30, 2023 were as follows:
Total OPEB liability $ 104,622,382
Plan fiduciary net position (10,534,554)
Net OPEB liability $ 94,087,828
Plan fiduciary net position as
a percentage of the total
OPEB liability 10.07%
The total OPEB liability in the most recent actuarial valuation was determined using the
following key actuarial assumptions applied to all periods included in the measurement, unless
otherwise specified:
Town of Canton, Massachusetts Page 72 of 126 Annual Comprehensive Financial Report