Canton, Massachusetts · Saved source text
Fiscal Year 2019 Comprehensive Annual Financial Report
Saved text from 138 source pages. Transcription and OCR may contain errors; verify figures and wording against the original. Retrieved 2026-10-15.
Source page 1
TOWN OF CANTON, MASSACHUSETTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended
June 30, 2019Source page 2
On the cover and below: Using Community Preservation funds the Town purchased seven acres of land located close to Canton Center for open space and recreational purposes and named it the Paul Revere Heritage Site. Photo on the cover taken by Eric Levin
Source page 3
Town of Canton, Massachusetts
Comprehensive Annual Financial Report
For the Fiscal Year
July 1, 2018 through June 30, 2019
Prepared by the Finance DepartmentSource page 4
This page intentionally left blank.
Source page 5
Introductory Section With funds provided by a Community Preservation grant, the newly renovated Devoll Playground is the home of the Recreation Department’s free summer playground program.
Source page 6
This page intentionally left blank.
Source page 7
TOWN OF CANTON, MASSACHUSETTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2019
TABLE OF CONTENTS
Page(s)
INTRODUCTORY SECTION
Letter of Transmittal ....................................................................................................................... 1-10
Certificate of Achievement For Excellence in Financial Reporting................................................. 11
Organizational Chart Town .............................................................................................................. 12
Organizational Chart Schools ........................................................................................................... 13
Principal Town Officials .................................................................................................................. 14
FINANCIAL SECTION
Independent Auditor’s Report ....................................................................................................... 17-19
Management’s Discussion and Analysis ....................................................................................... 21-32
Basic Financial Statements:
Statement of Net Position .......................................................................................................... 34
Statement of Activities............................................................................................................... 35
Balance Sheet – Governmental Funds ....................................................................................... 36
Reconciliation of the Governmental Funds Balance Sheet Total Fund Balances to
the Statement of Net Position ............................................................................................ 37
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds ........................................................................................................... 38
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances of Governmental Funds to the Statement of Activities ..................................... 39
Statement of Net Position – Proprietary Funds .......................................................................... 40
Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds.............. 41
Statement of Cash Flows – Proprietary Funds ........................................................................... 42
Statement of Fiduciary Net Position .......................................................................................... 43
Statement of Changes in Fiduciary Net Position ....................................................................... 44
Notes to Basic Financial Statements ....................................................................................... 45-78
Required Supplementary Information:
Schedule of the Town’s Proportionate Share of the Net Pension Liability ............................... 80
Schedule of the Town’s Contribution to Pension Plan .............................................................. 80
Schedule of the Commonwealth’s Collective Share of Net Pension Liability –
Massachusetts Teachers’ Retirement System… ................................................................. .81
Schedule of Changes in Net OPEB Liability and Related Ratios……………………………...82
Schedule of Contributions to OPEB Plan……………………………………………………....83
Schedule of Investment returns – OPEB Plan……………………………………………….....83
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and
Actual – General Fund .................................................................................................. 84-86
Notes to Required Supplementary Information .................................................................... 87-88
iSource page 8
TOWN OF CANTON, MASSACHUSETTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2018
TABLE OF CONTENTS
Page(s)
Combining Statements:
Nonmajor Governmental Funds ............................................................................................ 90-91
Combining Balance Sheet – Nonmajor Governmental Funds ........................................ 92-94
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances – Nonmajor Governmental Funds ........................................................... 96-98
Internal Service Funds ........................................................................................................... 100
Combining Statement of Net Position – Internal Service Funds ..................................... 102
Combining Statement of Revenues, Expenses and Changes in Net Position –
Internal Service Funds ............................................................................................ .103
Combining Statement of Cash Flows – Internal Service Funds ...................................... .104
Fiduciary Funds ..................................................................................................................... .106
Statement of Changes in Assets and Liabilities – Agency Fund .................................... .107
STATISTICAL SECTION
Narrative ..................................................................................................................................... 111
Net Position by Component – Last Ten Fiscal Years...................................................................... 112
Changes in Net Position – Last Ten Fiscal Years ....................................................................... 113-114
Fund Balances, Governmental Funds – Last Ten Fiscal Years ....................................................... 115
Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years .................................... 116
Assessed Value and Estimated Actual Value of Taxable Property By Classification
and Tax Rates – Last Ten Fiscal Years............................................................................. 117
Principal Taxpayers – Current Year and Nine Years Ago .............................................................. 118
Property Tax Levies and Collections – Last Ten Fiscal Years........................................................ 119
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ........................................................ 120
Ratios of General Bonded Debt Outstanding .................................................................................. 121
Computation of Legal Debt Margin – Last Ten Fiscal Years ......................................................... 122
Direct and Overlapping Governmental Activities Debt .................................................................. 123
Demographic and Economic Statistics – Last Ten Fiscal Years ..................................................... 124
Principal Employers (Excluding Town) – Current Year and Nine Years Ago ............................... 125
Full-time Equivalent Town Employees by Functions – Last Ten Fiscal Years .............................. 126
Operating Indicators by Function/Program – Last Ten Fiscal Years .............................................. 127
Capital Asset Statistics by Function/Program – Last Ten Fiscal Years .......................................... 128
iiSource page 9
Letter of Transmittal
December 15, 2019
Honorable Board of Selectmen and Citizens of the Town of Canton, Massachusetts:
I am pleased to acknowledge that the Town of Canton has completed its fourteenth consecutive
Comprehensive Annual Financial Report (CAFR). The report is for the fiscal year ended June 30, 2019,
and I am proud that we have continued this annual tradition of preparing a report that communicates to
our constituents and investors the highest degree of transparency in financial reporting for municipalities.
The Town is responsible for the accuracy, completeness and fairness of the data presented in the CAFR.
This letter of transmittal and the management’s discussion and analysis, located in the financial section
of the CAFR, provide a comprehensive financial overview of the Town and ensure that the financial and
general operations of Town government remain open for easy viewing.
The CAFR represents a complete set of financial statements in conformity with generally accepted
accounting principles in the United States of America (GAAP), that are audited in accordance with
generally accepted auditing standards by a firm of licensed certified public accountants. This CAFR
meets and exceeds those requirements and presents itself as an informative resource for all those
interested in the financial activities of the Town.
The report is designed to be used by the elected and appointed officials of the Town and others who are
concerned with its management and progress such as bond analysts, banking institutions and rating
agencies as well as the citizens and taxpayers of the Town of Canton.
Since the report consists of management’s representations concerning the finances of the Town,
management assumes full responsibility for the completeness and reliability of all of the information
presented. In addition, management of the Town is responsible for establishing and maintaining an
internal control structure designed to ensure the assets of the Town are protected from loss, theft or
misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial
statements in conformity with GAAP. Because the cost of internal controls should not outweigh their
benefits, the Town of Canton’s comprehensive framework of internal controls has been designed to
provide reasonable rather than absolute assurance that the financial statements will be free from material
misstatement.
Town of Canton, Massachusetts Page 1 of 130 Comprehensive Annual Financial ReportSource page 10
The Town’s financial statements have been audited by Roselli, Clark and Associates, a firm of licensed
certified public accountants. The goal of the independent audit is to provide reasonable assurance on an
annual basis that the financial statements of the Town are free of material misstatement. The independent
audit involved (1) examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; (2) assessing the accounting principles used and significant estimates made by
management; and (3) evaluating the overall financial statement presentation. The independent auditor
concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion
that the Town’s financial statements for the fiscal year ended June 30, 2019 are fairly presented in
conformity with GAAP. The independent auditor’s report is presented as the first component of the
financial section of this report.
The independent audit of the financial statements of the Town was part of a broader, federally mandated
“Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing
Single Audit engagements require the independent auditor to report not only on the fair presentation of
the financial statements, but also on the audited government’s internal controls and compliance with legal
requirements, with special emphasis on internal controls and legal requirements involving the
administration of federal awards. These reports are available in the Town’s separately issued Single Audit
Reports Pursuant to Title 2 of the US “Code of Federal Regulations” (CFR) Part 200, “Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany
the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter
of transmittal is designed to complement that analysis and should be read in conjunction with it. The
MD&A can be found immediately following the report of the independent auditors.
Profile of the Town
Canton was incorporated as a Town in 1797. The Town is located in eastern Massachusetts,
approximately 18 miles southwest of Boston, has a population of approximately 21,000 and a land area of
approximately 19 square miles. It is situated at the junction of Interstates 95 and 93, with access to Routes
24 and 138, providing an excellent location for residents, businesses and commuters.
Town of Canton, Massachusetts Page 2 of 130 Comprehensive Annual Financial ReportSource page 11
MBTA commuter rail trains on the Providence/Stoughton Line pass through Canton. Some stop at Canton
Junction. This line crosses the Neponset River on the Canton Viaduct, a prominent local landmark. Route
128 Station in neighboring Westwood also carries many Canton commuters into Boston. Amtrak trains
(including the Acela Express high-speed trains) also stop at Route 128, but pass through Canton without
stopping. Another line branches into Stoughton, stopping at Canton Center.
Bus service is available to Mattapan Station in the MBTA system, and Canton’s close proximity to
Boston also places it within a reasonable distance from Logan International Airport, the largest
transportation center in New England.
The Town has a rich and varied industrial heritage, serving as the location of Paul Revere’s copper rolling
mills in post-Colonial times, and as the site of woolen manufacturing in more recent times. Present
commercial enterprises play a key role in the Town’s fiscal stability and are considered a major asset to
the community. The prime commercial areas are well located so as to allow direct highway access
without affecting the community’s small town charm.
Many of the Town’s lakes, ponds and wetlands have been protected and preserved for present enjoyment
and future generations. Among the protected areas are the Eleanor Cabot Bradley Reservation, an 82 acre
estate that blends open fields, woodlands and gardens in the shadow of Great Blue Hill and Pequitside
Farm, a town-owned 38 acre conservation and recreation area which offers playing fields, picnicking,
hiking and cross country skiing.
The Town offers a full range of traditional municipal services including police and fire protection,
ambulance and rescue services, education, maintenance of streets and infrastructure, solid waste
collection and disposal, health and human services, cultural and recreational, administrative and financial
services. The Town is a member community of the Massachusetts Water Resources Authority (MWRA)
for its water and sewer services.
Canton prides itself on its quality school system. Canton students consistently perform well on national
and state tests and over 90% of students
graduating from the high school go on to
higher education. The Town is the location
of the Blue Hills Regional Technical School
which provides expanded vocational
education opportunities for high school
students of Canton and eight other area
communities. Canton is also home to one
of the two campuses of Massasoit
Community College. The campus is a
multi-level facility with specialized labs and
art studios that support the technical and
visual arts programs of the College. The
campus also includes the Milton Art
Museum, Akillian Gallery and the College’s Professional Development Center.
An elected, five-member School Committee appoints a School Superintendent who administers the public
school system of the Town. School Committee members, like the Selectmen, are elected at-large to three-
year staggered terms.
Town of Canton, Massachusetts Page 3 of 130 Comprehensive Annual Financial ReportSource page 12
Almost a decade ago, the Town reached its 10% affordable housing requirement mandated by the
Commonwealth of Massachusetts (Commonwealth), which is an important milestone as communities
under the 10% threshold are subject to an appeals process that can overturn local zoning board decisions.
This has allowed the Town to maintain its commitment to developing much needed affordable housing
units in areas of the Town that can accommodate the growth.
The Town operates under the Selectmen, Town Administrator, and Open Town Meeting form of
government. The five elected Selectmen make policy decisions, and the Town Administrator is
responsible for carrying out the policies of the Selectmen
and for managing the day-to-day operations of the Town.
The policies and procedures of the Board of Selectmen are
detailed in the administrative code that will continue to
evolve and be created over time to best serve the
community.
An annual operating budget is approved by Town Meeting
two months prior to the start of the fiscal year. This
annual budget serves as the foundation for the Town’s
financial planning and control. The budget is prepared by
fund, function (e.g. general government) and department
(e.g. finance) allowing the department heads to allocate resources within the department as they see fit.
Transfers between departments, however, need special approval by Town Meeting unless specifically
exempted by state statute.
Factors Affecting Economic Condition
Canton continues to take a pro-active approach encouraging well planned economic development. The
Town fully appreciates the significance of commercial and industrial growth and development (and
redevelopment) especially in terms of long term fiscal stability. The Town continues its focus on future
growth, which is sustainable and “complimentary” for economic development including employment
opportunities for our residents.
Municipal officials continue to work closely with and receive valuable support from the State Office of
Business Development as well as regional planning support from the Metropolitan Area Planning Council
(MAPC). In addition business advocacy organizations, such as Canton Association of Business and
Industry (CABI) play a vital role. The Town strives to take full advantage of the latest initiatives and
incentives made available to it notably under Chapter 43D for expedited permit approvals and Tax
Incremental Financing (TIF).
The Town’s Economic Development Committee (EDC) is also a special resource. The Town regularly
takes advantage of local talent from the community who specialize in finance, banking, development and
real estate.
The Town continues to update and publish an economic development recruitment guide which includes
pertinent information sought by private company CEO’s when making siting and expansion decisions.
Recently, the Board of Selectmen published a new business and community guide and has made that
information available online as well.
As previously discussed, the Town surpassed its required 10% affordable housing goal as required by
State regulation. The Town has incorporated a continued affordable housing unit goal, within the Housing
Action Plan, to ensure the Town keeps pace with any new market rate unit starts. Recently the
Town of Canton, Massachusetts Page 4 of 130 Comprehensive Annual Financial ReportSource page 13
construction by Avalon Development of additional affordable housing on Randolph Street has further
increased the Town’s 40B compliance.
The Town’s commitment to sound economic development is further demonstrated by creating
partnerships with MAPC and the Neponset Valley Chamber of Commerce to ensure that the coordination
and resource allocation on key planning issues facing the Town. The Town reactivated the Economic
Development Committee and created, with Town Meeting, the Permit Advisory Committee both of
which provide technical assistance to new businesses to Canton.
The Town has instituted a Google-based web search device, which identifies Canton as a business
friendly community. The web product highlights, via a series of videos, the Town of Canton as a solid
and desirable business and family destination. The Town’s continued status as a 43D Expedited
Permitting Community has benefitted the Town greatly and has led to the actual designation of many new
priority development sites. This 43D designation, which was granted to the Town in 2008, came with a
$150,000 grant to hire a permit specialist who has completed the administrative and organizational work
necessary to implement the issuance of permits via an integrated and automated town wide permit system
which better serves the public and the Town in terms of real time tracking of permits.
The Town has available a permit guidebook, which lays out the Town’s permitting requirements in an
easy to use format. The goal is to identify key requirements and improve communications, saving
applicants time and money. The Permit Advisory Committee has been a successful endeavor by bringing
together key permit granting agency representatives to counsel and guide any proponent of a proposed
commercial endeavor. Participation and results continue to be overwhelmingly positive. The Town has
also published a Tax Incremental Financing Evaluation Policy document designed to provide a rational
and consistent intake evaluation of TIF requests. The new approach allows the Town to quantify and
better evaluate any request to reduce taxes for a business seeking to locate or expand. Also, the Town
launched a Payment in Lieu of Taxes Program (PILOT) that encourages non-taxable property owners to
voluntarily participate in the support of public services.
The Town has completed
construction of the
downtown revitalization
project commonly referred
to as the Streetscape
Improvement Project. This
work was funded as a result
of a $2.6 million dollar
Commonwealth grant
received due to the Town’s
Smart Growth efforts and
rezoning of the Downtown.
In addition, the Town
completed safety and
efficiency improvement
work on two key intersections ($2.2 million-dollar Commonwealth grant) located in the heart of the Route
138 business district. These intersections are located at the Randolph and Washington Street Intersections
with Route 138. These projects have improved both the safety and efficiency of this commercial roadway.
The Board of Selectmen has also empanelled a multi-disciplined group of volunteers who have completed
a visioning process which has led to a variety of re-zoning recommendations with a goal of improving the
Town of Canton, Massachusetts Page 5 of 130 Comprehensive Annual Financial ReportSource page 14
business climate and enhance zoning flexibility to spur additional economic development potential along
this vital commercial roadway.
The Town was also a participant in a regional planning study to evaluate the effects of new growth in
both residential and commercial construction. The study’s focus was to identify growth related problems
such as transportation, infrastructure, environmental, and economic development issues. In addition, a
build-out analysis was completed to assist and improve public policy decision-making with regard to
growth and development related to educational planning. These studies have been coordinated with other
immediate area communities.
The Town is in the process of evaluating the opportunities and or impacts of the South Coast Rail Project
which is advancing through preliminary and environmental design. The State initiative would provide rail
service from Boston to Fall River/New Bedford via a route now determined by the State, known as the
Stoughton Alternative, which will include impacts in Canton.
In 2010 the Town received a MORE grant in the amount of $850,000 and completed infrastructure
improvements along Dan Road, an important commercial area of Town. After much effort, the Town
secured the commitment of
Organogenesis, a bio tech firm, now
located on Dan Road, which was
contemplating relocation. The
Company’s commitment to stay in
Canton and expand was an important
part of the Town’s success in obtaining
this new funding.
Canton’s Master Plan Initiative
required a careful review and analysis
of existing conditions balanced with a
vision for the future. The work program
is designed to enlist public interest and
participation in shaping the Town’s
future. Workshops, neighborhood meetings, leadership interviews and community surveys were
conducted. The Town has conducted an extensive public outreach campaign to better assure good
attendance at workshops and neighborhood focus groups.
Existing planning, engineering reports and documents have been reviewed and a written report, which
summarizes their major issues and relevant recommendations were prepared and remains available. The
overall objective of the Master Plan initiative was to develop a sustainable residential and business
development strategy for the Town.
Brightview Canton recently opened its community of 160 apartment homes for seniors which includes
independent living, dedicated assisted living and a specialized program and environment for people living
with Alzheimer’s and other forms of dementia.
This added to existing residential developments such as Windsor Woods, Indian Woods, Pequit View and
Blue Hill Commons; and provide a nice compliment to commercial developments such as Dunkin Brands
with their worldwide corporate headquarters along with other top Canton companies such as Meditech,
Boston Mutual, Computershare, LoJack and Pepsi.
Town of Canton, Massachusetts Page 6 of 130 Comprehensive Annual Financial ReportSource page 15
There has been increased activity on the development side in the last twelve months. This includes the
sale and redevelopment of the old Reebok site. In the fall of 2017, Reebok moved to Boston from its’
decades old home in Canton. Spear Street Capital, an
owner and operator of distinctive office properties,
became the new owner.
The world-class campus includes a 518,000 square foot
main building along with three support buildings, two
parking structures, a childcare center and a host of fitness
amenities, including an Olympic track, basketball courts,
tennis courts and a softball field.
In addition, the following private developments were completed during fiscal year or are
nearing completion:
Development projects recently completed or near completion
Name Description Completion Amount
Royall Development Hotel/restaurant Summer 2020 19,200,000
Paul Revere Heritage Site Residential development On-going 8,225,000
$ 27,425,000
In 2012 Town entered into a long-term lease of its capped landfill to be used by a private entity to install
solar panels on fifteen acres of the site at no cost to Canton. The lease provides the Town with guaranteed
payments of $20,000 per acre, per year, increasing annually by 2.5%, while allowing the Town the ability
to purchase all the electricity generated by this 5.6-megawatt facility at a substantial savings.
The Pine Street Solar Facility went online August 15, 2012 (one of the largest in the Northeast) and has
produced the following financial benefits:
• The 43 million kwh of solar electricity produced by this facility since its inception have resulted
in $8.5 million of net metering credits which exceeded the $7.4 million paid for generating this
solar power.
• The Town has received lease payments totaling $2.2 million over the last 7 years.
• Overall, the Town has received an annual financial benefit from this solar facility which has
helped in balancing the Town’s budget along with increasing free cash reserves as follows:
Fiscal Year 2013 - $303,519
Fiscal Year 2014 - $413,585
Fiscal Year 2015 - $498,069
Fiscal Year 2016 - $556,205
Fiscal Year 2017 - $461,428
Fiscal Year 2018 - $507,845
Fiscal Year 2019 - $512,303
Town of Canton, Massachusetts Page 7 of 130 Comprehensive Annual Financial ReportSource page 16
In summary, Town leaders recognize the importance of maintaining a stable tax situation for its residents.
Development on the commercial side helps accomplish this goal and the Town continues to seek out the
means to maintain vigilance in this area.
Property Taxes The growth of the Town’s main source of revenues, property taxes, is capped by
Proposition 2 ½ and can only be overridden through a ballot by the voters. While revenue increases have
been limited in recent years, fixed costs, including health insurance and pension costs, have increased
more proportionally. As a result, balancing the annual budget is a challenge without an appropriation
from free cash. The Town attempts to mitigate this impact by conservatively forecasting revenues thus
creating free cash in the subsequent year.
Several years ago, the Town’s management made the difficult choice to cut services and raise fees in
order to balance the budget. With more cuts looming in future years, the Town’s voters approved a $4.5
million Proposition 2 ½ tax override for fiscal year 2009 that allowed for the restoration of most of the
budget cuts from the prior years. The tax override was planned to be phased in over a three-year period
with an annual cost to the average residential homeowner of $450.
In addition, effective fiscal year 2013, the Town negotiated changes to its health insurance plans that
required higher out of pocket costs from its employees and retirees but stabilized rates. These initiatives
have allowed the Town to maintain a consistent level of reserves from year to year and continue to make
contributions to its OPEB Trust Fund.
The Town’s available reserves on a GAAP basis represent the amount in unassigned fund balance. As
discussed previously, the Town’s reserves have been increasing on an annual basis since the stabilization
of the recession in 2011. This has been a direct result of the initiatives implemented by management as
discussed in the previous paragraph.
These strong reserve levels, when
combined with the Town’s strong
management practices, desirable location
in a strong metropolitan statistical area,
assessed valuations and strong wealth
factors directly contributed to an upgrade
in the Town’s bond rating to ‘AAA’.
This is the highest investment grade
possible. The override and the resulting
revenue flexibility to restore lost services
and stabilize budgets in future fiscal years
were cited as prominent factors in the
upgrade. The Town is committed to
maintaining its reserves at a level expected from communities that engender the highest bond rating.
Long-term Financial Planning
Several years ago, the Town implemented a policy of preparing rolling projections. The Town believes
this will provide better insight when preparing annual budgets and will also alert the Town to any
potential budgeting issues far ahead of when these situations become real issues.
Town of Canton, Massachusetts Page 8 of 130 Comprehensive Annual Financial ReportSource page 17
The following represents the Town’s summarized budgets for each of the next five years:
2020 2021 2022 2023 2024
Revenues and Other Sources
Real Estate and Personal Property Taxes $ 79,166,862 $ 82,024,499 $ 85,210,689 $ 87,908,061 $ 90,703,375
State Aid 9,379,033 9,379,033 8,957,001 8,957,000 8,922,728
Local Receipts 7,378,804 7,385,025 7,391,400 7,397,935 7,404,634
Transfers and Other Sources 3,169,138 2,889,003 2,922,464 2,902,106 2,940,590
Total Revenues 99,093,837 101,677,560 104,481,554 107,165,102 109,971,327
Expenditures and Other Uses
Education Budget 44,114,362 45,243,337 46,615,933 47,964,860 49,431,579
Municipal Budget 21,777,124 22,331,654 23,006,364 23,672,100 24,395,970
Fixed Costs 30,070,814 31,363,923 31,989,646 32,526,791 32,809,893
State and County Charges 1,218,884 1,238,646 1,269,611 1,301,351 1,333,885
Capital costs and special appropriations 3,135,000 1,500,000 1,600,000 1,700,000 2,000,000
Total Expenditures 100,316,184 101,677,560 104,481,554 107,165,102 109,971,327
Surplus/(Deficit) $ (1,222,347) $ - $ - $ - $ -
Capital Improvements and Financing
The Town continues to invest in infrastructure improvements such as roads, sewers, and water supply
facilities, as well as various municipal and school facility upgrades. These include: Town Hall, Library,
Public Safety facilities, Public Works, Recreational facilities and School building improvement projects.
Recently, the Town began construction on a proposed $10 million ice rink as well as $6 million in
renovations to the Town pool. These are anticipated to be substantially completed in fiscal year 2020.
In addition, the Town has completed the construction of two new water filtration plants. These water
filtration plants will provide state of the art water filtration capabilities and allow for the use of local
source water to reduce operating costs, improve water availability (including redundancy) and filtrate
water for customers with the most technologically advanced system available today.
Recently the Town completed renovations of a former Knights of Columbus Hall and turned it into the
new Senior Center located at 500 Pleasant Street to address the growing, aging population in need of
expanded and updated senior services.
In addition, the Town completed repairs to Shepard Pond dam which was classified by the state as being a
Significant Hazard Dam in poor condition. To help fund this repair project, the Town received a grant
award of $665,000 from the Commonwealth and a $335,000 low interest loan from the Executive Office
of Environmental Affairs.
Construction of an eight-classroom addition to the Lt. Peter M. Hansen Elementary School was also
completed recently. This addition has alleviated increasing enrollment concerns while enabling more
children to attend an elementary school in their neighborhood.
As part of the annual budget process, the Capital Planning Committee (CPC) recommends the capital
budget for the upcoming year and prepares a five-year plan to address the long-term capital needs of the
Town. The capital spending plan for the five-year period from fiscal year 2020 through fiscal year 2024
has an estimated cost of $30.3 million, with $8.3 million to be funded from estimated revenues with the
remainder to be funded from the issuance of bonds. The CPC’s capital plan has allocated $7.4 million for
Town of Canton, Massachusetts Page 9 of 130 Comprehensive Annual Financial ReportSource page 18
municipal departments, $6.3 million for the school department, $12.8 million for the water enterprise
fund, and $3.8 million for the sewer enterprise fund.
The Town’s target set aside to finance its capital plan is 5% of recurring revenues. A portion of its annual
capital plan funds smaller capital projects on a pay-as-you-go basis through recurring revenues while
larger capital projects are financed through borrowing.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awards a
Certificate of Achievement for Excellence in Financial Reporting. This is a very prestigious award and
in order to be awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized comprehensive annual financial report. This report must satisfy both generally
accepted accounting principles and applicable legal requirements.
The GFOA awarded this Certificate of Achievement for Excellence in Financial Reporting to the Town of
Canton for its comprehensive annual financial report for the fiscal year ended June 30, 2018. This was the
thirteenth year that the Town has achieved this prestigious award.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report will meet the Certificate of Achievement Program’s requirements,
and we are submitting it to the GFOA to determine its eligibility for this certificate.
The publication of this CAFR represents an important achievement in the ability of the Town of Canton
to provide enhanced financial information and accountability to its citizens, elected and appointed
officials, and investors. The preparation of this report would not have been possible without the efficient
and dedicated services of the entire staff of the Finance Office.
Special thanks also go to the certified public accounting firm of Roselli, Clark and Associates for their
advice and assistance in the preparation of this report.
Respectfully submitted,
Charles J. Aspinwall
Town Administrator
James R. Murgia
Finance Director
Town of Canton, Massachusetts Page 10 of 130 Comprehensive Annual Financial ReportSource page 19
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Canton
Text38:
Massachusetts
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2018
Executive Director/CEO
Town of Canton, Massachusetts Page 11 of 130 Comprehensive Annual Financial ReportSource page 20
TOWN OF CANTON, MASSACHUSETTS ORGANIZATIONAL CHART Z Town Board Planning Cletks Board of Health Board Office of Selectmen Board of Selectmen Board of Library Appointed Multiple Authority Trustees Town Meeting Member Bodies Town Canton Director Town Town Town Director of || Executive Library a ees Moderator | | Representative || Public Health Planner Clerk Administrator Assessing || Director Director -Zoning Board.of Appeals -Water/Sewer Rate Policy Finance Commission Committee race. | Executive “Touth Coniens sion Town Counsel -Historical Commission Assistant -Fair Housing Committee Personnel Cable Advisory Committee Adv. Board Town Planner Administrative Beautification Committee Secretary -Conservation Commission Building ae Council on Aging bc eteaias Sealer of Weights Sehactial Develan’ - and Measures Secretary Financing Authority Committee -Local Emergency Planning Capital Committee Outlay -Traffic Study Committee . - -Industrial Development Committee Commission Building & Veteran's Building Police Fire Dept. of Human Department Council Recreation Conservation Zoning Maintenance De. ee ens Resource of Finance i a Bik Denaituent Office Department partm Department | | Public Works | | nenartment on Aging Commission Commission Building Veteran's Police Fire Superintendent} Human Finance CoA Recreation Conservation ae 2 ‘ of Resource 2 ; : Commission Commissioner] | Director Chief Chief Public Works | | Administrator Director Director Director Kgent Town of Canton, Massachusetts Page 12 of 130 Comprehensive Annual Financial Report [Original embedded text, retained for comparison] Town of Canton, Massachusetts Page 12 of 130 Comprehensive Annual Financial Report
Source page 21
CANTON PUBLIC SCHOOLS
CANTON SCHOOL COMMITTEE
ADMINISTRATIVE ASSISTANT TO THE
SUPERINTENDENT/SCHOOL COMMITTEE
SUPERINTENDENT OF SCHOOLS
DIRECTOR .OF CURRICULUM SCHOOL BUSINESS
BUILDING PRINCIPALS DIRECTOR OF
and INSTRUCTION ADMINISTRATOR
STUDENT SERVICES
WIDE AREA EDUCATIONAL SCHOOL
NETWORK TECHNOLOGY SECRETARIES ASSISTANT
SCHOOL COUNCIL SECRETARIES
ADM. ADM.. PRINCIPALS ADMINISTRATIVE ASST.
CAPT.
SPED
K-5 READING PARENT GROUPS
PARENT
BUILDING SPECIALISTS SPECIAL EDUCATION, ADVISORY
TECHNOLOGY DISTRICT ACCOUNTS
FACULTY BUILDING 504, ALT. ED. COUNCIL PAYROLL
SPECIALISTS DEPARTMENT PAYABLE
AND STAFF DEPARTMENT STUDENT SERVICES
COORDINATORS
COORDINATORS FACULTY AND STAFF
COMPUTER PROFESSIONAL
DIRECTOR OF
TEACHERS DEVELOPMENT
CHARMSS FOOD SERVICES
COMMITTEE
CUSTODIANS COLLABORATIVE
FACILITIES
PRIVATE SCHOOLS
DIRECTOR
CAFETERIA
MANAGERS/
CUSTODIANS/ WORKERS
MAINTENANCE
TRANSPORTATION
COORDINATOR
HEALTH
SERVICES
Town of Canton, Massachusetts Page 13 of 130 Comprehensive Annual Financial ReportSource page 22
PRINCIPAL TOWN OFFICIALS
Elected Officials
Board of Selectmen Christopher J. Connolly, Chairman
John J. Connolly, Vice Chairman
Thomas W. Theodore, Clerk
Mark J. Porter, Member
Michael C. Loughran, Member
School Committee Kristin Mirliani, Chairperson
Reuki Schutt, Vice Chairperson
Nichola Gallagher, Secretary
Kristian Merenda, Member
Maureen Moran, Member
Principal Executive Officers
Town Administrator Charles J. Aspinwall
Finance Director James R. Murgia
Town Accountant Kathy Dooley Butters
Superintendent of Schools Jennifer Fischer-Mueller
School Business Administrator Barry Nectow
Police Chief Kenneth N. Berkowitz
Fire Chief Charles E. Doody
DPW Superintendent Michael T. Trotta
Town of Canton, Massachusetts Page 14 of 130 Comprehensive Annual Financial ReportSource page 23
Financial Section Architectural rendering provided by Thorndike Development Over 200 condominiums are planned to be constructed adjacent to the Paul Revere Heritage Site to be called Copperworks as a homage to Paul Revere’s copper mill which was formerly located on this property. Town of Canton, Massachusetts Page 15 of 130 Comprehensive Annual Financial Report
Source page 24
This page intentionally left blank. Town of Canton, Massachusetts Page 16 of 130 Comprehensive Annual Financial Report
Source page 25
INDEPENDENT AUDITOR’S REPORT
Honorable Board of Selectmen
Town of Canton, Massachusetts
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the Town of Canton,
Massachusetts, (the “Town”) as of and for the year ended June 30, 2019, and the related notes to the
financial statements, which collectively comprise the Town’s basic financial statements as listed in the
table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Town of Canton, Massachusetts Page 17 of 130 Comprehensive Annual Financial ReportSource page 26
Town of Canton
Page Two
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund
and the aggregate remaining fund information of the Town, as of June 30, 2019, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Restatement of Prior Year Ending Balances
As more fully described in Note IV, a restatement of prior year ending net position balances was made to
the Town’s governmental activities, business-type activities and each Enterprise Fund. Our opinion was
not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, and the schedules listed under the required supplementary information section in
the accompanying table of contents be presented to supplement the basic financial statements. Such
information, although not part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic or historical context.
We have applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements, and statistical section are presented for purposes of additional
analysis and are not a required part of the basic financial statements. The combining and individual
nonmajor fund financial statements are the responsibility of management and were derived from and
relate directly to the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the
combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in
relation to the basic financial statements as a whole. The introductory and statistical sections have not
Town of Canton, Massachusetts Page 18 of 130 Comprehensive Annual Financial ReportSource page 27
Town of Canton
Page Three
been subjected to the auditing procedures applied in the audit of the basic financial statements and,
accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required By Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated December 15,
2019, on our consideration of the Town of Canton, Massachusetts’ internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
Roselli, Clark and Associates
Certified Public Accountants
Woburn, Massachusetts 01801
December 15, 2019
Town of Canton, Massachusetts Page 19 of 130 Comprehensive Annual Financial ReportSource page 28
This page intentionally left blank. Town of Canton, Massachusetts Page 20 of 130 Comprehensive Annual Financial Report
Source page 29
Management’s Discussion and Analysis Town of Canton, Massachusetts Page 21 of 130 Comprehensive Annual Financial Report
Source page 30
MANAGEMENT’S DISCUSSION AND ANALYSIS
As the management of the Town, we offer readers of the accompanying financial statements this narrative
overview and analysis of the financial activities of the Town for the fiscal year ended June 30, 2019.
Financial Highlights
During the year ended June 30, 2019 the Town completed an actuarial valuation of its net OBEB
liability with a valuation date as of July 1, 2018. Upon completion of this actuarial valuation, it was
determined that the net OPEB liability reported at June 30, 2018 was incorrectly stated. The impact
of properly recording the net OPEB liability at June 30, 2018 resulted in a prior period adjustment to
reduce Governmental Activities and Business-type Activities net position over $6.8 million and $0.1
million respectively. All discussions in the Management Discussion and Analysis are based on the
restated amounts.
The assets and deferred outflows of the Town exceeded its liabilities and deferred inflows at the close
of the most recent fiscal year by over $28.8 million (total net position).
The government’s total net position increased by over $1.7 million. This consisted primarily of a
decrease in governmental activities’ net position by almost $0.8 million and an increase in Business -
type activities’ net position of almost $2.5 million. Details of these changes are discussed in later
sections of the Management Discussion and Analysis.
The Town’s Unassigned Fund Balance reported in the General Fund was almost $17.5 million (17.0%
of General Fund expenditures). Total Fund Balance in the General Fund was almost $20.3 million
(19.7% of General Fund expenditures).
The Town reported a total deficit in its Capital Project Fund of over $1.0 million. This was made up
of over $0.2 million as restricted, and a deficit of almost $1.3 million as unassigned. This deficit was
funded from short term borrowings and will be cured at the time the short-term borrowings are
refinanced to long-term.
The Town reported total fund balances of over $14.4 million in the Combined Nonmajor
Governmental Funds. Almost $13.9 million in Restricted Fund Balances, combined with over $0.5
million in Nonspendable Fund Balances made up this amount.
The Town’s total debt decreased by almost $2.3 million during the fiscal year. Detail of this net
decrease is discussed in the debt section of this Management Discussion and Analysis.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Town’s basic financial
statements.
The Town’s basic financial statements comprise three components:
1) government-wide financial statements,
2) fund financial statements, and
3) notes to the financial statements.
This report also contains other supplementary information in addition to the basic financial statements
themselves.
Town of Canton, Massachusetts Page 22 of 130 Comprehensive Annual Financial ReportSource page 31
The layout and relationship of the financial statements and supplementary information is visually
illustrated as follows:
Required Supplementary Management Discussion and Analysis
Information
Government-wide Financial Statements
Governmental Fund Financial Statements
Basic Proprietary Fund Financial Statements
Financial Statements
Fiduciary Fund Financial Statements
Notes to the Basic Financial Statements
Required Supplementary
Information – Budgetary Reporting with Notes, Pension and
Other than MD&A Other Postemployment Benefits
Other Supplementary
Combining Fund Financial Statements/Schedules
Information
Government-wide Financial Statements – The government-wide financial statements are designed to
provide readers with a broad overview of the Town’s finances, in a manner similar to a private-sector
business. The statement of position presents information on all of the Town’s assets, deferred outflows,
liabilities and deferred inflows, with the net result reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position of the Town is
improving or deteriorating. The statement of activities presents information showing how the
government’s net position changed during the most recent fiscal year. All changes in net position are
reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation
leave.)
The government-wide financial statements consist of two classifications; (1) those whose activities are
principally supported by taxes and intergovernmental revenue (governmental activities), and (2) those
whose activities are intended to recover all or a significant portion of their costs through user fees and
charges (business-type activities).
The governmental activities of the Town include general government, public safety, highways and streets,
sanitation, education, economic development, debt service, fringe benefits and culture and recreation.
The business-type activities of the Town are comprised of water, sewer and rink enterprise funds.
Town of Canton, Massachusetts Page 23 of 130 Comprehensive Annual Financial ReportSource page 32
Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The Town, like other state
and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements. All of the funds of the Town can be divided into three categories: governmental
funds, proprietary funds, and fiduciary funds.
Accounting guidelines distinguish fund balance between amounts that are considered nonspendable, such
as fund balance associated with inventories, and other amounts that are classified based on the relative
strength of the constraints that control the purposes for which specific amounts can be spent. Beginning
with the most binding constraints, fund balance amounts will be reported in the following classifications:
• Restricted—amounts constrained by external parties, constitutional provision, or enabling
legislation
• Committed—amounts constrained by a government using its highest level of decision-making
authority
• Assigned—amounts a government intends to use for a particular purpose
• Unassigned—amounts that are not constrained at all will be reported in the general fund or in
other major funds if negative
Governmental funds – Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By doing
so, readers may better understand the long-term impact of the government’s near-term financing
decisions.
The Town maintains numerous individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the General Fund and Capital Projects Fund, which are considered to be
major funds. Data from the other governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these Nonmajor governmental funds is provided in the
form of combining statements.
The Town adopts an annual appropriated budget for its general fund and its enterprise fund. A budgetary
comparison schedule has been provided for the general fund to demonstrate compliance with this budget.
Proprietary funds – The Town maintains two types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements. The Town uses an enterprise fund to account for its water, sewer and rink enterprise funds.
Internal service funds are used to report activities that service all other Town Departments. The Town
uses internal service funds to account for self-insured health insurance claims.
Town of Canton, Massachusetts Page 24 of 130 Comprehensive Annual Financial ReportSource page 33
Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial statement because
the resources of those funds are not available to support the Town’s own programs. The accounting used
for fiduciary funds is much like that used for proprietary funds.
Notes to the Financial Statements - The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Other Information - In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information which includes the schedules of the Town’s
proportionate share of the net pension liability, contributions to the pension plan, the Commonwealth’s
share of the net pension liability of the Massachusetts Teacher’s Retirement System, the funding progress
and contribution funding of its obligation to provide other postemployment benefits to its employees as
well as the Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual –
General Fund and notes to this schedule.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. In the case of the Town, assets exceeded liabilities by over $28.8 million at the close of the
most recent fiscal year.
Condensed net position data is presented as follows:
Governmental Activities Business-Type Activities Total
June 30, June 30, June 30, June 30, June 30, June 30,
2019 2018 2019 2018 2019 2018
Assets
Currrent and other assets $ 52,931,937 $ 51,592,851 $ 13,960,712 $ 13,322,720 $ 66,892,649 $ 64,915,571
Capital assets, net 111,324,094 106,723,246 46,255,361 45,556,757 157,579,455 152,280,003
Total assets 164,256,031 158,316,097 60,216,073 58,879,477 224,472,104 217,195,574
Deferred outflows of resources 9,563,391 12,068,807 646,689 591,772 10,210,080 12,660,579
Liabilities
Long-term liabilities 150,113,570 146,883,727 25,851,607 27,974,324 175,965,177 174,858,051
Other liabilities 16,312,941 11,682,048 4,256,232 3,055,097 20,569,173 14,737,145
Total liabilities 166,426,511 158,565,775 30,107,839 31,029,421 196,534,350 189,595,196
Deferred inflows of resources 8,962,726 5,800,278 356,654 391,682 9,319,380 6,191,960
Net Position
Net investment in capital assets 85,225,980 81,317,923 23,248,847 20,603,290 108,474,827 101,921,213
Restricted 10,431,283 10,880,921 - - 10,431,283 10,880,921
Unrestricted (97,227,078) (86,179,993) 7,149,422 7,446,856 (90,077,656) (78,733,137)
Total Net Position $ (1,569,815) $ 6,018,851 $ 30,398,269 $ 28,050,146 $ 28,828,454 $ 34,068,997
By far, the largest portion (almost $108.5 million) of the Town’s net position reflects its investment in
capital assets (e.g. land, buildings, infrastructure, machinery, and equipment) less any related debt used to
acquire those assets that is still outstanding. The Town uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the Town’s
investment in its capital assets is reported net of related debt, the resources needed to repay this debt must
Town of Canton, Massachusetts Page 25 of 130 Comprehensive Annual Financial ReportSource page 34
be provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
An additional portion (over $10.4 million) of the Town’s net position represents resources that are subject
to external restrictions on how they may be used. Unrestricted net position is reported as a deficit of over
$90.0 million due to the recognition of net pension and other postemployment liabilities that continue to
be significant.
Condensed changes in net position data is presented as follows:
Governmental Activities Business-Type Activities Total
June 30, June 30, June 30, June 30, June 30, June 30,
2019 2018 2019 2018 2019 2018
Revenues
Program revenues:
Charges for services $ 7,907,770 $ 7,521,265 $ 13,430,669 $ 14,330,135 $ 21,338,439 $ 21,851,400
Operating grants and contributions 20,992,327 19,405,225 - - 20,992,327 19,405,225
Capital grants and contributions 795,169 2,293,126 450,000 5,625 1,245,169 2,298,751
General revenues:
Property taxes and tax liens 76,504,860 74,151,256 - - 76,504,860 74,151,256
Unrestricted grants and contributions 2,255,103 2,180,123 - - 2,255,103 2,180,123
Other 7,069,289 6,735,302 195,048 98,038 7,264,337 6,833,340
Total Revenues 115,524,518 112,286,297 14,075,717 14,433,798 129,600,235 126,720,095
Expenses
General government 6,597,325 5,578,489 - - 6,597,325 5,578,489
Public safety 20,028,852 19,250,042 - - 20,028,852 19,250,042
Education 72,945,712 70,396,176 - - 72,945,712 70,396,176
Public works 8,254,354 7,911,117 - - 8,254,354 7,911,117
Health and human services 1,598,126 1,635,120 - - 1,598,126 1,635,120
Culture and recreation 4,763,997 3,768,025 - - 4,763,997 3,768,025
Debt service 595,390 659,834 - - 595,390 659,834
Water - - 6,656,972 7,105,456 6,656,972 7,105,456
Sewer - - 6,415,007 6,275,549 6,415,007 6,275,549
Rink - - 15,301 13,498 15,301 13,498
Total Expenses 114,783,756 109,198,803 13,087,280 13,394,503 127,871,036 122,593,306
Change in net position before transfers 740,762 3,087,494 988,437 1,039,295 1,729,199 4,126,789
Transfers (1,500,000) (500,000) 1,500,000 500,000 - -
Change in net position (759,238) 2,587,494 2,488,437 1,539,295 1,729,199 4,126,789
Net position, beginning of year 6,018,851 32,339,217 28,050,146 27,690,953 34,068,997 60,030,170
Restatement for net OPEB liability (6,829,428) (28,907,860) (140,314) (1,180,102) (6,969,742) (30,087,962)
Net position, beginning of year,
as restated (810,577) 3,431,357 27,909,832 26,510,851 27,099,255 29,942,208
Net position, end of year $ (1,569,815) $ 6,018,851 $ 30,398,269 $ 28,050,146 $ 28,828,454 $ 34,068,997
Town of Canton, Massachusetts Page 26 of 130 Comprehensive Annual Financial ReportSource page 35
Governmental Activities – The governmental activities decreased net position by almost $0.8
million. Revenues were over $3.2 million greater than the previous year. Expenses were almost $5.6
million greater than the prior year and other financing uses were $1.0 million greater than the prior
year.
Revenues
Major fluctuations in revenues were from:
1. Property taxes, which at 66.2% of total revenues represents the largest revenue. The increase
over the prior year of almost $2.4 million is due to the levy limit being assessed at the legally
allowable limit under
proposition 2 ½ combined
with modest new growth in
developmental activity.
2. Operating grants and
contributions which represent
18.2% of total revenues
increased by almost $1.6
million over the prior year.
Gifts, School Chapter 70 Aid,
State special purpose
reporting for GASB 68 and
School special revenue grants
all experienced increased activity and contributed to this increase by similar amounts.
3. Capital grants and contributions which represents a very small (less than 1%) portion of total
revenues decreased by about $1.5 million due to the prior year including greater capital activity in
projects that were eligible for State funding.
4. Other revenues were minor in amount or consistent with the prior year.
Expenses
Major fluctuations in expenses were from:
1. General Government which represented 5.7% of total expenses increased approximately $1.0
million due to spending in green communities grant and increased allocations of pension and
OPEB costs to salaried departments.
2. Public Safety which represented 17.4% of total expenses increased approximately $0.8 million
due to a new dispatch center placed in operation, increased salaries, and increased allocations of
pension and OPEB costs.
3. Education which represented
63.6% of total expenses and
is by far the largest expense
category increased almost
$2.6 million or about 4%
over the prior year. This is
consistent with the Town’s
prior history of increasing
education effort by about 5%
year to year.
4. Culture and recreation costs
represent about 4.2% of
Town of Canton, Massachusetts Page 27 of 130 Comprehensive Annual Financial ReportSource page 36
total expenses and increased by almost $1.0 million. The Town recently completed construction
on its rink. This construction led to a collateral impact on other expenses as some expenses did
not meet the capitalization threshold and were expensed as maintenance. In addition, insurance
costs increased significantly to this function.
5. Other expenses were minor in amount or consistent with the prior year.
Other Financing Uses
1. Transfers increased by $1.0 million. This related 100% to the amounts subsidized for rink
construction from general fund operations.
Business-type Activities – Net position of the business-type activities increased almost $2.5 million over
the prior year. Prior year operations reflected increases in user charge rates that contributed to healthy
operations; this continued into the current year. In addition, in the current year, a $1.5 million subsidy
from general fund operating surplus to the rink enterprise fund for capital purposes bolstered an already
robust position.
Fund-wide Financial Analysis of the Government’s Funds
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Governmental funds – The focus of the Town’s governmental funds is to provide information on near-
term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
Town’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of
a government’s net resources available for spending at the end of the fiscal year.
As of the close of the current fiscal year, the Town’s governmental funds balance sheet reported a
combined ending fund balance of almost $33.7 million, a decrease of over $1.1 million over the prior
year.
Town of Canton, Massachusetts Page 28 of 130 Comprehensive Annual Financial ReportSource page 37
The following is a discussion of the more significant areas:
General Fund
The General Fund ended the year with an unassigned fund balance of approximately $17.5 million and a
total fund balance of about $20.3 million. Both were consistent with the prior year amounts.
General Fund revenues were approximately $2.9 million ahead of forecast and were paced by strong
performances in motor vehicle excise, building permits and departmental revenues all of which exceeded
forecasts. The continued robust economy continues to have this impact on local receipts.
General fund expenditures beat budget by almost $0.8 million. This was spread ratably across all
expenditure functions. The Town continues to manage all aspects of budgeting and procures products and
services in a competitive manner,
Offsetting these favorable conditions were appropriations for capital purposes from unassigned fund
balance of about $2.1 million and overlay surplus of $1.5 million. This caused the overall General Fund
result to be flat as compared to the prior year.
Capital Projects
The Capital projects fund ended the year in a deficit position of about $1.0 million. This was made up of
almost $1.3 million in unassigned deficit offset by over $0.2 million in restricted. Capital expenditures
over $5.2 million were offset by bond proceeds, premiums and transfers of $2.7 million. The deficit was
funded by a short-term bond anticipation note of $1.5 million. The deficit will be cured at a later date
when the short-term note is refinanced to long-term.
Combined Nonmajor Funds
The remainder of governmental fund balances are included as Combined Nonmajor Fund Balances and
are classified as either (1) non-spendable, due to being the corpus of an endowment in the amount of
approximately $0.5 million; and (2) restricted due to constraints placed externally by third-parties of
almost $14.0 million.
Revenues and expenditures in this category of funds are typically designed to offset, however, due to the
timing of receipts and disbursements, specifically in school grants, fund balances increase by about $1.0
million.
Proprietary funds – The Town’s proprietary funds are made up of (1) the Water, Sewer and Rink
Enterprise Funds which provides the same type of information found in the government-wide financial
statements under business-type activities, and discussed in that section but in more detail; and (2) the
Town’s Internal Service Fund which accounts for the Town’s Health Claims Fund.
The Health Claims Fund has a Net Position balance of about $5.0 million. This was a decrease of almost
$1.4 million as claims exceeded revenues due to a catastrophic event.
Town of Canton, Massachusetts Page 29 of 130 Comprehensive Annual Financial ReportSource page 38
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget included revisions to the following
line items:
Approximately $0.1 million in increases allocated to public safety.
Approximately $0.4 million in decreases allocated to general government.
Approximately $0.2 million in increases allocated to public works.
Approximately $0.1 million in decreases to benefits.
In addition, other financing uses, or transfers out increased by $2.5 million.
All of the amendments were between operating line items in the original budget and were for operating
purposes. The overall bottom line final budget increased $2.5 million from the original budget.
Major budget to actual differences on the revenue side included property tax and excise, which exceeded
budget by approximately $1.3 million, licenses and permits which exceeded budget by $0.4 million and
departmental revenues which exceeded budget by $0.7 million.
On the expenditure side, numerous net minor favorable variances which in total approximated $0.8
million existed.
Further detail of budget to actual comparisons may be reviewed as part of the Required Supplementary
Information following the footnotes to the report.
Capital Asset and Debt Administration
Capital Assets – The Town’s investment in capital assets for its governmental and business type
activities as of June 30, 2019 amounts to approximately $157.6 million (net of accumulated depreciation)
an increase from the previous year’s balance of approximately $5.3 million as current year additions
exceeded the annual depreciation provision.
Major capital asset additions included, roadway improvements, a land acquisition, construction on the
skating rink and infrastructure.
Additional information on the Town’s capital assets can be found in Note II subsection D.
Long-term Debt – State statutes limit the amount of general obligation debt a governmental entity may
issue to 5.0 % of its total assessed valuation. The current debt limitation for the Town is approximately
$255.6 million, which is significantly in excess of the Town’s outstanding general obligation debt
classified as inside the debt limit.
At the end of the current fiscal year, the Town had total debt outstanding including premiums of almost
$48.8 million. The entire amount comprises debt backed by the full faith and credit of the government.
Town of Canton, Massachusetts Page 30 of 130 Comprehensive Annual Financial ReportSource page 39
The Town’s total debt decreased by over $2.3 million during the fiscal year detailed as follows:
Issuances of debt
Governmental Activities $ 5,368,300
Business-Type Activities 2,906,700
Debt payments:
Governmental Activities (5,268,421)
Business-Type Activities (5,781,471)
Premium from issuance debt:
Governmental Activities 510,063
Business-Type Activities 323,184
Amortization of premium:
Governmental Activities (277,772)
Business-Type Activities (105,614)
$ (2,325,031)
The Town’s most recent credit evaluation resulted in the Town maintaining its “AAA” rating from
Standard and Poor‘s Investment Services for its general obligation debt. This is the highest investment
grade given by this agency.
The Town also holds a proportionate share of debt of other governmental units that provide services
within the Town’s boundaries. The debt service from such arrangements is assessed annually to the
Town.
Additional information on the Town’s short-term and long-term debt can be found in Note II under
subsections F and G.
Economic Factors and Next Year’s Budgets and Rates
Consistent with both State and National work force trends, the Town’s unemployment rates improved
dramatically and are now exceeding historical unemployment rate data dating back almost 40 years.
The Town’s property tax base is made up predominantly of residential real estate taxes, which
comprise about 61% of the Town’s property tax base. The Town also relies heavily on its
commercial and industrial property tax base, which in aggregate comprise about 39% of the Town’s
property tax base. The Town uses a split rate in assessing taxes, thus commercial, industrial and
personal property tax rates are just over double the residential rate. In addition, Chapter 580 of the
Acts of 1980, more commonly referred to as Proposition 2 ½, limits the Town’s ability to increase
taxes in any one year by more than two and one-half percent (2 ½%) of the previous year tax levy.
Consistent with both State and National indices, the Town’s housing market experienced a downward
trend from 2005 – 2010. Housing prices began to stabilize during fiscal year 2011 and in recent years
are in an upward trend. During 2019, houses in the Town continued selling at greater than their
assessed values, as a result, the Town expects its housing market to continue to maintain or slightly
Town of Canton, Massachusetts Page 31 of 130 Comprehensive Annual Financial ReportSource page 40
outpace National indices. In addition, The Town has residential developments in various stages of
completion. These are expected to be completed in the near future.
The Town has responded well to the recent economic challenges. Reductions in local revenue,
primarily interest income and other reductions in revenue have caused the Town to aggressively seek
other revenue producing initiatives in order to maintain appropriations in ways that preserved local
service levels. The Town has been very successful in that regard.
All of the above items were considered when the Town developed its budget for fiscal year 2020. The
budget was adopted in May 2019 and the Town’s tax rate was certified in December 2019.
Requests for Information
This financial report is designed to provide a general overview of the Town’s finances for all those with
an interest in the government’s finances. Questions concerning any of the information provided in this
report or request for additional financial information should be addressed to the Office of the Finance
Director, 801 Washington Street, Canton, Massachusetts 02021.
Town of Canton, Massachusetts Page 32 of 130 Comprehensive Annual Financial Report