HomeMy WebLinkAboutNAndover FY07 Financials TOWN OF NORTH ANDOVER, MASSACHUSETTS
INDEPENDENT AUDITORS' REPORT ON
BASIC FINANCIAL STATEMENTS AND
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
TOWN OF NORTH ANDOVER, MASSACHUSETTS
INDEPENDENT AUDITORS' REPORT ON
BASIC FINANCIAL STATEMENTS AND
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
TABLE OF CONTENTS
Page
IndependentAuditors' Report................................................................................................................................................1
Management's Discussion and Analysis...............................................................................................................................4
BasicFinancial Statements.....................................................................................................................................................14
Statementof net assets.......................................................................................................................................................15
Statementof activities........................................................................................................................................................16
Governmentalfunds-balance sheet...............................................................................................................................18
Governmental funds-statement of revenues,expenditures and changes in fund balances..................................20
Reconciliation of governmental funds balance sheet total fund balances to the statement of net assets...............22
Reconciliation of the statement of revenues,expenditures and changes in fund balances of governmental funds
tothe statement of activities..............................................................................................................................................23
Proprietary funds-statement of fund net assets...........................................................................................................24
Proprietary funds-statement of revenues,expenses and changes in fund net assets .............................................25
Proprietary funds-statement of cash flows...................................................................................................................26
Fiduciary funds-statement of fiduciary net assets.......................................................................................................27
Fiduciary funds-statement of changes in fiduciary net assets...................................................................................28
Notes to basic financial statements..................................................................................................................................29
RequiredSupplementary Information................................................................................................................................57
General Fund-schedule of revenues,expenditures and changes in fund balance-budget and actual..............58
Notes to required supplementary information..............................................................................................................60
AdditionalInformation..........................................................................................................................................................61
Enterprise funds-schedule of revenues,expenses and changes in fund net assets-budgetary basis-budget
andactual.............................................................................................................................................................................62
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Independent Auditors' Report
SULLIVAN, ROGERS & COMPANY, LLC
�f Corporate Place I,Suite 204 • 99 South Bedford Street
r.
Burlington,Massachusetts 01803
P•781-229-5600 F•781-229-5610 www.sullivan-rogers.com
Certified Public Accountants
Independent Auditors'Report
To the Honorable Board of Selectmen
Town of North Andover,Massachusetts
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 North Andover,
Massachusetts,as of and for the fiscal year ended June 30,2007,which collectively comprise the Town's basic
financial statements as listed in the table of contents. These financial statements are the responsibility of the
Town of North Andover,Massachusetts'management. 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 examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our 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 of North Andover,Massachusetts as of June 30,2007,and the respective
changes in financial position and cash flows,where applicable,thereof for the fiscal year then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards,we have also issued our report dated January 4,2008,on
our consideration of the Town of North Andover,Massachusetts' internal control over financial reporting and on
our tests of its compliance with certain provisions of laws,regulations,contracts, and grant agreements and other
matters. The purpose of that report is 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 conjunction with this report in considering the
results of our audit.
The management's discussion and analysis and budgetary comparison for the general fund(located on pages 4
through 13 and 57 through 60,respectively) are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United States of America.
We have applied certain limited procedures,which consisted principally of inquiries of management regarding
the methods of measurement and presentation of the required supplementary information. However,we did not
audit the information and express no opinion on it.
2
Our audit was conducted for the purpose o/forming opinions on the financial statements that collectively
comprise the Town of North Andover,Massachusetts'basic financial statements. The additional information '
located nu pages 61 through 63 is presented for purposes of additional analysis and is not a required part of the
basic financial statements. Such information has been subjected tn the auditing procedures applied in the audit of �
the basic financial statements and,in our opinion,is fairly stated in all material respects in relation to the basic
financial statements taken ama whole,
�J�'
U � �
January 4,2O08 `~
3
Management's Discussion and Analysis
Management's Discussion and Analysis For the Fiscal Year Ended June 30,2007
As management of the Town of North Andover,Massachusetts(Town),we offer readers of these financial
statements this narrative overview and analysis of the Towri s financial activities for the fiscal year ended June 30,
2007.
Financial Highlights
➢ The assets of the Town exceeded its liabilities at the close of the most recent fiscal year by$142,269,021
(net assets). Of this amount,$11,880,291 (unrestricted net assets)may be used to meet the government's
ongoing obligations to citizens and creditors.
➢ The Town's total net assets increased by$7,685,984.
➢ As of the close of the fiscal year,the Town's governmental funds reported a combined ending fund
totaling$14,564,978;an increase of$9,738,148 in comparison with the prior year. Approximately
$12,310,000 represents unreserved fund balance.
➢ At the end of the fiscal year,undesignated fund balance for the general fund totaled$1,308,742,or 1.8
percent of total general fund expenditures. In the prior year,undesignated fund balance for the general
fund totaled$4,074,811.
➢ The Town's total gross bonded debt decreased by$6,011,257 during the fiscal year;$4,064,899 of new debt
was issued.
Overview of the Basic Financial Statements
This discussion and analysis is intended to serve as an introduction to the basic financial statements,which consists
of the following three components:
1. Government-wide financial statements
2. Fund financial statements
3. Notes to the basic financial statements.
This report also contains other supplementary information in addition to the basic financial statements
themselves.
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 net assets presents information on all of the Town's non-fiduciary assets and liabilities,with the
difference between the two reported as net assets. Over time,increases or decreases in net assets 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 assets changed during the
most recent fiscal year. All changes in net assets 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,earned
but unused vacation leave, etc.).
Town of North Andover,Massachusetts 5 Basic Financial Statements
Management's Discussion and Analysis For the Fiscal Year Ended June 30,2007
Both of the government-wide financial statements distinguish functions of the Town that are principally
supported by taxes and intergovernmental revenues (governmental activities)from other functions that are
intended to recover all or a significant portion of their costs through user fees and charges(business-type activities).
Governmental activities include general government,public safety,education,public works,health and human
services, culture and recreation and debt service(interest). Business-type activities include the Town's water,
sewer and Osgood Hill Estate operations.
The government-wide financial statements can be found on pages 15-17 of this report.
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 can be divided into
the following categories and are described below:
1. Governmental funds
2. Proprietary funds
3. Fiduciary funds
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 funds financial statements focus on near-term inflows and outflows of expendable resources,as
well as on balances of expendable 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 effect of the government's near-term financing decisions. Both the governmental funds
balance sheet and the governmental funds statement of revenues,expenditures,and changes in fund balances
provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The Town maintains 33 individual governmental funds. Information is presented separately in the governmental
funds balance sheet and in the governmental funds statement of revenues,expenditures, and changes in fund
balances for the general,stabilization(special revenue), community preservation(special revenue), and school
construction project(capital project)funds,each of which are considered to be major funds. Data from the other
29 governmental funds are combined into a single,aggregated presentation titled nonmajor governmental funds.
The basic governmental fund financial statements can be found on pages 18-23 of this report.
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 enterprise funds to account for its water,sewer and Osgood Hill Estate
operations,all of which are considered to be major funds.
Town of North Andover,Massachusetts 6 Basic Financial Statements
Management's Discussion and Analysis For the Fiscal Year Ended June 30,2007
Internal service funds are an accounting device used to accumulate and allocate costs internally among the Town's
various functions. The Town uses an internal service fund to account for its employees' health insurance risk-
financing activities. Because these services predominantly benefit governmental rather than business-type
functions,they have been included within governmental activities in the government-wide financial statements
but are combined into a single, aggregated presentation in the proprietary fund financial statements.
The basic proprietary fund financial statements can be found on pages 24-26 of this report.
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 statements because the resources of those
funds are not available to support the Town's programs. The accounting used for fiduciary funds is similar to
that used for proprietary funds.
Private-purpose trust funds and agency funds are reported and combined into a single, aggregate presentation in
the fiduciary fund financial statements under the captions "private purpose trust funds" and"agency funds",
respectively.
The basic fiduciary fund financial statements can be found on pages 27-28 of this report.
Notes to the basic financial statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund financial statements. The notes to the financial statements can be found on pages 29-
55 of this report.
Other information
In addition to the basic financial statements and accompanying notes,this report also presents certain required
supplementary information and additional information(located on pages 57 through 60 and 61 through 63,
respectively). Presented in this information is the budget comparison for the general fund and budgetary
comparisons of the enterprise funds on the budgetary basis of accounting.
Government-Wide Financial Analysis
The following tables present current and prior year data on the government-wide financial statements.
Net Assets
As noted earlier,net assets may serve over time as a useful indicator of a government's financial position. The
Town's assets exceeded liabilities by$142,269,021 at the close of the fiscal year and are summarized as follows:
Town of North Andover,Massachusetts 7 Basic Financial Statements
Management's Discussion and Analysis For the Fiscal Year Ended June 30,2007
GovernmentaIActivities Business-Type Activities Total
2007 2006 2007 2006 2007 2006
Assets
Current assets......................... $ 28,566,912 $ 25,477,871 $ 6,834,943 $ 8,155,263 $ 35,401,855 $ 33,633,134
Noncurrent assets(excluding
capital assets),............ 11,059,498 20,787,725 1,261,334 1,331,170 12,320,832 22,118,895
Capital assets(net)................... 132,023,691 133,684,238 55,180,977 50,997,938 187,204,668 184,682,176
Total assets................°...... 171,650,101 179,949,834 63,277,254 60,484,371 234,927,355 240,434,205
Liabilities
Current liabilities
(excluding debt). ....... 6,186,915 6,312,992 1,114,141 751,599 7,301,056 7,064,591
Noncurrent liabilities
(excluding debt)................ 1,267,960 1,240,098 168,000 224,000 1,435,960 1,464,098
Current debt........................... 9,121,037 17,480,404 3,647,580 3,291,883 12,768,617 20,772,287
Noncurrent debt..................... 44,061,782 49,974,986 27,090,919 26,575,206 71,152,701 76,550,192
Total liabilities.................. 60,637,694 75,008,480 32,020,640 30,842,688 92,658,334 105,851,168
Net Assets
Invested in capital assets
(net of related debt)............ 96,211,743 88,197,300 28,849,317 22,554,318 125,061,060 110,751,618
Restricted.............................. 5,327,670 3,923,673 - 5,327,670 3,923,673
Unrestricted...... .................... 9,472,994 12,820,381 2,407,297 7,087,365 11,880,291 19,907,746"
Total net assets......... ......... $ 111,012,407 $ 104,941,354 $ 31.,256,614 $ 29,641,683 $ 142,269,021 $ 134,583,037
A portion of the Town's net assets(87.9%)is its investment in capital assets (i.e., land,construction in progress,
land improvements,buildings and improvements,machinery and equipment,library books,vehicles, treatment
plants, pump stations,reservoirs and infrastructure);less any related outstanding debt used to acquire those
assets. These capital assets are used to provide services to citizens;consequently,these assets are not available for
future spending. Although the investment in its capital assets is reported net of related debt,it should be noted
that the resources needed to repay this debt must be provided from other sources,since the capital assets
themselves cannot be used to liquidate these liabilities. The governmental activities investment in capital assets
includes$12,296,650 of state school construction assistance which will be received in subsequent fiscal years as
described in Note 4 on page 42 of this report.
An additional portion of the Town's net assets (3.7%)represents resources that are subject to external restrictions
on how they may be used. The remaining balance of unrestricted net assets (8.4% or$11,880,291)may be used to
meet the Town's ongoing obligations to citizens and creditors. Of this amount,$9,472,994 may be used to support
governmental activities and$2,407,297 may by used to support business-type activities.
At the end of the current fiscal year,the Town reports positive balances in all three categories of net assets,both
for the government as a whole, as well as for its separate governmental and business-type activities.
Changes in Net Assets
For the fiscal year ended June 30,2007,the Town's total net assets increased by$7,685,984 compared to an
increase of$5,513,289 in the prior fiscal year. These amounts are summarized as follows:
Town of North Andover,Massachusetts 8 Basic Financial Statements
Management's Discussion and Analysis For the Fiscal Year Ended June 30, 2007
Go vernmen ta I Activities Business-Type Activities 1°kiW
2007 2006 2007 2(X)b 2d.Bt'1'7 2006
Revenues
Program Revenues.'
Charges for services,.....,,........ .................. $ 6,446,239 a 7,583,604 $ 9,071,735 $ 9,311,476 S, 15,517,974 $ 1.6,895,080
Operating grants and contributions. .............. 14,159,597 12,817,007 227,214 414,429 1.4,386,811 13,231,436
Capital grants and contributions................... 3,273,196 86,308 - 3,273,196 86,308
General Revenues:
Real estate and personal property taxes........... 49,146,112 47,687,445 49,146,112 47,687,495
Motor vehicle and other excise taxes....,,, -. ... 3,432,710 4,076,385 3,432,720 4,076,385
Tax liens................................................... 290,057 365,140 290,057 365,140
Penalties and interest on taxes............. ....... 305,539 410,394 305,539 410,394
Payments in lieu of taxes........ .............. 1,623,750 1,441,209 1,623,750 1,441,209
Community preservation surcharges.... ........ 1,249,235 1,1.96,950 1,249,235 1,196,950
Grants and contributions not restricted
to specific programs................................... 3,589,640 3,297,899 3,589,640 3,297,899
Unrestricted investment income.,....... .......... 1,136,035 880,381 1,136,035 880,381
Gain on disposal of capital assets,,.,..... 1,770 1,770
Total revenues.. ........._...... 84,653,880 79,842,772 9,298,949 9,725,905 93,952,829 89,568,677
EXperises
General government......................................... 3,299,710 2,779,374 3,299,710 2,779,374
Public safety..................... ............................ 12,241,105 12,01 1,224 12,241,105 12,011,224
F.ducabon...................................................... 52,015,222 50,523,956 52,015,222 50,523,956
Public works,... ..._.... ........... 4,466,922 5,496 347 4,466,92.2.
Heal th and human services,............. ................ 1,697,653 1,61.7,246 1,697,653 1,617,246
Culture and recreation.- 1,931,878 2,494,159 1,931,878 2,494,159
Debt service-interest....... . ...
..... .............. 2,720,892 3,6.36,270 2,720,892 3,636,270
..........
Water.... ....__............... ....... ....... 2,929,823 2,946,719 2,929,823 2,946,71.9
Sewer.,-._. .... ... .............. .. ............... - 3,418,575 3,076,592 3,418,575 3,076,592
Osgood I fill.............. ......:... ........_............... 515,640 502,926 515,6140 502,926
'Total expenses,, 79,402,807 77,529,151 6,864,038 6,526,237 86,266,845 84,055388
Change in net assets before transfers,. ................. ... 5,251,073 2,313,6121 2,434,911 3,199,668 7,685,984 5,513,289
Transfers,net....................... . 819,980 522,018 (819,980) (522,018)
Change in net assets........ ........... .. ,. 6,071,053 2,835,639 1,614,931 2,677,650 7,685,984 5,513,289
Net easels-beginningofyear....... ........................... 104,941,354 102,105,715 29,641,683 26,964,033 1.34,583,037 1.29,069,748
Neta.s.sets._endofyear.......................................... $ 1.1.1,012,407 $ 104,941,354 $ 31,256,61.4 $ 29,641,683 $ 142,269,021 $ 134,583,037
Governmental activities increased the Town's net assets by$6,071,053,accounting for 79.0% of the total growth in
net assets. In the prior year,governmental activities increased the Town's net assets by$2,835,639. The key
element of this change is the accrual of$2,985,922 in intergovernmental revenue from the Massachusetts School
Building Authority(MSBA)for school construction assistance.
Business-type activities increased the Town's net assets by$1,614,931, accounting for 21.0% of the total growth in
net assets. In the prior year,business-type activities increased the Town's net assets by$2,677,650. The key
elements of this change are:
➢ Decrease in sewer revenues due to a non-recurring prior year receipt of approximately$70,000 for a
settlement payment
➢ Increase in the Greater Lawrence Sanitary District(GLSD) assessment of approximately$262,000
➢ Decrease in MWPAT subsidies of approximately$187,000
➢ Decrease in transfers from other funds to the Osgood Hill enterprise fund of approximately$226,000
Town of North Andover,Massachusetts 9 Basic Financial Statements
Management's Discussion and Analysis For the Fiscal Year Ended June 30,2007
Fund Financial Statement Analysis
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental funds
The focus of the governmental funds is to provide information on near-term inflows, outflows,and balances of
expendable resources. Such information is useful in assessing the Town's financing requirements. In particular,
unreserved fund balance may serve as a useful measure of a government's net resources available for spending at
the end of the fiscal year.
At the end of the current fiscal year,the governmental funds reported combined ending fund balances totaling
$14,564,978,an increase of$9,738,148 in comparison with the prior year. Approximately$10,820,000 represents
undesignated fund balance. The remainder of fund balance is designated or reserved to indicate that it is not
available for new spending because it has already been committed to:
➢ Liquidate contracts and purchase orders of the prior period($582,147)
➢ Debt service ($1,088,368)
➢ Perpetual permanent funds ($28,050)
➢ Other specific purposes($556,062)
➢ Funding a portion of the fiscal year 2008 budget($1,490,844)
The general fund is the chief operating fund of the Town. At the end of the current fiscal year,undesignated fund
balance of the general fund totaled$1,308,742,while total fund balance was$4,470,101. As a measure of the
general fund's liquidity,it may be useful to compare both undesignated fund balance and total fund balance to
total general fund expenditures. Undesignated fund balance represents 1.8% of total general fund expenditures,
while total fund balance represents 6.0% of that same amount.
The balance of the Town's general fund decreased by$1,135,922 during fiscal year 2007. Although the Town
recognized a positive budget to actual variance(excluding encumbrances and continuing appropriations) totaling
approximately$936,000,unreserved fund balance totaling approximately$2,207,000 was used during the year.
Financial highlights of the Town's other major governmental funds are as follows:
The fund balance of the stabilization fund (special revenue)increased by$51,758 during the current fiscal year.
This is attributable to investment income.
The fund balance of the community preservation fund (special revenue)increased by$755,367 during the current
fiscal year. The fund recognized$1,176,436 in surcharges,$1,125,960 in intergovernmental revenues,$97,983 in
investment income and$3,726 of a premium from issuance of bonds and notes. Expenditures of$1,596,978 were
incurred during the fiscal year. Transfers out of$51,760 to the Osgood Hill enterprise fund were made during the
fiscal year.
The fund balance of the school construction capital projects fund increased by$9,811,398 during the current fiscal
year. This is primarily attributable to the receipt of funds from the MSBA.
Proprietary funds
The Town's proprietary funds provide the same type of information found in the government-wide financial
statements,but in more detail.
Town of North Andover,Massachusetts 10 Basic Financial Statements
Management's Discussion and Analysis For the Fiscal Year Ended June 30,2007
Unrestricted net assets of the water,sewer and Osgood Hill enterprise funds at the end of the year amounted to
$628,491,$1,675,207 and$103,599,respectively. The water,sewer and Osgood Hill enterprise funds had
increases/decreases in net assets for the year totaling$1,710,385,($19,628)and ($75,826),respectively. Other
factors concerning the finances of these three funds have already been addressed in the discussion of the Town's
business-type activities.
General Fund Budgetary Highlights
The original general fund budget of$71,621,440 was decreased by$607,948 (0.8%) during the fiscal year. The
following table summarizes the decrease:
Purpose of Increase/Decrease Amount Funding Source
Various departmental increases.................................$ 507,420 Undesignated fund balance
Employee benefits.................................................. 39,578 Undesignated fund balance
Liability insurance.................................................. (6,110) Undesignated fund balance
Debt service interest................................................ (41,554) Undesignated fund balance
Various departmental decreases................................ (151,593) Undesignated fund balance
Various departmental decreases................................ (1,459,355) Tax levy
Fund deficit in the school lunch program fund............. 312,214 Undesignated fund balance
Fund deficit in the highway improvements fund.......... 191,452 Undesignated fund balance
Total decrease........................................................ $ (607,948)
During the year,general fund revenues exceeded budgetary estimates and other financing sources and
expenditures and encumbrances and continuing appropriations were less than budgetary estimates,resulting in
an actual decrease in fund balance that was less than the final amended budget amount by$353,381.
Encumbrances at June 30, 2007,total approximately$582,000.
Capital Asset and Debt Administration
Capital assets
The Town's investment in capital assets for its governmental and business type activities at the end of the fiscal
year totaled$187,204,668(net of accumulated depreciation). This investment in capital assets includes land,land
improvements,buildings and improvements,machinery and equipment,library books,vehicles,treatment
plants,pump stations,reservoirs,infrastructure and construction in progress. The total increase in the
investment in capital assets for the current fiscal year totaled$2,522,492, or 1.4% (a 0.9% decrease for
governmental activities and a 2.3% increase for business-type activities).
Major capital asset events that occurred during the current fiscal year include the following:
➢ Construction in progress- water storage tanks ($3,721,000)
➢ Land-Cullen property($1,404,000)
➢ Continued upgrades of the water and sewer infrastructure($1,303,000)
➢ Continued reconstruction of roadways and sidewalks ($610,000)
➢ Construction in progress-various school projects($450,000)
➢ School buildings ($332,000)
➢ Public works equipment($184,000)
➢ Public safety vehicles ($136,000)
Town of North Andover,Massachusetts 11 Basic Financial Statements
Management's Discussion and Analysis For the Fiscal Year Ended June 30,2007
The following table summarizes the Town's capital assets(net of accumulated depreciation):
Governmental Activities Business-Type Activities Total
2007 2006 2007 2006 2007 2006
Land.................................... $ 17,657,609 $ 16,253,510 $ 6,097,262 $ 6,097,262 $ 23,754,871 $ 22,350,772
Land improvements........ 1,080,237 1,216,112 153,724 162,771 1,233,961 1,378,883
Buildings and improvements... 84,373,144 87,015,491 1,456,720 1,446,973 85,829,864 88,462,464
Machinery and equipment....,.., 2,589,738 2,661,986 956,594 991,055 3,546,332 3,653,041
Library books.............. ....... 314,769 408,949 314,769 408,949
Vehicles., ...._,_.. 819,409 940,320 117,438 164,154 936,847 1,104,474
Pump stations.... ...... 1,332,910 1,448,566 1,332,910 1,448,566
Treatment plants............ ......... 8,521,202 8,973,460 8,521,202 8,973,460
Reservoirs. 549,399 601,720 549,399 601,720
Infrastructure,................ ... ... 18,731,837 19,184,907 30,145,130 29,505,464 48,876,967 48,690,371
Construction in progress........... 6,456,948 6,002,963 5,850,598 1,606,513 12,307,546 7,609,476
Total capital assets..............._ $ 132,023,691 $ 133,684,238 $ 55,180,977 $ 50,997,938 $ 187,204,668 $ 184,682,176
Additional information on the Town's capital assets can be found in Note 5 on pages 43-45 of this report.
L -Term Debt
At the end of the current fiscal year,total gross bonded debt outstanding was$81,396,212,which is backed by the
full faith and credit of the Town, and is summarized as follows:
Governmental Activities Business-Type Activities "lota1
20,07 2006 2007 2006 2007 2006
General obligation bonds...... $ 50,577,395 $ 57,036,769 $ 22,452,602 $ 24,238,231 $ 73,029,997 $ 81,275,000
MWPAT notes..................... 8,366,215 6,132,469 8,366,215 6,132,469
Total bonds and notes............ $ 50,577,395 $ 57,036,769 $ 30,818,817 $ 30,370,700 $ 81,396,212 $ 87,407,469
The Town's total gross bonded debt decreased by$6,011,257(6.9%) during the current fiscal year,with$4,064,899
of new debt issuances.
The Town's bond ratings from Standard &Poor's and Moody's Investors Services for the September 2006 bond
issue was AAA and Aaa,respectively.
Additional information on the Town's long-term debt can be found in Note 8 on pages 47-53 of this report.
Town of North Andover,Massachusetts 12 Basic Financial Statements
Management's Discussion and Analysis For the Fiscal Year Ended June 30,2007
Economic Factors and Next Year's Budgets and Rates
The Fiscal Year 2008 general fund operating budget will result in the partial restoration of municipal services after
several years of service reductions. These restorations would not have been possible with out the voter approval
of a proposition 21/z operating override that added$1.65 million dollars to the property tax levy. Services to be
restored include:
0 Hiring of 17 teachers to reduce class sizes to previous levels and address special education needs
o School Curriculum updates.
0 Hiring of a school librarian to reopen a closed library.
a Funding of an in-house special education program to reduce costs associated without sourcing these
services.
Restoration of a police officer,staff engineer,assistant town librarian and Elder Services outreach
coordinator positions eliminated in previous budgets.
Other positive financial developments impacting the FY08 budget are:
Continued high levels of'new growth' in the property tax levy. In FY08, the town will receive approximately
$950,000 from taxes on new residential and commercial construction, adding an additional 1.7% to the levy.
State Aid is increasing 5.5% or$529,597 over FY07 levels,primarily in Chapter 70 Education Aid. While this
increase is appreciated,state aid in real dollars has still not returned to pre FY2002 levels when state aid was
reduced aid by 20%.In addition,mandated special education costs continue to absorb higher levels of the total
education budget each year.
Offsetting these positive financial developments are the ever increasing costs of employee benefits,particularly
health insurance. In FY08, the Town's contribution towards the Health Insurance Trust fund will increase 14%
from$7.2 million to$8.2 million. This rate of growth is far greater then the growth in the town's overall revenues
exclusive of the proposition 21/2 overrides. If this trend continues unabated it will result in a return to the years of
service reductions and layoffs.
While the Town will be able to reduce the use of other financing sources(Reserves and One Time only revenue)
by 14% from FY07,the Town will allocate its entire certified free cash amount of$1.1 million dollars to balance
the budget. However,none of the Stabilization Fund which currently has a balance of$1,193,194 was allocated in
the FY08 budget.
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 its finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to the Budget Director/Town Accountant,Town Hall,120
Main Street,North Andover,Massachusetts 01845.
Town of North Andover,Massachusetts 13 Basic Financial Statements
Basic Financial Statements
14
STATEMENT OF NET ASSETS
JUNE 30,2.007
primary Government
Governmental Business-type
ASSETS Activities Activities Total
Current as£f'ks:
Cash and cash rquivallenci.... ......... $ 13,773,291 $ 1,15%213 5 14,932,504
Resl:ric Led cash and cash equivatent?s..... .......... 8,595„583 3,075,669 11,671,252
InvesurrEiits_.... . ... ...... ... ., ........... 225,703 - 225,703
ReceWables,net of aglowanic:e for uncollecUlble.mnouunls:
Rest e,statct and personal pu'c perly I:axes................................ ...... 1.,165,210 1,165,210
Tax:rand ulihi:y liens.................................. 1,217,457 4,929 1,222,386
Motor vehicle and offier excise taxes. .......... 268,174 268,174
Conin.m..Rim itY pre-seo°val:on,surcharges .......... 17,125 17,125
User cfwrges...........................:............................................. 2578,645 2,578,645
lyepau'Imem,tal and other............................. 319,140 319,140
lralcrgrtsvernrrr.curl:aep...............:................................................... 2,694,569 69,836 2,764,405
1nl:emall:ralancer ............ ...... 53349 (053,3409) ..
`k'ax forecNaasraaes................................,..........................,................ 2.3'7,317. 237,311
T ol:alcurreritas,seW............:........................... 1$,566,912 6,834,943 35,401,855
Nonc':urrenl:a.,sels:,
Receivables,net of allowance for iancollecllible am ourd:s:
Weu govern rn en ltax➢............._.,.. 71,0759„498 1,261,334 12,320,832
.... 24,114,557 1.1,947,8609 36,062,417
6 ap21ka1 asss ls,uowt of aca::r.anniatale l oleparccaation.... . . 1817,909,1.34 43,233,117 ]ul 142,2.51
143,083;189 756 442,3 11 199,52.x,500
Total assets,... 171,050,101 63,277,254 234,927,355
LIABIL'LICN'pES
Cu rreri.I:I labll it I:ies:
Wazranl.s pity zi We.. .... 71,008,818 74%546 1,758,:364
Acci'ui edpa.yroll.......................................... 2,375,197 10,116 2,385:313
Tax refunds p,ryi ble....e....................... .. .......... . ....:.....,. '730,488 7::30,488
G0t1aerhaLunputies.. . . ...... ......:... 121,706 12 1,706
EzabJitucs #r.redelro al:orfs,,.... 1416,160 1416,160
Accrued inlererst.. 834,155 298,479 1132„634
xArcu'x.ued heallh cllabrrs payable .......... ........._. 869,507 - 869,5617
Cor.urtjmlgrAaenOs....... - 54;,000 56,0069
Cornpen,mted a3bsearces.....:............................ 7140,884 1461,884
Short to'eusr.notespayable,.:. .. ....... ..... . 3,095,676 341,8'70 9,433,546
Long-term Ibonds,.rndnol:esprryable........... ... .. ....... 3305,710 9335,071
poP,vlcruirreinll.nlydlslie.^ .... 15307,952 4,761,721 20,069,673
Noncurrent H,,vb011aesr:
l".:oasx @iczdgmenls. .:....... ............ .. :168,000 '163,000
Compen ,steelabsenaass............. .. .... 1,2.67,960 - '1,267,960
l..ang-teuxrr bonds and rootes payable............. ,..... 44,86'1,7€„2 27,090,919 71,1.52,701
Tol:al noncurrent lliabllibes............ 45,32 9,742 27,258,91119 72,588,661
T'oLd luaibalihes.. 60,637,694 'x31,02.0,640 92,658,334
N hx A,Slslc,S
invested lra('OpRall A sellx,n2.k of uelated delnl.......... 96,211,743 28,849,317 125,061,060
Res I:A'lIctQ:'d pox:
De1u sa rvup_e.... 1,4133,363 1,038,363
3,121,546 - 3,121,546
1'e"naanenl:fuardsr,
ExpendalbNe.:.......:............................................... 533,644 533,644
NonexpendiMe.............:.::......................................:........ 28,050 .. 28,050
Offier specific paurlposes................................ 556,062 556,062
Y1tuesrirarled.......... . . .... 9,472,994 2,407,297 11,880,29 1.
olidnelas,els..... ... ...... $ 1."18,012,407 $ 31,256,614 $ 142,269,02 1
See notes to basic fiih 1ncW st.'alerxle�nls.
Town of North Andover,Massachusetts 1.5 Basic Financial Statements
STATEMENT OF ACTIVITIES
FOR Tf IE FISCAL YEAR ENDED JUNE 30,2007
Program Revenues
Operating Capital Net
Charges for Grants and Grants and (Expense)/
Functions/Programs Expenses Services Contributions Contributions Revenue
Primary governments
Governmental activities:
General government....................... $ 3,299,710 $ 459,419 $ 207,283 $ $ (2,633,008)
Public safety.......... . ..... ........ ..... 12,241,105 2,609,422 368,372 - (9,263,311)
Education.... 52,015,222 2,137,410 12,305,566 2,985,922 (34,586,324)
Public works....... 5,496,347 133,171 238,820 287,274 (4,837,082)
flea Ith and human services.............. 1,697,653 376,355 36,253 - (1,285,045)
Culture and recreation.. .. .,............ 1,931,878 730,462 255,588 (945,828)
Debt service-interest...................... 2,720,892 - 747,715 (1,973,177)
Total governmental activities.... .. 79,402,807 6,446,239 14,159,597 3,273,196 (55,523,775)
Business-type activities:
Water...-.................. ................... 2,929,823 5,174,840 - - 2,245,017
Sewer...................... ................. .. 3,418,575 3,425,722 227,214 234,361
Osgpod Hill.......... 515,640 471,173 (44,467)
lotall:rr.asirrr^.s-type ac°tavrlie,s,,..,.. 6,864,038 9,071,735 227,214 2,434,911
$ 86,266,845 $ 15,517,974 $ 14,386,811 3,273,196 $ (53,088,864)
18rta 17 r'1 Y]"tary gGYWG r%1.LTlG"Ytt..
Q .
See notes to basic financial statements,
Town of North Andover,Massachusetts 16 Basic Financial Statements
STATEMENT OF ACTIVITIES (Continued)
FOR THE FISCAL YEAR ENDED JUNE 30,2007
Primary Government
Governmental Business-type
Activities Activities Total
Changes in net assets:
Net(expense)/revenue(from previous page)......... ..... $ (55,523,775) $ 2,434,911 $ (53,088,864)
General revenues:
Real estate and personal property taxes.................. 49,146,112 - 49,146,112
Motor vehicle and other excise taxes...................... 3,432,710 - 3,432,710
Tax liens.......................................................... 290,057 290,057
Penalties and interest on taxes.............................. 305,539 - 305,539
Payments in lieu of taxes..................................... 1,623,750 - 1,623,750
Community preservation surcharges..................... 1,249,235 - 1,249,235
Grants and contributions not restricted to
specific programs............................................. 3,589,640 - 3,589,640
Unrestricted investment income........................... 1,136,035 - 1,136,035
Gain on disposal of capital assets.......................... 1,770 - 1,770
Transfers, net......................................................... 819,980 (819,980) -
Total general revenues and transfers.......................... 61,594,828 (819,980) 60,774,848
Change in net assets........................................... 6,071,053 1,614,931 7,685,984
Net assets-beginning of year................................... 104,941,354 29,641,683 134,583,037
Net assets-end of year............................................ $ 111,012,407 $ 31,256,614 $ 142,269,021
Town of North Andover,Massachusetts 17 Basic Financial Statements
GOVERNMENTAL FUNDS
BALANCE SHEET'
JUNE 30,2007
Community
ASSETS General Stabilization Y,eoemauvo
Cash and cash equivalents......... ....... ........ $ 7,976,017 $ 1'193,194 $ -
Investments................ --............ .......... -----......... ......... -
Receivables,net vf allowance for uo,oDeubleamounts:
Real estate and personal property taxes............ ...... 1,165,210 -
Taxueoo---------------------------. 1,217,e57 -
Motor vehicle and other excise taxes...-------------- 268,174
Community preservation oorduzgeu—.... ................------- - - 17,12
Departmental and other, .... ---------- .................. .... 245,956 - -
uotergu,eonnental— ..... ............ —........ ........................ ...... 12,296650 - 1,189,634
Due from other funds...................... .......... ........... ........ —....... — 53,349 ^ -
Tax foreclosures....... ............................................................ --. 237,311 - -
Restricted assets:
Cash and cash equivalents..................... ...... ...........-----' �_ 3,521£62�
TOTAL ASSETS..................-- ............. — ..............----........ $ 23,460,124 $ 1,193,194 $ 4,728,121
LIABILITIES AND FUND BALANCES
oxouo7uS:
Warrants puyuhle—...---....... ------- ........-- ......... $ 678148 $ - $ 1,824
Accrued payroll......... ........--................ ....... ....... --...-- 2,18*,77 ^ -
Tax refunds payable....... — ....... --- ......... ....... .......-- 730\48 - -
Other liabilities.... —...— ........... .............. ...... ----- ...... 120,50 - 1,20
Liabilities due depositors........ — .................................. — ....... 106,160 - -
Deferred revenue, ------- ...... ......... --------.... 15,118,950 - 1,206,759
Accrued short-term interest......... ..............------- .......... 48,998 - -
Short-term notes payable........ ........ — .......—............ ....... _ - �. 1,603,546_
TOTAL LIABILITIES.................... ....................................... — ... 18,9*0023 ___2,813,334�
FUND BALANCES:
Reserved for:
Encumbrances and continuing appropriations,..... .......... 582,147
Debt service...— .... ---,— ........ ..._ ........... --- ....... 1,088,368
Perpetual 9eononeo funds........... — ........—.......... ......... —'
Other specific po,posea---- ........... ----....... ..........
Designated for subsequent year's expenduunm— 1,490844 - -
Dudesignvted,reported in:
General und-----....... 1,308742 ' -
Special revenue funds............ ............ ..-^ ... . ..... — - 1J93,194 1,914,787
Capital projects funds...
Permanent funds............... ...... - - -
1,193,194 z�u���
TOTAL.,FUND BxLaNCES���.� ����������......�� �� ����������� ����� ������� ������� ---_ � z�����
TOTAL LIABILITIES AND FUND n&c&0CES...................... ....... $ 23460124 $ 1,193,194 $
See notes m basic financial statements.
Town v/North Andover,Massachusetts 18 Basic/mvn6a/Statements
School Non major Total
Construction Governmental Governmental
Project Funds Funds
$ 3,351,264 $ 12,520,475
225,703 225,703
1,165,210
1,217,457
268,174
- 17,125
73,184 319,140
267,783 13,754,067
- 53,349
- 237,311
2,602,129 2,472,092 8,595,583
2,602,129 $ 6,390,026 $ 38,373,594
199,747 $ 128,963 $ 1,008,682
188'„=119 2,375,197
730,488
121,706
106,160
16,325,709
48,998
216,729 1„271,401 3,019-1,676
416,476 1,588,783 23,808,616
- - 582,147
1,088,368
28,050 28,050
556,062 556,062
- 1,490,844
1,308,742
- 1'49%3w 11 5,607,342
2,185,653 1,'1.8'4„"126 3,369,779
- 5 3 3,c'AI 533,644
Z 185,65,3 4,801,243 14,564,978
2,602,129 $ 6,390,026 $ 3. 8,373,594
Town of North Andover,Massachusetts 19 Basic Financial Statements
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE FISCAL YEAR ENDED JUNE 30,2007
Community
General Stabilization Preservation
.........................
REVENUES _.
Real estate and personal property taxes...................................................... $ 48,777,621 $ $
Motor vehicle and other excise taxes. ..... .... 3,477,581
Tax and utility liens................................................................................ 282,196 -
Payments in lieu of taxes......................................................................... 1,586,050 -
Community preservation surcharges......................................................... 1,176,436
Charges for services............................................................................... 797,455
Intergovernmental..........................._.,,.,.,.......,..................................... . 15,208,051 1,125,960
Penalties and interest on taxes................................ 305,539
Licenses,permits and fees............ ......................... .... 1,245,595 -
Fines and forfeitures..
....................................................... 124,303 - -
Departmental....... .... ...... ... ......, 415,233
Contributions........................................................................................ -
Investmen.tincorie................................................................................... 1,082,484 51,758 97,983
TOTAL REVENUES.. ........ . ..... ........ ........... 73,302,108 51,758 2,400,379
EXPENDITURES
Current:
General government...... ......... 2,427,837 1,404,099
Public_safety............................. .................. ............... 8,308,701 -
............ .
Education.................. ....... ..... ....... 32,052,996
Public works......................................................................... .......... 3,599,351
Health and human services, ........ 729,238
Culture and recreation,... .... ... ... 675,313 138,467
Pension beer.efits.................................................`.......•,...................... 7,212,850
Employee benefits........ ..................... .......... .......... 7,957,488
Property and liability insurance,.. 415,406
State and county charges................................. 2,170,566
Debt service:
Principal.,...... . .......................................................... ................ 6,588,374
Interest .......... 2,687,682 54,41:2
TOTAL EXPENDITURES............................................................... 74,825,802 1,596,978
EXCESS(DEFICIENCY)OF RFVENUFS
OVER EXPENDITURES, ... .......... ......... .. ......... (1,523,694) 51,758 803,401
OTHER FINANCING SOURCES(USES)
Transfers in............................................. ..................... 889,668 -
Proceeds of bonds and notes......................................... ...........,..,. - _
Premium from issuance of bonds and notes............................. .. .............. - 3,726
Sale of capital assets...-..--.................. ......... . ...... .... 1,770 - -
Transfers out........................................................................................ (503,666) - (51,760)
TOTAL.OTHER FINANCING SOURCES(USES),. 387,772 (48,034}
NET CHANGE IN FUND BALANCES,... ........... . ........ (1,135,922) 51,758 755,367
FUND BALANCES AT BEGINNING OF YEAR --......... .... ... .......... ........ 5,606,023 1,141,436 1,159,420
FUND BALANCES AT END OF'YEAR........................................................... $ 4,470,101 $ 1,193,194 $ 1,914,787
See notes to basic financial statements.
Town of North Andover,Massachusetts 20 Basic Financial Statements
School Nonmajor Total
Construction Governmental Governmental
.......
Project Funds Funds
$ 48,777,621
3,477,581
282,196
37,700 1,623,750
- 1,176,436
2,966,948 3,764,403
10,635,131 3,303,800 30,272,942
305,539
848,012 2,093,607
124,303
124,843 540,076
110,217 110,217
111,160 1,343,385
10,635,131 7,502,680 93,892,056
........ ...
424,028 4,255,964
901,187 9,209,888
875,928 4,482,026 37,410,950
977,984 4,577,335
369,689 1,098,927
65,4,762 1,468,542
7,212,850
7,957,488
415,406
2,170,566
6,588,374
- 2,742,094
...................
875,928 7,809,676 85,108,384
9,759,203 (306,996) 8,783,672
503,666 1,393,334
52,195 76,805 129,000
- 3,726
L770
- (17,928) (573,354)
52,195 562,543 954,476
............
9,811,398 255,547 9,738,148
(7,625,745) 4,545,696 4,826,830
2,185,653 $ 4,801,243 $ 14,564,978
Town of North Andover,Massachusetts 21 Basic Financial Statements
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET ASSETS
FOR THE FISCAL YEAR ENDED JUNE 30,2007
Total governmental fund balances(page 19)....................................................................................... $ 14,564,978
Capital assets(net of accumulated depreciation)used in governmental activities are not
financial resources and,therefore,are not reported in the governmental funds.................................. 132,023,691
Other assets are not available to pay for current period expenditures and,
therefore,are deferred in the governmental funds., .... ...... .................. 16,325,709
In the statement of activities,interest is accrued on outstanding long-term debt,
whereas in the governmental funds interest is not reported until due.............................................. (785,157)
Long-term liabilities are not due and payable in the current period and,
therefore,are not reported in the governmental funds.
Bonds and notes payable,net of unamortized premiums and deferred losses on refundings............ (50f091,143)
Compensated absences..................................................................................................... (1,408,844)
Internal service funds are used by management to account for health insurance
activities.The assets and liabilities of the internal service funds are
reported as governmental activities in the statement of net assets........................... 383,173
Net assets of governmental activities(page 15).................................................................................... 111,012,407
See notes to basic financial statements.
Town of North Andover,Massachusetts 22 Basic Financial Statements
RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30,2007
Net change in fund balances-total governmental funds(page 21)................................................... $ 9,738,148
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. These amounts represent the related activity
of the current period.
Capital outlays............... .........__....... ....... ......... .......... 3,408,410
Depreciation........................................................................................................... (5,068,957)
Revenues in the statement of activities that do riot provide current financial resources
are fully deferred in the statement of revenues,expenditures and changes in fund
balances. Therefore,the recognition of revenue for various types of accounts receivable
(i.e.,real estate and personal property,motor vehicle excise,etc.)differ between the
two statements. This amount represents the net change in deferred revenue............................ (9,243,672)
The issuance of long-term debt(e.g.,bonds and leases)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 transaction,however,has any
impact on net assets. Also,governmental funds report the effect of issuance costs,
premiums,discounts,and similar items when debt is first issued,whereas these amounts
are deferred and amortized in the statement of activities. These amounts represent the
related activity of the current period.
Bondmaturities...................................................................... ................................ 6,588,374
Amortization of deferred losses on refundings............................................................... (65,205)
In the statement of activities,interest is accrued on outstanding long-term debt,
whereas in the governmental funds interest is not reported until due. This amount
represents the net change in accrued interest payable........................................................... 86,407
Some expenses reported in the statement of activities do not require the use of current
financial resources and,therefore,are not reported in the governmental funds.
This amount represent the net change in long-term liabilities:
Compensated absences................ ...... ......... ........ (30,957)
Internal service funds are used by management to account for health insurance
The net activity of the internal service funds is reported with governmental activities................. 787,505
Changes in net assets of governmental activities(page 17)............................................................. $ 6,071,053
See notes to basic financial statements.
Town of North Andover,Massachusetts 23 Basic Financial Statements
PROPRIETARY FUNDS
STATEMENT OF FUND NET ASSISTS
JUNE 30,2007
Business-Type Activities Enterprise Funds
Governmental
Activities-
Internal
Osgood Service
ASSETS Water SCIArer I HE Total Funds
.....................
Current asseas�
C.ash and cash cquivalenis..-, $ $ 1,028,487 5 130,726 $ 1,159,213 5 1,252,816
Res1rided cash and casti eqWviflenis.. ...... ...... 646,299 2,429,370 3,075,669
RecEivabkm,nel of allowance ior uncoflecbWe amowfls:
User charges and.uJflity kens 1,407,931 1,175,643 2,583,574
IMPrgovernmenial ...... ......... 69,836 69,836
T'M.al c.wrenf,assets..... ... .... 2,054,230 4,703336 130,726 6,888,292 1,252,81.6
NorcurmrQ assels:
Receivables,net of aflowance for uncoliectible aniounts:
fniergovemuri.q.-nita➢, , ...... ....... . .. ...... - 1,261,334 1,26 l,3,'M
Capital assets not being deprechate.ci 7,706,387 152,387 4,089,086 11,947,860
Capitafassets,neV of aca.nnuhAed depreciaHon- ..... 19,231,594 22 385,088 1,616,435 43,233,117
'['Walnoncurrentassers 20,937,981 23,798,809 5,705,521 56,447,311 ......
Totpdasse6r—, 28,992,211 28,502,345 5,836,247 63,330603 1,252,816
MARMITIES
Curreni liabitibes:
Warrarils payable, .... ....... ........ 609,829 113,263 26,4,54 74.9,546 136
Accrued payroll -. ... ...... .... 7,031, 2,412 673 10,116
Due to o1her funds..., ... . ...... 53,349 - 53,349
Accrued miterest., . - 109,231 189,248 298,479 -
Accrued heaMi claftiris payaWe........ 869,507
Cou rf in drineu is.....—.—, -- --.... ..... 56,000 56,000
Short-term notes payable.... - .—.... ...... . ... ... .. 110,0()0 231,870 341,870
L,onr[einn.bonds and notes payable- 1,912,700 1,393,010 3 305,M
............
lf'okal c i.A rre n 6 11a b ih H es.. 2,802,140 1,985,803 27,127 4,815,070 869,643
.......................................... ................................................ ...........
Noncurrent liabditim
court judpynalts.... ...... ... .... ........ .. 168,000 1.68,000
Long tenin,bonds and no(c-s payabie- 12,231,783 14,859,136 27,090,919
....................
Total noncurren6 liabilffies, 12,231,783 15,027,136 27,258,919
........................
Totalliabffli:ies— .. ... ...... 15,033,923 17,01Z939 27,127 32,073,989 869,643
FUND NET ASSETS
Invosted in caFnial assets,n(R of relaied debL ... 13,329,797 9,813,999 5,705,521 28,849,317 -
Unresi.ricied 628,491 1,675,207 103,599 2,407,297 383,173
.............................................. ............ .............—
Total fund net assets.... 13,958,288 $ 111,489,206 $ 5,80%120 $ 31,256,614 $ 38,3,173
See ml.es to basic finandal sYaienwnts
Town of North Andover,Massachusetts 24 Basic Financial Statements
PROPRIETARY FUNDS
STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET ASSETS
FOR THE FISCAL.YEAR ENDED JUNE 30,2007
Business-Tare Activities-Enterorise Funds
. .........
Governmental
Activities-
Internal
Osgood Service
Water Sewer Hill Total Funds
OPFRATM;REVENU17S
Charves for services.— ... ......... .. $ 4,988,467 5, 3,296,557 471,173 5 8,756,197 $
UaWy hens— , - . ......... ........ ... . ..... 167,458 111,539 - 278,997
Pena Ries and interest...........-........ . ...... ........ ... .. .... 18,915 17,626 36,541
liniployer contribufions. .. . . ...... .. .... 7, I8,"0.31
Flylpkoyee coniributiorlF......---.. ........ . ...... 1,546,530
5,174,840 3,425,722 471,173 9,071,735 8,784,661
OPERATING EXPENSES
Cost of service and admirdstration-............... ... ... . .... 1,640,433 546,720 430,801. 2,617,954
GI.SI)assessment..... ....... ..... ..... . .... ....... 1,210,663 1,210,663
Repairs and maintenarice—,—. - '--. ......... . . .. ........ .... 116,251 46,152 8,687 171,090
Depredai on- — ......... .................... . ..... .. . ..... .. 585,565 855,120 76,152 1,516,837
Empoyeebenefits—.............. . ...................... ....... 8,039,341
...........
TOTM,OPERATM,FXPENSES, ..... .. 2,342,249 2,658,655 515,640 5,516,544 8,039,341
0PERAllNG INC.OME . . .... .... ....... 2,832,591 767,067 (44,467) 3,555,191 745,320
.......... ................ ..................
NONOPERATING REVENUES(EXPENSFS)
InWrgovernmentaT............ .... ..... ... ......... - ............ - 225,797 225,797
Investr.rent inrome. . ,,, , -- . .... .. .... .... ..... . 1,417 1,417 42,185
hAereM vxpense.... ... ... ... ......... ........ ... .. . .... .. ............... (759,920)
..... ......................................ME.... ...................(1 347,49
T(.)TAL.NONOPERATING REVFNUFS(EXPENSFS),NEIT— (587,5 42,185
.................... (532,706) (1120,280)
...........................—
WCOME(I,OSS)BEFORETRANSFERS. ........ 2,245,017 44,467) 2,434,911
TRANSFERS
'11'ransfers in 5L760 511,760
Transfers out- (534,632) (lib,989) 3�L 191 1,
....................................... ........................ .....................
(87 740)
TOTAI..'FRANSFEM- .......... . .. .... . (534,63 3). 25 11
( , (819,980)..........
CHANGE IN FUND NET AS ]CIS .. ... ... .... . ... .. ...... ......... 1,71tQ85 (1%629) (75,826) 1,614,93-1 787,505
FUND NET ASSETS AT BEGINMNG OF YEAR A2,247,903 11,508 834 5,884,946 29,641,683 404,332)
...........-.. .....................
FUND NETASSE'lS ATFND OF YEAR.... $ 13,958,298 $ 111,489,206 $ 5,809,120 $ 31,256,614
See noivs,W basic fiffmveial
Town of North Akgdovpr,Massachusetts 2`5 Basic Financial Statements
PROPRIETARY FUNDS
STATEMENT OF CASI I FLOWS
FOR THE FISCAL YEAR ENDED JUNE X 2007
Business-Tvoe Ao.livities-Enter prise Funds
............ ...... Governmental
Activities-
Internal
Osgood Service
Water Sewer Hill Total' Funds
CASH FLOWS FROM OPERAIINGACYWHIFS
Receipts front customers and users- ...... ...... $ 4,615,000 $ 2,996,864 $ 471,173 $ 8,083,037 $ 1,634,473
Receipts from inieffund services provided, .................. 7,238,131
I'ayments to vendors...... .............. ....................... ..... .... ....... ...... (731,460) (1,444,648) (258,507) (2,434,615) (8,310,512)
Payments to employees....--....... ...... .......... (686,882) ....... 1.70L2 .......--
NET CASH FROM OPERATING ACTIVITIES, ......... 3,196,659 1,239,660 41,945 4,478,263 562,092
----------
CASH FLOWS FROM NONCAPI FAL FINANCING ACI)VITIES
Transfers 41-............................. .. . ...... ...... 51,760 51,760
ryansorscu'Ll-I - ....... ....53 253,989} 111 ------------
1�6,ja - -: (871,740)
NET CASH FROKI NONCAPITAL FINANCING ACTIVITIES (534,632) (253,989)
CASH FLOWS FROM CAPI JA I,AND RELATED FINANCING AC-FIVITIES
Proceeds front the issuance of bonds and nol.m... 6,051,798 851,870 6,903,668
Acquisition and construction ofcapilal assets--- (4,382,061) (1,241,544) (76,271) (5,699,876)
Principal payments on bonds and noise ... ..... .............- (4,728,282) (1,321,713) (6,049,995)
-
Interest expense....... ...... .... (533,112) (5
------------ �542,2114)
NET'CASH FROM CAPIFAL AND RELATED FINANCING AC1I'jVfj'IES' (3,591,657) (2,253,591)
CASH FLOWS FROM INVESFING AcrivrrIES
Investment income,,,,, ................ . 3,417 1,417 42,185
NET CHANGE IN CASH AND CASI I EQUIVALENTS... .......... ...... (929,631) (1,266,503) (65 6 9, (2,261,919) 604,277
CASI I AND CASH EQUIVALENTS A'1'BEGINNING OF YEAR
(Includes$1,508,259 and$2,729,336 reported as restricted in the water
and sewer enterprise foods,respectively),,,,,,,,. ........ 1,575,930 4,724,360 196,411 6,496,701 648,539
---------------------
CASH AND CASH EQUIVALENTS A'1 END 01;YEAR
(Includes$646,299 and$2,429,370 reported as restricted in the
water and sewer enterprise funds,respectively}. ............ .. ... 646,299 $ 3,457,857 $ 130,726 $ 4,234,882 $ 1,252,816
RECONCILIATION OF OPrRATING INC(MIE(LOSS)TO NF.1-CASFI
FROM O11FRA'IING ACTIVITIES
Operating incorne(loss),,.,.,,..... $ 2,832,591 $ 767,067 $ (44,467) $ 3,555,191 $ 745,320, mm Adjustments to reconcile operating income(loss)to net
cash from operating activities:
Depreciation-, , . ---.... ...... 585,565 855,120 76,152 1516,837
Changes inasse s and liabilities:
Accounts receivable .... ...... .. ..... ...... ... (559,840) (428,858) (988,698)
Working capital deposli-,... ....... . ....... .... .... - - 87,943
Warrants payable...... 277,962 99,919 9,587 387,468 136
Accrued payroll.,.. 7,031 2,412 673 10,116
Accrued health clahns payable.. . ....... .............. (7.71,307}Courtiudgments- (56,000) (56,000)
Due t0 offier funds' ...... j%Mq 53,349
............................
T'otall adlu9nneints 364,067 472,593 86,412 923,072 (183,2281
NET CASH FROM OPERATING A(..--]'IVII'IES $ 3,196,658 $ 1,239,660 $ 41,945 $ 4,478,263 $ 562,092
NONCASH INVESTING,CA PIr I-Al.AND FINANCING ACHVITIES
JoWgovernmental debI subsidies(MWPAT).... .... ....... ..... $ - $ 289,483 $ $ 289,483
Net amortization of deferred charges,... ........ ........ ........ 74,672 6,751 81,423
notes.to 1-1,frerarrrial'W'raents
Town of North Andover,Massachusetts 26 Basic Financial Statements
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET ASSETS
JUNE 30,2007
Private
Purpose Agency
ASSETS Trust Funds Funds
Cash and cash equivalents........................................................ $ 69,444 $ 4,619,981
LIABILITIES
Warrants payable............................................................... 2,125
Liabilities due depositors..................................... 4,617,756
Total liabilities............................................................... - 4,619,881
NET ASSETS
Held in trust for other purposes............................................. $ 69,444 $ -
See notes to basic financial statements.
Town of North Andover,Massachusetts 27 Basic Financial Statements
FIDUCIARY FUNDS
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FOR THE FISCAL YEAR ENDED JUNE 30,2007
Private
Purpose
Trust Funds
ADDITIONS
Net investment income:
Interest.................................................................................... $ 1,295
NET ASSETS AT BEGINNING OF YEAR.......................................... 68,149
NET ASSETS AT END OF YEAR...................................................... $ 69,444
See notes to basic financial statements.
Town of North Andover Massachusetts 28 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. General
The basic financial statements have been prepared in accordance with accounting principles generally accepted in
the United States of America(GAAP). The Governmental Accounting Standards Board(GASB) is the standard-
setting body for establishing governmental accounting and financial reporting principles. The significant
accounting policies are described herein.
B. Reporting Entity
The Town of North Andover,Massachusetts(Town) is a municipal corporation that is governed by an elected
Board of Selectmen.
For financial reporting purposes,the basic financial statements include all funds, organizations,agencies,boards,
commissions and institutions that are not legally separate from the Town.
The Town has also considered all potential component units for which it is financially accountable as well as
other organizations for which the nature and/or significance of their relationship with the Town are such that
exclusion would cause the Town's basic financial statements to be misleading or incomplete. It has been
determined that there are no component units that require inclusion in the basic financial statements.
Joint Venture
A joint venture is an organization(resulting from a contractual arrangement) that is owned,operated or governed
by two or more participants as a separate and specific activity subject to joint control in which the participants
retain an ongoing financial interest or ongoing financial responsibility. Joint control means that no single
participant has the ability to unilaterally control the financial or operating policies of the joint venture.
The Town participates in the following joint ventures with other municipalities to pool resources and share the
costs,risks and rewards of providing goods and services to venture participants directly,or for the benefit of the
general public or specified recipients.
Greater Lawrence Sanitanj District(GLSD)
GLSD operates a wastewater treatment plant for five member communities and is located within the Town. The
GLSD is governed by a seven member board consisting of one appointed representative from the Town. The
Town is indirectly liable for the GLSD's debt and other expenditures and is assessed annually for its share of
operating and capital costs. For the fiscal year ended June 30,2007, the Town's assessment was approximately
$1,211,000. Separate financial statements may be obtained by writing to the Treasurer of the GLSD at 240 Charles
Street,North Andover,MA 01845.
Greater Lawrence Regional Technical Vocational School (GLRTVS)
The GLRTVS is governed by a seven member school committee consisting of one elected representative from the
Town. The Town is indirectly liable for the GLRTVS' debt and other expenditures and is assessed annually for its
share of operating and capital costs. For the fiscal year ended June 30,2007,the Town's assessment was
approximately$232,000. Separate financial statements may be obtained by writing to the Treasurer of the
GLRTVS at 57 River Road,Andover,MA 01801.
Town of North Andover,Massachusetts 29 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
C. Government-Wide and Fund Financial Statements
Government-Wide Financial Statements
The government-wide financial statements(statement of net assets and the statement of activities) report
information on all non-fiduciary activities of the primary government and its component units. Governmental
activities,which are primarily supported by taxes and intergovernmental revenues,are reported separately from
business-hjpe activities,which are primarily supported by user fees.
Fund Financial Statements
Separate financial statements are provided for governmental funds,proprietary funds,and fiduciary funds,even
though fiduciary funds are excluded from the government-wide financial statements. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund financial
statements. Nonmajor funds are aggregated and displayed in a single column.
Internal service funds and fiduciary funds are reported by fund type.
D. Measurement Focus,Basis of Accounting and Basis of Presentation
Government-Wide and Fund Financial Statements
The government-wide and enterprise fund financial statements apply all applicable Financial Accounting
Standards Board (FASB)pronouncements issued on or prior to November 30,1989,unless those pronouncements
conflict with or contradict GASB pronouncements.
Government-Wide Financial Statements
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 the liabilities are incurred. Real estate and personal 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 have been met.
The statement of activities demonstrates the degree to which the direct expenses of a function or segment are
offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or
segment. Program revenues include the following:
➢ Charges to customers or applicants who purchase,use, or directly benefit from goods,services, or
privileges provided by a given function or segment.
➢ Grants and contributions that are restricted to meeting the operational requirements of a specific function
or segment.
➢ Grants and contributions that are restricted to meeting the capital requirements of a specific function or
segment.
Taxes and other items not identifiable as program revenues are reported as general revenues.
Except for charges between the general fund and enterprise funds, the effect of interfund activity has been
eliminated from the government-wide financial statements. Elimination of these charges would distort the direct
costs and program revenues reported for the functions affected.
Town of North Andover,Massachusetts 30 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Fund Financial Statement
Governmental funds financial statements are reported using the flow of current financial resources measurement
focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting,revenues are
recognized when susceptible to accrual(i.e.,measurable and available). Measurable means the amount of the
transaction can be determined and available means 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,and certain
compensated absences,claims and judgments which are recognized when the obligations are expected to be
liquidated with current expendable available resources.
Real estate and personal property tax revenues are considered available if they are collected within 60-days after
the end of the fiscal year. Investment income is susceptible to accrual. Other receipts and tax revenues become
measurable and available when the cash is received and are recognized as revenue at that time.
Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria
is met. Expenditure driven grants recognize revenue when the qualifying expenditures are incurred and all other
grant requirements are met.
The following major governmental funds are reported:
The general fiend is the primary operating fund. It is used to account for all financial resources,except those
required to be accounted for in another fund.
The stabilization fund is a special revenue fund used to account for the accumulation of resources to provide
general and/or capital reserves. Use of this fund is subject to Town Meeting approval.
The community preservation fund is a special revenue fund used to account for the 3% local real estate tax surcharge
on nonexempt property(and matching state trust fund distribution)that can be used for open space,historic
resource and affordable housing purposes. Property exempt from the surcharge consists of the first$100,000 of
all residential property and also property owned by low income or seniors with a low or moderate income as
defined by Massachusetts Department of Revenue(DOR) guidelines. Disbursements from this fund must
originate from the Community Preservation Committee and be approved by Town Meeting.
The school construction project fiend is a capital projects fund used to account for financial resources to expand and
upgrade the school facilities.
The nonmajor governmental funds consist of other 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 fund is used to account for the proceeds of specific revenue sources (other than capital projects
funds or permanent funds) that are restricted by law or administrative action to expenditures for specified
purposes.
The capital projects fund is used to account for financial resources to be used for the acquisition or construction of
major capital facilities(other than those financed by enterprise funds).
The permanent fund is used to account for financial resources that are legally restricted to the extent that only
earnings, and not principal, may be used for purposes that support governmental programs.
Town of North Andover,Massachusetts 31 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Proprietary funds financial statements are reported using the flow of economic resources measurement focus and
use the accrual basis of accounting,whereby revenues are recorded when earned and expenses are recorded
when the liabilities are incurred.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues
and expenses generally result from providing services and producing and delivering goods in connection with
the proprietary funds principal ongoing operations. All revenues and expenses not meeting this definition are
reported as nonoperating revenues and expenses.
The following major proprietary funds are reported:
The water enterprise fund is used to account for the water activities.
The sewer enterprise fund is used to account for the sewer activities.
The Osgood Hill enterprise fund is used to account for the operation of Osgood Hill Estate activities.
Additionally, the following proprietary fund type is reported:
The internal service fund is used to account for the financing of services provided by one department to other
departments or governmental units. This fund is used to account for risk financing activities related to
employees'health insurance.
Fiduciary funds financial statements are reported using the flow of economic resources measurement focus and
use the accrual basis of accounting. Fiduciary funds are used to account for assets held in a trustee capacity for
others that cannot be used to support the government's programs.
The following fiduciary fund types are reported:
The private-purpose trust fund is used to account for trust arrangements,other than those properly reported in the
permanent fund,under which principal and investment income exclusively benefits individuals,private
organizations, or other governments.
The agency fund is used to account for assets held in a custodial capacity. Such assets consist primarily of
performance bonds and bid deposits. Agency funds do not present the results of operations or have a
measurement focus.
E. Cash and Investments
Government-Wide and Fund Financial Statements
Cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with
an original maturity of three months or less from the date of acquisition. Investments are carried at fair value.
F. Accounts Receivable
Government-Wide and Fund Financial Statements
The recognition of revenue related to accounts receivable reported in the government-wide financial statements
and fund financial statements are reported under the accrual basis of accounting and the modified accrual basis of
accounting,respectively.
Town of North Andover,Massachusetts 32 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Real Estate Taxes,Personal Property Taxes and Tax Liens
Real estate and personal property taxes are levied and based on values assessed on January 1St of every year.
Assessed values are established by the Board of Assessor's for 100% of the estimated fair market value. Taxes are
due on August 1st,November 151,February 11t and May ist and are subject to penalties and interest if they are not
paid by the respective due date.
Real estate tax liens are processed approximately one-year after the close of the valuation year on delinquent
properties and are recorded as receivables in the fiscal year they are processed.
Motor Vehicle Excise Taxes
Motor vehicle excise taxes are assessed annually for each vehicle registered in the Town and are recorded as
receivables in the fiscal year of the levy. The Commonwealth is responsible for reporting the number of vehicles
registered and the fair values of those vehicles to the Town. The tax calculation is the fair value of the vehicle
multiplied by$25 per$1,000 of value.
Community Preservation Surcharges
Community preservation surcharges are levied annually and at a rate of 3% of residents' real estate tax bills with
exemptions for the first$100,000 of residential property and property owned by qualified persons with low
income and seniors (60+) with low or moderate income as defined by DOR guidelines. The surcharge is due with
the real estate tax on August 1st,November 1st,February 1St and May 1st and are subject to penalties and interest if
they are not paid by the respective due date. Overdue surcharges are included on the tax liens processed on
delinquent real estate taxes. Surcharges are recorded as receivables in the fiscal year of the levy.
Water and Sewer User Charges and Utility Liens
User fees are levied monthly based on individual meter readings and are subject to penalties and interest if they
are not paid by the respective due date. Water and sewer liens are processed approximately six months after the
end of the fiscal year and are included as a lien on the property owner's tax bill. Water and sewer charges and
liens are recorded as receivables in the fiscal year of the levy.
Departmental and Other
Departmental and other receivables primarily consist primarily of amounts due from ambulance charges and
police details. These receivables are recorded when the applicable service has been performed.
Intergovernmental
Various state and federal operating and capital grants are applied for and received annually. For non-
expenditure driven grants, revenue is recognized as soon as all eligibility requirements imposed by the provider
have been met. For expenditure driven grants,revenue is recognized when the qualifying expenditures are
incurred and all other grant requirements are met.
G. Allowance for Unco llectib le Amounts
The allowance for uncollectible amounts is estimated based on historical trends and specific account analysis for
the following accounts receivable:
➢ Personal property taxes
➢ Motor vehicle and other excise taxes
➢ Departmental and other
Town of North Andover,Massachusetts 33 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
The following types of accounts receivable are secured via the lien process and are considered 100% collectible.
Accordingly,an allowance for uncollectible amounts is not reported.
➢ Real estate taxes
➢ Tax and utility liens
➢ Community preservation surcharges
➢ User charges
Intergovernmental receivables are considered 100% collectible.
H. Inventories
Government-Wide and Fund Financial Statements
Inventories are recorded as expenditures at the time of purchase. Such inventories are not material in total to the
government-wide and fund financial statements and therefore are not reported.
I. Restricted Assets
Government-Wide and Fund Financial Statements
Assets are reported as restricted when limitations on their use change the nature of the availability of the asset.
Such constraints are either externally imposed by creditors,contributors, grantors,or laws of other governments,
or are imposed by law through constitutional provisions or enabling legislation.
J. Capital Assets
Government-Wide and Proprietary Fund Financial Statements
Capital assets,which consist of land,land improvements,buildings and improvements,machinery and
equipment,library books,vehicles,treatment plants,pump stations,reservoirs,infrastructure(e.g.,roads,water
mains,sewer mains, and similar items) and construction-in-progress, are reported in the applicable governmental
or business-type activities column of the government-wide financial statements.
Capital assets are recorded at historical cost or at estimated historical cost if actual historical cost is not available.
Donated capital assets are recorded at the estimated fair market value at the date of donation.
All purchases and construction costs in excess of$10,000 are capitalized at the date of acquisition or construction,
respectively, with expected useful lives of greater than one year.
Capital assets (excluding land) are depreciated on a straight-line basis. The estimated useful lives of capital assets
are as follows:
Town of North Andover,Massachusetts 34 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Estimated
Useful
Life
Capital Asset Type (in years)
Land improvements.............................. 20-30
Buildings and improvements.................. 7-50
Machinery and equipment..................... 3-20
Library books...................................... 10
Vehicles.............................................. 5
Treatment plants.................................. 10-40
Pump stations...................................... 20-40
Reservoirs........................................... 20-40
Infrastructure-........................ ... 20-60
The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend asset
lives are not capitalized and are treated as expenses when incurred. Improvements are capitalized.
Governmental Fund Financial Statements
Capital asset costs are recorded as expenditures in the acquiring fund in the fiscal year of the purchase.
K. Interfund Receivables and Payables
During the course of its operations,transactions occur between and within funds that may result in amounts
owed between funds.
Government-Wide Financial Statements
Transactions of a buyer/seller nature between and within governmental funds are eliminated from the
governmental activities in the statement of net assets. Any residual balances outstanding between the
governmental activities and business-type activities are reported in the statement of net assets as"internal
balances".
Fund Financial Statements
Transactions of a buyer/seller nature between and within funds are not eliminated from the individual fund
statements. Receivables and payables resulting from these transactions are classified as"Due from other funds"
or"Due to other funds" on the balance sheet.
L. Interfund Transfers
During the course of its operations,resources are permanently reallocated between and within funds.
Government-Wide Financial Statements
Transfers between and within governmental funds are eliminated from the governmental activities in the
statement of net assets. Any residual balances outstanding between the governmental activities and business-
type activities are reported in the statement of activities as "Transfers,net".
Town of North Andover,Massachusetts 35 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Fund Financial Statements
Transfers between and within funds are not eliminated from the individual fund statements and are reported as
transfers in and transfers out.
M. Deferred Revenue
Deferred revenue at the fund financial statement level represents billed receivables that do not meet the available
criterion in accordance with the current financial resources measurement focus and the modified accrual basis of
accounting. Deferred revenue is recognized as revenue in the conversion to the government-wide financial
statements(full accrual).
N. Net Assets and Fund Equity
Government-Wide Financial Statements (Net Assets)
Net assets are reported as restricted when amounts are restricted by outside parties for a specific future use.
Net assets have been"restricted" for the following:
"Debt service" represents amounts accumulated from the Massachusetts School Building Authority(MSBA)to
reduce school construction excluded debt service costs over the next three fiscal years.
"Community preservation" represents amounts restricted for the purpose of acquiring land for conservation,
recreational, and affordable housing purposes.
"Permanent funds- expendable" represents amounts held in trust for which the expenditures are restricted by
various trust agreements.
"Permanent funds- nonexpendable" represents amounts held in trust for which only investment earnings may
be expended.
"Other specific purposes" represents restrictions placed on assets from outside parties.
Fund Financial Statements (Fund Balances)
Fund balances are reserved for amounts that are not available for appropriation or are legally restricted by
outside parties for a specific future use. Designations of fund balance represent tentative management plans that
are subject to change.
Fund balances have been"reserved for" the following:
"Encumbrances and continuing appropriations" represents amounts obligated under purchase orders,contracts
and other commitments for expenditures that are being carried over to the ensuing fiscal year.
"Debt service" represents amounts accumulated from the Massachusetts School Building Authority (MSBA)to
reduce school construction excluded debt service costs over the next three fiscal years.
"Perpetual permanent funds" represents amounts held in trust for which only investment earnings may be
expended.
"Other specific purposes" represents restrictions placed on assets from outside parties.
Town of North Andover,Massachusetts 36 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Fund balances have been"designated for" the following:
"Subsequent year's expenditures" represents amounts appropriated for the fiscal year 2008 operating budget.
O. Long-term Debt
Government-Wide and Proprietary Fund Financial Statements
Long-term debt is reported as liabilities in the government-wide and proprietary fund statements of net assets.
Material bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-
line method. Bonds payable are reported net of the applicable bond premium or discount.
Governmental Fund Financial Statements
The face amount of governmental funds long-term debt is reported as other financing sources when the debt is
issued. Bond premiums and discounts,as well as issuance costs, are recognized in the current period. Bond
premiums are reported as other financing sources and bond discounts are reported as other financing uses.
Issuance costs,whether or not withheld from the actual bond proceeds received,are reported as general
government expenditures.
P. Investment Income
Excluding the permanent funds,investment income derived from major and nonmajor governmental funds is
legally assigned to the general fund unless otherwise directed by Massachusetts General Law(MGL).
Q. Compensated Absences
Employees are granted vacation and sick leave in varying amounts based on collective bargaining agreements,
state laws and executive policies.
Government-Wide and Proprietary Fund Financial Statements
Vested or accumulated vacation and sick leave are reported as liabilities and expensed as incurred.
Governmental Fund Financial Statements
Vested or accumulated vacation and sick leave,which will be liquidated with expendable available financial
resources, are reported as expenditures and fund liabilities upon employee retirements and resignations.
R. Post Retirement Benefits
Government-Wide and Fund Financial Statements
In addition to providing pension benefits,health insurance coverage is provided (on a pay-as-you-go basis)for
retired employees and their survivors in accordance with MGL Chapter 32. These costs are recognized by
recording the employer's 65% share of insurance premiums in the general fund in the fiscal year paid. For the
fiscal year ended June 30,2007, this expenditure totaled approximately$383,000. There were approximately 140
participants eligible to receive benefits at June 30,2007.
Town of North Andover,Massachusetts 37 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
S. Use of Estimates
Government-Wide and Fund Financial Statements
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.
T. Total Column
Government-Wide Financial Statements
The total column presented on the government-wide financial statements represents consolidated financial
information.
Fund Financial Statements
The total column presented on the fund financial statements is presented only to facilitate financial analysis. Data
in this column is not the equivalent of consolidated financial information.
NOTE 2- STEWARDSHIP,COMPLIANCE AND ACCOUNTABILITY
A. Budgetary Information
Municipal Law requires the adoption of a balanced budget that is approved by Town Meeting vote. The Finance
Committee presents an annual budget to Town Meeting,which includes estimates of revenues and other
financing sources and recommendations of expenditures and other financing uses. Town Meeting,which has full
authority to amend and/or reject the budget or any line item, adopts the expenditure budget by majority vote.
Increases or transfers between and within departments subsequent to the approval of the annual budget,requires
majority approval via Special Town Meeting and are included in the final budget.
The majority of appropriations are non-continuing which lapse at the end of each fiscal year. Others are
continuing appropriations for which the governing body has authorized that an unspent balance from a prior
fiscal year be carried forward and made available for spending in the current fiscal year. These carry forwards
are included as part of the subsequent fiscal year's original budget.
Generally,expenditures may not exceed the level of spending(salaries,expenses and capital) authorized for an
appropriation account. However, the Town is statutorily required to pay debt service,regardless of whether such
amounts are appropriated.
An annual budget is adopted for the general fund in conformity with the guidelines described above. The
original fiscal year 2007 approved budget for the general fund authorized$71,621,440 in appropriations and other
amounts to be raised. During fiscal year 2007,a reduction in appropriations totaling$607,948 was authorized.
The Accountant's office has the responsibility to ensure that budgetary control is maintained. Budgetary control
is exercised through the accounting system.
Town of North Andover,Massachusetts 38 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
B. Fund Deficits
At June 30,2007,the following fund deficits exist:
Fund Amount Funding Source
Building permit GLSD special revenue........................ $ 28,460 Available funds
Franklin school capital project................................... 20,419 Issuance of long-term debt
SPED program special revenue.................................. 20,384 Federal grant
Drug free school special revenue................................ 16,470 State grant
Title V special revenue............................................. 12,109 Federal grant
Extra stipends special revenue................................... 11,342 Available funds
Custodial overtime special revenue............................ 10,384 Available funds
Teacher training math/science special revenue............. 10,203 Federal grant
Athletic association special revenue............................ 4,885 Available funds
Partnership award special revenue............................. 3,767 State grant
Tech bradstreet sped &tech capital projects................. 3,130 Issuance of long-term debt
Tech atkinson,franklin&kittredge capital projects....... 2,384 Issuance of long-term debt
Highway improvements fund.................................... 1,250 State grant
C. Excess of Expenditures Over Appropriations
During the fiscal year ended June 30,2007,expenditures exceeded appropriations for state and county charges
and debt service interest. These over-expenditures will be funded by taxes during fiscal year 2008.
NOTE 3-DEPOSITS AND INVESTMENTS
The municipal finance laws of the Commonwealth authorize the Town to invest temporarily idle cash in bank
term deposits and certificates of deposits,and treasury and agency obligations of the United States government,
with maturities of one year or less;U.S. treasury or agency repurchase agreements with maturities of not more
than 90 days;money market accounts;and the state treasurer's investment pool-the Massachusetts Municipal
Depository Trust(MMDT).
The MMDT meets the criteria of an external investment pool and operates in accordance with applicable state
laws and regulations. The Treasurer of the Commonwealth serves as Trustee. The reported value of the pool is
the same as the fair value of pool shares.
A cash and investment pool is maintained that is available for use by all funds with unrestricted cash and
investments. The deposits and investments of permanent and private purpose trust funds are held separately
from other Town funds.
Deposits-Custodial Credit Risk
Custodial credit risk for deposits is the risk that,in the event of a bank failure,the Town's deposits may not be
recovered. The Town does not have a policy for custodial credit risk of deposits. As of June 30,2007,$20,827,462
of the Town's bank balance of$21,721,684 was uninsured and uncollateralized.
Town of North Andover,Massachusetts 39 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Investments Summary
The Town's investments at June 30,2007 are presented below. All investments are presented by investment type,
with debt securities presented by maturity.
Investment
Maturities
Fair Less Than
Investment Type Value 1 Year
Debt Securities:
U.S.Treasuries............................ $ 49,437 $ 49,437
Money market mutual funds......... 267,975 267,975
External investment pools............. 11,466,423 11,466,423
Total debt securities— 11,783,835 $ 11,783,835
Other Investments:
Equity securities.......................... 39,974
Equity mutual funds.................... 136,292
Total other investments............... 176,266
Total investments........................ $ 11,960,101
Investments-Interest Rate Risk of Debt Securities
Interest rate risk for debt securities is the risk that changes in interest rates of debt securities will adversely affect
the fair value of an investment. The Town does not have a policy for interest rate risk of debt securities.
Investments-Custodial Credit Risk
Custodial credit risk for investments is the risk that,in the event of the failure of the counterparty,the Town will
not be able to recover the value of its investments or collateral securities that are in the possession of an outside
party. The Town does not have a policy for custodial credit risk of investments. As of June 30,2007, the Town's
investments of$11,960,101 were uninsured,not registered in the name of the Town,held by counterparty and
exposed to custodial credit risk as follows:
Fair
Investment Type Value
U.S. Treasuries............................ $ 49,437
Money market mutual funds......... 267,975
External investment pools............. 11,466,423
Equity securities.......................... 39,974
Equity mutual funds.................... 136,292
Total.......................................... $ 11,960,101
Town of North Andover,Massachusetts 40 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Investments-Credit Risk of Debt Securities
Credit risk for debt securities is the risk that an issuer or other counterparty to a debt security will not fulfill its
obligations. The Town does not have a policy for credit risk of debt securities. As of June 30,2007, the credit
quality ratings of the Town's debt securities are as follows:
Quality
Hatin Ls
Fair
Investment Type Value ,AAA Unrated
Money market mutual funds........ $ 267,975 $ 267,975 $ -
External investment pools........... 11,466,423 -- 11,466,423
Total........................................ $ 11,734,398 $ 267,975 $ 11,466,423
*Per the rating scale of Standard and Poor's (a national credit rating organization)
NOTE 4-ACCOUNTS RECEIVABLE
At June 30,2007,receivables for the individual major governmental funds and nonmajor governmental,internal
service,and fiduciary funds in the aggregate,including the applicable allowances for uncollectible amounts, are
as follows:
Allowance
Gross for Net
Amount Uncollectibles Amount
Receivables:
Real estate and personal property taxes....... $ 1,165,210 $ - $ 1,165,210
Tax liens................................................... 1,217,457 1,217,457
Motor vehicle and other excise taxes............ 524,268 (256,094) 268,174
Community preservation surcharges........... 17,125 - 17,125
Departmental and other.............................. 618,816 (299,676) 319,140
Intergovernmental...................................... 13,754,067 mm 13,754,067
$ 17,296,943 $ (555,770) $ 16,741,173
At June 30, 2007,receivables for the water and sewer enterprise funds consist of the following:
Allowance
Gross for Net
Amount Uncollectibles Amount
Receivables:
User charges and utility liens....................... $ 2,583,574 $ $ 2,583,574
Intergovernmental..................................... 1,331,170 1,331,170
$ 3,914,744 $ - $ 3,914,744
Town of North Andover,Massachusetts 41 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30, 2007
Governmental funds report deferred revenue in connection with receivables and other assets(tax foreclosures)for
revenues that are not considered to be available to liquidate liabilities of the current period. The following
identifies the various components of deferred revenue reported in the governmental funds:
Community
General Preservation
Fund Fund(Major) Total
Receivable tyke:
Real estate and personal property taxes................ $ 874,868 $ - $ 874,868
Tax liens......................................................... 1,217,457 - 1,217,457
Motor vehicle and other excise taxes.................... 268,174 - 268,174
Community preservation surcharges.................... - 17,125 17,125
Departmental and other..................................... 224,490 - 224,490
Intergovernmental(state school construction)........ 12,296,650 12,296,650
Intergovernmental(CPA state match).................. - 1,189,634 1,189,634
Tax foreclosures............................................... 237,311 - 237,311
'.r0t'<tl...,. ............. ................. $ 15,1"18,950 $ 1,206,759 $ 16,325,709
The Commonwealth has approved school construction assistance. The assistance program,which is administered
by the MSBA,provides resources for future debt service of previously issued general obligation school bonds
outstanding. During fiscal year 2007, approximately$1,925,000 of such assistance was received. Approximately
$16,400,000 will be received in future fiscal years. Of this amount, approximately$4,100,000 represents
reimbursement of long-term interest costs,and approximately$12,300,000 represents reimbursement of approved
construction costs. Accordingly, a$12,296,650 intergovernmental receivable and corresponding deferred revenue
have been reported in the governmental funds financial statements. The deferred revenue has been recognized as
revenue in the conversion to the government-wide financial statements.
During fiscal year 2007, the MSBA authorized the final reimbursement(totaling$11,140,820) of the school
building assistance award for the North Andover High School Project. Of this amount,$10,635,131 represents
reimbursement of approved construction costs,which were used to retire outstanding bond anticipation notes,
and$505,689 represents reimbursement of approved short-term interest costs,which were credited to the general
fund and set aside to reduce related debt service costs over the next three fiscal years.
Town of North Andover,Massachusetts 42 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
NOTE 5-CAPITAL ASSETS
Capital asset activity for the fiscal year ended June 30, 2007,was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital assets not being depreciated:
Land........................................................... $ 16,253,510 1,404,099 $ $ 17,657,609
Construction in progress................................. 6,002,963 453,985 6,456,948
Total capital assets not being depreciated...... 22,256,473 1,858,084 24,114,557
Capital assets being depreciated:
Land improvements....................................... 2,717,500 - 2,717,500
Buildings and improvements........................... 116,195,342 370,075 116,565,417
Machinery and equipment.............................. 7,894,564 402,995 8,297,559
Library books............................................... 3,586,350 - 3,586,350
Vehicles...................................................... 2,548,582 167,695 (137,690) 2,578,587
Infrastructure............................................... 30,529,747 609,561 31,139,308
Total capital assets being depreciated........... 163,472,085 1,550,326 (137,690) 164,884,721
Less accumulated depreciation for:
Land improvements—, (1,501,388) (135,875) - (1,637,263)
Buildings and improvements........................... (29,179,851) (3,012,422) - (32,192,273)
Machinery and equipment.............................. (5,232,578) (475,243) - (5,707,821)
Library books............................................... (3,177,401) (94,180) - (3,271,581)
Vehicles...................................................... (1,608,262) (288,606) 137,690 (1,759,178)
Infrastructure............................................... (11,344,840) (1,062,631) - (12,407,471)
Total accumulated depreciation.................. (52,044,320) (5,068,957) 137,690 (56,975,587)
Total capital assets being depreciated,net............... 111,4271,765 (3,518,631) 107,909,134
Total governmental activities capital assets,net........ $ 133,684,238 $ (1,660,547) $ $ 132,023,691
Town of North Andover,Massachusetts 43 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30, 2007
Beginning Ending
Balance Increases Decreases Balance
Business-Type Activities:
Capital assets not being depreciated:
Land.... .................. ................................. $ 6,097,262 $ - $ $ 6,097,262
Construction in progress................................. 1,606,513 4,244,085 5,850,598
Total capital assets not being depreciated...... 7,703,775 4,244,085 11,947,860_
Capital assets being depreciated:
Land improvements....................................... 216,259 - 216,259
Buildings and improvements........................... 1,832,344 76,271 1,908,615
Machinery and equipment.............................. 1,661,310 76,979 1,738,289
Vehicles...................................................... 406,288 - (19,000) 387,288
Treatment plants........................................... 16,573,234 16,573,234
Pump stations.............................................. 2,966,257 2,966,257
Reservoirs.................................................... 1,477,296 - 1,477,296
Infrastructure............................................... 38,469,960 1,302,541 39,772,501
Total capital assets being depreciated_ 63,602,948 1,455,791 (19,000) 65,039,739
Less accumulated depreciation for:
Land improvements....................................... (53,488) (9,047) (62,535)
Buildings and improvements........................... (385,371) (66,524) (451,895)
Machinery and equipment.............................. (670,255) (111,440) (781,695)
Vehicles...................................................... (242,134) (46,716) 19,000 (269,850)
Treatment plants........................................... (7,599,774) (452,258) - (8,052,032)
Pump stations.............................................. (1,517,691) (115,656) - (1,633,347)
Reservoirs.................................................... (875,576) (52,321) - (927,897)
Infrastructure............................................... (8,964,496) (662,875) - (9,627,371)
Total accumulated depreciation.................. (20,308,785) (1,516,837) 19,000 (21,806,622)_
Total capital assets being depreciated,net............... 43,294,163 (61,046) - 43,233,117
Total business-type activities capital assets,net........ $ 50,997,938 $ 4,183,039 $ $ 55,180,977
Town of North Andover,Massachusetts 44 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities:
General government.................................................... $ 49,227
Public safety......................................................,......,, 407,724
Education.................................................................. 2,948,315
Public works.............................................................. 1,252,231
Health and human services........................................... 121,872
Culture and recreation................................................. 289,588
Total depreciation expense-governmental activities.............. $ 5,068,957
Business-Type Activities:
Water........................................................................ $ 585,565
Sewer........................................................................ 855,120
OsgoodHill................................................................ 76,152
Total depreciation expense-business-type activities.............. $ 1,516,837
NOTE 6- INTERFUND RECEIVABLES,PAYABLES AND TRANSFERS
Receivables and payables between funds at June 30,2007,are summarized as follows:
Receivable Fund Payable Fund Amount
General Fund...... Water Enterprise Fund........ $ 53,349 (1)
(1) Cash advance to water enterprise operating fund
Interfund transfers for the fiscal year ended June 30,2007, are summarized as follows:
Transfers In:
Nonmajor Osgood
General Governmental Hill
Transfers Out: Fund Funds Fund Total
General Fund............................. $ - $ 503,666 $ - $ 503,666 (1)
Community Preservation Fund..... - 51,760 51,760 (2)
Nonmajor Governmental Funds.... 17,928 - m 17,928 (3)
Water Enterprise Fund................. 534,632 - 534,632 (4)
Sewer Enterprise Fund................. 253,989 - 253,989 (4)
Osgood Hill Fund....................... 83,119 - _ 83,119 (4)
$ 889,668 $ 503,666 $ 51,760 $ 1,445,094
Town of North Andover,Massachusetts 45 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
1) Represents budgeted transfers to the school cafeteria special revenue fund ($312,214) and to the highway
improvements special revenue fund($191,452)to fund permanent deficits.
2) Represents transfer to fund Osgood Hill capital outlay.
3) Represents budgeted transfer from the trash fee stabilization special revenue fund.
4) Represents budgeted transfers for indirect costs.
NOTE 7-SHORT-TERM FINANCING
Short-term debt may be authorized and issued to fund the following:
• Current operating costs prior to the collection of revenues through issuance of revenue anticipation notes
(RAN)or tax anticipation notes (TAN).
• Capital project costs and other approved expenditures incurred prior to obtaining permanent financing
through issuance of bond anticipation notes(BAN) or grant anticipation notes(GAN).
Short-term loans are general obligations and carry maturity dates that are limited by statute. Interest
expenditures/expenses for short-term borrowings are accounted for in the general fund,community preservation
fund and enterprise funds.
Details related to the short-term debt activity for the fiscal year ended June 30,2007,is as follows:
Notes Payable- Governmental Funds
Origination Maturity Interest Balance at Balance at
Type Description Date Date hate 6/30/2006 Increases Decreases 6/30/2007
BAN High School Construction,. 10/5/05 10/5/06 4.00% $ 9,61.0,899 $ $ (9,610,899) $
BAN Land Acquisition/CPA.,.... ........... 10/5/05 10/5/06 4.00`! 1,359,179 (1,359,179)
BAN High School Construction.... .................... 10/5/06 4/4/07 4.00% - 9,610,899 (9,610,899)
BAN Land Acquisition/CPA............................. 10/5/06 10/4/07 100% 1,603,546 1,603,546
BAN Fire Equipment.... .... .. ..... ................... 6/19/07 6/19/08 3.85% 158,539 158,539
BAN School Projects. ...,.... ...... ......... 6/19/07 6/19/08 185% 2 16,729 216,729
BAN Roadway and Sidewalk Improvements......., 6/19/07 6/19/08 3.85% 794,360 794,360
BAN DPW Equipment.................................... 6/19/07 6/19/08 3,85% - 270,000 270,000
BAN Other Projects..... ...................... 6/19/07 6/19/08 185% 48,502 48,502
Total... ...... $ 10,970,078 $ 12,702,575 $ (20,580,977) $ 3,091,676
Notes Payable-Enterprise Funds
Origination Maturity Interest Balance at Balance at
Type Description Date Date hate 6/30/2006 Increases Decreases 6/30/2007
BAN MW4dPA'F........... ....... 12/1/06 12/31/07 1.73! $ $ 2,625,899 $ (2,625,899) $ -
BAN Sewer Presjeds....................................... 6/19/07 6/19/08 3.8510 - 231,870 231,870
BAN Water Mains........................... .............. 6/19/07 6/19/08 185% 110,000 110,000
rtai.....................,............................. $ $ 2,967,769 $ (2,625,899) $ 34 1,870
Town of North Andover,Massachusetts 46 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Subsequent Events
On October 4,2007, the Town used community preservation funds to retire the outstanding BAN for land
acquisition in the amount of$1,603,546.
On December 18,2007, the Town issued$5,532,288 of MWPAT drinking water bonds. Of this amount$2,625,899
was used to retire the MWPAT BAN outstanding at June 30, 2006. Accordingly,the$2,625,899 of MWPAT
drinking water bonds issued subsequent to year end is included as long-term debt at June 30,2007.
NOTE 8 -LONG-TERM DEBT
Chapter 44,Section 10,of the MGL authorizes indebtedness up to a limit of 5% of the equalized valuation. Debt
issued in accordance with this section of the law is designated as being"inside the debt limit". However, debt
may be authorized in excess of that limit for specific purposes. Such debt,when issued,is designated as being
"outside the debt limit".
Details related to the outstanding indebtedness at June 30,2007,and the debt service requirements are as follows:
Bonds and Notes Payable- Governmental Funds
Outstanding Outstanding
Interest at June 30, at June 30,
Project Rate 2006 Additions Reductions 2007
Municipal Purpose Loan of 1997........ 4.8-5.5% $ 559,000 $ $ (559,000) $
Land Acquisition-Public Domain...... 4.3-6.0% 3,290,000 (205,000) 3,085,000
Municipal Purpose Loan 1998............ 4.3-5.4% 14,110,000 (890,000) 13,220,000
Municipal Purpose Loan 1998............ 4.3-6.0% 6,970,000 - (585,000) 6,385,000
Municipal Purpose Loan of 2001........ 4.0-4.2% 425,000 - (85,000) 340,000
Municipal Purpose Loan of 2002........ 4.0-4.5% 7,940,000 (1,841,250) 6,098,750
Municipal Purpose Loan of 2003........ 2.3-4.0% 744,120 (119,000) 625,120
Municipal Purpose Loan of 2004........ 2.0-5.0% 6,235,000 (985,000) 5,250,000
Refunding Bonds of 2004.................. 2.0-4.2% 5,293,900 - (64,434) 5,229,466
Municipal Purpose Loan of 2005........ 3.0-4.0% 1,331,488 m (230,512) 1,100,976
Municipal Purpose Loan of 2005........ 3.0-4.0% 6,643,261 - (789,328) 5,853,933
High School Construction................. 3.3-5.0% 3,000,000 (150,000) 2,850,000
Sargent School Ventilation................. 3.6-4.5% 72,805 7,195 (7,805) 72,195
School System Technology................ 3.6-4.5% 205,000 44,805 (25,750) 224,055
Roadwork...................................... 3.6-4.5% 217,195 - (43,595) 173,600
Drainage Improvements................... 3.6-4.5% - 52,000 (5,200) 46,800
Town Garage Heating...................... 3.6-4.5% - 25,000 (2,500) 22,500
Sub-total............ .............. 57,036,76 129,000 (6,588,374) 50,577,395
Deferred loss on refundings............... (551,457) - 65,205 (486,252)
Total governmental funds,net........... $ 56,485,312 $ 129,000 $ (6,523,169) $ 50,091,143
Town of North Andover,Massachusetts 47 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Debt service requirements for principal and interest for governmental bonds and notes payable in future fiscal
years are as follows:
Fiscal Year Principal Interest Total
2008........... $ 6,094,566 $ 2,106,758 $ 8,201,324
2009........... 6,153,261 1,854,812 8,008,073
2010........... 5,278,024 1,616,330 6,894,354
2011........... 5,204,245 1,404,226 6,608,471
2012........... 5,165,248 1,192,873 6,358,121
2013........... 4,071,566 977,922 5,049,488
2014........... 4,099,560 805,820 4,905,380
2015........... 2,941,164 643,140 3,584,304
2016........... 2,689,777 506,315 3,196,092
2017........... 2,715,000 381,939 3,096,939
2018........... 2,835,000 252,690 3,087,690
2019........... 1,010,000 117,462 1,127,462
2020........... 370,000 86,662 456,662
2021........... 370,000 71,862 441,862
2022........... 365,000 57,162 422,162
2023........... 355,000 42,762 397,762
2024........... 355,000 28,340 383,340
2025........... 354,984 13,696 368,680
2026........... 150,000 3,187 153,187
Tota&.......... $ 50,577,395 $ 12,163,958 $ 62,741,353
Town of North Andover,Massachusetts 48 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Bonds and Notes Payable-Water Enterprise Fund
Outstanding Outstanding
Interest at June 30, at June 30,
Project Rate 2006 Additions Reductions 2007
Municipal Purpose Loan of 1996..... 4.0-5.2% $ 1,536,134 $ - $ (351,690) $ 1,184,444
Municipal Purpose Loan of 1997..... 4.8-5.5% 101,000 - (101,000) -
Municipal Purpose Loan of 1998..... 4.5-5.4% 2,515,100 (340,800) 2,174,300
Municipal Purpose Loan of 2001..... 4.0-4.2% 325,000 - (65,000) 260,000
Municipal Purpose Loan of 2002..... 4.0-4.5% 1,605,000 (398,750) 1,206,250
Municipal Purpose Loan of 2003..... 2.3-4.0% 3,279,943 - (443,712) 2,836,231
Refunding Bonds of 2004............... 2.0-4.2% 951,100 y (10,566) 940,534
Municipal Purpose Loan of 2005..... 3.0-4.0% 2,188,800 (243,200) 1,945,600
Municipal Purpose Loan of 2005..... 3.0-4.0% 510,000 - (30,165) 479,835
Water Supply System Security........ 3.6-4.5% 135,000 80,000 (21,500) 193,500
Bear Hill Water Tank.................... 3.6-4.5% 95,000 (19,000) 76,000
Sutton Hill Water Tank.................. 3.6-4.5% 75,000 10,000 (17,000) 68,000
Lake Outlet Structure.................... 3.6-4.5% 600,000 (60,000) 540,000
MWPAT..................................... 2.00% - 2,625,899 2,625,899
Sub-total..................................... 13,317,077 3,315,899 (2,102,383) 14,530,593
Deferred loss on refundings........... (460,782), - 74,672 (386,110)
Total water enterprise fund,net...... $ 12,856,295 $ 3,315,899 $ (2,027,711) $ 14,144,483
Town of North Andover,Massachusetts 49 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Debt service requirements for principal and interest for water enterprise fund bonds and notes payable in future
fiscal years are as follows:
Fiscal Year Principal Interest Total
2008...........$ 1,987,371 $ 456,138 ; 2,443,509
2009,,........,, 2,025,152 379,827 2,404,979
2010.......,.,, 1,969,336 353,734 2,323,070
2011,,,..,..... 1,962,836 273,112 2,235,948
2012,......,,., 1,494,978 210,805 1,705,783
2013-......... 1,345,866 155,541 1,501,407
2014,........... 785,514 104,987 890,501
2015........... 777,324 78,211 855,535
2016.......,... 400,180 50,320 450,500
2017................, 166,759 37,840 204,599
2018.,,......., 169,320 33,406 202,726
2019........,,. 131,932 28,920 160,852
2020,,,,,..,,,. 134,598 26,280 160,878
2021.,,..,,,,,. 137,317 23,588 160,905
2022,.,.,,..... 140,091 20,842 160,933
2023..... .., 142,921 18,040 160,961
2024........... 145,808 15,182 160,990
2025........... 148,754 12,266 161,020
2026........,.. 151,759 9,290 161,049
2027,..,,....,, 154,825 6,256 161,081
2028........... 157,952 3,160 161,112
Total.......... $ 14,530,593 $ 2,314,095 $ 15,878,475
Town of North Andover,Massachusetts 50 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Bonds and Notes Payable-Sewer Enterprise Fund
Outstanding Outstanding
Interest at June 30, at June 30,
Project Rate 2006 Additions Reductions 2007
MWPAT...................................... 3.7-5.4% $ 447,707 $ $ (39,231) $ 408,476
MWPAT...................................... 3.4-5.4% 387,958 (33,996) 353,962
MWPAT...................................... 3.4-5.4% 552,266 a (48,393) 503,873
Municipal Purpose Loan of 1996...... 4.0-5.2% 323,865 (63,310) 260,555
Municipal Purpose Loan of 1998...... 4.3-5.40/. 379,900 (44,200) 335,700
Municipal Purpose Loan of 1998...... 4.3-6.0% 465,000 (40,000) 425,000
MWPAT...................................... 2.8-3.4% 823,987 (49,008) 774,979
MWPAT...................................... 2.8-3.45/. 307,163 (18,537) 288,626
MWPAT...................................... 2.8-3.47. 1,108,143 (65,619) 1,042,524
MWPAT...................................... 2.8-3.5% 211,109 (12,267) 198,842
MWPAT...................................... 2.8-3.5% 172,541 (10,219) 162,322
MWPAT...................................... 2.8-3.5% 127,326 (6,545) 120,781
MWPAT...................................... 2.6-2.8% 1,994,269 (108,338) 1,885,931
Municipal Purpose Loan of 2001...... 4.0-4.8% 925,000 (85,000) 840,000
Municipal Purpose Loan of 2002...... 4.0-5.1% 3,650,000 (230,000) 3,420,000
Municipal Purpose Loan of 2003...... 2.3-3.70/. 3,265,938 (292,289) 2,973,649
Municipal Purpose Loan of 2005...... 3.0-4.0% 1,464,712 (166,288) 1,298,424
Municipal Purpose Loan of 2005...... 3.0-4.0% 346,739 (20,509) 326,230
Sewer Extension............................ 3.6-4.5% 100,000 620,000 (51,650) 668,350
Sub-total..,. ............ .................. 17,053,623 620,000 (1,385,399) 16,288,224
Deferred loss on refundings............ (42,829) 6,751 X(M 18)
-1�'�_
Total sewer enterprise fund,net....... $ 17,010,794 $ 620,000 (1,378,648) $ 16,252,146
Town of North Andover,Massachusetts 51 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30, 2007
Debt service requirements for principal and interest for sewer enterprise fund bonds and notes payable in future
fiscal years are as follows:
Fiscal Year Principal Interest Total
2008..........$ 1,399,762 $ 721,130 $ 2,120,892
2009.......... 1,412,204 659,435 2,071,639
2010.......... 1,439,380 604,791 2,044,171
2011.......... 1,447,749 529,425 1,977,174
2012.......... 1,461,078 472,712 1,933,790
2013.......... 1,470,198 409,131 1,879,329
2014.......... 1,474,642 349,929 1,824,571
2015.......... 1,498,919 279,260 1,778,179
2016.......... 1,109,292 214,165 1,323,457
2017.......... 850,000 164,397 1,014,397
2018.......... 860,000 122,513 982,513
2019.......... 650,000 82,867 732,867
2020.......... 625,000 52,322 677,322
2021.......... 375,000 26,240 401,240
2022.......... 215,000 11,018 226,018
Total......... $ 16,288,224 $ 4,699,335 $ 20,987,559
During fiscal year 2007, the Town issued$1,439,000 in general obligation bonds for school ventilation,school
system technology improvements, drainage improvements, town garage heating and water and sewer projects.
The Town also issued MWPAT drinking water bonds in the amount of$2,625,899.
The Town receives subsidy assistance from the Massachusetts Water Pollution Abatement Trust(MWPAT).
Principal and interest on the outstanding bonds for MWPAT is subsidized over the life of the bonds to assist the
Town in the repayment of this future debt. During fiscal year 2007,the Town's subsidy totaled approximately
$289,500. Future subsidies total approximately$2,708,000. The amount of MWPAT bonds outstanding at June 30,
2007,totaled$8,366,215.
The Town is subject to various debt limits by statute and may issue additional general obligation debt under the
normal debt limit. At June 30,2007,the Town had the following authorized and unissued debt:
Purpose Amount
Public safety projects................................... $ 521,087
Public works projects.................................. 1,726,846
Education projects...................................... 814,000
Community preservation(land acquisition)..... 1,603,546
Other general governmental projects.............. 80,000
Water projects............................................ 3,016,389
Sewer projects............................................ 231,870
Total................... ................................... 7,993,738
* $2,906,389 issued subsequent to year-end.
Town of North Andover,Massachusetts 52 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Changes in Long-Term Liabilities
During the fiscal year ended June 30, 2007,the following changes occurred in long-term liabilities:
Balance Balance
June 30, June 30, Current
2006 Increases Decreases 2007 Portion
Governmental Activities:
Bonds and notes payable,gross..... $ 57,036,769 $ 129,000 $ (6,588,374) $ 50,577,395 $ 6,094,566
Unamortized deferred loss
on refundings........................... (551,457) - 65,205 (486,252) 65,205
Bonds and notes payable,net........ 56,485,312 129,000 (6,523,169) 50,091,143 6,029,361
Compensated absences................ 1,377,887 30,957 1,408,844 140,884
Total......................................... $ 57,863,199 $ 159,957 $ (6,523,169) $ 51,499,987 $ 6,170,245
Business-type Activities:
Bonds and notes payable, gross..... $ 30,370,700 $ 3,935,899 $ (3,487,782) $ 30,818,817 $ 3,387,133
Unamortized deferred loss
on refundings........................... (51)3,fi'l.l.' _ 81,423 (422,188) 81,423
Bonds and notes payable,net........ 21,867,089 3,935,899 ('3,406,359) 30,396,629 3,305,710
Court judgments........................ 280,000 56,000) 224,000 56,000
Total..,,... ........ 30,147,089 $ 3,935,899 $ (3,462,359) $ 30,620,629 $ 3,361,710
The governmental activities long-term liabilities are generally liquidated by the general fund,except for bond
principal and interest costs related to the community preservation fund (major fund).
NOTE 9-RISK FINANCING
The Town is exposed to various risks of loss related to torts;theft of,damage to and destruction of assets;errors
and omissions;and natural disasters for which the Town carries commercial insurance. The Town participates in
a premium-based workers' compensation plan for its active and retired employees.
The Town is self-insured for its health insurance activities. These activities are accounted for in the internal
service fund where revenues are recorded when earned and expenses are recorded when incurred.
Health Insurance
The estimated "Incurred But Not Reported (IBNR)" claims are based on actual and historical lag claims. The
liability at June 30,2007 totaled$869,507. Changes in the reported liability since July 1,2005,are as follows:
Town of North Andover,Massachusetts 53 Basic Financial Statements
Notes to Basic Financial Statements For the Fiscal Year Ended June 30,2007
Current Year
Balance at Claims and Balance at
Beginning of Changes in Claims Fiscal
Fiscal Year Estimate Payments Year-end
Fiscal year 2006............... $ 1,086,101 $ 7,881,436 $ (7,826,723) $ 1,140,814
Fiscal year 2007............... $ 1,140,814 $ 8,039,341 $ (8,310,648) $ 869,507
NOTE 10-PENSION PLAN
Plan Description-The Town contributes to the Essex Retirement System(System), a cost-sharing multiple-
employer defined benefit pension plan administered by the Essex County Retirement Board. Substantially all
employees of the Town are members of the System,except for public school teachers and certain administrators
who are members of the Massachusetts Teachers Retirement System (MTRS),to which the Town does not
contribute. Pension benefits and administrative expenses paid by the Teachers Retirement Board are the legal
responsibility of the Commonwealth. The amount of these on-behalf payments totaled approximately$4,986,000
for the fiscal year ended June 30, 2007,and, accordingly, are reported in the general fund as intergovernmental
revenues and pension expenditures.
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 increases in other benefits imposed by the Commonwealth's state law
during those years are borne by the Commonwealth and are deposited into the pension fund. Cost-of-living
adjustments granted after 1997 must be authorized by the Essex County Retirement Board and are borne by the
System. The System issues a publicly available report in accordance with guidelines established by the
Commonwealth's Public Employee Retirement Administration Commission. That report may be obtained by
contacting the System located at 36 Federal Street,Salem,Massachusetts,01970.
Funding Policy-Plan members are required to contribute to the System at rates ranging from 5% to 11% of
annual covered compensation. The Town is required to pay into the System its share of the system-wide actuarial
determined contribution that is apportioned among the employers based on active current payroll. Chapter 32 of
MGL governs the contributions of plan members. The Town's contributions to the System for the fiscal years
ended June 30,2007,2006,and 2005 were$2,227,020,$2,082,692,and$1,947,643,respectively,which equaled its
required contribution for each fiscal year.
NOTE 11 -COMMITMENTS
The Town has entered into contracts totaling approximately$4,745,000 for various school projects,public safety
projects, public works projects,land acquisition and other governmental projects.
The Town has entered into, or is planning to enter into,contracts totaling approximately$3,248,000 for
improvement projects of its water and sewer distribution systems.
The Town has entered into an agreement with Wheelabrator,Inc. to dispose a minimum tonnage of solid waste
and make certain minimum payments for such disposal at Wheelabrator,Inc.'s facility located within the Town.
These payments are unconditionally obligated without regard to any tonnage at the facility and whether or not
the facility continues in operation. The Town's cost under the agreement totaled approximately$596,000 for the
fiscal year ended June 30,2007.
Town of North Andover,Massachusetts 54 Basic Financial Statements
Notes ho Basic Financial Statements For the Fiscal Year Ended June 3O,2OO7
As host community of the waste-to-energy facility(owned and operated by WNAI),the Town receives a
"Payment in Lieu o/Taxes (PIL0)" that isequal to$2.O5 for each ton of waste processed. This amount is
adjusted annually for changes in the Boston consumer price index and totaled approximately$1,282,000 during
fiscal year 2OO7.
NOTE 12-CONTINGENCIES
Various legal actions and claims are pending against d6cTonm.. Litigation io subject ho many uncertainties,and
the outcome of individual litigated matters is not always predictable. Although the amount of liability,if any, at
June 30,2007,cannot be ascertained,management believes any resulting liability should not materially affect the
financial position o{the Town et June 3O,20U7.
The Town participates inw number o{federal award programs. Although the grant programs have been audited
in accordance with the provisions of the Single Audit Act Amendments of 1996 through June 30,2007,these
programs are still subject tn financial and compliance audits. The amount,if any, of expenditures which may 6e
disallowed by the granting agencies cannot be determined at this time,although the Town expects such amounts,
iF any, tobeimmaterial.
NOTE 23-FUTURE IMPLEMENTATION OF GASBPlXUNODC8MENTB
The G/\5D has issued the following statements:
> Financial Reportingfor Posternployment Benefit Plans Other Than Pension Plans,which is
required to be implemented during fiscal year 2008, This Statement will not impact the Town's basic
financial statements.
� Accounting and Financial Reporting by Employersfor Postemploynient Benefits Other Than
Pensions, which is required tobe implemented during fiscal year 20O0. The Town ia currently evaluating
the effect that this Statement will have on its basic financial statements.
> Sales and Pledges nf Receivables and Future Revenues and Iutru-Eu6ty Transfers of Assets and
Future Revenues,which is required to be implemented during fiscal year 2008. The Town imcurrently
evaluating the effect that this Statement will have on its basic financial statements.
� Accounting and Financial Rrpordn%6or Pollution Rnmcdiut/on Obligations,vrbjcbiozcgnbedto
6e implemented during fiscal year 2O09. The Town ia currently evaluating the effect that this Statement
will have oo its basic financial statements.
�k Pension Disclosures,which is required to be implemented during fiscal year 2008. The
Town is currently evaluating the effect that this Statement will have on its basic financial statements.
� Accounting and Financial Reportingfor Intangible Assets,which is required to be
implemented during fiscal year 2010. The Town is currently evaluating the effect that this Statement will
have oo its basic financial statements.
These pronouncements will bc implemented by their respective due dates.
Town o/North Andover,Massachusetts 55 Basic Financial Statements
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56
Required Supplementary Information
57
GENERALFUNLI
SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL,
FOR THE FISCAL,YEAR ENDED TUNE 30,2007
Prior Year
Encumbrances Supplemental
and Continuing Original Appropriations Final
p p ' g Transfers Budget
A ro nations Bud et and ..........
REVENUES
Real estate and personal property taxes............................... S $ 50,780,645 $ (1,459,355) $ 49,321,290
Motor vehicle and other excise taxes.................................... 3,985,000 3,985,000
Taxliens. .....-,.- ........ ..
Payments in lieu of taxes............ ......... ....... 1,595,75,
y .................... ... .... - 3 - 1,595,753
Charges for services........ ........--........... ......... 650,000 650,000
Intergovernmental....................................... ...... 9,550,833
Penalties and interest on taxes............................................ 186,700 186,700
Licenses,permits and fees............ ....... ........ 1,415,350 1,415,350
Fines and forfeitures................. 102,560 102,560
Departmental.................................................................. 348,308 348,308
Investment income,............ . ......... ......... 850,000 - 850,000
TOTAL REVENUES................................................ - 69,465,149 (1,459,355) 68,005,794
EXPENDITURES
Current:
General government,................... 91,472 2,430,035 (39,996) 2,481,511
Public safety.............................................................. 10,767 8,262,082 184,920 8,457,769
Education,.... ....--......... ........ ...... ........ ...... 99,238 33,374,429 (1,026,709) 32,446,958
Public works............................................................... 3,355 3,945,645 (154,319) 3,794,681
Health and human services........................................... 1,438 751,822 (17,600) 735,660
Culture and recreation..... ...... ......... . ....................... 30 745,707 (49,824) 695,913
Pension benefits-..... ... ....... .................................... 2,227,020 2,227,020
Employee benefits-.-.... .... ... .......... ......... ........... 32,740 7,941,499 39,578 8,008,817
Property and Liability insurance,............. .... ... 416,516 (6,110) 415,406
State and county charges................................................... ... 2,127,944 2,127,944
Debt:service:
Principal................................................................... 6,616,222 6,588,372
Interest- ..........- 2,782,519 41,554) 2,768,815
TOTAL EXPENDLTUIdLS ........ 239,040 71,621,440 (1,111,614 70,748,866
EXCESS(DEFICIENCY)OF REVENUES
OVER EXPENDITURES., , ....... .......... (239,04 (2,156,291) (347,741 (2,743,072)
t3`I.`HER FINANCING SOU.rRCEIl S(USES)
Transfers in................................................................... 889,668 889,668
Premium from issuance of bonds and notes..... ...... . 150,000 150,000
Sake of capital assets.....I....- ---....... ---... ......
Transfers out................ ........... (503,666) 503,666
TOTAL OTFIER FINANCING SOURCE'S(USES).......... 1,039,668 (503,61,6) 536,002
NET CHANGE IN FUND BALANCE,....... ......... ....... (239,040) (1,116,623) (851,407) (2,207,070)
FUND BALANCE AT BEGINNING OF YEAR........................... 6,230,788 6,230,788 6,230,788 6,230,788
FUND BALANCE AT END OF YEAR-. ..........--...... $ 5,991,748 $ 5,114,165 5,379,381 $ 4,023,718
See notes to basic financial statements.
Town of North Andover,Massachusetts 58 Required Supplementary Information
Current Year Actual and
Encumbrances Encumbrances Variance
and Continuing and Continuing Positive/
Actual AEELopriations AEE2P i"atOls aUvje
- _IHM _ _
$ 48,915,350 $ $ 48,915,350 (405,940)
3,477,581 3,477,581 (507,419)
282,196 282,196 282,196
1,586,050 1,586,050 (9,703)
797,455 797,455 147,455
10,222,221. 10,222,221 671,388
305,539 305,539 118,839
1,245,595 1,245,595 (169,755)
124,303 124,303 21,743
415,233 415,233 66,925
1,082,484 1,082,484 232,484
68,454,007 68,454,007 448,213
. ...............--
2,427,837 26,006 2,453,843 27,668
8,308,701 41,305 8,350,006 107,763
32,052,996 374,016 32,427,012 19,946
3,599,351, 121,721 3,721,072 73,609
729,238 182 729,420 6,240
675,313 12,917 688,230 7,683
2,227,020 - 2,227,020 -
7,957,488 6,000 7,963,488 45,329
415,406 - 415,406 -
2,170,566 2,170,566 (42,622)
6,588,372 6,588,372
2,961,033 2,961,033
92,218)
70,113,321 582,147 70,695,468 53,398
___S1,659,3141 582,147 2,241,461 501,611
889,668 889,668
(150,000)
1,770 1,770 1,770
L503,6661
387,772 387,772 S148,230
(1,271,542) (582,147) (1,853,689) 353,381
6,230,788 6,230,788 6,230,788 -
$ 4,959,246 $ 5,648,641 $ 4,377,099 $ 353,381
Town of North Andover,Massachusetts 59 Required Supplementary Information
Notes to Required Supplementary Information For the Fiscal Year Ended June 30,2007
Budgetary- GAAP Reconciliation
For budgetary financial reporting purposes,the Uniform Massachusetts Accounting System basis of accounting
(established by the Commonwealth) is followed,which differs from the GAAP basis of accounting. A
reconciliation of budgetary-basis to GAAP-basis results for the general fund for the fiscal year ended June 30,
2007,is presented below:
Revenues Expenditures
Budgetary basis as reported on the schedule of
revenues,expenditures and changes in fund
balance-budget and actual..................................................... $ 68,454,007 $ 70,695,468
Adjustments
Net change in recording 60-day receipts.................................... 122,459
Net change in recording tax refunds payable.............................. (260,188) -
To record activity for MTRS on-behalf payments........................ 4,985,830 4,985,830
Net change in recording short-term interest accrual..................... - (273,349)
To account for encumbrances and continuing appropriations........ (582,147)
GAAP basis as reported on the statement of revenues,
expenditures and changes in fund balances................................ $ 73,302,108 $ 74,825,802
Town of North Andover 60 Required Supplementary Information
Additional Information
61
ENTERPRISE FUNDS
SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
BUDGETARY BASIS-BUDGET AND AC`I'UAL
FOR THE FISCAL YEAR ENDED JUNE 30,2007
Water Fund
Variance
Original Final Positive/
b!� .�et Bud.g.et Actual (Negative)
................. .............................. ......................
OPERATING REVENUES
Charges for services- -—.-...——............. $ 5,208,723 $ 5,208,723 $ 4,405,686 $ (803,037)
Utility hens—........... ... ........ ..........—........... ....... 179,646 179,646
Penalties and interest..... ...... ......... ........ .................. 18,000 18,000 18,915 915
TOTAL OPERATING REVENUES... ............ 5,226,723 5,226,723 4,604,247 (622,476)
OPERATING EXPENSES
Cost of service and administration... ............ ......... 2,095,890 2,095,890 1,756,684 339,206
GLSD assessment...................... .. ........ ..... ...
Debt service-principal................. .......... ...... 2,129,632 2,129,632 2,102,382 27,250
TOTA 1.OPERATING EXPEND ffU RES .........—...... . 4,225,522 4,225,522 3,859,066 366,456
EXCESS(DEFICIENCY)OF REVENUES
OPERATING INCOME(L.OSS).................................... 1,001,201 1,001,201 745,181 (256,020)
NONOPERATING REVENUES(EXPENSES)
Interest expense— ........... .... .... (502,609) (502,609) (533,114) (30,505)
TOTAL.NONOPERATING REVENUES(EXPENSE),NET (502,609) (502,609) (533,114) (30,505)
............................................ ........................................................... ---
INCOME(LOSS)BEFORE TRANSFERS......... ....... ...... 498,592 498,592 212,067 (286,525)
TRA.NSFFRS
Transfers out, ............. ......... (534,632) 4,632) 34,632)
CHANGE IN FUND NET'ASSETS................ .... .. . (36,040) (36,040) (322,565) (286,525)
FUND NET ASSETS AT'BEGINNING OF YEAR... ....... 808,922 808,922 808,922
FUND NET ASSETS AT'END OF YEAR................... . ......... $ 772,882 $ 772,882 $ 486,357 $ (286,525)
Town of North Andover,Massachusetts 62 Additicuial Information
Sewez Fund Osgood Hill Fund
............ ....................
Variance Variance
Original Final Positive/ Original Final Positive/
Budget........... Budget Actual (Negative) Budget et .............B.....u.....d....g e....t.............. Actual (Negative)
$ 2,764,624 $ 2,764,624 $ 2,825,(A9 $ 61,025 535,000 535,000 471,173 $ (63,827)
- 12-1,145 121,145 - -
10,000 10,000 17,626 7,626
2,774,624 2,774,624 2,964,420 189,796 535,000 535,000 471,173 (63,827)
743,209 743,209 648,872 94,337 461,163 461,163 439,488 21,675
1,298,000 1,298,000 1,210,663 87,337
�IT
1,321,714 .........
1,270,064 1,270,064 (51,650) -
.
3,311,273 3,311,273 3,181,249 130,024 461,163 461,163 439,488 21,675
(536,649) (536,649) (216,829) 319,820 73,837 73,837 31,685 (42,152)
(629,741) (629,741) (542,202) 87,539 - -
...........
........... (629,741) (629,741) (542,202) 87,539
(1,166,390) (1,166,390) (759,031) 407,359 73,837 73,837 31,685 (42,152)
(253,919) (253,989)
.............. (253,989) (83"11 (83,119) (83,119)
(1,420,379) (1,420,379) (1,013,020) 407,359 (9,282) (9,282) (51,434) (42,152)
2,431,258 2,431,258 2,431,258 70,655 70,655 70,655
$ 1,010,879 $ 1,010,879 $ 1,418,238 $ 407,359 $ 61,373 $ 61,373 $ 19,221 $ (42,152)
.............
.............................................
Town of North Andover,Massachusetts 63 Additional Information