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Home My WebLink About2016 Annual Town Report ,�I�� rpro�� i¢„ � Y��'i'��yiG �;f ir��i� o �p�{r�IV��xd I!Y � ��UJ � ,1N��` v��9i1 ��S ��flr O///////�(kf !C O// � jNl��(f � ,� �/G;/,'/ ir�i,r i%%,,,r 1 � fl lV �® ",J �- ?� rr r ��ra i Y ��,�liu D p ,� r»mY �[ 1�NN1« i ��NDNI�NIttYro' 'PVY i RM1�dtlion��NSRM � ��P t ��h��r�rm�reK��t � /��io�i t� �ru�r1U inairx�Ur y i r i r vgN'�IVi9uB�/�'Odf`1 f�fN!� � �"" � � S{� /� (�/�fi.Yf�NONi�NWPVVIIIf �1 �Kri� � / ii% � ry�mus�dii��i�¢� � � � � oINJ�1�4f4��UMRUUV ! iii l /ii�ii � � � r aNi�0.!� i II r T '�any y� �� j (� i i��l(I �iilV wNIIVI f, 1/ % iuNl i11� i i �� f o� 1 I �� a� � �/� �� h „, �� I l i� �� , i � � �4r !�� .��ur�� d � I � ,�ti � I ' 2016 Annual Town Report The cover of the 2016 Annual Town Report is dedicated to the renovated Town Hall Offices located at 120 Main Street. This building was originally constructed as the Town's only fire station in 1909 and later expanded to include Town Offices in 1925. The first renovation of the building was completed in 2005 with the addition of a Selectmen's Meeting Room, an elevator, expanded office space and a state of the art vault located in the basement to house all the Town's permanent records. This was the first step to modernize space and yet preserve the historic beauty of the building. The main focus was to preserve the character of the original building. The completion of the new North Andover Main Fire Station in 2015 opened the door to finally bringing all Town Offices into a single location. The building project would allow residents,visitors, and businesses to be able to conduct all their business in one convenient place. The Main Street offices relocated to 1600 Osgood Street to allow construction to begin in January 2016. Physically moving while maintaining all services was a daunting task. With the cooperation of all our residents business as usual was accomplished. Tireless efforts to come back to Main Street culminated in a triumphant return on October 24, 2016. Of particular note was the building opened to Early Voting at the same time the doors opened and continued for 12 days with over 7,100 voters taking advantage of this for the first time. The combination of modern updates with beautiful decor and design are a tribute to the citizens of North Andover and the Facilities Master Plan Committee for their support and vision. The Town Hall decorating Committee's countless hours and dedication have made the beautiful building come to life. The benefit of having all departments under one roof makes an efficient government possible. The building is now the majestic home of the people of North Andover. Table of Contents North Andover Service Listings Division of Public Safety Our Town 3 Emergency Management 58 Town Offices 4 Fire Department 59 Town Officers and Committees 10 Police Department 61 General Government Division of Public Works Board of Selectmen and Town Manager 15 Division of Public Works 68 Assessors Office 27 Town Treasurer 28 Division of Community Services Town Clerk 29 Commission on Disability Issues 73 Housing Authority 75 Community Development and Services Community and Economic Development 30 School Department Animal Inspector 32 Public School System 77 Board of Appeals for Zoning 33 Town Meetings and Elections Building Department 34 Annual Town Election, March 29, 2016 86 Conservation Commission 35 Elder Services 38 Annual Town Meeting Minutes, May 10, 2016 88 Health Department 42 Historical Commission 43 Supplements Information Technology 44 Comprehensive Annual Financial Report Planning Department 45 for Fiscal Year Ended June 30, 2016 Stevens Memorial Library 48 Reports on Federal Award Programs Veterans' Services 53 Youth and Recreation Services Department 55 Management Letter North Andover Service Listings Our Town INCORPORATED ASSESSED VALUATION April 7,1855 Real Estate Only $4,510,828,458 Personal Property $126,535,930 SITUATION Total $4,637,364,378 About 24 miles north of Boston Latitude 42°40" TAX RATE Longitude 717' For the period from July 1,2015-June 30,2016 Residential$14.28,Commercial $20.45 COUNTY Essex TAX BILLS Tax bills are paid quarterly. Payments are due on August 1, POPULATION November 1,February 1,and May 1.If unpaid by due date, 31,400 interest will be added according to law from the date due to the date payment is made.Motor Vehicle Excise is due thirty AREA days from date of issuance.Water bills are issued quarterly Approximately 26.63 square miles and are due 30 days from date of issuance. ELEVATION ANNUALTOWN ELECTION 91 feet.847 inches above sea level at Town Building Last Tuesday in March TOWN HALL TOWN MEETING Built in 1925 Open Town Meeting Meets in May SENATORS IN CONGRESS PRECINCTVOTING LOCATIONS* Edward Markey(617) 565-8519 All precincts vote at North Andover High School, Elizabeth Warren(617)565-3170 430 Osgood St. REPRESENTATIVE IN CONGRESS Polls open 7:00 a.m.until 8:00 p.m. Seth Moulton(978)531-1669 Call Town Clerk's Office at(978) 688-9501 for information. STATE REPRESENTATIVES 14th Essex—Precincts 1,2,3,4,and 5 Town of North Andover Web Site Diana DiZoglio(617) 722-2060 www.northandoverma.gov 18th Essex—Precincts 6,7,and 8 James J.Lyons Jr.(617) 722-2014 STATE SENATORS 1st Essex Precincts 1,2,3,and 4 Kathleen O'Connor Ives (617) 722-1604 1st Essex and Middlesex Precincts 5,6,7,and 8 Bruce E.Tarr(617) 722-1600 *Polling locations subject to change. — 3 — Town Offices FIRE DEPARTMENT TOWN CLERK 795 Chickering Road 120 Main Street Emergency:911 PHONE: (978) 688-9500 PHONE: (978) 688-9590 FAX: (978) 688-9557 FAX: (978) 688-9594 HOURS: Mon.,Wed,Thurs.8:00-4:30 BUSINESS HOURS: Mon.,Wed,Thurs.1:00-4:30 Tues.8:00-6:00 Tues.8:00-6:00 Fri.8:00—Noon Fri.8:00—Noon Call for Passport Hours SCHOOL ADMINISTRATION POLICE DEPARTMENT 566 Main Street 1475 Osgood Street PHONE: (978) 794-1503 Emergency:911 FAX: (978) 794-0231 PHONE: (978) 683-3168 HOURS: 8:00-4:30 FAX: (978) 681-1172 TTY. (978) 683-3168 North Andover High School HOURS:24 hours a day 430 Osgood Street (978) 794-1711 ANIMAL CONTROL North Andover Middle School PHONE: (978) 683-3168 495 Main Street (978) 794-1870 PUBLIC LIBRARY Atkinson Elementary School 345 Main Street 111 Phillips Brook Road PHONE: (978) 688-9505 (978) 794-0124 FAX: (978) 688-9507 Franklin Elementary School HOURS:Please call for hours 2 Cypress Terrace (978) 794-1990 PUBLIC WORKS Kittredge Elementary School 384 Osgood Street 601 Main Street PHONE: (978) 685-0950 (978) 794-1688 FAX: (978) 688-9573 HOURS: Mon.,Wed,Thurs.8:00-4:30 Sargent Elementary School Tues.8:00-6:00 300 Abbott Street Fri.8:00—Noon (978) 794-3673 SENIOR CENTER Thomson Elementary School 120R Main Street 266 Waverly Road PHONE: (978) 688-9560 (978) 794-1545 FAX: (978) 688-9563 HOURS: Call for Hours TOWN MANAGER 120 Main Street PHONE: (978) 688-9510 FAX: (978) 688-9556 — 4 — PARKING CLERK PUBLIC WORKS 120 Main Street 384 Osgood Street PHONE: (978) 688-9550 PHONE: (978) 685-0950 Parking Ticket Information/Payment EMERGENCY(Non-Business Hours):(978) 683-3168 FAX: (978) 688-9573 PERSONNEL HOURS: Mon.,Wed,Thurs.8:00-4:30 Town Hall Tues.8:00-6:00 120 Main Street Fri.8:00—Noon PHONE: (978) 688-9526 Field and Park Maintenance Town Employment Opportunities Boat and Fishing Permits -Lake Cochichewick Pothole and Road Hazard Repairs PLANNING Public Tree Issues 1600 Osgood Street Recycling Permits PHONE: (978) 688-9535 Sewer Connections Flood Maps Sewer Blockages Planning Board Agendas Snow Removal Regulations Site Plan Review Street/Sidewalk Resurfacing Info. Subdivision Plans Trash&Recycling Collection Info. Zoning By-Law Water Connections Zoning Map Information Water Leaks Water Main Replacement POLICE DEPARTMENT Water Meters Watershed Information 1475 Osgood Street PHONE: Emergency 911 RECREATION Non-Emergency(978) 683-3168 PHONE: (978) 682-9000 FAX: (978) 681-1172 Arts in the Parks/Children's Theatre TTY. (978) 683-3168 Band Concerts Adult Police Academy Alcohol Server Training Information Boys Basketball Animal Control Field/Park Administration Auction Permits Field/Playground Permits Bicycle Helmet Sales Field Trips Girls Basketball Bicycle Registration Girls Softball Burial Permits(Non-Business Hours) Indoor/Outdoor Skating Information Business Security Surveys Parent Guide to Childress Resources. Car Seat Loan Program Child Identification Program Playground Areas Citizen Advisory Council Program Information/Registration Community Policing Seasonal Employment/Volunteer Opportunities Crime Watch Sports Organization Information Tennis Court Passes D.A.R.E.Program Womens Softball Detective Hot Line Firearm Permits School Safety Questions Student Police Academy Town Emergencies(Non-Business Hours) Traffic Control and Safety Issues — 7 — TOWN ACCOUNTANT BUILDING DEPARTMENT 120 Main St. 1600 Osgood Street PHONE: (978) 688-9520 PHONE: (978) 688-9545 FAX: (978) 688-9522. ADA Coordinator Municipal Budgeting Building Permits Municipal Financial Reporting Building Information State&Federal Reporting Demolition Permits Accounts Payable Fireplace&Chimney Permits Payroll Gas Permits Masonry Permits ASSESSORS Occupancy Permits 120 Main Street Plumbing Permits PHONE: (978) 688-9566 Relocating Structure Permits FAX: (978) 688-9556 Replacement Door Permits Exemption Applications Replacement Window Permits Motor Vehicle Excise Questions Roofing Permits Property Assessments Sealer of Weight and Measures Tax Rate Information Sign Permits Swimming Pool Permits BOARD OF HEALTH Tent Permits Vinyl Siding Permits 1600 Osgood Street Woodstove Permits PHONE: (978) 688-9540 Zoning By-Law Enforcement/Questions Communicable Diseases Info/Surveillance Environmental Health Concerns COMMISSION ON DISABILITIES Food Establishment Permits/Complaints Food Sanitation Training Programs American Disabilities Act Coordinator Health Screening:Blood Pressure,TB Home Visits CONSERVATION COMMISSION Housing:Requirements for safe and sanitary housing 1600 Osgood Street Influenza PHONE: (978) 688-9530 Nuisance and Sanitation Complaints Wetlands Information Public Swimming Pool Permits Rabies Vaccination Clinics:Dogs and Cats Recreational Camp Permits Subsurface Sewage Disposal:Permits and Information on Location Tanning&Massage Est.Permits Tobacco Control Program Vaccine Depot Well Drilling Permits — 5 — COUNCIL ON AGING-SENIOR CENTER FIRE DEPARTMENT 120R Main Street 795 Chickering Road PHONE: (978) 688-9560 PHONE: Emergency 911 Alzheimer's Identification/Intervention Program Non-Emergency(978) 688-9590 Assistance Programs Blasting Permits Blood Pressure Clinics Burning Permits 1/15-5/1 Choral Group Fire Prevention Discussion Group Fire Inspection- Smoke Detectors Educational Programs Flammable Liquids/LP Gas Permits Elders at Risk Oil Heat Appliance Installation Fitness Programs Sprinkler Fire Alarm Plan Review Free Pamphlets Sprinkler Installation Friendly Visitor Program Underground Fuel Tank Installation/Removal Fund-Raising Permits Handicapped Accessible Health Care Proxy LIBRARY Health Screenings 345 Main Street Home Care Services PHONE: (978) 688-9505 Homestead Act FAX: (978) 688-9507 Immunization Programs Anne Bradstreet Collection Income Tax Assistance Book Discussion Series Informational and Referral Books Lectures Books on Tapes Lending Library Boston Globe on CD-ROM Lunch Program Camcorder Magazines and Newspapers Cassette Players Meals on Wheels Computers (PC and Mac) Memorials Conference Room Monthly Parties Dial-Up Access Newsletter Exhibits Outreach Friends of Stevens Memorial Library Recreational Programs Geneology and Local History Senior/Disabled Tax Relief Program Handicapped Accessible SHINE(Serving Health Insurance Needs for Elders) Inter-Library Loan Telephone Reassurance Program Language Tapes Transportation Programs:Medical&Grocery Large Print Books ShoppingVolunteer Opportunities Magazines and Newspapers Weight Maintenance Program Meeting Room Widows/Widowers Support Group Merrimack Valley Library Consortium Member Museum Passes EMERGENCY MANAGEMENT SERVICES Music CDs PHONE: (978) 688-4904 On-line Periodical Database Auxiliary Police Original Art for Loan Disaster Services Phonedisc Evacuation Coordination Services Photocopies(reduce and enlarge) Liaison for State and Federal Agencies Records Local Emergency Planning Committee Rental Books Radio Communication Capability with Local, Reference Services State and Federal Agencies Special Programs for Adults and Young Adults Storyhours/Children's Programs EMERGENCY MEDICAL SERVICES Talking Books for the Blind PHONE:911 Tax Forms Television with Cable TV Hook-up Videos — 6 — SCHOOL ADMINISTRATION— TOWN CLERK SUPERINTENDENT'S OFFICE Town Hall,Main Floor 566 Main Street PHONE: (978) 688-9500—General Information PHONE: (978) 794-1503 (978) 688-9501 Town Clerk FAX: (978) 794-0231 Absentee Ballots Art:K-12 Alcoholic Liquor License Athletics (794-3144) Appointed Committee Listing Community Schools Program (978-794-3080) Automatic Amusement Device License Day Care Programs Birth Certificates Breakfast Club Bowling Alley/Billiard License Extended Kindergarten Business Certificates KidStop! Census Information/jury List EXCEL Enrichment Program Certification of Petitions High School SAT Prep Class I—Dealer License High School Driver Education Class II—Used Cars License Mens Basketball Class III Junk Dealer License Summer School Common Victualler License Academic Remediation Coordinates Annual Town Report Camps Death Certificates Technology Training Dog License—due January 1 Computers:K-12(978-794-3144) Elected Officials Current Listing Continuing Education(978-794-1711) Entertainment License English as a Second Language Fishing and Hunting License Literary Publications Justice of the Peace Music:K-12 Marriage License Physical Education:K-12 (978-794-3144) Massachusetts Income Tax Forms Special Education:Pre-School-12(978-794-1717) Nomination Papers Notary Public SCHOOL CLOSINGS Passports When weather conditions cause schools to be closed Raffle Permits or to delay their openings, PLEASE DO NOT Residential Street Listing CALL THE SCHOOL DEPARTMENT, POLICE Voter Registration DEPARTMENT, OR FIRE DEPARTMENT. TREASURER/TAX COLLECTOR Announcements are made on GOVERNMENT Town Hall,Main Floor ACCESS CHANNEL 22,local television stations PHONE: (978) 688-9550 (WBZ—Channel 4,WCVB—Channel 5,WHDH— Betterments Channel 7) and radio stations(WBZ AM,WRKO AM, Motor Vehicle Excise Tax Payments WBMX FM,WCCM AM,WLLH AM WHAV AM). Municipal Lien Certificates Parking Ticket Payments SELECTMEN'S OFFICE Real Estate Information/Payments Town Hall,Second Floor Water/Sewer Bill Payments PHONE: (978) 688-9510 Appointments—Boards/Commissions VETERANS' SERVICES Selectmen's Meeting Agendas Town Hall Utilities Hearings PHONE: (978) 688-9552 All Veteran Benefits STEVENS ESTATE AT OSGOOD HILL Discharge Papers Recorded 723 Osgood St. Flags and Holders for Graves PHONE: (978) 682-7072 Headstones and Grave Markers Facility Rental Information Veterans'Assistance — 8 — YOUTH AND RECREATION SERVICES 33 Johnson St. PHONE: (978) 682-9000/688-9515 EMERGENCY BEEPER: (508) 387-4919 WEB SITE:www.nayouth.com Crisis Intervention Information and Referral Social Programs Recreation Programs Juvenile Court Services Support Services Student-Run Services Adventure Programs Ropes Course Clothes Closet Summer Programs Job Bank Peer Mediation Joseph N.Hermann Youth Center Prevention Programs 24-Hour Emergenc Response Attendance Officer Holiday Giving Program Parenting Programs Family Services Youth Concert Series Recreation and Use of Fields Stevens Pond — 9 — Town Officers and Committees Officials and Term Expiration Dates AFFORDABLE HOUSING TRUST, COMMUNITY PRESERVATION COMMITTEE BOARD OF TRUSTEES John Simons, Chair(Planning Bd.Appt.) 2017 Laurie Burzlaff, Chairperson 2017 Alberto Angles,Jr.' 2017 Stephen L. Bernard 2017 Albert Fowler2 2017 Robert Bernardin 2018 Deborah A. Feltovic(Cons. Comm.Appt.) 2017 Joan Fitzgibbons 2017 Charles Gangi(Historical Comm.Appt.) 2017 Roger B. Lawson,Jr. 2017 Terrence Holland 2017 George Koehler 2017 (Youth&Recreation Council Appt.) Tracy M.Watson 2018 Tracy Watson' 2017 William Gordon' 2017 ASSESSORS, BOARD OF Marybeth Soucy 2017 David J.Minicucci, Chairperson 2017 (Housing Authority Appt.) George R. Barker,Jr. 2017 Bryan Perry 2017 CONSERVATION COMMISSION Garrett Boles, Chief Assessor Louis Napoli, Chairperson 2017 Deborah A. Feltovic 2018 CABLE TV ADVISORY COMMITTEE' Joseph W. Lynch,Jr. 2019 Ronn R. Faigen 2017 John Mabon 2019 Shane Woodruff 2017 Albert P.Manzi,Jr. 2017 Chanida Oros 2018 Sean F.McDonough 2018 Robert S. Parker 2017 Douglas Saal 2019 Paul Blinn 2018 Jennifer A. Hughes, Conservation Administrator COMMISSION ON DISABILITY ISSUES Phyllis A.Jones, Chairperson 2018 CONSTABLES Stacey Leibowitz 2019 Ronald E. Bertheim 2019 Nancy D.Murphy 2018 Richard D. Cain,Jr. 2018 Donald B. Stewart 2018 Ronald Pollone 2017 Brenda Savary 2017 Terry Brown 2018 COUNCIL ON AGING2 Jeffrey French 2017 Joe Sergi, Chairperson 2017 Maria V. Rosati 2018 COMMUNITY ACCESS & MEDIA, Peter Aziz 2017 BOARD OF DIRECTORS William P. Callahan 2019 Stephen J.D'Onofrio, President' 2017 Joyce Bold 2019 Steven Ventre,Treasurer n/a Dorothy Consiglio 2017 Randall Hart n/a John Gilboard 2018 Peter Baylies n/a John W. Graham 2017 Michael Grant', Secretary n/a Patricia A. Long 2017 Brian Fraser, Executive Director Joseph McCarthy 2019 Margaret V. Shaheen 2019 COMMUNITY AND ECONOMIC Irene M. O'Brien,Director, Elder Services DEVELOPMENT Eric Kfoury,Division Director Elected Official Appointed by Selectmen Appointed by Town Manager 'Appointed by Town Moderator 'Appointed by School Committee 'Appointed by School Superintendent 'Replacement by Vote of Remaining Members — 10 — CULTURAL COUNCIL FINANCE COMMITTEE Helena Minton, Chairperson 2017 William Callahan, Chairperson 2018 Cari Wahlberg 2019 Karen Blake 2018 Mary Delano 2017 Liz Gerron 2018 Ken Delano 2017 Sasha Weinreich 2017 Kim Barry 2019 Chris Nobile 2017 Diane Hinckley 2017 Thomas Ringler 2017 Gail Armondino 2018 Jennifer Goldman 2018 Vaijayanthi Gomadum 2019 Tim Tschirhart 2018 Divya Bhatnagar 2017 ELDERLY/DISABLED TAXATION FUND David Minicucci 2017 FIRE CHIEF Muriel Katschker 2017 William McCarthy Richard Gramly 2017 Lauren Lemack 2017 FINANCE DIRECTOR/TOWN ACCOUNTANT Lyne M. Savage 2022 EMERGENCY MANAGEMENT AGENCY2 JeffreyJ. Coco,Director 2017 GREATER LAWRENCE COMMUNITY John P. Savastano, Deputy Director 2017 ACTION COUNCIL Charles Gray, Co-Dep. Director, 2017 Jonathan Pearlson 2018 Police Dept. Liaison William McCarthy, Co-Dep. Director, 2017 GREATER LAWRENCE REGIONAL Fire Dept. Liaison TECHNICAL HIGH SCHOOL DISTRICT Connor Lincoln, 2017 COMMITTEE REPRESENTATIVE' Senior Operations Officer Frank A. Rossi 2017 Frank Dushame, Operations Division 2017 Neil Hamel, Operations Division 2017 GREATER LAWRENCE SANITARY Carl Langlois, Operations Division 2017 DISTRICT REPRESENTATIVE William M. Hastings, 2017 William Gordon 2018 RACES Sr. Communications Officer Timothy McDonald, 2017 BOARD OF HEALTH RACES Communicator Thomas Trowbridge,DDS,MD, 2018 Steven Tessler, RACES Communicator 2017 Chairperson Michael J.Xenakis 2017 Larry F. Fixler 2017 Francis P.MacMillan,Jr.,MD 2017 FESTIVAL COMMITTEE Joseph McCarthy 2016 Jeff Coco, Co-Chairperson 2017 Edwin C. Pease 2018 Joan Heafey, Co-Chairperson 2017 Brain LaGrasse, Public Health Director Sharon Coco 2017 Michele Grant, Public Health Inspector William Dolan 2017 James Fazio 2017 HARBOR MASTER E.J. Foulds 2017 Peter Boynton 2018 Neil Hamel 2017 Genevieve Koenig 2017 Conner Lincoln 2017 William Murphy 2017 Pristene Pazzanese 2017 Philip Pelletier 2017 Elected official Martha Salisbury 2017 'Appointed by Selectmen Chandra Oros 2017 'Appointed by Town Manager Suzanne Fischer 2017 "Appointed by Town Moderator Robert Leonard 2017 'Appointed by School Committee Krishna Patel 2017 'Appointed by School Superintendent Replacement by Vote of Remaining Members — 11 — HISTORICAL COMMISSION OLD CENTER HISTORIC DISTRICT Kathleen Szyska, Chairperson 2018 COMMISSION Anne Erickson 2019 Harry Aznoian, Chairperson 2018 Charles Gangi 2019 Ryan Schruender 2018 Patricia Long 2018 Leslie M. Frazier 2019 James F.Wefers 2017 Shepard Spear 2017 Janice Williams 2017 Martha Larson 2018 Nicholas Pelletier 2019 Michael Lenihan 2017 Kathleen Szyska 2019 HOUSING AUTHORITY' Roger D. Lawson,Jr. 2018 Francis McCarty 2021 David M.Mermelstein 2019 Edward Capodilupo 2020 Stephen Long 2017 PATRIOTIC OBSERVANCE & MARCHING Mary Beth Soucy 2018 COMMITTEE Madeleine Sutcliffe, State Appointee 2016 Paul Gangi 2017 Cathy Hoog, Executive Director Rosemary Smedile 2017 Joe Edward Smith 2017 HUMAN RESOURCES3 Domenic Terranova 2017 Cathy J.Darby,Director Matt Twiss 2017 Lynn Spitalere 2017 INSPECTORS3 Adele Johnson 2017 Donald Belanger,Inspector of Buildings & Ann Armitage 2017 Zoning Enforcement Officer Muriel Katschker 2017 Stephen C. Galinsky, Plumbing&Gas Inspector Gerry Maguire,Veterans Director 2017 Allan Paduchowski, Electrical Inspector R.David Lindsay,DVM, 2017 PLANNING BOARD Animal Inspector John Simons, Chairperson 2018 David R. Kellogg 2019 LICENSING COMMISSIONERS Lora McSherry 2018 Phil DeCologero, Chairperson 2018 Peter Boynton 2017 Rosemary Connelly Smedile 2019 Lynne Rudnicki 2017 Donald B. Stewart 2017 Aaron Preston,Associate 2017 Richard M.Vaillancourt 2018 Tracy Watson 2017 POET LAUREATE Ken and Nadine Delano 2018 MACHINE SHOP VILLAGE NEIGHBORHOOD CONSERVATION DISTRICT COMMISSION Liz Fennessy, Chairperson 2017 Harry Aznoian 2018 Janice Williams 2018 Matthew Rock 2018 Jerry Wilson 2017 MERRIMACK VALLEY PLANNING COMMISSION Richard J. Byers Elected Official Appointed by Selectmen Appointed by Town Manager 'Appointed by Town Moderator 'Appointed by School Committee 'Appointed by School Superintendent 'Replacement by Vote of Remaining Members — 12 — POET LAUREATE COMMITTEE STEVENS ESTATE, BOARD OF TRUSTEES2 Helena Minton, Chairperson 2019 Kevin J.Willoe, Chairperson 2019 Jill Barker 2018 William V.Dolan 2018 Kristen Hollenbeck 2018 Eric P. Frahlich 2017 Blair Woodman 2019 E.William Hanson 2017 Gayle Heney 2019 Nicole Pelletier 2018 Mark Bohrer 2018 David Boudreau 2017 Maryellen Osgood 2018 Jonathan Albano 2019 Kathleen Keenan, Library Director, Ex Officio STEVENS MEMORIAL LIBRARY, BOARD OF TRUSTEES' POLICE CHIEF Eva Hamori, Chairperson Charles Gray Maria G.Mesinger Ann Cavanaugh PUBLIC WORKS3 William Duffy,Jr. James Stanford,Director E.William Hansen Peter Lafond PURCHASING DIRECTOR Stan Limpert Raymond Santilli Kathleen Keenan, Library Director REGISTRAR OF VOTERS, BOARD SUSTAINABILITY COMMITTEE Carrie Crouch 2019 Raymond Geraneo 2018 Linda McHugh 2018 Susan Almono 2019 Alexandra Mezzina 2017 Shoba Donti 2019 Joyce A. Bradshaw,Town Clerk, Michael Carney 2019 Ex Officio Robert Rafferty 2019 Brian Sheckman 2018 SCHOOL BUILDING COMMITTEE Shepard Spear 2019 Stanley B. Limpert, Chairpersons Allyson Poole 2018 Jordan Burgess' Diana Perkel 2018 Jay Burke James Lally 2018 Eva Hamori4 Andrew Mitchell 2017 Dan Ryan' Cari Wahlberg 2019 Maureen Walsh Sakakeeny4 John David Dishaw 2017 Thomas Zahoruiko4 James Stanford, Public Works Director, Ex Officio SCHOOL COMMITTEE' Brian D. Gross, Chairman 2017 TOWN CLERK Andrew P.McDevitt 2018 Joyce A. Bradshaw Stanley B. Limpert 2017 David Torrisi 2018 TOWN COUNCIL Amy Mabley 2019 Suzanne Egan SCHOOL SUPERINTENDENTS Dr.Jennifer Price SELECTMEN, BOARD OF' Tracy M.Watson, Chairman 2017 Elected Official Phil DeCologero 2018 'Appointed by Selectmen Rosemary Connelly Smedile 2019 Appointed by Town Manager Donald B. Stewart 2017 "Appointed by Town Moderator Richard Vaillancourt 2018 'Appointed by School Committee 'Appointed by School Superintendent 'Replacement by Vote of Remaining Members — 13 — TOWN MANAGER' YOUTH & RECREATION COUNCIL' Andrew W.Maylor Peter Breen 2018 Kevin Driscoll 2019 TOWN MODERATOR' Maureen Ferris 2018 Mark S.DiSalvo 2018 Andrew Firmin 2017 Terry Holland 2018 TREASURER COLLECTOR John D. Lennhoff 2017 Brian Conway Sandra L. Goldstein Savoie 2019 Hollie Williams 2017 VETERANS' SERVICES2 Rick Gorman, Executive Director Gerry Maguire, Director 2018 Neil Patnaude, Graves Officer 2017 ZONING BOARD OF APPEALS2 Albert P.Manzi,III, Chairperson 2018 WINDRUSH FARMS STEERING COMMITTEE Alan E. Cuscia 2017 Rosemary Connelly Smedile', 2017 D. Paul Koch,Jr. 2019 Chairperson Douglas Ludgin 2018 Jennifer Hughes' 2017 Ellen P.McIntyre 2019 John Mabon' 2017 Alexandria Jacobs,Associate 2018 Josselyn Shaunessey Denny Morganthal,Associate 2017 (Appt.by Lic. Bd. of Directors) Nathan Weinreich,Associate 2018 Amanda Hogan (Appt.by Lic. Bd. of Directors) Elected Official Appointed by Selectmen Appointed by Town Manager "Appointed by Town Moderator Appointed by School Committee 'Appointed by School Superintendent 'Replacement by Vote of Remaining Members — 14 — Tracy M.Watson, Chairman Philip DeCologero, Chairman of the Board of Selectmen and Town Manager Licensing Commission b Rosemary Connelly Smedile Donald B. Stewart Richard M. Vaillancourt Andrew W. Maylor, Town Manager As stated in the past,the first step in effective public leadership is setting the agenda or what we call the Plan.The result of our commitment to our Plan has been in so many ways trans- formative.The past year has been a continuation of the previous four from an accomplishment perspective. In North Andover,being a responsible public administrator requires a practical accountability.The residents and business owners of the Town of North Andover take great pride in the quality of life that living in our town provides.The local government of North Andover sees its role and goal as preserving or enhancing that quality of life.We make deci- sions with that as our focus and follow through using guiding principles to help us deliver on that goal.Those three principles are: Service, Stewardship and Sustainability. 2016 was an extraordinary year from a financial perspective. Most notably we were up- graded to AAA bond rating by Standard and Poors. It marked the second rating increase in the last 5 years and the first time in North Andover's history that we had achieved the high- est rating possible.This accomplishment was due in large part to our ability to work collec- tively toward common goals.We have learned from difficult times of the Great Recession of 2008/2009 that sustainability is essential.Therefore,we fund reserves before new programs. But fiscal stability is not enough to maintain the quality of life our town provides,equally im- portant is our focus on stewardship. So in 2012 we committed to a plan to invest in our bricks and mortar infrastructure.2016 marked the completion of the 4"project in that plan,a newly expanded and renovated Town Hall. The Board and the Town Manager would like to take this opportunity to express their sincere appreciation to all those individuals who have taken time away from their families and friends to serve on the many committees, commissions and boards that are the lifeblood of the Town.The Board and the Town Manager are grateful for the depth of experience and talent that each individual brings to these committees.As one Selectwoman likes to announce whenever a volunteer is appointed"This Town would come to a screeching halt if it wasn't for our volunteers." The following pages contain excerpts from the approved minutes from various Select- men's meetings held during calendar year 2016.These minutes are not intended to provide the reader with a comprehensive list of all business before the Board during 2016,but instead are intended to provide an overview of the issues addressed by the Board and the Town Manager, and various votes taken by the Board. Please note that the format of the minutes may have been changed for presentation purposes and should not be construed as the official record of said meetings. JANUARY 2016 Vote to approve and sign Conservation Restriction for 16 Berry Street Pursuant to M.G.L. Chapter 40, Section 8C and Chapter 184, Section 32, the Board was asked to approve and sign a Conservation Restriction for 16 Berry Street (Riding Academy Development), a 40B subdivision. Town Counsel reviewed the document and the Conser- vation Commission has already signed. Donald Stewart made a MOTION, seconded by Rosemary Smedile, that the Board of Selectmen, pursuant to Massachusetts General Laws, Chapter 40, Section 8C and Chapter 184, Section 32, approve and sign the Conservation Restriction for 16 Berry Street.Vote approved 5-0. — 15 — Recognition of first responders to Dow Chemical incident The following police, fire and emergency management personnel were recognized for their response to the explosion at Dow Chemical(not all were present at the meeting): Chief Paul Gallagher, Lt. Charles Gray, Officers Jason Wedge, Eric Sewade, Jarrad Lawlor, Robert Hillner and Freddy Almanzar, Chief Andrew Melnikas, Deputy Chief William McCarthy, Lt.Fred McCarthy,Lt.John Weir,Lt.Jeff Judge,Firefighters Matt Lacolla,John McCarthy, Sean Fountain, Scott Swiniarski, Gary Ford, Kevin Lundy,Jim White, Elizabeth Iminski, Chris Holland and Len Severino. Communication Officers Marc Gagnon,Justin Lacolla, John Wood,Jonathan Bonanno and Gianna Borelli. Emergency Management director Jeff Coco, Senior Operations Officer, Connor Lincoln and Transportation Officer Neil Hamel. Vote to authorize Town Manager to sign Community Compact Agreement On Thursday, January 21", the Lieutenant Governor and officials from North Andover, Methuen and Andover met to sign the Community Compact Agreement. The Agreement was to be signed by the Chairman of the Board of Selectmen;however Chairman Watson was unable to attend the signing.The Board was asked to vote to authorize the Town Manager to sign the agreement. Selectmen DeCologero noted that the Lieutenant Governor praised Town Manager,Andrew Maylor, and stated that he was a driving force in getting the Com- munity Compact done. Rosemary Smedile made a MOTION, seconded by Donald Stewart, that the Board of Selectmen authorize Town Manager, Andrew Maylor, to sign the Com- munity Compact Agreement.Vote approved 5-0. FEBRUARY 2016 Town Manager, Andrew Maylor, presented his FY17 Recommended Budget. Mr. Maylor indicated the School Committee adopted the consensus budget with a 3.7% increase to the School Department. He acknowledged Superintendent Price's impressive presentation to the School Committee which he believed showed a real understanding for the community. Mr. Maylor highlighted the new initiatives that are outlined in the Executive Summary and in- dicated they are close to bringing North Andover to a AAA rating which has never been done before.Dr. Price was present and thank the Town Manager for working with her on the budget and providing insight on town finances.The Board praised both the Town Manager and the Superintendent for a thoughtful budget and great planning.Mr.Maylor also thanked Town Finance Director, Lyne Savage, for her commitment and skills.Mr.Maylor indicated he is not recommending an increase in the water and sewer rates. This will be the 5"year in a row those rates have stayed the same. Phil DeCologero made a MOTION, seconded by Richard Vaillancourt, that the Board of Selectmen approve the Town Manager's FY17 Recommended Budget reserving the ability to make amendments as additional information comes forward and to forward the budget to the Finance Committee.Vote approved 5-0. Fire Chief Selection Process The Board conducted interviews of the two candidates for Fire Chief. Lieutenant Graham Rowe and Deputy Fire Chief William McCarthy.The Board asked each candidate the same five questions and each candidate gave a closing statement. After the interviews the board discussed the candidates. Rosemary Smedile made a MOTION,seconded by Richard Vaillancourt,that the Board of Selectmen appoint William McCarthy as the Fire Chief effective March 22, 2016, sub- ject to receipt of letter relinquishing his civil service status and execution of the employment agreement provided by the Town Manager.Vote approved 5-0. MARCH 2O16 Request of Bradstreet Partners, LLC to modify development plan of Bradstreet on Main project Attorney Bob Lavoie and Bill Perkins,the developer of the former Bradstreet School site, presented a request to alter the use of the second floor of the building facing Main Street — 16 — from commercial to residential and add a third floor. The first floor will remain commercial. This change would require Planning Board approval. Since the Board accepted the proposal assuming commercial, the Board would need to approve this request prior to it going to the Planning Board.The Board discussed the issues they had with the change and their disap- pointment that the developer is looking to change the original plan. Phil DeCologero made a MOTION, seconded by Rosemary Smedile to table the matter until the next meeting on March 21,2016.Vote approved 4-0. Police Chief Selection Process The Board conducted interviews of the three candidates for Police Chief in the following or- der: Sergeant Daniel J. Crevier, Lieutenant Charles Gray and Lieutenant Eric J. Foulds.The candidates gave an opening statement, the Board asked each candidate the same questions and then each candidate gave a closing statement. After the interviews the board discussed the candidates. Donald Stewart made a MOTION, seconded by Rosemary Smedile, that the Board of Selectmen appoint Lieutenant Charles Gray as the Police Chief effective July 1, 2016, subject to receipt of letter relinquishing his civil service status and execution of the employment agreement negotiated with the Town Manager.Vote approved 3-2.Richard Vail- lancourt and Phil DeCologero opposed. Vote on committee to select in house counsel Town Manager,Andrew Maylor, explained that the budget for the upcoming fiscal year, as- sumes the hiring of in-house town counsel.The concept is that the Town can get more legal services while spending the same amount of money.With in-house counsel, the town would be spending approximately 860.00/hour vs. 8180/hour. The position would be shared with the School Department. Chairman Watson and Brian Gross, chairman for the School Com- mittee,propose the selection committee include the chairs of both committees,one additional member of each committee, Andrew Maylor,Jennifer Price and Cathy Darby. The School Committee will be voting on their representative at their meeting on Thursday.Richard Vail- lancourt made a MOTION, seconded by Donald Stewart that the Board of Selectmen select Tracy Watson and Phil DeCologero to serve as the Board's representatives on the selection committee to hire in-house counsel. Vote approved 5-0. Ms. Smedile reserved her right to review the math. Request of Jean Enright, Assistant Director of Community and Economic Development, to waive permit fees for the installation of the Machine Shop Village information kiosk Jean Enright, Assistant Director of Community and Economic Development requested the Board waive all permit fees for the installation of the Machine Shop Village Information Kiosk. The kiosk graphics, location and site details were included in the packet. Richard Vaillancourt made a MOTION, seconded by Phil DeCologero, that the Board of Selectmen waive all fees for the installation of the Machine Shop Village Information Kiosk. Vote ap- proved 5-0. Paul Gallant of Merrimack College requests One Day Wine & Malt licenses Merrimack College requests one day Wine and Malt licenses for the following events: Onstagers Performance after party on Saturday,April 9,2016 from 8:30pm to 11:30pm at the Rogers Center for Performing Arts Lobby and Avenue QQOpening Reception on Thurs- day,April 21,2016 from 7:OOpm to 11:OOpm at the Rogers Center for Performing Arts Lobby. Rosemary Smedile made a MOTION, seconded by Tracy Watson, that the Board of Select- men,acting as Licensing Commissioners,approve the two One Day Wine&Malt licenses for Merrimack College for events at the Rogers Center on Saturday,April 9,2016 from 8:30pm to 11:30pm and Thursday,April 21,2016 from 7:OOpm-11:OOpm,as presented.Vote approved 5-0. — 17 — APRIL 2016 Certificate of Achievement for Excellence in Financial Reporting for FY15 The Certificate of Achievement for Excellence in Financial Reporting for FY15 has been awarded to the Town of North Andover by the Government Finance Officers Association (GFOA)for its comprehensive annual financial report.The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting. Update on National Grid utility undergrounding surcharge Assistant Town Manager,Ray Santilli,indicated that the National Grid utility underground- ing surcharge that began in 2003,which was for the work done around the Town Common, will now be removed from residents'bills. Verizon's surcharge will continue for another 3-4 years. Accept donation in the amount of$6,000 from the Friends of the North Andover Senior Center and Borderline Running Club for the 4'"of July Fireworks display Martha Cashins, President of the Friends of North Andover Senior Center and Chris Mar- shall from the Borderline Running Club presented a check to the Board in the amount of $6,000 to be used for the 2016 4"of July Fireworks display. Rosemary Smedile made a MO- TION, seconded by Phil DeCologero, that the Board of Selectmen accept the donation of $6,000 from the Friends of the North Andover Senior Center and Borderline Running Club to be used toward the 4"of July Fireworks display.Vote approved 5-0. MAY 2016 Request of North Andover Patriotic Observance and Marching Committee to conduct Memorial Day Parade and Ceremony on Monday, May 30, 2016 from 10:OOam-12:OOpm Included in the packets was a request from Gerry Maguire, Director of Veteran Services, to hold the annual Memorial Day Parade on May 30, 2016 from 10:OOam-12:OOpm. The pa- rade route will be from Osgood Street to Mass Avenue to Salem Street ending at Ridgewood Cemetery.All relevant departments have reviewed and have no issues.Donald Stewart made a MOTION,seconded by Phil DeCologero,that the Board of Selectmen approve the request of the Patriotic Observance and Marching Committee to hold the annual Memorial Day Parade on May 25,2016 from 10:OOam to 12:OOpm starting at Osgood Street.Vote approved 5-0. Request of North Andover Merchants Association to use the Town Common and close a portion of Massachusetts Avenue for the Fall Festival on Saturday, September 24, 2016 from 7:OOam to 5:30pm Sylvie Foulds from the North Andover Merchants Association was present to request the use of the Town Common for their annual Fall Festival on Saturday, September 24, 2016 from 7:00 a.m. to 5:30 p.m. and to close Mass Ave. from Osgood Street to Andover Street from 8:00 a.m.to 4:00 p.m. Richard Vaillancourt made a MOTION,seconded by Rosemary Smedile,that the Board of Selectmen approve the request of the North Andover Merchants Association to use the Town Common for their Fall Festival on Saturday,September 24,2016 from 7:00 a.m.to 5:30 p.m. and to close Massachusetts Avenue from Osgood Street to Andover Street from 8:00 a.m. to 4:00 p.m.Vote approved 5-0. Request to surplus equipment and vehicle-Fire Department Included in the packet was a request from Fire Chief William McCarthy to surplus a 2002 Ford F-550 brush truck, 12 AEDs and 2 stretchers. All will be traded in for credit toward a new ambulance, new AEDs and a new stretcher. Phil DeCologero made a MOTION, seconded by Richard Vaillancourt, that the Board of Selectmen approve the request of Fire Chief William McCarthy to surplus a 2002 Ford F-550 brush truck, 12 AEDs and 2 stretch- ers, as presented. Vote approved 5-0. — 18 — Affordable housing unit resale-3 Harvest Drive, Unit 211 (Oakridge Village-Maplewood Reserve) The Citizens' Housing and Planning Association(CHAPA) has notified the Town that the affordable housing unit at 3 Harvest Drive,Unit 211 (Oakridge Village-Maplewood Reserve) is up for sale. It is recommended the Board not exercise its right of first refusal. Phil De- Cologero made a MOTION,seconded by Richard Vaillancourt,that the Board of Selectmen decline the right of first refusal to purchase the affordable housing unit at 3 Harvest Drive, Unit 211 (Oakridge Village-Maplewood Reserve).Vote approved 5-0. JUNE 2016 Bond rating upgrade—David Eisenthal, Vice President, UniBank Fiscal Advisory Services, Inc. David Eisenthal,Vice President of UniBank Fiscal Advisory Services,Inc.,briefed the Board on the recent upgrade of the bond rating from AA+to AAA. Ratification of Collective Bargaining Agreement between the Town of North Andover and AFSCME Council 93, Local 2978— Professional Librarians for period July 1, 2016 through June 30, 2019 Included in the packets was the Memorandum of Agreement between the Town and the Professional Librarians union to be ratified by the Board. Richard Vaillancourt made a MOTION, seconded by Phil DeCologero that the Board of Selectmen ratify the collective bargaining agreement between the Town of North Andover and AFSCME Council 93, Lo- cal 2978- Professional Librarians for the period July 1, 2016 through June 30, 2019. Vote approved 5-0. Accept donation from Joseph N. Hermann Youth Center Inc. to Youth & Recreation Services for summer programming ($10,149.80) and 'Adopt a Youth' for the Summer Fun Program ($1,400) The Joseph N.Hermann Youth Center Inc.generously donated$11,549.80 to the Youth Cen- ter to be used towards summer programming and four Summer Fun scholarships. Phil De- Cologero made a MOTION, seconded by Rosemary Smedile, that the Board of Selectmen accept the donations from Joseph N. Hermann Youth Center Inc. to Youth & Recreation Services totaling $11,549.80 to be used towards summer programming and four scholarships to the Summer Fun Program.Vote approved 5-0. Fuel Efficient Vehicle Use Policy Included in the packets was a draft of a Fuel Efficient Vehicle Use Policy. In order to apply for designation as a Green Community, the Board of Selectmen and the School Committee must adopt a Fuel Efficient Vehicle Use Policy.The policy will only apply when a new vehicle is purchased.The Town is not required to replace any of its current vehicles.Phil DeCologero made a MOTION,seconded by Richard Vaillancourt,that the Board of Selectmen adopt the Fuel Efficient Vehicle Use Policy as presented.Vote approved 5-0. Dissolution of Audit Committee Included in the packet was a memorandum from Chairman Watson regarding the Audit Committee. Phil DeCologero made a MOTION, seconded by Rosemary Smedile, that the Board of Selectmen dissolve the Audit Committee established by the Board on September 8,2008, as amended on May 23,2011, and delegate back to the Board of Selectmen the responsibilities of reviewing the RFPs for the audit firms, selecting the desired firm to conduct the audit and approve the draft audit prepared by the selected audit firm. Vote approved 5-0. — 19 — Accept donation of a treadmill to the Fire Department from the Lietz Family Included in the packets was a memorandum from Fire Chief William McCarthy asking the Board to accept the donation to the Fire Department of a treadmill valued at $800 from the Lietz Family. Richard Vaillancourt made a MOTION,seconded by Phil DeCologero,that the Board of Selectmen accept the donation of a treadmill from the Lietz Family for the Fire Department. Vote approved 5-0. JULY 2016 Vote to approve and sign License Agreement for 2302 Turnpike Street(taken out of order) Earthworks,Inc.is building a mixed use retail and business office commercial complex at the corner of Sharpners Pond Road and Turnpike Street.The Special Permit from the Planning Board and the Order of Conditions from the Conservation Commission require the devel- oper to construct and maintain a rain garden which will allow for treatment of storm water runoff.A License Agreement is required because the rain garden is located on Town property. Town Counsel has approved the document. Phil DeCologero made a MOTION, seconded by Rosemary Smedile,that the Board of Selectmen approve and sign the License Agreement between the Town of North Andover and Gill Family,LLC as presented.Vote approved 4-0. Request of Alexandra Coakley of the North Andover Athletic Association to use streets in North Andover for the 6th Annual Knights on the Run road race on Saturday, October 27, 2016 Included in the packets was a request from Alexandra Coakley of the North Andover Athletic Association requesting to use the streets in North Andover for their annual 5K road race on Saturday, October 27, 2016 beginning at 9:30am. The race route is North Andover High School to Osgood Street to Stevens Street to Great Pond Road to Pleasant Street to Stevens Street to Harkaway Road to Osgood back to NAHS.All relevant departments reviewed the request and had no issues. Rosemary Smedile made a MOTION, seconded by Phil DeColo- gero, that the Board of Selectmen approve the request of the North Andover Athletic As- sociation to use streets in North Andover for a 5K road race on Saturday, October 27, 2016 beginning at 9:30AM, as presented. Vote approved 4-0. Appointments: Nadine and Ken Delano—Poet Laureate Karen Kline's term as Poet Laureate expired on June 301h. The Poet Laureate Committee recommended Nadine and Ken Delano be appointed as the new Poet Laureate. Rosemary Smedile made a MOTION, seconded by Donald Stewart, that the Board of Selectmen ap- prove the appointment of Nadine and Ken Delano as the Poet Laureate for a term ending June 30,2018.Vote approve 4-0. Public hearing for alleged liquor violation-Hokkaido Restaurant Donald Stewart made a MOTION, seconded by Rosemary Smedile, that the Board of Se- lectmen open the public hearing for the purpose of obtaining information regarding a possible liquor license violation by Hokkaido Restaurant, 1250 Osgood Street. Vote approved 4-0. The Chair read the notice sent to license holder. Sgt. Staude gave a summary of the events he witnessed.The bar manager and the owner of Hokkaido Restaurant testified they did not dispute the facts that were presented. Donald Stewart made a MOTION,seconded by Rosemary Smedile that Board of Select- men close the public hearing. Vote approved 4-0. Donald Stewart made a MOTION, sec- onded by Richard Vaillancourt, that Board of Selectmen, acting as licensing commissioners, find that on June 12, 2016 at Hokkaido Restaurant, 1250 Turnpike Street, a liquor license violation did occur pursuant to the Town of North Andover Alcoholic Beverages Regulations Section B(4)-Hours of Operation and that a penalty of a written warning be imposed for said violation.Vote approved 4-0. — 20 — AUGUST 2016 Textile recycling-WasteZero Steve Lisauskas from WasteZero gave an overview of their proposal to provide textile recy- cling in North Andover. The program is a voluntary program with no cost to the Town or residents. Accept donation of$15,161 from Kittredge School PTO toward replacement of Kittredge School Playground Accept donation of$15,161 from Kittredge School PTO toward replacement of Kittredge School Playground The Kittredge School PTO has generously donated $15,161 to the Town to be used toward the Kittredge School playground project. Rosemary Smedile made a MOTION, seconded by Phil DeCologero, that the Board of Selectmen accept the donation of$15,161 from the Kittredge School PTO to be used toward the Kittredge School playground project. Vote ap- proved 5-0. Request from Cathy Darby, Human Resources Director, to change abatement rate, number of hours and number of participants for Senior Property Tax Work Off Program Included in the packets was a request from Cathy Darby, Human Resources Director, to increase the abatement rate to $10 per hour, increase the number of service hours to 100 and increase the number of participants to 40.Rosemary Smedile made a MOTION, seconded by Phil DeCologero,that the Board of Selectmen accept the revised Senior Citizen Property Tax Work Off Program policy, increasing the maximum number of participants to 40; the hours to 100 and the abatement to $10.00 per hour.Vote approved 5-0. Larry Camerlin of Angel Flight Northeast requests a One Day Wine & Malt License on Sunday, September 11, 2016 from 11:OOAM to S:OOPM at the Lawrence Municipal Airport Richard Vaillancourt made a MOTION, seconded by Rosemary Smedile, that the Board of Selectmen,acting as Licensing Commissioners,approve the request of Larry Camerlin of An- gel Flight Northeast for a One Day Wine and Malt License on Sunday, September 11,2016 from 11:OOAM-5:OOPM.Vote approved 5-0. Vote to approve disbursement of$115,000 from the Affordable Housing Trust Fund to Bread & Roses Housing, Inc. for the purchase of 70 May Street Laurie Burzlaff, chair of the Affordable Housing Trust and Yesenia Gil, Executive Director of Bread&Roses Housing, Inc.,gave the Board an overview of the project at 70 May Street and requested the Board vote to approve the disbursement of$115,000 from the trust fund to Bread &Roses Housing, Inc. for the purchase of 70 May Street. Donald Stewart made a MOTION, seconded by Phil DeCologero that the Board of Selectmen vote to approve the disbursement of 8115,000 from the Affordable Housing Trust Fund to Bread&Roses Hous- ing,Inc. for the purchase of 70 May Street.Vote approved 4-0. Request of Francis and Sharon Devan of 32 Boston Hill Road to amend Grant of Easement Attorney Paul Ross who represents Francis and Sharon Devan of 32 Boston Hill Road, pre- sented their request to void the easement granted to the Town in 2010 and record a new easement with the correct scope and the correct easement area. Mr. Maylor indicated that after reviewing the documents he supports Attorney Ross' request and asked the Board for permission to contact the other two property owners on the street that also granted easements that should be corrected.Tracy Watson made a MOTION, seconded by Rosemary Smedile, that the Board of Selectmen void the Grant of Easement recorded in the Essex North Registry of Deeds in Book 12202, Page 52 and record a new easement limited to the use and main- tenance of the as-built sewer only and a new plan showing the correct easement area and to — 21 — give permission to the Town Manager to contact the other two property owners that granted easements.Vote approved 5-0. Vote to accept Community Compact grant The Town Manager briefed the Board about the Community Compact grant and asked for their vote to accept the grant.Tracy Watson made a MOTION, seconded by Phil DeColo- gero, that the Board of Selectmen accept the Community Compact grant in the amount of $25,000.Vote approved 5-0. Request of William M. Dwyer, Manager of Tuscan Market, Inc. d/b/a The Vineyard for change of location to 757 Turnpike Street and change of d/b/a to A Taste of the Vineyard Brian Vaughn of Smolak&Vaughn spoke on behalf of the owner of The Vineyard request- ing the Board approve the request to change the location and the d/b/a of The Vineyard.The store will be located inside the Stop and Shop and operate as a separate store.Tracy Watson made a MOTION, seconded by Donald Stewart, that the Board of Selectmen, acting as Licensing Commissioners, approve the request of William M. Dwyer, Manager of Tuscan Market, Inc. for a change of location to 757 Turnpike Street and change of d/b/a to A Taste of the Vineyard.Vote approved 4-1. Selectman Smedile voted against. SEPTEMBER 2016 Alex Parsons, Taylor Parsons, Kayla Dow and Eric Dow request permission to use an area by the stage or near the benches at the common for a Kindness Rock Project Alex Parsons (81hgrade)Taylor Parsons (61h grade) and Kayla Dow(91h grade)were present to request permission to start a Kindness Rock Project at the Common. Eric Dow (61h grade) also submitted the request but could not be present.The Board suggested the Youth Center as more appropriate place for the project. Tracy Watson made a MOTION, seconded by Rosemary Smedile, that the Board of Selectmen approve the Kindness Rock Project at the Youth Center.Vote approved 5-0. Appointments: Donald Belanger—ADA Coordinator The Board needed to appoint a new ADA Coordinator to replace Gerry Brown who has retired. Tracy Watson made a MOTION, seconded by Rosemary Smedile,that the Board of Se- lectmen approve the appointment of Donald Belanger as ADA Coordinator. Vote approved 5-0. Jamie Green Klopotoski of Ipswich Ale Brewery requests a One Day Wine & Malt License for an outdoor concert at the Stevens-Coolidge Place on Wednesday, September 28, 2016 from 5:OOPM-7:OOPM Donald Stewart made a MOTION, seconded by Rosemary Smedile, that the Board of Se- lectmen, acting as Licensing Commissioners, approve the request of Jamie Green Klopotoski of Ipswich Ale Brewery for a One Day Wine &Malt license for an outdoor concert at the Stevens Coolidge Place on Wednesday, September 28,2016 from 5-7PM.Vote approved 5-0. Accept donation of kiosk from Eagle Scout Francis Hearst(taken out of order) Francis Hearst described his Eagle Scout Project and ask the Board to accept his donation of a kiosk that he built and installed at the base of the trail at the Stevens Estate.Tracy Watson made a MOTION, seconded by Donald Stewart that the Board of Selectmen accept the do- nation of a kiosk from Eagle Scout Frankie Hearst.Vote approved 5-0. Columbia Gas requests permission to excavate Main Street from Waverly Road to 70 Main Street for the purpose of installing new gas line (taken out of order) Kyle Benoit from Columbia Gas was present to answer any questions regarding their request to excavate on Main Street. Donald Stewart made a MOTION, seconded by Tracy Watson — 22 — that the Board of Selectmen approve the request of Columbia Gas to excavate on Main Street from Waverly Road to 70 Main Street.Vote approved 5-0. Vote to appoint Town Counsel Donald Stewart indicated he doesn't agree with the hiring of in house town counsel because of the cost. Rosemary Smedile indicated she prefers a person with town experience and that it is more cost effective to have outside counsel.Phil DeCologero made a MOTION,seconded by Tracy Watson that the Board of Selectmen appoint Suzanne Egan as Town Counsel, subject to the Chairman and Town Manager negotiating a salary not to exceed the range provided in the posted job description. Vote approved 3-1-1. Ms. Smedile voted against. Mr. Stewart ab- stained. Vote to approve revisions to Lake Cochichewick Boating Regulations (taken out of order) Included in the packets were revisions to the Lake Cochichewick Boating Regulations pro- posed by the Lake Study Group. Bruce Thibodeau and Peter Boynton were present to review the changes and answer any questions. Phil DeCologero made a MOTION, seconded by Rosemary Smedile that the Board of Selectmen approve the revisions to the Lake Cochiche- wick Boating Regulations as presented.Vote approved 5-0. Approval to enter into agreement in excess of three years—PILOT and net metering credit agreement with Osgood Solar, LLC Included in the packets was an update of the solar projects in town along with a Memoran- dum of Understanding between the Town and Osgood Solar, LLC.The Board was asked to approve the terms of the PILOT Agreement and the Net Metering Credit Agreement and authorize the Town Manager to sign the agreements. Rosemary Smedile made a MOTION, seconded by Phil DeCologero, the Board of Selectmen approve the PILOT Agreement be- tween the Town and Osgood Solar, LLC pursuant to Article 27 of the 2015 Annual Town Meeting and authorize the Town Manager to sign the PILOT Agreement for a term of 20 years and approve the Net Metering Credit Agreement between the Town and Osgood So- lar, LLC pursuant to Article 29 of the 2015 Annual Town Meeting and authorize the Town Manager to sign the Net Metering Credit Agreement for a term of 25 years, both in accor- dance with the terms of the Memorandum of Understanding dated September 20,2016.Vote approved 4-0. Downtown parking The Town Manager indicated that parking downtown continues to be an issue even with the spaces that were added last year.The Board instructed the town manager to research proper- ties surrounding Town Hall and report back to the board with options for either obtaining a right of first refusal or a taking by the town. OCTOBER 2016 Halloween Trick or Treat day and hours At the meeting on September 12,2016, resident Brian Birchall requested the Board consider changing trick or treating from Monday,October 31"to Saturday, October 29". Police Chief Charles Gray has no issues with either date but recommends the Board designate Halloween Trick or Treat hours from 5:30 p.m. to 7:30 p.m. Rosemary Smedile made a MOTION, sec- onded by Donald Stewart that the Board of Selectmen approve Halloween `Trick or Treat' on Monday, October 31, 2016 from 5:30 p.m. and 7:30 p.m. Vote approved 3-2. Selectmen Watson and DeCologero opposed. Fiscal 2018 Budget Policy Statement In accordance with the Town Charter,Chapter 9-2-3,"on or before the first day of November of each year, the Board of Selectmen, after consulting with the Town Manager, shall issue a — 23 — policy statement relating to the budget for the ensuing fiscal year.The statement shall estab- lish the outer limits of possible budget growth for the town."Rosemary Smedile made a MO- TION, seconded by Phil DeCologero that the Board of Selectmen approve the FY18 Budget Policy Statement as presented.Vote approved 5-0. Request of Patriotic Observance Committee to conduct Veterans Day Parade and Ceremony on Friday, November 11, 2016 starting at 10:OOAM Rosemary Smedile of the Patriotic Observance Committee explained the request to hold the annual Veterans Day Parade and Ceremony on Friday, November 11, 2016 starting at 10:OOAM. All relevant departments reviewed the request and had no issues. Tracy Watson made a MOTION, seconded by Phil DeCologero that the Board of Selectmen approve the request of the Patriotic Observance Committee to conduct the Veterans Day Parade and Cer- emony,as presented, on Friday,November 11,2016 starting at 10:OOAM.Vote approved 5-0. NOVEMBER 2016 Government Finance Officers Association Distinguished Presentation Award For the 5th year in a row,the Town has received the Government Finance Officers Association (GFOA)Distinguished Budget Presentation Award for the current budget.This award is the highest form of recognition in governmental budgeting. Middle School athletic/recreation complex DPW Director, Bruce Thibodeau, and Craig Miller from Waterfield Design Group gave an update on the Middle School athletic/recreation complex. Terry Holland and Rick Green were also present to provide information from the working committee. The Board agreed to establish a committee to solicit community input and develop a plan for the site. Phil DeCologero made a MOTION,seconded by Rosemary Smedile to form a five member Mid- dle School Athletic/Recreation Complex Committee to also include a liaison from the Board of Selectmen and a liaison from the School Committee.Vote approved 4-0.Phil DeCologero made a MOTION,seconded by Rosemary Smedile to appoint Terry Holland and Rick Green as members of the Middle School Athletic/Recreation Complex Committee. Vote approved 4-0.Phil DeCologero made a MOTION, seconded by Donald Stewart to appoint Rosemary Smedile as the Board of Selectmen liaison to the Middle School Athletic/Recreation Complex Committee. Vote approved 4-0. Phil DeCologero made a MOTION, seconded by Donald Stewart to appoint Deb Raffali,Derek Wessel and Todd Dow to the Middle School Athletic/ Recreation Complex Committee.Vote approved 4-0. Request of North Andover Police Department for stop signs on Parker Street at Greene Street, Bradstreet at Greene, West Bradstreet at Greene, Woodbridge at Greene and West Woodbridge at Greene Included in the packets was a request from Mark Wilson,Traffic Safety Officer,for five new stop signs to be installed on Parker Street, Bradstreet, West Bradstreet, Woodbridge and West Woodbridge,all at intersections with Greene Street.DPW Director,Bruce Thibodeau, and Police Chief Charles Gray answered questions from the Board. Phil DeCologero made a MOTION, seconded by Donald Stewart,that the Board of Selectmen approve the request of the North Andover Police Department to install a stop sign at the intersection of Parker and Greene Streets. Vote approved 4-0. Phil DeCologero made a MOTION, seconded by Donald Stewart, to table until the next meeting the request for stop signs at Bradstreet and Greene Streets, West Bradstreet and Greene Streets, Woodbridge and Greene Streets, and West Woodbridge and Greene Streets.Vote approved 4-0. Vote to adopt Energy Reduction Plan for Green Community Application The application to become a designated Green Community requires the Town to adopt an Energy Reduction Plan. The plan must show at least a 20% reduction in energy use over a period of 5 years. The baseline year of the plan is FY2014 so that the reductions in energy — 24 — use realized from the implementation of the energy savings contract with Ameresco can be included when calculating the 20%.The School Committee must also adopt the plan and they are scheduled to do so at their meeting on November 3`d.Phil DeCologero made a MOTION, seconded by Donald Stewart, that the Board of Selectmen adopt the Energy Reduction Plan in fulfillment of the Massachusetts Green Communities Grant Program, Criteria 3. Vote approved 4-0. Vote to appoint members for Master Plan selection committee Town Manager explained the process for completing the Master Plan and is recommending a committee be formed to select the members of the Master Plan Committee. He is recom- mending the selection committee consist of two Selectmen, two members of the Planning Board and Director of Community and Economic Development, Eric Kfoury.Donald Stew- art made a MOTION, seconded by Phil DeCologero that the Board of Selectmen appoint Rosemary Smedile and Phil DeCologero to serve on the Master Plan selection committee. Vote approved 4-0. National Grid Pole Petition—Middlesex Street Tracy Watton made a MOTION,seconded by Rosemary Smedile,to open the public hearing to receive comments on the proposed National Grid Pole Petition for Middlesex Street. Vote approved 5-0. Included in the packets was the pole petition for Middlesex Street and recommendations from relevant departments. Paul Saffler from National Grid was present to answer any ques- tions regarding the petition.The Board indicated they are concerned with the number of poles that are being installed.The plan submitted with the petition was from December 2014.The Board requested Mr. Saffler provide them with an updated plan and consider other alterna- tives to putting in an additional pole. Amy Slade,the attorney representing the owner of 113 Middlesex Street, spoke on behalf of her client and indicated that her client has not agreed to have the pole and/or the guy wire placed on her property. Rosemary Smedile made a MOTION, seconded by Phil DeCologero to close the public hearing to receive comments on the proposed National Grid Pole Petition for Middlesex Street. Vote approved 5-0. Rosemary Smedile made a MOTION, seconded by Donald Stewart, that the Board continued the matter of the National Grid Pole Petition #18128513-Middlesex Street until December 5,2016.Vote approve 5-0. Vote to proceed with plan to underground wires in the "Downtown Area" as described in Chapter 170 of the Town Bylaw The Town Manager explained that the town bylaw,voted in many years ago,requires under- grounding of wires in the "Downtown Area". Mr. Maylor was seeking the Board's approval to move forward with that project. Rosemary Smedile made a MOTION, seconded by Phil DeCologero that the Board of Selectmen allow the Town Manager to proceed with the un- dergrounding of utilities in the "Downtown Area" in accordance with Chapter 170 of the Town Bylaw.Vote approved 5-0. DECEMBER 2016 Property Tax Classification The purpose of the hearing was to receive comments regarding classification and taxation of property according to use.Tracy Watson made a MOTION,seconded by Rosemary Smedile, to open a public hearing on property tax classification.Vote approved 5-0. Garrett Boles,As- sessor, presented the Board with information regarding the tax classification. In response to a question from the Board,Mr. Boles indicated that a resident must file for an abatement no later than February 1, 2017. Wil Carpenter from the Merrimack Valley Chamber of Com- merce requested the Board reduce the business and industry tax classification rate. Rosemary Smedile made a MOTION, seconded by Tracy Watson to close the public hearing on prop- erty tax classification.Vote approved 5-0. — 25 — Vote to set the property tax classification for FYI Tracy Watson made a MOTION, seconded by Rosemary Smedile, that the Board of Select- men adopt a residential factor of.949540 for the purpose of classifying the FY2017 North Andover property tax rates.Vote approved 5-0. Anant Shah requests approval of Eagle Scout project to build a gazebo at the Stevens Estate Anant Shah from Troop 87 presented his Eagle Scout project for approval by the Board.The project is to build a 12 x12'gazebo at the Stevens Estate.Donald Stewart made a MOTION, seconded by Rosemary Smedile that the Board of Selectmen approve the Eagle Scout project of Anant Shah, as presented, and waive any building permit fees.Vote approved 4-0. Town Manager Recommended FY2018-2022 Capital Improvement Plan The Town Manager presented his Recommended FY2018-2022 Capital Improvement Plan. Per Chapter 9, Section 5-1 of the Town Charter,the Board of Selectmen has 30 days to act on the CIP and forward to the Finance Committee once approved.It is recommended the Board accept the CIP as submitted reserving the right to make any changes at future meetings.The most notable item is the revision to the Facilities Master Plan which adds funding for the kindergarten facility. Donald Stewart made a MOTION, seconded by Rosemary Smedile that the Board of Selectmen accept the FY2018-2022 Capital Improvement Plan reserving the right to make changes as additional information becomes available and to forward the document to the Finance Committee for their review.Vote approved 4-0. National Grid removal of public shade trees Rosemary Smedile made a MOTION, seconded by Phil DeCologero,to open a public hear- ing on removal of public shade trees. Vote approved 4-0. Included in the packets were ma- terials provided by National Grid for the removal of several public shade trees on Johnson, Salem and Sutton Hill Road.The Department of Public Works has reviewed the request and recommends removal of all the trees. Neil Doran, arborist for National Grid and Nash Degarmo, National Grid's consul- tant, explained that the trees need to be remove so they can replace the poles. Mr. Maylor questioned the need to remove two trees that appeared to be healthy but were on the list. Mr. Doran agreed to remove those trees from the list. He also indicated that National Grid would grind the stumps that were not in wooded areas and will be replacing some of the trees. Karen and Getty Busanovich of 249 Rea Street asked for the trees to be replaced at the park so people will not park on the grass. Rosemary Smedile made a MOTION, seconded by Phil DeCologero to close the public hearing on public shade trees.Vote approved 4-0. Rosemary Smedile made a MOTION, seconded by Donald Stewart, that the Board of Selectmen approve the request of National Grid to remove the public shade trees presented with the exception of the trees listed at 542 and 1044 Salem Street and contingent upon Na- tional Grid providing an adequate replacement plan approved by the Director of the Depart- ment of Public Works, and grinding all stumps that are not in wooded areas. Vote approved 4-0. — 26 — Assessors Office Garrett C. Boles, Chief Assessor Aggregate Value of Real Estate-12 month $4,510,828,458 Aggregate Value of Personal Property $126,535,920 Real Estate Tax Levy-12 months $67,151,341.56 Personal Property Tax Levy-12 month $2,590,190.28 Residential Rate per Thousand $14.28 C.I.P. Rate per Thousand $20.45 Water Lein $233,063.76 Sewer Lein $266,665.13 Interest(Water) $27,789.11 Interest(Sewer) $30,978.80 Betterment with Interest Chapter 80(Sewer) 12,152.70 Chapter 40(Sewer) — Committed Interest(Sewer) — Committed Interest(Water) — Water/Sewer Lien Demand $22,395.60 Water/Sewer Lien Demand Commit Interest $1,507.09 Buildings and Vacant Land Assessed Single Family 6287 Condominiums 2105 Misc. Res. 30 Two Family 405 Three Family 47 Four—Eight Family 53 Vacant Land 429 Residential/Commercial 33 Commercial Buildings and Land 511 Industrial Buildings and Land 85 Personal Property Accounts 846 Chapter 61—Forest Property 7 Chapter 61A—Farm Property 129 Chapter 61B—Recreational Land 6 Exempt Buildings and Land 421 Public Utilities 4 Utilities Valued by State 6 — 27 — Town Treasurer Gail Tierney, Treasurer As Town Treasurer, I submit my report for the 12 months ending June 30,2016. Receipts July 1,2015 to June 30,2016 $124,164,643.46 Disbursements July 1,2015 to June 30,2016 $116,854,824.42 RECONCILIATION OF CASH Developer Bond Escrows $3,439,842.86 Petty Cash 1,350.00 Bank of NY Mellon 518,109.93 Century Bank 4,510,508.99 Fidelity 741,628.17 Georgetown Savings 1,931,970.75 Institution for Savings 11,471,610.88 Lowell Five 16,471,275.19 M.M.D.T. 4,495,459.50 Pentu cket 2,783,971.95 Peoples 635,493.70 Sage 674.93 Smith Barney 282,664.73 TD Bank 6,715,538.18 Unibank 4,497,251.43 Total $58,497,351.19 UNCOLLECTED BALANCES—JUNE 30, 2016 Real Estate 2016 $471,209.52 2015 178,040.94 2014 31,060.48 2013 20,688.86 Personal Property 2016 32,678.56 2015 20,835.89 2014 16,373.87 2013 9,746.19 Motor Vehicle Excise 2016 222,959.74 2015 80,034.88 2014 31,391.27 2013 22,182.71 — 28 — Town Clerk Joyce A. Bradshaw, CMMC, Town Clerk I respectfully submit the report of the Town Clerk for the Year 2016. Our Annual Town Election on March 31, 201 reelected Rosemary Connelly Smedile to the Board of Selectman. Amy T. Mabley was elected to the School Committee for a three year term.Newcomer Francis McCarty was elected to a five year term on the North Andover Housing Authority. The very busy year began with a move to temporary quarters at 1600 Osgood Street while the Town Hall at 120 Main Street was being renovated.This was a difficult transition as we were in active preparation for a busy election year.We began on March 1.2016 with the Presi- dential Primary Election with a 49% turnout and 9,000 voters. The Annual Town Election followed close behind on March 29.Town Meeting was held on May 10,2016.Another suc- cessful Town Meeting completed in one night and all bylaw changes approved by the Attorney General.The State Primary Election was held on September 8,2016. Nothing can describe the impact of the November 8, 2016 Presidential Election. For the first time Early Voting was used.The first day of early voting was October 24,2017 and coin- cided with our return to Town Hall at 120 Main Street.Through the tireless efforts of our IT Department all our systems were relocated and up and running when the doors opened.Early voting included 12 days and added evening and Saturday hours.No one would have predicted that we would have over 7,100 voters participate.This was 35% of our voters.My staff, Reg- istrars, and election workers processed the voters as well as preparing the ballots for Central Tabulation on the actual Election Day on November 8.Many additional hours were required to process and prepare.Those voters who participated were unanimous in their praise of this initiative.Actual election day preparations were still needed as we opening the polling location at the High School at 6:00 a.m.The processing of the Early Voted ballots(all 7,200 of them) was completed by 9:30 p.m. The final tally showed 80% of our 20,101 voters had cast their ballots.The outstanding work of our Registrars Carrie Crouch, Linda McHugh, and Martha Salisbury made this extraordinary event happen.All my dedicated election workers and many volunteers preserved to achieve this outcome at the end of a very long eighteen hour day. We continue our passport agency authority and processed over 1000 passports under the able direction of Patricia Sifferlen and Angela Ciofolo. This is one of the best services we provide to North Andover citizens and others as well. She gave 20 years of service to the Town in various capacities. Suzanne Pelich, Assistant Town Clerk, has ably assumed all the responsibilities for Licensing for the Board of Selectmen,Vital Records and support to me and the office. Patricia Sifferlen, Senior Clerk, provides Vital Record, Absentee Voting, Notary service, dog licensing and all our information services.Angela Ciofolo in addition to provid- ing service in our office also provides support to the Finance Committee.My remarkable staff continues to provide excellent service to the community. Open Meeting Law postings and assuring mandatory ethics filings for over 3,000 em- ployees and members continues to be a challenge. Constantly evolving on-line initiatives re- quire significant training and perseverance until technical glitches are ironed out.A dedicated and creative staff make all this possible. The staff that answers and directs resident inquiries in a professional and friendly manner is often the first contact a resident has.What a pleasure to call and get a real person to help and guide our residents and visitors to where they need to go for help.Our successful move to Os- good Street and the eventual move back to our beautiful renovated building was complicated especially during such a busy year.We look forward to enjoying our new space on Main Street. We recorded 243 Births, 75 Marriages, and 305 Deaths in 2016. Another busy year! Working with elected boards, appointed committees and outstanding personnel is a pleasure in North Andover as all these talented individuals give so much of their time and themselves. Their expertise and dedication to our community makes our Town the fine place to work and live.Thanks to all our residents for their continued support. — 29 — Community and Economic Development Eric J. Kfoury, Director The Division of Community and Economic Development oversees programs in land use plan- ning, economic development, health, transportation, and affordable housing. It manages the Town's land use authorities, the Health Department and the Stevens Estate, a special event and conference center owned by the Town.The primary objectives of the division are to en- hance the physical environment and improve the quality of life for North Andover residents, as well as to foster business development and promote economic growth.The division pro- vides technical support to a variety of groups and committees and manages a variety of proj- ects.It is staffed by a Director and Administrative Assistant. There are four land use departments, including Building, Planning, Conservation, and Zoning. These departments assist residents and contractors involved in construction and land development achieve code and regulatory compliance to protect their health, safety and welfare; reduce potential hazards; protect the environment; and maintain a well-designed, physically integrated, livable and prosperous community. Between them, there are a total of 11 full-time employees and 3 part-time employee,as well as senior volunteers,interns, special employees and consultants assisting them.Finally,there are 3 autonomous boards(Conserva- tion, Planning, and the Zoning Board of Appeals)with a combined total of 21 members. The Health Department protects the public health of residents, workers and patrons of the town through field inspections,compliance/enforcement activities,consultation and guid- ance, and the monitoring of potential environmental hazards. It is managed by 3 full-time employees, a part-time nurse, outside consultants, and 1 intern.The staff assists a 5-member Board of Health in shaping policies,developing local regulations and implementing programs. The Stevens Estate is an events and function center for people and corporate groups; sup- porting local businesses and tourism, as well as a variety of town recreational, educational and community events. It operates under an Executive Director and an Events Manager. A 7-member Board of Trustees advises on various capital improvement and operational matters. In 2016,various development initiatives took place.Included among them are: • Mixed use development at the East and West Mills property continued with over 100,000 sf of new leased space, as well as 42 new market-rate apartment units fully on-line. • Bradstreet on Main's mixed use project at the former Bradstreet School continued with 15 rental apartments completed and the 18,000+ sf commercial building shell completed. • Merrimack College's growth continued with plans for 7,000 sf expansion of its Cam- pus Center and construction of new athletic fields and associated clubhouse and con- cession facilities. • A new mixed-use development for the former Forgetta Farm site consisting of 192-market rate apartments and 40,000+ square feet of new retail/commercial space was permitted. • A 6-megawatt solar array was placed on Osgood Landing site. • Atlantic Management purchased the 250,000+ square feet former Solo Cup facility and invested resources to make the site more marketable. • Earth Works Inc.began development of a mixed-use retail,business, office complex for its operations on Route 114. — 30 — Some of the largest employers in North Andover include: NAME CATEGORY Merrimack College Higher Education Demoulas Supermarkets Grocery Store Edgewood Retirement Healthcare Watts Water Technologies Manufacturing National Grid Utility The Eagle Tribune Newspaper F. H. Cann &Associates Accounts Receivable Management With regard to affordable housing,the division continued its efforts to maintain and sup- port State sponsored programs and funding activities focused on promoting affordable hous- ing in the town, as well as the Commonwealth and Merrimack Valley region.The Town is a member of the North Shore HOME Consortium. Construction of the 196-unit Berry Farms 40B development was essentially completed with all but a handful of units coming on line. In addition to working with the Planning Board,Zoning Board of Appeals,Conservation Commission and the Board of Health, the division assists the various boards, commissions and organizations regularly or on an as needed basis.These include: Local.- North Andover Merchants Association North Andover Affordable Housing Housing Partnership Committee Trust Disabilities Commission Community Preservation Committee Technical Review Committee Regional and State Designees.- Merrimack Valley Regional Transit Merrimack Valley Economic Authority Development Council Metropolitan Planning Organization Merrimack Valley Chamber Massachusetts Office of Business of Commerce Development — 31 — Animal Inspector R. David Lindsay DVM, Inspector of Animals The following is a summary by the Animal Inspector for the calendar year 2016. 2016 Number of animals quarantined for biting 22 Number of animals tested for Rabies 0 Number of animals testing positive for Rabies 0 Number of Cats quarantined for exposure to Rabies 16 Number of Dogs quarantined for exposure to Rabies 7 Number of Barns/Locations inspected 9 Number of Dairy cows and heifers 14 Number of Dairy herds' 1 Number of Beef cattle 3 Number of Steers/Oxen 0 Number of Beef herds' 1 Number of Horses/Ponies/Donkeys/Mules 65 Number of Goats 9 Number of Sheep 29 Number of Swine 3 Number of Swine herds' 1 Number of Fallow Deer 15 Number of Llamas/Alpacas 11 Number of Gamebirds 26 Number of Guinea Fowl 0 Number of Peacock 10 Number of Chickens 64 Definition—herd: 1 or more animals. — 32 — Zoning Board of Appeals Albert P. Manzi III, Esq., Chairman The North Andover Zoning Board of Appeals is a voluntary land use appeals board that is ap- pointed by the North Andover Board of Selectmen and is comprised of five regular members and three alternate members. The Zoning Board of Appeals annually elects a Chairperson, Vice-Chairperson, and Clerk pursuant to the adopted rules and regulations of the Zoning Board.Zoning Board members are each appointed to three year term.Regular Zoning Board meetings typically are scheduled on the 2°d Tuesday of each month and special meetings are scheduled as needed. Generally, pursuant to MGL Ch. 40A, the North Andover Zoning Bylaw, The North Andover Town Charter, and the adopted Rules and Regulation of the Board, the purpose of the Zoning Board of Appeals is to hear petition(s) from an Aggrieved Party who has stand- ing to seek relief from the North Andover Zoning Bylaw for a particular purpose by means of a dimensional variance, stemming from a particular zoning dimensional requirement that results in a hardship for the land owner with respect to the soil, shape &topography of their property.The Zoning Board of Appeals also hears petitions of land owners who have stand- ing that require a Special Permit for a particular use as required by the North Andover Zon- ing Bylaw.The Zoning Board of Appeals also has the authority to hear zoning enforcement requests and make subsequent findings thereto from an Aggrieved Party who has standing to bring the request for enforcement to the Building Inspector. Additionally, pursuant to MGL Ch. 40B and related regulations, the Zoning Board of Appeals is charged with hearing applications for affordable housing petitions when the appli- cant seeks a single comprehensive permit to construct an affordable housing project that may require zoning relief from other aspects of the Town of North Andover Zoning Bylaw(s)that the Zoning Board of Appeals would not otherwise hear pursuant to MGL Ch. 40A. From 2016 through April 2017,the following is the reported: • The Zoning Board of Appeals held 8 regular meetings and 2 special meetings. 15 Petitions were filed that included 9 Variance requests and 6 Special Permits requests, 1 Building Inspector Aggrieved Party Finding application,and 1 Variance withdrawn. After the close of public hearings the Zoning Board took the following action: 9 Vari- ance requests were granted, 6 Special Permits requests were granted, and 1 Building Inspector Aggrieved Party petition is ongoing with respect to the General Business Zone.There have been no Appeals of the Zoning Board Decisions. Finally, the ZBA Administrative Office continues to operate with half time staff from previous years funding reductions.The ZBA thanks Merylle Chase for her continued admin- istrative service.In June the ZBA welcomed our new Building Inspector and Zoning Enforce- ment Officer Donald Belanger.Additionally in June an Annual report to the Board of Select- men was given by the Chairman.As part of the Town Hall Renovation, the ZBA office was relocated from 1600 Osgood Street to Town Hall located at 120 Main Street on the first floor. — 33 — Donald Belanger, Inspector of Buildings, Building Department Zoning Enforcement Officer Jim Hurley, Plumbing/Gas Inspector Paul Hutchins, Local Building Inspector Allan Paduchowski, Electrical Inspector Maura Deems, Building Dept. Assistant The following comparison table indicates construction activity for the Fiscal Year 2016.The permitting process and inspection remained on schedule. We wish to thank those Town Departments that cooperated in the proper enforcement of Public Safety and Zoning By-Laws. NUMBER OF PERMITS PERMITS ISSUED FY 16 FY 15 FY 14 FY 13 New Single Dwellings 17 40 45 56 Multi Dwellings 5 — 4 2 Residential Additions & Alterations 960 778 678 657 New Commercial & Industrial Building 6 7 10 3 Commercial & Industrial Additions, Alterations 130 118 113 98 Pools 11 10 18 10 Assessory Building 16 17 20 13 Miscellaneous (Signs, Demolition, Foundations, 266 296 207 292 C of O, Town Owned) Certificate of Inspections 105 99 102 101 Wireless Facilities/Solar Installs 116 63 88 3 Total # Building Permits issued 1632 1428 1285 1235 Total Building Permit fees $1,314,457.93 $832,529.04 $634,902.81 $657,992.27 Electrical Permits 942 930 760 759 Gas Permits 634 632 606 529 Plumbing Permits 591 593 556 557 Total # Utility Permits issued 2167 2155 1922 1845 Total Utility Permit fees $367,034.79 $265,400.77 $189,725.87 $271,893.84 Total # Permits Issued—Buildings & Utilities 3799 3583 3207 3080 Total Building& Utility fees $1,681,492.72 $1,097,929.81 $824,628.88 $929,886.11 — 34 — Louis Napoli, Chairman Albert P. Manzi,Jr., Vice Chairman Deb Feltovic Joseph Lynch Conservation Commission John Mahon Sean McDonough Douglas Saal Jennifer A. Hughes, Conservation Administrator Heidi Gaffney, Conservation Field Inspector Donna Wedge, Administrative Assistant The Conservation Commission is comprised of seven (7) volunteer members who are ap- pointed by the Board of Selectmen for three (3) year terms. In addition, the Conservation Department is staffed by an Administrator, a Field Inspector and a Departmental Assistant who are responsible for the issuance of permits,ongoing inspection of permitted sites,wetland delineation reviews, open space management and monitoring and providing information and assistance to residents and developers regarding the Town's natural resources. The Conservation Commission administers the Wetlands Protection Act(M.G.L.C. 131 S. 40) and the Town of North Andover Wetlands Protection Bylaw and Regulations (C. 178 of the Code of North Andover).These state and local regulations help protect valuable natu- ral resources including North Andover's lakes, rivers, ponds, marshes, swamps, lands sub- ject to flooding,vegetated freshwater wetlands, riverfront areas, ephemeral/vernal pools, and ephemeral/vernal pool habitats. These wetland resource areas play an important role in the following public health and safety interests: 1. Protection of public and private water supplies; 2. Protection of Ground Water Supply; 3. Flood Control; 4. Storm Damage Prevention; 5. Prevention of Pollution; 6. Protection of Fisheries; 7. Protection of Wildlife &Wildlife Habitat; 8. Recreation; 9. Sedimentation and Erosion Control. In addition, wetlands provide a wealth of values to the public. Wetland benefits can be divided into three basic categories:fish and wildlife values,environmental quality values,and socio-economic values.Destruction or alteration of wetland resource areas eliminates or mini- mizes these important functions and values. For example, drainage of wetlands eliminates all the beneficial effects of the wetland on water quality and directly contributes to flooding problems. When wetlands are filled or their functions impaired, these benefits are lost and we all pay the price — in increased flooding and storm damage to streets and homes; more contamination of surface, groundwater and drinking water supplies; loss of wildlife habitat; and loss of valuable open space. Any construction (including, but not limited to: a permanent structure, addition, deck, patio,shed,pool,roadway,driveway,septic system replacement/repair,public and private utili- ties, etc.) or alteration of land (including grading, landscaping, tree removal, etc.)within 100 feet of any wetland resource area or within 200 feet of a perennial stream/river in North Ando- ver requires public review and a permit from the Conservation Commission.The Conservation Commission and professional staff are required to examine the potential impacts any proposed activity may have on identified wetland resource areas.Meetings are held twice a month for the purpose of reviewing project applications and conducting other Commission related business. — 35 — In fiscal year 2016, the Conservation Commission reviewed and permitted thirty (30) Notices of Intent, thirty-two (32) Requests for Determinations, twenty-five (25) Small Projects,eight(8)Abbreviated Notices of Resource Area Delineation,thirty-six (36)Certificates of Compliance,and six(6)extension requests,seven(7)amendments/ modifications for a total of 144 Permits. In addition,numerous Emergency Certifica- tions and Enforcement Orders were issued. Some of the significant projects permit- ted or under construction in fiscal year 2016 include: a new water main on Boxford Street,demolition and new construction at the West Mill on High Street,the Organics to Energy project at the Greater Lawrence Sanitary District (GLSD), Runway Safety areas at the Lawrence Municipal Airport,Demolition of the North Pump Station and new oil tanks on Massachusetts Avenue. A new subdivision was also permitted on Boxford Street,as well as two new homes on Hillside Avenue. In addition to the administrative permit review process,the Department conducts weekly inspections for building permit applications and monitoring of active, permitted projects. Enforcement action and issuance of fines,when appropriate,is also a function of the Depart- ment. The Conservation Department, in cooperation with the Board of Health and DPW continue to coordinate efforts on beaver population and control where it causes damage to public and private properties and affects water supplies. In March of 2016, the NACC voted to revise the North Andover Wetland Protection Regulations. Revisions included updates to the Stormwater Management section of the Reg- ulations. The changes make the regulations consistent with those in the town's Stormwater Erosion Control Bylaw. The Department is also charged as active land managers of Town owned Open Space properties.A 2013 study by the Trust for Public Land, states that every dollar Massachusetts spends on conservation returns 84 and supports jobs for hundreds of thousands of people. With that in mind the Conservation Department,in conjunction with the Planning Depart- ment, undertook an update of the Town's Open Space Plan (last updated in 2010) which allows North Andover to accept state grant monies for open space purchase.The plan, origi- nally anticipated to be completed in fiscal year 2015,will require additional work to finalize maps depicting all of the towns open space and recreational areas.The plan is anticipated to be complete by the end of calendar year 2016 to ensure that the town continues to have the ability to accept grant monies for the purchase and protection of vital open space. Trails and Open Space Local volunteers, including members of the Friends of North Andover Trails (FONAT), the Appalachian Mountain Club (AMC) and several Eagle Scouts, completed maintenance and improvements to several existing trail systems this year including: installation of a new boardwalk on the Bay Circuit Trail within Harold Parker State Forest; trail maintenance on the Loucust Trail at Mazurenko Farm,James Swamp and the Shawsheen River Trail by FONAT. FONAT holds trail work days, often on town open space, the first Saturday of the month spring through fall. In addition, FONAT, with a Massachusetts Recreational Trails Program Grant, designed and installed new kiosk signage on each of the town's open space properties.An Eagle Scout candidate built a new kiosk and installed it at Osgood Hill behind the Steven's Estate with the assistance of the Division of Public Works.A FONAT volunteer and DPW employee built new kiosk roofs for kiosks installed at Windrush Farm on Lacy Street and the Shawsheen River Trail at the end of Greene Street. Baseline monitoring was conducted at Foster Farm by a master's degree candidate from Boston University.These main- tenance,monitoring, and improvement activities were very much needed and will benefit the residents of North Andover for decades to come.The Conservation Department is grateful to these organizations and volunteers for their efforts. In 2013 the non-native and invasive Emerald Ash Borer was found in trees on the Os- good Hill property.This insect,which has devastated ash trees across the United States and Canada,had only been detected in Western Massachusetts up to this point.The Department of Conservation and Recreation(DCR)went to work immediately to determine the scope of — 36 — the infestation and issued a quarantine which regulates the movement of wood products in affected counties. DCR continues to monitor trees and place traps throughout town. More information can be found at www.emeraldashborer.info. Hunting Hunting continues to be an important and effective land management tool in the control of deer populations throughout the commonwealth. Hunting is generally allowed pursuant to state statute on Open Space properties within the Commonwealth unless otherwise pro- hibited. Some method of hunting is, and has been, allowed on many Open Space properties in North Andover.The Conservation Department plays an important role in administering Hunting policies on town-owned Open Spaces by annually issuing special Hunting Licenses to promote an orderly coexistence with other recreational users during the hunting season. Forest Stewardship Following a demonstration Timber Harvest in fiscal year 2015, a video was created by North Andover CAM and former North Andover Fire Chief Dolan documenting the demonstration timber harvest and the ongoing forest regeneration. Boy Scout Troop 87 installed a location map and markers on Legacy Trees identified as part of the Forest Management Plan for Os- good Hill. Stormwater The Conservation Department assists the Department of Public Works in implementation of the Public Education portion of the Massachusetts Small MS4 General Permit required by the Environmental Protection Agency (EPA). The Conservation Department continued installation, maintenance and monitoring of dog waste stations at open space properties and worked with Greenscapes including a school program at the Atkinson School in the 5"Grade. — 37 — Elder Services Irene M. O'Brien, Director "Senior Centers: Blazing a Trail" Mission Statement The Elder Service Staff is encouraged to create an atmosphere that acknowledges the value of human life, affirms the dignity and self-worth of the older adult in the community and maintains a climate of Respect,Trust and Support. Vision Statement The most trusted resource in supporting the needs of the older adult in the community. The Elder Service Department,under the direction of Irene M.O'Brien provides services and programs for over 6,547 older adults in the North Andover Community. (Town Clerk census as of 3/17). We have come a long way since 1965 and we continue to expand and redefine our services and programs to meet the needs of the aging adult in the community. As a service based department our community is changing every day. In a few short years the older adult will comprise between 25%-33%of the population of North Andover. Approximately 70%of the Senior Center's participants are women;half of them live alone. The majority of them are Caucasian. Compared with their cohort group, 75% of them visit the senior center 1-3 times The average age of participants is 68-89 They spend an average of 3.5 hours per visit. You can now find the Senior Center on Media Websites such as Facebook,Twitter,Pinter- est and Instagram.We have electronic boards within the senior center announcing educational programs,social events,photo collages along with fitness and support services programs.One of our main efforts is to keep our older adult healthy with an emphasis on nutritious food,for our homebound elders as well as those at our congregate site. Significant Changes Our state Formula Grant through the Executive Office of Elder Affairs received an increase in funding of 81 per older adult,bringing the total to$10.00 per older adult and increasing the total grant to Elder Services to $53,341.28. A new van was purchased through the Capital Improvement Program that seats 14 pas- sengers.We are now able to transport more adults for grocery shopping, trips and daily pick- ups and drop-offs. The Board of Selectmen approved an increase in the number of participants in the Senior Tax Work-Off Program from 35 to 40.Each participant must complete 100 hours of volunteer services for an abatement of$1,000 off their Real Estate Taxes. Staff vacancies of Outreach Manager, Program coordinator and Office Assistant were filled by promoting from within the Elder Service Department. Prior Year Accomplishments • Early Stage Alzheimer's support groups continue to grow as awareness and demand for counseling increases.A total of four trained facilitators continue the early Alzheimer's Support Group. • Through collaboration with TRIAD, North Andover Housing Authority and the Friends of the North Andover Senior Center, hosted four cookouts for the residents of housing authority locations in an attempt to create a better sense of community.At each of these cookouts,representatives from the Police Department explained and signed up seniors for the UCARE program.The RESPECT video has been completed and will be presented at the MCOA conference in the fall. — 38 — • On Veterans'Day,90 meals were prepared at and by the Senior Center staff and volun- teers and delivered to Homebound Seniors in town. • Maintained 35 participants for each Fresh Table meal that is offered weekly from June to October for a total of 770 seniors served.These meals are prepared by volunteers us- ing locally grown produce and the freshest of ingredients.A$5.00 meal charge covers cost and overhead of this program which is paid by the participants. • The Brown Bag program continues to deliver 48 bags of groceries to eligible recipients on a monthly basis. Food for this program comes from the Boston Food Bank. • The Tuesday Night Dinner Buffet is supported by local assisted living facilities, from April through October. Thirty-five seniors attended each month for a total of 245 seniors served. • In the fall,three"Online Virtual Tours"were presented in the social support Heart to Heart program. Live and Interactive: Hallmark Museum, Kansas City, Islands of the World Indonesia,Australia,Greenland and exploring 3 of the 7 Wonders of the World • Throughout the year, 1,455 clothing items(for newborns and infants)were shipped to Puerto Plata, Dominican Republic and distributed to new mothers and newborns at the Public Hospital.The items were donated by North Andover residents and seniors, including participants in the Heart to Heart, Knitting and Cuddles programs. Ship- ping costs are funded by The Friends of the North Andover Senior Center. • Maintained the`Hats 4 Vets'and`Hats 4 Kids'program with our knitting group as well as young women from the Crochet Community Service Club in the Dominican Re- public.A total of 75 hats were distributed to three North Andover elementary schools and 115 hats and 14 crocheted blankets were presented to the Reeds Veterans Outreach Center in Haverhill. • Maintained Intergenerational programs with participation from North Andover Youth & Recreation Services, Thomson School, Kittredge School, the High School and Middle School. • Maintained the annual Giving Trees drive by providing one hundred handmade stock- ings which were distributed to homebound seniors during the holiday season. Each stocking contained a Market Basket or CVS gift card along with various items of per- sonal needs such as greeting cards, postage stamps,pens, emery boards, tooth brushes etc.This is a 25%increase over last year's outreach. • Continued our social media presence with a 114%growth of followers on Facebook and 126%growth of followers on Twitter. • Offered a"coupon"program to senior residents from the housing communities,with a $50 value that could be applied as payment for computer training, exercise classes,van charges to go on a trip or to participate in a social event at the senior center. FYI GOALS • Pilot a quarterly nutritional meals `Test Kitchen' by October 31, 2017 whereby area chefs prepare meals and recipes with the senior population. • Evaluate and restructure Wednesday's Blood Pressure clinic to include other health related services and education by December 31,2017. • To create a long range plan that evaluates existing programs and services, and perform a needs assessment identifying future programs and services that the older adult may need at various stages of aging with recommendations to address future needs of the of the Older Adult Population. • Collaborate with the Stevens Memorial Library in providing quarterly programming for seniors through June 30,2018. — 39 — FYI FYI FYI CATEGORY TOTAL ACTUAL ACTUAL PROJECTED Outreach Contacts 7,384 5,782 11,564 Community Education 7,496 4,320 8,640 Congregate Meals 3,293 2,101 4,202 Home Delivered Meals 17,001 8,486 16,972 Recreation 12,162 5,836 11,672 Transportation 4,614 2,520 5,040 Community Projects 7,456 2,370 4,740 Fitness 5,174 2,317 4,634 Conclusion The North Andover Senior Center is the only municipally funded resource and referral agency for the older adult living in the North Andover Community.The Elder Service Department continues to educate the citizens of North Andover so that they are aware of services avail- able to support seniors in their homes.The challenge to the community as a whole is to find resources to continue funding new programs and enhance activities to meet the ever changing and growing needs of the older adult.The Council on Aging Board of Directors and the staff at the North Andover Senior Center are committed to supporting and helping the older adult remain active, engaged and independent in the community. COA BOARD OF DIRECTORS Joe Sergi, Chairperson Patricia Long, Vice Chairperson Dorothy Consiglio, Treasurer William Callahan, Secretary BOARD MEMBERS Peter Aziz Joyce Fiocca Bold John Gilboard John Graham Joseph McCarthy Maria Rosati Margaret Shaheen ADMINISTRATIVE AND SUPPORT STAFF Cahla Ahlstrom John Conlon Paula Crudale Adele Johnson Lya Morse Jose Morel Jamie Phelan Gloria Philbrook Joe Sergi Karen Talbott SPECIAL GROUP CHAIRS AND FACILITATORS Fred Arakelian Vivian Aziz William Callahan George Chory Arleen Coon Lois DiNapoli Gail Holleran Thomas Kooken Milton Long Carol &John Melvidas Robert Milstone Lester Rugg Richard Slade NUTRITION SUPPORT Judy A. Lalmond Maryanne Ramsey MEALS ON WHEELS DRIVERS Cathy Collins Vinney Dolan Cliff Goddard Edward Laycock Patricia Patnaude — 40 — WEDNESDAY FRESH TABLE VOLUNTEERS Rose Arraj Judy Lalmond Nancy McCarthy Gail O'Donnell Gloria Philbrick SENIOR WELLNESS WALK-IN CLINIC SUPPORT Rita Lonardo RN,Visiting Nurses Association Tina Cormio RN, Middlesex Community College &Students Registration Support Volunteers: Priscilla Cole, Arleen Coon, Marie Furneaux, Patricia Long, Elizabeth Poirier, Mary Savukinas, Glenda Stewart MEDICAL TRANSPORT COORDINATOR AND VOLUNTEERS Paula Crudale,Transportation Coordinator Sarah Dunlap Thomas Koken Betty Little Boyna Sipos Sharleen Sullivan — 41 — Brian LaGrasse, Public Health Director STAFF Michele Grant, Public Health Inspector Francis P. MacMillan Jr., MD, Public Health Physician Health Department Debra Rillahan, R.N., Public Health Nurse Lisa Hadge, Department Assistant BOARD OF HEALTH MEMBERS Thomas Trowbridge, DDS, MD,Chairman Larry F. Fixler Francis P. MacMillan Jr., MD Joseph McCarthy Edwin C. Pease Operating Department Information FY10 FY11 FY12 FY13 FY14 FY15 FY16 Commercial Permits' 254 262 266 241 295 260 242 Professional Permitsz 83 82 89 53 101 62 70 Food Est/Related Permits & Reviews3 179 288 225 234 352 258 298 Septic (all related reviews/permits/ inspections)' 159 137 124 140 202 213 164 Offal Haulers/Trash Haulers and Placards' 237 250 256 241 273 226 288 Animal (11), Body art(1), Ice Rink(3), Rec Camps(31), Sun Tanning(3), Swimming pools(17), Tobacco(21), Well (1), Dumpster(154), Frozen Dessert(18) 2 Body art(1), Funeral (2), Septic Installer(30), Inspector(29) 3 Food(159), Temp Food(96), Food Plan Reviews(3) 'Title 5 (89), Plan Reviews(35), Soils(30), Repairs(57),Trench (2) s Offal (80), Trash Hauler(36 businesses), Placards(110) — 42 — Historical Commission Kathleen Szyska, Chairman The North Andover Historical Commission is a seven person volunteer board whose members are appointed by the Board of Selectmen. Our mission is to serve as a resource to the citizens of North Andover in matters pertaining to the history of the Town, helping to protect and preserve houses, landscapes, monuments and places of historical value.We also serve on the Community Preservation Act Board, the Old Center Historical District Commission and the Neighborhood Conservation District Commission (Machine Shop Village), as required by law. During the past year the Commission served as an historic resource for the Third Street neighborhood, and also the Stevens Village neighborhood located on Phillips Court. The Commission worked to preserve the exterior of the North Parish Church by disallowing the request to install solar panels on the roof of the church based on the 2008 Historic Preserva- tion Restrictions. We also served as a resource for many citizens in regard to the Demoli- tion Delay By-law.We continue to advocate for the preservation of North Andover's Historic Landscapes as exemplified by the replica of the Berry Farmhouse on Berry Street and by pre- serving the original facade of Town Hall during its recent renovation.In the next year we will complete the twenty-five year project to restore and preserve the markers in the Old Burying Ground,North Andover's oldest and most historical site. The Historical Commission is indebted to Carol Majahad,Director of the North Andover Historical Society,for her continued support and assistance throughout the year. — 43 — Christopher McClure, Director Information Technology David Brodeur, Network Systems Manager Craig Lemke, Support Analyst Christine McElhiney, Administrative Assistant The Town of North Andover is committed to excellence in Information Technology in order to support communication, collaboration, efficiency,transparency, and service. The Technology Department was reorganized in 2016 to eliminate one Support Analyst position and add an Administrative Assistant position. The change was made based on an analysis of Help Desk calls versus time spent on administrative tasks. The change has been positive,resulting in increased efficiency and service delivery for the department. The Technology Department upgraded virtual server infrastructure hardware in 2016 to move from 70%virtualization to 100%virtualization.This eliminated fifteen physical serv- ers,decreasing energy usage and support time while increasing overall capacity and flexibility. This upgrade also eliminated tape backup, creating an offsite disk based backup solution. The Technology Department managed the technology planning for the newly renovated Town Hall and managed the October 2016 move back to Town Hall and reconnection of all departments. The Technology Department migrated all available meeting minutes into the Laserfiche Document Management System and increased the type and number of documents available to search online.The number of public documents stored in Laserfiche increased from 30,000 to 60,000. The Technology Department migrated all agendas and web documents into Google Drive and added online meeting packets for Board of Selectmen, Planning Board and Finance Committee.Agendas for all public meetings are now also shared via email and social media. The Technology Department implemented a new Google based public Geographic In- formation System greatly increasing the number and type of maps and forms available online. The Technology Department expanded training and adoption of Google Apps products and created a vibrant staff portal to share information. The Technology Department implemented Employee Self Service in the Munis financial system, allowing employees to make basic changes, access pay, accrual and other information without HR or Payroll assistance. The Technology Department worked with Community Development departments to launch online permitting for Plumbing, Electrical and Gas permits in 2016.Additional per- mits,including Building Permits, are planned for 2017. The Technology Department made several improvements and additions to the town's website in 2016, and assisted in expanding the reach of social media. The online citizen "Report It!" tool grew from 164 reports to in 2015 to 621 reports in 2016. Reports may also now be made via North Andover's mobile app. North Andover increased its Twitter followers from 2,016 to 3,000 by the end of 2016. Facebook followers increased from 2,400 to 2,625 . Google + followers increased from 50 to 75. Email subscribers increased from 546 to 610.The town keeps these followers up to date with frequent news and agendas and continues to increase the volume and variety of posts. Looking forward to 2017, the Technology Department is working with public safety de- partments to launch an upgraded Public Safety software package in the spring.The Technol- ogy Department is working with financial departments to complete the transition to Munis Tax, Utility Billing, and Customer Self Service by the end of 2017. The Technology De- partment is also assisting the Cable Advisory Committee to reach a Verizon cable contract renewal agreement in 2017 for the license expiring in June of 2018. — 44 — Jean Enright, Planner Director Planning Department NORTH ANDOVER PLANNING BOARD John Simons, Chairman Peter Boynton Dave Kellogg Lora McSherry Lynne Rudnicki The Planning Department consists of a Planning Director, a Staff Planner, a Planning As- sistant, and a six member volunteer Planning Board. The Department reviews and endorses all Approval Not Required Plans (M.G.L. Ch. 41 Sec. 81-L and 81-P), all Preliminary and Definitive Subdivision plans as required by M.G.L. Ch. 41 Sec. 81 - K to 81 - GG and the North Andover Subdivision Rules and Regulations. The Planning Department also reviews applications for the following seventeen different Special Permits, as authorized by M.G.L. Ch.40A and the North Andover Zoning Bylaw, and Chapter 160, Stormwater Management and Erosion Control Bylaw: • Section 2.30.1 Common Driveway • Section 4.125 R-6 Zone • Section 4.136 Watershed Protection District • Section 7.2.1 Access Other Than Street Frontage • Section 7.2.2 Frontage Exception Lot • Section 8.3 Site Plan Review • Section 8.5 Planned Residential Development • Section 8.9 Wireless Service Facilities • Section 11 Planned Development District • Section 12 Large Estates Condominium Conversion • Section 13 Continuing Care Retirement Center • Section 14 Independent Elderly Housing • Section 15 Planned Commercial Development District • Section 16 Corridor Development District • Section 17 Osgood Smart Growth Overlay District • Section 18 Downtown Overlay District • Chapter 160 Town Bylaws, Land Disturbance Permit Planning Board Changes The Planning Board is fully staffed with five full members and one associate member. Past Year Overview During FY 2016,the Planning Department reviewed and granted the following permits: — 45 — # of Permits Type of Application Reviewed Approval Not Required 5 Site Plan Review Special Permit 6 Site Plan Review Modificaion 2 Watershed Special Permit 2 Watershed Special Permit Modification 1 Definitive Subdivisions 2 Planned Residential Development 1 Wireless Special Permits 1 Total 20 The Board also held public hearings for zoning changes during FY16 for the Annual Town Meeting FY16, including bylaw amendments for Corridor Development District 3, Continuing Care Retirement Center, and the Business 2 District The Planning Department participated in the National Pollutant Discharge Elimination System (NPDES) Task Force. This task force supports the efforts for the town's requirement to file a permit on a yearly basis with Massachusetts Department of Environmental Protection as part of a Federal NPDES program. Representatives from various town departments meet to coordinate the infor- mation that is required by this permit program. The Planning Department also coordinates and manages the Technical Re- view Committee (TRC) meetings, which are held at the request of applicants who may want to open a new business, construct a new commercial building, or residential development in North Andover. The TRC meetings include repre- sentatives from several town departments and provide applicants with a venue to ask questions about the permitting process. In FY16, the Planning Depart- ment hosted seventeen TRC meetings for various projects, ranging from a new automobile repair shop with an attached convenience/pizza shop, a landscape operation with a mixed-use retail and business office commercial complex, Department of Public Works improvements,redevelopment of a gas station site to include a retail convenience store, solar array project, and a mixed use site involving four commercial (retail/restaurant/office) buildings along with 192 rental residential units. The Planning Department goals for FY 17 include the following: • Provide assistance for the Master Plan update process by working with the Town's con- sultant,Master Plan Committee, and the Planning Board through June,2018. • Complete and submit required MA Record Retention forms and purge approved docu- ments by March 1,2018. • Construct a Multi-Use Path, "Mills to Hills"trail, to provide a recreational facility for walkers and bicyclists through June,2018. • Work with the Affordable Housing Trust to implement plans to provide housing for "special needs"populations,including low income,veterans,the disabled and the elder- ly. The Trust is exploring collaborations with local service providers to provide housing for these populations.This is an on-going effort through June,2018. — 46 — The Planning Board meets regularly, as needed, two Tuesdays of every month and con- ducts Saturday morning site visits. Planning Board meetings are held at the Town Hall Board of Selectmen Meeting Room located at 120 Main Street. All interested persons may appear and be heard. Persons needing special accommodations and/or those interested in viewing the application materials should contact the North Andover Planning Department at (978) 688-9535. — 47 — BOARD OF TRUSTEES Eva Hamori, Chair Ann Haltmaier Cavanaugh, Vice Chair/ Stevens Memorial Library Stanley Limpert, Treasurer William B. Duffy,Jr. E. William Hansen Peter J. Lafond Maria Galvagna Mesinger Kathleen Keenan, Director To the Citizens of North Andover: The Trustees of the Stevens Memorial Library herewith present their 108' Report, com- mencing with the report from the Library Director, Kathleen Keenan. Report of the Library Director To the Trustees of the Stevens Memorial Library, I hereby submit the 108th Report of the Director which is for the period January 1,2016—December 31,2016. The Library's Mission From the Library's FY18-FY22 Strategic Plan: The Stevens Memorial Library is committed to enhancing the quality of life for our diverse community and is free and open to all. The Library is a hub fostering literacy and lifelong learning opportunities providing access to materials and resources, technology,programs,and space forpeople to connect, engage and learn. The Library is our gateway to the Merrimack Valley Library Consortium:35 neighboring libraries with over 3,000,000 items to read,watch or hear.It also is our gateway to the entire Massachusetts public library system: over 350 libraries with an additional 30,000,000 items. The Library's impact on the community can be divided into three key areas: providing children with literacy-rich environments, beginning at birth; enriching lives by providing materials and experiences that make North Andover a great home town; and helping patrons acquire new skills and provide the resources to grow and prosper. Partnerships Stevens Memorial Library services are greatly enriched by partnering with a variety of groups and the support of many individuals.The dedicated Friends of the Library group is an inte- gral partner in all our programming activities throughout the year. Summer at the Stevens pro- grams(June through August for children,teens and adults)and Sunday at the Stevens programs (September through May) are a direct result of their hard work.The Stevens Estate was the site of the 4th annual Family Movies under the Tent. Our North Andover Schools partnership reached a new high with the addition of a shared elementary library media specialist staff member and the One,4uthor, One Community series. Summer programs were coordinated with the schools and the Youth and Recreation Dept. Other summer program partners include the Massachusetts Library System,the Massachusetts Board of Library Commissioners, the Boston Bruins, and the North Andover Arts Council. We are grateful to the Friends, to our volunteers, and to our many partners who made 2016 both rewarding and memorable. Library Events and Programs It was a year of changes with staff retiring and others making career moves. New staff were welcomed; new programs were added while regular programs were maintained.The early lit- eracy programs are widely recognized; Girls Who Code and Crazy Eights Math are examples of the Science Technology Engineering Math(STEM)additions.Reading practice also received — 48 — a boost:the Youth Center Girls Service Group became Reading Buddies for younger children. Added to a schedule of elementary grade book clubs, adult book discussion groups, writing events, and Sunday afternoon programs,the Library is bustling. Knowing that reading during the summer is a key to a child's school success, Summer at the Stevens is for all ages. Adults who read set a great example, so the goal was to get more people of all ages participating. The summer's theme was Get in the Game. Summer started with Emerald Isle Magic with visits by Reptiles Rock and Super Cold Science.Younger children "walked"the Stevens Trail gameboard, completing squares for time read. Coordinated with the elementary schools,children filled in a boot print for each book read.In September,these boot print created hiking trail around their school.Thursday evening programs meant visits from authors,musicians, and theater companies to start the weekend off. The Library and the School District's One Author, One Community 2016 joint project worked to foster a sense of community, using literature and discussions that support the Town's RAISE values. Our author,Jacqueline Woodson, spoke to 3,000 school children during day and in the evening spoke to an attentive community audience. Chosen for her ac- cessible writing and positive messages,Ms.Woodson,has received numerous awards includ- ing the National Book Award and a Newberry Honor for her young-adult memoir Brown Girl Dreaming. Numerous Woodson books were placed in the schools where teachers used them for story time, book discussions, and art assignments. A variety of events were held before Ms.Woodson's visit.National artist Rob Surette delivered an inspiration message while per- forming his "Amazing Hero Art" speed painting. Community art pieces in response to her books became an exhibit at the Library. Book discussions were held in the Library; another was hosted by the Stevens Coolidge Estate.Professor Kevin Comtois discussed the History of American Music.Dr.William Smith met with high school students one afternoon and spoke to the community in the evening, describing The Other Tradition, the history of amity and fellowship in America.The OneAuthor series was made possible by the generous support of the Trustees of the Stevens Memorial Library, the Friends of the Stevens Memorial Library, the North Andover Foundation for Education, North Andover Schools Enrichment Council,North Andover Community Programs,North Andover Parent Resource Network, the North Andover Cultural Council, the Friends of the North Ando- ver Senior Center, Kumon Math&Reading Center of North Andover, Andover Pediatrics, Lawrence General Hospital, Georgetown Bank, Pentucket Bank, Butcher Boy, families and friends. We are appreciative of the work of numerous other visitors who presented programs enter- tained, educated, and inspired patrons. 2016 by the Numbers By the Numbers data is based on FY2016(July 2015 June 2016)as reported to the Massachusetts Board of Library Commissioners. In an average Stevens week: • The Library was open 7 days for 61 hours, Labor Day through Memorial Day; and 5 days during the summer(2,903 hours/year). • 3,569 visitors came into the building(185,589 visitors/year). • 3,954 items were borrowed in book or electronic form (205,628 items/year). • 1,096 items came and went through interlibrary loan services(56,977 items/year). • 520 library public computer sessions (27,040 sessions / year) as WiFi usage steadily increased. • 478 information and reference questions were answered by staff(24,841 questions / year). • 8 library events were held(420 events/year). — 49 — Library Building Update Last year's building envelope study provided a detailed plan to address the Library's roof. With the support of Town Capital Improvement(CIP) funds and a generous grant from the Community Preservation program, the Stevens roof project will be done in the Spring,2017. Thank you to everyone who worked to make this project a reality. Library Long Range Planning Stevens Memorial Library'sFY18—FY22 Strategic Plan was filed with the Massachusetts Board of Library Commissioners in October. It outlines a development plan and potential activi- ties for the Library over the next five years. Completed by the Library Trustees, the Library Director, and Assistant Director, the plan is based on information gathered through focus groups, surveys, and conversations with patrons,residents, and the Library staff. Looking Forward The Stevens Memorial Library looks forward with excitement to 2017 as we build on and enhance our programs, services, and collections for the residents of North Andover. Report of the Board of Trustees The Board of Trustees offers its sincere thanks to the Library staff for their dedication in pro- viding the public with exceptional Library services.The Board also extends its appreciation to the many volunteers for their behind-the-scenes activities;their efforts enable staff to provide and focus on direct services to the patrons.The Board extends a special thanks to the Friends of the Library whose numerous hours of volunteer service generate the funds that allow the Library to enhance its services beyond the annual budget. The Friends' popular book sales draw customers from around the region. Thanks is also due to the members of the School District who worked tirelessly to produce the OneAutbor, One Community series. Finally, the Board acknowledges and commends the spirit of cooperation between Town departments and organizations that made 2016 an exceptional year. The Board oversees the investment and expenditure of Endowed Funds and Special Gifts to the Library. Proceeds from the Funds purchase patron materials, furnishings, and equip- ment; help maintain the building and grounds; and fund public programs and staff develop- ment. The Board also provides support for public photocopying and public printing. The Board's Annual Financial Report for Fiscal Year 2016 (July 1, 2015 —June 30, 2016) is in- cluded below. — 50 — ENDOWMENT FUNDS SUMMARY: FIDELITY INVESTMENTS Fidelity Eaton Vance (as of 6/30/16) (as of 6/30/16) $232,599.82 $509,198.00 PRESENT PRESENT HISTORICAL 6/30/16 6/30/16 FUNDS VALUE UNITS PERCENTAGE VALUE VALUE COMBINED Charles Whitney Davis Fund $10,000.00 6742.8727 2.83% $6,592.36 $14,431.73 $21,024.09 Carrie Millar Dushame Memorial Fund $250,000.00 94195.3193 39.59% $92,092.73 $201,605.62 $293,698.35 Phillips Fund $2,550.00 2369.8682 1.00% $2,316.97 $5,072.21 $7,389.18 Berrian Fund $1,000.00 1184.9341 0.50% $1,158.48 $2,536.11 $3,694.59 I Katherine Currier Osgood, Gayton Osgood, and Mary Ellen Osgood Fund $50,000.00 18482.2386 7.77% $18,069.68 $39,557.41 $57,627.10 Elizabeth P. Stevens Fund $10,000.00 9479.4692 3.98% $9,267.87 $20,288.85 $29,556.72 Nathaniel/Elizabeth P. Stevens Fund $25,000.00 21325.3808 8.96% $20,849.36 $45,642.57 $66,491.94 Dale Stevens Fund $13,500.00 11849.3373 4.98% $11,584.84 $25,361.06 $36,945.90 Anne Bradstreet Fund $1,500.00 1184.9341 0.50% $1,158.48 $2,536.11 $3,694.59 M.T. Stevens, Abbot Stevens, Mary O. Tyler Stevens & Reynolds Fund $61,682.81 71096.0137 29.88% $69,509.03 $152,166.33 $221,675.37 $425,232.81 237910.3679 100.00% $232,599.82 $509,198.00 $741,797.82 ENDOWMENT ACCOUNT Beginning Balance TD Bank $2,002.58 Receipts Deposits $10,000.00 Interest $8.76 Donations $175.00 Total Receipts $10,183.76 Expenditures Collections(Books& Periodicals,e-content) $0.00 Building Maintenance $657.66 Supplies & Equipment $439.14 Professional Services—Audit $0.00 Community Outreach/Fundraising $0.00 Trustee Meetings/Planning/Consultant $7,312.29 Programs $850.43 Professional Development/Training $1,504.50 Staff Appreciation $0.00 Bank Service Charges $0.00 Total Expenditures ($10,764.02) Ending Balance TD Bank Account $1,422.32 COPIER CHECKING ACCOUNT ACTIVITY—AS OF 6/30/16 Beginning Balance TD Bank $3,155.27 Receipts Misc Deposits $0.00 Copier & Computer Printouts $5,007.50 Total Receipts $5,007.50 Expenditures Copier/Printing lease $1,914.78 Copier/Printer Supplies $897.23 Books $0.00 Periodicals $0.00 Total Expenditures ($2,812.01) Ending Balance 5,350.76 — 52 — Veterans' Services North Andover-Boxford District Gerard Maguire, Director of Veterans' Services The Department of Veterans ` Services is to advocate on behalf of all the Commonwealth's Veterans and provide them with quality support services and to direct an emergency financial assistance program for those Veterans and their dependents who are in need of benefits and services. In 1946, the Selectmen of the Towns of North Andover and Boxford voted to form a district and appointed a District Director of Veterans'Services to carry out the provisions of Chapter 115 of the General Laws.The Veterans Service Officer(VSO)is located at the North Andover Town Hall on Main Street.Walk-ins are always welcome, however we recommend calling first to ensure a representative is present. Office Hours Monday, 8:00 a.m.to 4:30 p.m. Tuesday, 8:00 a.m.to 6:00 p.m. Wednesday and Thursday, 8:00 a.m.to 4:30 p.m. Friday, 8:00 a.m.to 12:00 noon Office (978) 688-9525 or for urgent matters, call(978) 807-7286, or e-mail us at gmaguire@ northandoverma.gov Services Provided as Directed by The Commonwealth of Massachusetts • Financial assistance • Medical Services • Educational&Burial Benefits • Property Tax Exemptions • Veterans War Bonus • Gold Star Mothers&Fathers Annuities • Obtaining copies of discharges • Replacement of Service Medals • Burial Internment for Veteran and Spouse • V.A. Home Loans and education benefits • Life Insurance and Widows Pensions • Veterans Disability Comp&Pensions • V.A. Hospitals/Clinic Enrollment&Prescription plan All of these programs are subject to eligibility according to State and Federal Guidelines. NORTH ANDOVER/BOXFORD VETERANS SERVICES DISTRICT BOARD MEMBERS District Director of Veterans Services: Gerard Maguire Boxford Town Manager:Alan Benson North Andover Town Manager:Andrew W. Maylor — 53 — Services Provided by North Andover/Boxford Veteran's Services Office • Honor Platoon • Motorized Wheelchair Placement • Social Activities: Field Trips/Support Groups • Implementation of New Veteran's Legislation • Mobile Food Market • Resume Assistance • Credit Repair Counseling • Suicide Prevention Expenditures The Veterans Services salary and office expenses for FY2017 total 8 76,360.00.The Town of Boxford apportionment for salary and office expenses total 8 17,257.36.As of March 31,2017 The Town of North Andover expended a total of 188,382.45 with 75% of this expenditure being reimbursed by the Commonwealth of Massachusetts. Enhancements To help offset the increased demand for benefits and services we obtained a part-time office administrator to provide 18 hours per week of invaluable administrative service. Are you a veteran or a widow(er) of a veteran? Is your income less than$1,915 per month(single applicants)with cash assets below 85,000? Married Veterans,is your combined income below$2,585 month&cash assets below 89,800? Primary residence and automobiles are not counted as assets If so you may be entitled to REIMBURSEMENT of your MEDICAL EXPENSES and/or FINANCIAL ASSISTANCE Under Massachusetts General Law Chapter 115 Call your Veteran's Service Officer for more information (978) 688-9525 — 54 — Youth & Recreation Services Rick Gorman, Executive Director The Youth&Recreation Services Department,under the direction of Rick Gorman contin- ued to provide superior quality services and a full complement of programs. The programs consisted of support programs, court-related programming, student leadership programs, family and individual services as well as a host of social, recreational and adventure services. In 2016,Youth&Recreation Services serviced 3,300 youth. 2016 also marked the 28th an- niversary of our founding in 1988.2016 also marked the 16th year the doors of the Joseph N. Hermann Youth Center have been opened. The outstanding professional staff consists of Rick Gorman—Executive Director, Demi Tetrault—Assistant Director,Diana Madden—Support Services Coordinator,Justin Barry— Recreation Coordinator, and Mike Uttley—Social Programs Coordinator. After 16 years the Joseph N. Hermann Youth Center continues to be a lively and safe place for the youth of North Andover.The Center is open six days a week for middle and high school aged youth. On Saturday afternoons we have also built in time for 4th/5th graders to experience the center in preparation for when they enter the middle school. In 2016 we had the most youth participating in our extensive eight week summer program. The summer was filled with clinics,recreational programs,playground programs, events and field trips. Once again this summer we oversaw the ever popular Stevens Pond. The Pond continues to be a jewel of North Andover. The Center continues to offer part-time employment for the youth of North Andover, as we employed 150 kids during the extensive summer programs as well as after school.We also had numerous adult volunteers assisting us at the front desk,working within the building and serving on a numbers of boards and committees. 2016 also marked the 11th year of assimilating programs run under the previous Recre- ation Department.The programs consist of Sunday Night Skating at Brooks School,the Sat- urday morning 4th grade basketball programs,along with the Sunday Night Summer Concert Series and our popular Summer Children's Shows on the Common. The Youth&Recreation Director also chairs the Town Fields Committee.This position is responsible for permitting fields, working with our youth sport programs and developing short and long term plans for use and development. In 2016 we began working on long range plans for the redevelopment of the middle school playing fields.2016 also marked the 6th year of raising funds for new fields/facilities.We have now raised over 8300k over a six year period. The Center also relies on a number of committees to assist in the areas of fundraising, marketing,public relations,finance,budgeting and technology. The Youth & Recreation Services Board of Directors and Joseph N. Hermann Youth Center,Inc.are also continuing to work on long range planning for the department and Cen- ter. We thank the JNHYC, Inc. for their continued financial and emotional support of the Center. In 2016 the JNHYC,Inc. donated over$30,000 in equipment funding. The Joseph N. Hermann Youth Center, Inc. also ran the eighth annual fundraiser, re- branded as a"Knight to Shine"and held at DiBurro's in Haverhill.The event provided food, fun,live and silent auctions,recognition of youth volunteers and college scholarship recipients, as well as an opportunity to recognize the Center on 28 years of service. The lifeline of Youth&Recreation Services is to provide support services, and I am once again pleased and proud of our constant mission of helping the youth and families in this community.As we enter our 29th year of service to the community,we are proud of our past successes as well as excited about new initiatives and plans for the future.The following are the services provided during the last year. — 55 — ADVENTURE PROGRAMS SOCIAL/RECREATION PROGRAMS Challenge Course Teenco Dances Skateboard Park 8th Grade Dress-Up Dance Walking Programs Core 4 Leadership Program Mountain Biking Programs Boys and Girls Basketball Tournaments Summer Adventure Week Boys and Girls Flag Football Ski Trips Joseph Walsh Summer Basketball Ropes Course Groups League After School Adventure Trips Black Knights Winter Basketball League Black Knights Spring Basketball SUPPORT SERVICES League High School Girls Groups Youth Center Classes Middle School Girls Groups NAYRS/NABC 4th Grade Basketball Youth Tracking and Outreach Daily Drop-in Holiday Giving Program Extensive 8 week Summer Programs Thanksgiving Drive Summer Fun Personal Care Drive Sports &Rec Crisis Intervention Services Girls Weeks Job Bank Boys Weeks NAYRS Annual Teen Job Fair Adventure Week Collaboration with Local Therapists/ One Day Field Trips (Paddle Boarding, Counselors Surfing, Painting) Collaboration with NAHS Advisory North Andover Fall Ball League Program Crusaders Special Olympics Basketball Participation in Community Collabora- 4 vs.4 Fall Soccer Tournament tive Initiative(CCI) 4 vs.4 Winter Volleyball Tournament Collaboration with high school Student Video Game Tournaments Assistance Team (SAT) Pick-up Beach Volleyball Information and Referral Services Dance Team First Aid/CPR Classes Street Hockey League Participation in North Andover Opioid Fishing Program Task Force Science Club Participation in Merrimack Valley Opi- Outdoor Skating Rink activities ate Committee Seasonal Field Trips (Indoor Surfing, Collaboration with North Andover Par- Archery, Gymja Warrior) ent Resource Network Stevens Pond Programs and Swim Simon Potter Project Lessons STUDENT-RUN/COMMUNITY SERVICE PROGRAMS: NAYRS News Youth Council Senior Youth Council Helping Hands Teenco Dance Committee Step Up Knight Work Book Buddies Elevated Thought Art Program Community Involvement Programs — 56 — SPECIAL EVENTS/PROGRAMS: COURT-RELATED PROGRAMS: Annual Spring Carnival Juvenile Diversion Youth Appreciation Day Summer Kickoff Party 1/z School Day Events Turkey Toss End of Summer Celebration Stop the Silence 3 vs.3 Tourney Youth Center Fundraisers Big Screen Movie Nights Welcome Back to School Event 6th Grade Welcome Week Orientation Core 4 Youth Leadership Summit Sunday Night Brooks Skating Summer Children's Shows on Common Summer Concerts on Common — 57 — Jeffrey J. Coco, Director John P. Savastano, Deputy Director Emergency Management Co-Deputy Directors: Charles Gray, Police Chief William McCarthy, Fire Chief Connor Lincoln, Senior Operations Officer William Hastings, Senior Communications Officer Emergency Management's duties include supporting public safety incidents,hazardous mate- rial incident support, regional emergency planning committee coordination, auxiliary police support, mass causality incident support, incident evacuation, state and federal resource co- ordination, emergency communications, disaster response planning, natural and manmade disaster response and mitigation. North Andover Emergency Management activated its emergency operations center (EOC) and/or responded to "State of Emergency"incidents this year due to weather related incidents.We also responded to hazardous material incidents,providing incident support and state and federal incident liaison. Our RACES communicators continue to support monthly communications tests with MEMA to maintain communications proficiency and readiness in event of emergencies.We also conduct weekly testing of our primary communications to insure readiness during emer- gency situations. The RACES,as well as the Emergency Management operations staff contribute countless hours of voluntary services to the town in support of any events that may require communica- tions coverage or crowd control and public safety assistance during incidents. We thank Mr. Benjamin Farnum for his continued support allowing us the use of Bos- ton Hill for one of the repeaters and we are indebted to Andover Emergency Management director/Police Chief for his allowing the use an antenna and our alternate repeater on Holt Hill in Andover. The placement of these two repeaters and antennas allows us fairly large communication coverage of the town. We continue to recruit operations officers and RACES communicators holding valid Ra- dio Amateur Licenses from the Federal Communications Commission(FCC).All town resi- dents meeting these criteria are eligible to apply regardless of race, sex or creed.Interested in- dividuals may contact the undersigned at any time.We continue to support, at their requests, the police and fire departments during other incidents. As always our thanks to the many town boards and departments including Town Man- ager,the Finance Board,Honorable Board of Selectmen,DPW,Police,and Fire Departments who can always be depended on to support our efforts including all MEMA,FEMA exercises and real emergencies that may arise. My personal thanks to the Emergency Management Deputy Director,John Savastano, Operations Staff,headed by Connor Lincoln,Transportation Officer Neil Hamel, the Com- munications staff, headed by William Hastings and the RACES communicators and all the Emergency Management Officers;without your dedicated support and all the voluntary ser- vice you provide to our community, our agency could not support our community. I greatly appreciate your time and effort. — 58 — Fire Department William A. McCarthy, Fire Chief North Andover Fire Department saw significant change in the ranks during 2016. Fire Chief Andrew Melnikas retired on March 21, 2016 after a 38 year career. He served as chief for the last six years. With my promotion from deputy chief to fire chief came the promotion for Lieutenant Graham Rowe to deputy fire chief. Firefighter Matt Lacolla was promoted to lieutenant and Kyle Kobierski was hired as a new probationary firefighter. Firefighters Nic Padallaro and Sean Powers were sworn in on September 26 as full-time firefighters after completing their probationary year and graduating from the Massachusetts Firefighting Academy. Fire fighter Matt Sifferlen was hired as a probationary firefighter on October 31,2016. One-hundred-twenty total fires were reported in 2016, with 21 involving a structure, including an explosion at Dow Chemical, 60 Willow Street,which caused serious injuries to four employees of the company. This was a 2-day incident that included the Massachusetts Region 6 Hazardous Material Team as well as the specialized joint hazardous response team, which includes the Massachusetts State Police Bomb Squad. One-and-half hours into this incident a 911 call was received reporting a house fire on Great Oak Street. North Andover Engine 3 and apparatus from Lawrence,Andover, and Haverhill assisted fighting the fire. Tragically on February 6, we experienced a death of a town resident in a fire at 41 Park Street. During April, fires were reported on Boston Street and Walnut Ave with significant fire damage to both structures occurring two days apart. Careless disposal of smoking mate- rial was the cause of four of the fires occurring in 2016,with one being on Turnpike Street causing considerable damage to the outside of the building.The last fire of 2016 occurred on December 5th.The building contained a candy store on the bottom floor and two apartments on the second floor.The fire was knocked down by apparatus arriving quickly on scene and limiting fire damage to the second floor allowing the business to operate the following day during their busiest month of sales. The fire department responded to 4,117 incidents in 2016. Sixty-four percent (64%) of those incidents were emergency medical service (EMS) calls,which included 275 motor ve- hicle accidents.There was 34 opioid overdoses in 2016, an increase from the 25 in 2015.All North Andover firefighters are Emergency Medical Technicians (EMTs) trained in admin- istering naloxone (Narcan). The department again was awarded both of the S.A.F.E.grants from Executive Office of Public Safety.The Student Awareness of Fire Education(S.A.F.E.) Program is a state initia- tive to provide resources to local fire departments to conduct fire and life safety education programs in grades K 12.The mission is to enable students to recognize the dangers of fire and more specifically the fire hazards tobacco products pose. North Andover Fire Depart- ment has been receiving this grant since 1996.The S.A.F.E. Program has been in existence since FY`96. During the first seven years, S.A.F.E. was funded by the tobacco tax, better known as the Health Protection Fund, because smoking is the leading cause of fire deaths. It is currently funded by a state appropriation from general revenue funds distributed by the Executive Office of Public Safety. The Senior SAFE program was created by the Legislature in the FY`14 budget. It is a grant program to local fire departments to support fire and safety education for older adults, those most at risk of dying in fires in our state. Senior SAFE builds on the successful 20 years of the school-based(S.A.F.E.) Program that has reduced the average annual child fire deaths by 70%.The fire service expects to have a similar impact for older adults. Firefighter Matt Davis is our life safety educator who organizes education with the North Andover School Department, Senior Center and North Andover Elderly Housing. Matt was awarded the 2016 Exchange Club Firefighter of the Year for his work in fire education and community service. — 59 — The North Andover Fire Department continued its pro-active approach to fire prevention and education by participating jointly with the North Andover Police Departments"National Night Out"during August and the annual Fire Prevention week open house during October. Those in attendance were educated in smoke and carbon monoxide detectors, child car seat installations, blood pressure and blood sugar checks, tours of the station and shown equip- ment used by the fire department. The department received several donations throughout the year. We want to thank the Roberts family, for their"Lemonade for Firefighters"fundraiser for the purchase of a tread- mill, the Lietz family for donating a treadmill and the North Andover's Women's Club for their "Old Fashion Barn Dance" fundraiser to purchase audio visual training equipment. Finally, we would like to thank the town administrators and community for their contin- ued support of the North Andover Fire Department. Our members are dedicated to keeping North Andover and its residents safe. — 60 — Police Department Charles Gray, Chief I am honored to be writing my first annual town report since my new role as Chief of Police began on July 1"2016.This past year Chief of Police Paul J Gallagher retired after 37 years of service to the Town of North Andover.Also retiring after 35 years of serving North Andover was Director of Administrative Services, Richard Boettcher. Vacancies were created within the department and the following promotions were given, Sergeant Daniel Lanen was promoted to Lieutenant in charge of the Operations Division. The Sergeant's position was filled with the promotion of Officer Jay Staude to this rank.Lead Communication Officer Jonathan Bonanno was promoted to Director of Administrative Ser- vices.The Lead Communication Officer position was filled by the promotion of Communi- cations Officer John Wood.These promotions have already proven fruitful to the department as these current employees have brought forward many innovative ideas and have continued to make a significant difference in the department over the last year. Although the department underwent significant changes in Administration,we were still able to have a productive and successful year! One of our biggest achievements,is our depart- ment's continued partnership with the Drug Enforcement Agency. The "Prescription Take back Program"in North Andover has resulted in the secure destruction of prescription drugs. This program eliminates prescription drugs from ending up in landfills, sanitary sewers, or the wrong hands.This comes in part with our valiant effort to continue the fight against the opioid epidemic. The department has continued to upgrade its motor fleet with three new Dodge Charger police cruisers and two new undercover vehicles.This is a continuation of a process that we started last year to upgrade all frontline police cruisers with the most up-to-date emergency equipment and computer systems. Our goal is to create one common operating picture, thus giving the Officers all the tools necessary to complete their jobs in the most efficient and ef- fective manner. In addition, my command staff has worked tirelessly with the Information Technology Department to develop a North Andover Police Staff Portal to give officers ac- cess to all of the important documents,policies,and direct software links all on one webpage. Furthermore,the IT Department,has begun building the infrastructure necessary to support our new computer-aided dispatch and record management system (IMC) that will be imple- mented in spring of 2017. Once again, this year North Andover Police Department was asked to be the dispatch center for all 53 communities in the NEMLEC (North East Massachusetts Law Enforce- ment Counsel) organization. The department's commitment to regionalization of services has continued this year. North Andover is a key member of NEMLEC, a coordinated effort of 53 city and town Police Departments and two Sheriff's Departments to provide member communities with adequate personnel and equipment resources for the many situations that a modern Police Department may face,but no one community alone can prepare for. We once again celebrated National Night Out which had a tremendous turnout from both the local businesses and residents.This event gives the Police and Fire Departments an op- portunity to showcase all of the different services the departments offer,In addition,it allows us to educate the community regarding safety and public awareness. I am extremely proud of the men and women of the North Andover Police Department, who provide a high level of service and demonstrate a commitment to our community.Using the community policing philosophy and approach, our officers work each day to identify and resolve problems which directly affect the safety and quality of life of our residents. — 61 — Selected Criteria Date: Dec 31,2016 Period: 366 Tab: Part1 Property Crimes CYTD:-22.67% Violent Crimes CYTD: 16,13% Part I Incidents 360 320 280 240 `Y o 200 11 160 / 120 Current o/� �� ,`� 80 ( r, ,'" Prior Doi 40 .f 1P .4, Current Prior Delta %Change CYTD PYTD YTD Delta %Change YTD Criminal Homicide 0 1 -1 100.00% 0 1 -1 100.00% Rape 0 0 0 0.00% 0 0 0 0.00% Robbery 1 5 -4 -80.00% 1 5 -4 -80.00% Aggravated Assault 71 56 15 26.79% 71 56 15 .26.79% Burglary 65 147 -82 -55.78% 65 147 -82 -55.78% Larceny 318 347 -29 -8.36% 318 347 -29 -8.36% Motor Vehicle Theft 14 21 -7 -33.33% 14 21 -7 33.33% Arson 2 1 1 100,00% 2 1 1 100.00% Grand Total 471 578 -107 18.51% 471 578 -107 -18.51% — 62 — Selected Criteria Date: Dec 31, 2016 Period: �366 Tab: Part2 Pert 2 incidents 240A. rf,r 200 i 160 120 ' 80 r 40 ' � ��° Current Prior �* \ 4a 4fi \ " ��0 4 � � 4b 'ek � 4pQ *� 4� 44 ��'`� 4yw� ��"� p� 4� 7� \Cfi C3 A 4a l ,0 <S Current Prior Delta %Change CYTD PYTD YTD Delta %Change YTD Vandalism 141 227 -86 37.89% 141 227 -86 37.89% Fraud 112 103 9 8.74% 112 103 9 8.74% Drug Violations 40 22 18 81.82% 40 22 18 81.82% Overdose 35 9 26 288.89% 35 9 26 288.89% Driving Under the 31 30 1 3.33% 31 30 1 3.33% Influence Alcohol Offense 13 20 -7 -35.00% 13 20 -7 -35.00% Family Offenses, 6 4 2 50.00% 6 4 2 50.00% Nonviolent Disorderly Conduct 0 0 0 0.00% 0 0 0 0.00%a Drunkeness 0 0 0 0.00% 0 0 0 0.00% Embezzlement 0 0 0 0.00% 0 0 0 0.00% Forgery and 0 0 0 0.00% 0 0 0 0.00% Counterfeiting Gambling Offenses 0 0 0 0.00% 0 0 0 0.00% Intimidation 0 0 0 0.00% 0 0 0 0.00%4 Kidnapping/Abduction 0 0 0 0.00% 0 0 0 0.00% Prostitution 0 0 0 0.00% 0 0 0 0.00% Runaway 0 0 0 0.00% 0 0 0 0.00% Sex Offenses 0 0 0 0.00% 0 0 0 0.00% Simple Assault 0 0 0 0.00% 0 0 0 0.00%4 Stolen Property 0 0 0 0.00% 0 0 0 0.00% Offenses Vagrancy 0 0 0 0.00%u 0 0 0 0.00% Weapons Violations 0 0 0 0.00% 0 0 0 0.00% Grand Total 378 415 -37 -8.92% 378 415 -37 -8.92% - 63 - Selected Criteria Date: Dec 31, 2016 Period: 1366 Tab: QOL Quality of Life 6000 6000 4000 3000 2000 Current 1000 ffflPrior 0 gp g" o Q0 AN A Current Prior Delta %Change CYTD PYTD YTD Delta %Change YTD Motor Vehicle Stops 4586 5283 -697 -13.19% 4586 5283 -697 -13.19% Larceny 318 347 -29 -8.36% 318 347 -29 -8.36% Vandalism 141 227 -86 -37.89% 141 227 -86 -37.89% Fraud 112 103 9 8,74% 112 103 9 8,74% Motor Vehicle Crash 100 107 -7 -6.54% 100 107 -7 -6.54% Aggravated Assault 71 56 15 26.79% 71 56 15 26.79% Burglary 65 147 -82 -55.78% 65 147 -82 -55.78% Drug Violations 40 22 18 81.82% 40 22 18 81.82% Overdose 35 9 26 288.89% 35 9 26 288.89% Driving Under the 31 30 1 3,33% 31 30 1 3,33% Influence Motor Vehicle Theft 14 21 -7 -33.33% 14 21 -7 -33.33% Arson 2 1 1 100,00% 2 1 1 100.00% Motor Vehicicle Stops 1 12 -11 -91.67% 1 12 -11 -91.67% Robbery 1 5 -4 -80.00% 1 5 -4 -80.00% Criminal Homicide 0 1 -1 -100.00% 0 1 -1 -100.00% Disorderly Conduct 0 0 0 0.00% 0 0 0 0.00% Forgery and 0 0 0 0.00% 0 0 0 0.00% Counterfeiting Rape 0 0 0 0,00% 0 0 0 0.00% Simple Assault 0 0 0 0.00% 0 0 0 0.00% Stolen Property 0 0 0 0.00% 0 0 0 0,00% Offenses Vagrancy 0 0 0 0.00% 0 0 0 0.00% Weapons Violations 0 0 0 0.00% 0 0 0 0.00% Grand Total 5517 6371 -854 -13.40% 5517 6371 -854 -13.40% - 64 - Selected Criteria Date: Dec 31,2016 Period: 366 Tab: Sc Service Calls 0 100 200 300 400 500 600 700 800 900 1000 1100 Suspicious Activity EMUNUMMERTMMME117�3t t0 1g1a1 E11MIi11TtIt Assist Fire Department t(OAtGO7�Ct�tt ' 9�2 �11��1H11f Aid To Public 5t01� t MN1t kVi1�4i177tti1i11�IStiN1dA �� Alarm-Commercial 10 . it O1 w Tt1 Alarm-Residential =N1M0§NE=VQN=1M1= Animal Complaint-Domesticated MHOMMEMMUREMN Parking Enforcement INNEENISMINEMMM Disturbance-General OffAMNISM111MENE Animal Complaint-Wild HIMEMEMEM MV-Erratic Operation KNEREMERIEN Well Being Check 111=11E Itd1 Liquor Check 11S Assist Other Police Department ttiltli!tt12Et1 Parking Complaint NEMI Domestic-Verbal,No Assault 1 111M MV Accident Hit&Run fMUStl Family Problem ff=M Assist Other Agency 121 Neighbor Complaint 1611 Youth Complaint OEM Bicycle Patrol 1 Threats IM Current Field Interview 11 Forgery/Utter IN Domestic-Abuse/Neglect 1,1 MV Off Road,No Accident 11 Sudden Death/Unattended Death I'1 Shots Heard 0 Assault III Missing Person III Civil Complaint k Public Service 1 K-9 EOD Assist It Ambulance t Suicide/Attempted t Recovered Property 1 Mutual Aid t Medical t NEMLEC Callout I Disturbance-House Party I K-9 Patrol Assist R Domestic-Abuse/209A Violation I Firearms Violation I MV Fatality I - 65 - Current Prior Delta %Change CYTD PYTtO YTD %Change YTD Delta � 1 ag 850 666 184 27.63% 850 666 184 27.63% " 719 681 38 5.58% 719 681 38 5.58a/a 589 624 -55 -8.81°!o 569 '624 -55 -8.81% 7 . . 1 6 .600.00% /a 21I1, ��i�%r„ 7 9 6 80p.00 ' r ��`�'' 467 286 181 63.29% 467 286 181 63,29% / Jr rr �� + t r 318 148 170 114.86% 318 148 170 114.86% 16 26 -10 -38.46% 16 26 -10 -38.46% r a/r �/�i�/�� J6 909 1114 205 18.40% 909 1114 205 -18.40% �� i////%/i' r i r r/r/r/f , 70 78 8 10.26% 70 78 -$ 10.26°/a � i �''198 131 85 4$.62a/a 196 131 65 49,62a/o/ q/i 'nor 0/ i 45 37 8 21.62% 45 37 8 21.62% � Ai /,,./ 12 9 3 33.33% 12 9 3 33.33% r2 /I9 /P/iiro :0 1 1 100.00/a p 1 1 100.00% y.i`�11 6j %''393 373 20 5.36% 393 373 20 5,36% vny/rill HO ✓/ as // 1 %% 3 0 3 800.00% 3 0 3 300.00% 2 3 -1 33.33% 2 3 -1 -33,33% " i, Ir"% iNlDf rr yf°i/1 rF i" a o 19 4 21,0,5�/a 23 19 4 21.05/a ggg WA ' � 118 117 1 0.85°/a 118 117 1 p.85% rl/`�� ✓//�rl 96 89 7 7.87% 96 89 7 7.87% 39 28 11 39.29% 39 28 11 39.29% 2 0 2 200.00% 2 0 2 20U0% a a 24 10 14 140.00/0 24 10 14 140.p0/a 10 5 5 100.00% 10 5 5 100.00% nrr / 3 8 5 62.50% 3 8 S 62.50°/a %236 385 -149 -38.70% 236 385 -149 -38,70% rrr /fir � rri r r 97 104 -7 -6.73% 97 104 -7 -6.73% 1 0 1 100.00% 1 0 1 100.00% r� r r 21 56 -35 -62.50% 21 56 -35 62,50% 313 300 13 4.33% 313 300 13 4.33% 5 2 3 150.00% 5 2 3 150.00% 15 23 -8 -34.78% 15 23 -8 34.78% 6 8 -2 -25.00% 6 8 •2 -25.00% 4 6 2 -33.33% 4 6 -2 33,33% 65 97 -32 -32.99% 65 97 -32 -32,99a/a 130 151 -21 -13.91a/a 130 151 -21 -13.91% ME, � 4 34 1259 -825 -65,53% 434 1259 -825 -65.53% 11 15 -4 -26.87°/a 11 15 -4 -26.67°la 6 16 -10 -62.50% 6 16 -10 62.50% 17 9 8 88.89% 17 9 8 88.89% �18 14 4 28.57% 18 14 4 28,67% 7 10 -3 -30.00% 7 10 -3 -30.00% 1046 1009 37 3.67% 1046 1009 37 3.67% 45 34 11 32.35% 45 34 11 32.35% - 66 - Current Prior Delta %Change CYTD PYTD YTD %Change YTD Delta 311 317 6 1.8$°10 311 317 6 1.89% i!/6^.51 73 22 30.14% 51 73 22 30.14"/0 Grand Total 7730 8342 -612 -7.34% 7730 8342 -612 -7.34% - 67 - Division of Public Works Jim Stanford, Director Division of Public Works Water Supply & Distribution Distribution In FY16, 2,740 of 12-inch, and 1,280 feet of 8-inch ductile iron pipe were installed. The water distribution system now consists of 149.63 miles of main pipe; 6 twelve-inch check valves; 4 twelve-inch altitude valves; 5 twenty-four-inch butterfly valves; 566 twelve-inch, 4 ten-inch, 1,118 eight-inch, 1,890 six-inch, and 4 four-inch gate valves; with 1,539 public hydrants. Size of Pipe (Inches) 24 12 10 8 6 4 Length of Pipe (Feet) 1,917 278,341 7,615 413,705 81,159 684 There were installed in FY14 either wholly or partially, 27 water services. Six fire hy- drants were replaced and 16 water main breaks or leaks were repaired.Hydrants were repaired, flagged and painted as necessary. Statistics Relating to Distribution System Kind of Pipe Cast Iron,Ductile Iron,HDPE Sizes 3"to 24" Extended During the Year(Feet) 4,029 Discontinued(Feet) 0 Total Number of Hydrants Added During the Year 5 Total Number of Hydrants Now In Use 1,539 Number of Stop Gates Now In Use 3,595 Number of Stop Gates Smaller Than 4 Inches 0 Number of Blowoffs 6 Range of Pressure on Mains 20 to 148 psi Kind of Service Pipe Cement Lined Cast Iron, Copper,Ductile Iron Size of Service Pipe 3/a"to 10" Number of Service Taps Added This Year 27 Number of Service Taps Now In Use 7,848 Number of Meters Installed 92 During FY16, new water mains were installed in Chestnut Street and Rosemont Drive to expand the Sutton Hill High Service area for greater hydrant flow rates.The Rosemont Drive booster station can be eliminated as a result of this work. Water Supply & Distribution Drinking Water Treatment Plant(DWTP) & Booster Pumping Stations Throughout this fiscal year many repairs and improvements were made within the DWTP, Booster Pump Stations(BPS) and Storage Tanks.The following are just a few of the projects completed: • Emergency power upgrade-Installed new rooftop radiator used for the emergency gen- erator; • Purchased new pickup for the Water Treatment Plant — 68 — • Passed the requirements to be recertified for FINISHED WATER PUMPED FY 2016 bacterial sampling in our lab; • Replaced three gear boxes on the floccula- MONTHS MILLION GALLONS (MG) tion mixers; • New SCADA system design completed and July 2015 133.301 bids received. August 141.055 September 129.164 October 88.495 Cross Connection Control Program (CCCP) November 71.495 The program is ongoing annually in accor- December 2015 71.470 dance with the Department of Environmen- January er 2 72.308 tal Protection, Division of Water Supply 310 February 74.431 CMR 22.22 Regulations. The Town's Water March 70.431 Department is ultimately responsible for all ac- April 72 740 tions regarding this program to insure that it May 172.329 is managed and maintained correctly accord- June 2016 102.478 ing to Federal&State Laws.No cross connec- tion violations were detected in FY 16 thus the TOTAL 1,174.691 program is extremely successful in keeping our water safe from outside contaminated sources. Average daily consumption-3.210 MG/day Six hundred and fifty seven(657) devices were Max day pumping—June 26, 2016: 6.159 MG successfully tested. Largest pumping period—June 14-20, 2016: 38.31 MG Sewage Collection and Treatment Collection In North Andover, sewage is designed to flow in three divisions: The East Side Drainage Area with its trunk sewer following Lake Cochichewick to the Merrimack River; the West Side Drainage Area with two trunk sewers: one on Waverly Road,Mass Ave, Beverly Street and Sutton Street, the other along the Shawsheen River; and the Central Drainage Area bounded by Waverly Road,Middlesex Street, and Main Street.All sewerage from the Town is treated at the Greater Lawrence Sewage Treatment Plant before being discharged to the Merrimack River. There are 90.97 miles of sewers in the North Andover Sewerage System with 5,861 house connections. Size of Sewers Length of Sewers Size of Sewers Length of Sewers (inches) (feet) (inches) (feet) 36 440 15 2,889 30 10,179 12 43,785 27 4,171 10 11,073 24 19,359 8 279,173 21 7,939 6 82,154 18 19,992 Also in FY 16,three repairs were made to Town sewer mains by our contractors and five blockages were cleared by our sewer crew. Sewer Pump Station (SPS) The Town has the responsibility of maintaining 22 sewer pump stations(SPS).These stations are scattered throughout the town and assist the low lying areas in pumping the sewerage to a higher location so that it will eventually reach the Greater Lawrence Sanitary District for treatment. — 69 — As with anything mechanical,repairs were made to the stations throughout the year.The following is a few projects that occurred during the year. • Pumps overhauled at Carter Field and Bonnie Lane • Construction on the new Rae's Pond sewer station continues. Solid Waste Collection and Disposal Solid Waste and Recycling Northside Carting of North Andover continued with contract collection and transportation of solid waste.A total of 8,300 tons of solid waste was delivered to the Wheelabrator facility on Holt Road. The division also coordinated removal of the Earth Day clean-up that was conducted by volunteers and two household hazardous waste collection days.Fall leaf pickup, spring brush cleanup and Christmas tree pickup were also conducted in this fiscal year. The Sustainability Committee's (formally Solid Waste Advisory Committee) efforts to promote and enhance recycling continued to be very successful in the past fiscal year. Pro- grams to improve education and outreach,increase school recycling volumes, collect all num- bered plastic curbside,and not allow visible cardboard and paper to be placed in the trash have appreciably decreased solid waste tonnage and increased recycling tonnage. Weekly collection of single stream recyclables, which means that all recycling materials may be put out for collection into one covered container marked as recyclables,has been very successful and continues to increase recycling participation.Appliance pick-up and operation of a drop off center for recycling at the TBI Facility,210 Holt Road by our contractor,North- side Carting continues. Further, the DPW continues to provide drop off three days per week for yard waste at the Cyr Recycling Facility on Sharpeners Pond Road. A total of 2,048 tons of yard waste, paper,glass, tin, aluminum and plastic were recycled in this fiscal year. Highway & Engineering The roads program continued this year, in part,with approximately$800,000 funding from the State's Chapter 90 program and supplemental local funds. Prioritization of the improve- ments continued with the use of an outside consultant that prepared pavement management plan which investigated all roads in Town,rated condition of roads,identified repair methods, and costs. Using the pavement Management process we have been following a program that estab- lishes a priority for how funds are directed to types of roads.The arterials and collector roads are improved with Chapter 90 money and then local funding is directed to the local streets such as neighborhood streets that never seem to get improved. Below is a list of the streets improved in FY 2016 which amounted to approximately 6.0 miles of improvements. — 70 — PAVED ROADWAYS FYI Street Location Academy Road Osgood St.to Mass Ave. Andrew Circle Andover St.to Cul-De-Sac Appleton Street 250' east of Hitching Post to End Boxford Street Brookview Dr. to 700'west Flagship Drive Willow St.to End Great Pond Road Pond Rd. to 3,500'west Green Street Main St.to Faulkner Rd. Hollyridge Road Johnson St.to Wild Rose Dr. Johnson Street Oakes Dr.to 650' south of Farnum St. Marbleridge Road Johnson St.to Salem St. Meadowview Road South Bradford St.to Morningside Ln. Milk Street Johnson St.to Chestnut St. Pleasant Street Osgood St.to Clarendon St. Prescott Street Osgood St.to Chickering Rd. Rea Street South Cross Rd. to Summer St. Rosemont Drive Chestnut St.to Ridge Way Salem Street Campbell Rd.to Ingalls St. Sutton Hill Road Johnson St.to Heath Rd. Third Street Main St.to Maple Ave. Willow Street Flagship Dr.to 100' east In addition to road paving, safety improvements were designed and constructed to the Farnum Street/Mill Road/Johnson Street intersection. Design and layout for the Sutton Street/Chadwick Street/High Street intersection were also ongoing. The Engineering Department is involved in major endeavors, along with the day-to-day requests for information from town boards, businesses, developers, and residents.The Dept. provided reviews, comments, and engineering input on various projects before the Planning Board, Board of Appeals, Conservation Commission and worked on compliance with the Environmental Pollution Agency storm-water permit. The Department is continuing with its efforts to convert paper plans to electronic format and file them within its database. Some of these plans have been imported into our GIS.We are also working on increasing the functionality of GIS for the management and record keep- ing needs of the DPW. Forestry & Tree Maintenance Our skyworker bucket truck was active in this fiscal year including pruning, removal and planting trees throughout Town.Christmas trees were chipped in January and a large amount of brush was chipped during the curbside spring cleanup conducted in April. Our tree department crews again worked with the various Committees in many ways throughout the year: Christmas lights were put up in the Old Center Common as well as the downtown area which made for a wonderful and festive display,flags were put up along Mass. Ave and Main Street for the 4th of July celebration and veterans day, and wreaths were hung along these same streets for the Christmas holiday. Playground Maintenance The playground system consists of Grogan's Field, 4.7 acres; Drummond Field, 5.0 acres; American Legion Beach, 1.4 acres; Carl Thomas Playground, 4.7 acres; Aplin Playground, 1.8 acres;McEvoy Playground,4.1 acres,Reynolds Playground 3.0 acres;the Gallagher Field at the Town Farm 2.5 acres, the Cyr Recreation Area, 10.3 acres and the new Foster Farm — 71 — Fields 6.0 acres.This brings the total number of acres to 43.5.New swing sets and mulch was installed at Reynolds and Carl Thomas playgrounds. Parks & School Grounds Maintenance The parks area consists of the Center Common, 8.1 acres;training grounds, 1.9 acres;Memo- rial Park,2.7 acres;Old Burying Ground, 1 acre;Historical Society Plot;Farrington Burying Grounds; and 20 small plots at street intersections — a total of 15 acres. All park areas were maintained, and mowed an average of once per week. All triangles at various locations were maintained and mowed. School ground areas consists of the Thomson School, 3.00 acres; Kittredge School, 6.57 acres; Franklin School, 8.77 acres; Sargent School 15 acres; North Andover Middle School and Atkinson School,38.34 acres; and the High School,44.52 acres—a total of 115.20 acres. Baseball fields,track and field facilities,field hockey,soccer,lacrosse, and football fields were maintained for competitive school events and for youth and adult athletic events. Our thanks to all the volunteer organizations for funding programs, making improve- ments and for providing their time and effort in maintaining and improving our playing fields. — 72 — Phyllis A.Jones, Chairman Terry Brown Commision on Disability Issues Susan Christensen Jeffrey French Stacy Leibowitz Nancy Murphy Brenda Savory Don Stewart Who We Are We are a community educational group established to advance the community interests of cit- izens with disabilities who live in North Andover.Our Commission is made up of individuals with and without disabilities who are providing an important civic duty for the town.We are all volunteers appointed by the Board of Selectmen and Town Manager.We are encouraged by the enthusiasm the members bring to The Commission as we volunteer our time and skills to represent and ensure equal access and treatment for people with disabilities. The North Andover Commission on Disability Issues (NACDI) continues to work to- ward educating the local community(and building citizen support) concerning the needs and interests of people with disabilities. The commission has been undergoing a process of committee organization during 2016. Phyllis A.Jones was elected Chairman of the Commission in November and has undertaken the task of organizing. The Board of Selectmen has appointed new members during 2016. Terry Brown,Jeffrey French, Stacy Leibowitz, and Brenda Savory.Nancy D.Murphy,Darcy Rubino, and Susan Christensen have continued their invaluable service during the year. Among this year's accomplishments We educate people on the ADA as well as state regulations and all pertinent matters related to people with disabilities. We strongly emphasize that the Town needs to update its ADA Transition Plan that is sorely outdated, and no longer pertinent. We educate in all critical areas, i.e., municipal obligations, employment, transportation, public accommodations and access to programs,facilities.People with disabilities are faced with restrictions and a diversity of issues. At this time, more than 59 million Americans have a physical or mental disability and this number is growing fast! People with disabilities are a group that has been faced with restrictions and limitations.We educate against the stereotyped assumptions that people with disabilities encounter that are not indicative of our ability to participate in, and contribute to society and their community. The Town Clerk,Joyce Bradshaw is dedicated to making certain that anyone who needs special assistance for voting at elections is accommodated.The use of the AutoMark machine was used for all elections at the North Andover High School where voting takes place.This device allows independent voting for those with vision, hearing, and mobility issues the op- portunity to vote privately and independently. Assistance is provided to anyone who wishes. The Auto Mark is also available during absentee voting at Town Hall. The advent of early voting for the November Presidential election also had the AutoMark machine available at the Clerk's Office for anyone requesting to use it. Any special requests for accommodations at the Annual Town Meeting in May can be sent to the Town Clerk's office and will see that these needs are met. It is the goal to have all government functions accessible to all. Requests for meetings of Boards or Committees can also be made to allow full participation by everyone.The commission oversees business and reports to the Licensing Commission (Board of Selectmen) if there are any concerns. The Commission will work with business owners and the Town to assure that all proper regula- tions are followed. Our State House,One Ashburton Place,and other testimonies this year helped the Com- mission's understanding of transportation needs,concerns and ideas for improving these criti- cal services utilized by persons with disabilities, persons with low incomes, etc. Together, — 73 — Commissioners recommended service improvements and modifications to maintain or en- hance current service levels and delivery methods while achieving efficiencies and cost-sav- ings; as well as other reforms,initiatives or improvements to paratransit services in the Com- monwealth that will enhance the quality, customer-service or efficiency of these services. Being a Community Access Monitor requires knowledge of access laws and regulations, understanding of the range of organizations that have responsibilities under both state and federal regulations, skill in surveying and advocacy, and the ability to be persuasive and per- sistent.Through this training program, participants gained the knowledge and skills needed to become an effective accessibility advocate. Accessibility in Massachusetts in mandated by complex and far-reaching state and federal laws, whose enforcement depends upon the ac- tive involvement of the disability community. In close partnership with The Massachusetts Office on Disability(MOD) we encouraged people to get involved; every individual makes a difference. The law is behind this. Through your efforts, and the collective effort of the Community Access Monitor Program of MOD and the whole advocacy movement,you will help bring about change.If there are questions, or you are interested in attending an upcom- ing training,please feel free to contact Jeffrey Dougan at(800) 322-2020. All persons interested in learning more about the Commission,The ADA or any other disability related issues are welcome to come to our meetings which are posted with the place, time and agenda on the Town of North Andover web site.You may also call the Town Clerk's Office(978)688-9502 if you need any help. — 74 — Cathy Hoog, PHM, LMHC, LMFT Housing Authority Mary Beth Soucy-Larkin, Chairman Stephen Long, Assistant Chairman Edward Capodilupo, Secretary Madeleine Sutcliffe, State Appointee, Treasurer Francis McCarty, Member As the Executive Director of NAHA,I am pleased to submit on behalf of the North An- dover Housing Authority Board of Commissioners,the Authority's annual report.This report has been prepared in accordance with Chapter 121B of the General Laws of Massachusetts, which govern housing authorities. The Housing Authority owns and manages 297 income based rental units of Public Hous- ing in North Andover.The Authority-owned units are distributed in six elderly and two fam- ily developments,which consist of: State funded Fountain Drive 40 units of elderly/handicapped Bingham Way 42 units of elderly/handicapped Foulds Terrace 52 units of elderly/handicapped O'Connor Heights 20 units of elderly/handicapped 10 units of congregate housing Veteran's(Family) Housing 14 two bedroom family units 10 three bedroom family units Ashland Street 4 three bedroom family units Federally funded: McCabe Court 45 units of elderly/handicapped Morkeski Meadows 60 units of elderly/handicapped Public Housing units administered by the North Andover Housing Authority are subject to the following income limits: State Federal 1 person household $45,500 $46,000 2 52,000 52,600 3 58,500 59,150 4 65,000 65,700 5 70,200 71,000 6 75,400 76,250 7 80,600 81,500 8 or more 85,800 86,750 The state minimum age requirement for elderly is 60, or handicapped.The federal mini- mum age requirement for elderly is 62, or handicapped. The minimum head of household age for family housing is 18 or over. Neither program has an asset limit. Income from assets is added to total income and that must remain within the above thresholds. North Andover residents and people who work in North Andover receive a preference for these programs. In addition to owned units,the Authority also administers rental subsidy programs through the use of Federal and State funds.These programs are designed to provide a subsidy for hous- ing to eligible elderly/handicapped, families, and single individuals.The Authority currently administers 133 Section 8 Housing Choice Vouchers and 4 Mass Rental Vouchers (MRVP). — 75 — The Authority offers the Family Self-Sufficiency Program(FSS)to those individuals par- ticipating in the Section 8 Housing Choice Voucher Program. FSS is a HUD funded social service program designed to promote employment and increase assets for families receiving Section 8 rental subsidies. During a five to seven year period, participants work individually with a case-manager on such goals as education,money management,job training, childcare, transportation, and homeownership education. A key component of the FSS Program is the establishment of an escrow or savings account that accumulates as earned income increases. Families receive the funds after they successfully complete the program. Many FSS families have used their escrow to purchase homes. FSS is unique because of its individual approach to supporting families and is one of the few asset building government programs in existence. Future Plans/Goals: • Modernization improvements to housing authority properties • Increase affordable housing opportunities • Educate residents on available community resources and services • Partner with local colleges to provide ongoing social work internships for social ser- vice coordination for residents • Maintain smoke free properties • Increase landlord participation in section 8 program through incentives and education • Promote community and intergenerational activities for the elderly through partner- ships with area providers • Partner with the private and public sector to maximize services and resources for residents • Provide financial education to housing authority residents and Section 8 participants to promote financial independence • Promote home-ownership education for public housing tenants and Section 8 par- ticipants The North Housing Authority is dedicated to serving the housing needs of the community. The mission of the North Andover Housing Authority is to promote adequate and afford- able housing, economic opportunity, and a suitable living environment free from discrimina- tion. Working together with the staff, board of commissioners, residents, and community members,the North Andover Housing Authority strives to create neighborhoods where resi- dents continue to be a valuable part of the community. — 76 — North Andover Public Schools The new School Superintendent, Dr. Jennifer Price, began her tenure at the district's new Central Office located at 566 Main Street, the site of the old police station. Dr. Price spent much of the summer meeting with community members and parent groups, and her entry survey,with over 1,100 logins,provided valuable input as to both teachers'and parents'expec- tations and what they value as a community. In response to one recurring theme raised in the entry surveys, improved communication, Dr. Price launched the Knightly News, a monthly newsletter,in September,2015. Approximately 25 new teachers were welcomed to the District with a barbecue hosted by Dr. Price on August 31, 2015. Schools opened for the 2015/16 school year on Tuesday, Sep- tember 8, 2015, as the district welcomed over 300 teachers and professional staff and 4,709 students in grades Pre-K through 12 into our town's schools.The High School increased its enrollment overall by 51 students,continuing last year's trend,while K 8 enrollment declined by 85 students in grades Pre-K through 8 over the previous year. Challenges NAPS overall student enrollment has increased by just over 600 students since 2000.During that same time period the percentage of students categorized in the Department of Educa- tion's selected student populations has increased as follows: students with disabilities from 11.7% to 14.9%; low income from 4.4% to 10.7%; first language not English from 3.4% to 7.3%.This growth in both enrollment and diversity presents incredible opportunities and ad- ditional challenges for our schools. School Building Projects The two major projects completed for the beginning of the 2015/2016 school year were the renovation of the high school track and the completion of a new home for School Adminis- tration. A number of smaller facilities projects were completed during the summer of 2015. At the Atkinson School repairs were made to the portable classrooms to extend the life of these structures, and the library/music/art area was redesigned.At the Franklin School a new playground was installed through the CPC Playground program.The cafeteria was renovated at the Kittredge School, and roof repairs were made on the flat roof above the library at the Sargent School.At the Thomson School a deficiency in installation was addressed by creating access panels in the classrooms that allowed the placement of the needed installation.At the Middle School a classroom was redesigned to provide the proper space for a special education program, and at the high school repairs were made to the weight room and the Fieldhouse. Strategic District Improvement Plan North Andover's Strategic District Improvement Plan,as represent- �j�i ryiEq ,„ ed below,was approved by the School Committee on December 1 2016: Vision: North Andover Public Schools,with the support from our i community,will provide a safe learning environment that cultivates a respectful community of engaged learners, insightful thinkers, and effective communicators who will demonstrate progress toward career and college readiness. — 77 — OBJECTIVES: INITIATIVES: All Students: • Improve district programming to ad- To ensure all students are provided equal dress students' variable needs with a access to an excellent education that en- focus on increasing opportunities for courages them to improve their capacity inclusion to think critically, communicate effective- • Decrease class sizes, with a specific ly, understand and manage emotions, and focus on elementary class sizes, in engage in academic risks. order to better meet the needs of all students • Increase support for and understand- ing of the social/emotional learning (SEL) needs of our students • Improve communication and collabo- ration between regular and special education Professional Practice: • Provide effective district and school To hire and develop excellent educators level leadership and collaboration who utilize data, professional develop- structures that ensure adequate levels ment and collaboration to continually of support and accountability. adapt their practice to best meet the needs • Provide rigorous Professional Devel- of all students. opment focused on enhancing our curriculum, analyzing data, support- ing all students, integrating technol- ogy into our classrooms and using ef- fective instructional practices • Develop a comprehensive human re- sources model to support staff recruit- ment, advancement, supervision, and evaluation Consistent& Rigorous Curriculum: • Create and implement a multi-year To provide a consistent and rigorous cur- curriculum plan that phases in a riculum that encourages all students to consistent and rigorous curriculum learn to the depth and distance of their throughout the district abilities and leave our schools with the • Continue to use and develop common skills and knowledge necessary to succeed assessments that allow teachers to re- in college, career and life. flect on, improve, adapt and share best practices. • Implement targeted, innovative, learn- er-centered experiences that allow students to apply their knowledge to authentic situations, with a focus on civic engagement, social justice, and empowering global leaders • Ensure that our schools have sufficient access to technology and provide our faculty up-to-date instructional mate- rials — 78 — Teaching and Learning: District-Wide MCAS Results • Overall we continue to score above the state average in all grades • Our performance levels remained constant or improved in all grades • Some exciting areas of growth • Our students on IEP's continue to perform below the state average in many grades • Of particular concern is the%of students on IEP's and from low-income families scor- ing in the failing/warning category H.S.Areas of Strength: • Over 10 years, continuously above the State average in both ELA and Math • ELA median SGP was above 51%for all students, and in all sub-groups H.S.Areas of Concern: • Median SGP in Math for all students is very low(37.5)AND the median SGP since 2009 is not much higher(39) Middle School Areas of Strength/Improvement: • Significant growth in the proficient and advanced range for 7th grade math: 69% in 2014-76%in 2015 • Student Growth Percentiles for Special education students improved in 7th and 8th grade. Middle School Areas of Concern: • Narrowing the achievement gap Atkinson School Areas of Strength: • In 2015, grade 4 &5 students earned a median growth score of 52 in ELA (high- moderate growth). • The same students earned an SGP of 67.5 (high growth)in Mathematics. • SGP's for our two largest subgroups were also a highlight. • Low Income students in grades 4&5 scored SGP's in ELA and Math of 50 and 72.5 respectively. • Current students on IEP's in grades 4&5 earned SGP scores of 54.5 and 59.5 in ELA and Math. Atkinson School Areas of Concern: • We've got to intervene with special education students to increase Proficient scores and to decrease Warning scores. Exploring new instructional models. • ELA— 68%of Sp.Ed. subgroup scored in NI&W(37%and 31%) • Math— 78%of Sp.Ed. subgroup scored in NI &W(51%&27%) • More attention focused on grade 5 students based on dip in%Adv and P scores Franklin School Areas of Strength: • Consistently high#'s in CPI and SGP in both Math and ELA • Met the CPI Target for Math(92.2);just shy of ELA(94.1) • Increase in%of students scoring A&P from 2014 to 2015 in both Math and ELA • ELA: 80%— 82% • Math: 79%— 87% Franklin School Areas of Concern: • ELA— 57%of Sp.Ed. subgroup scored in NI&W(30%and 27%) • Math— 51%of Sp.Ed. subgroup scored in NI&W(27%&24%) — 79 — Kittredge School Areas of Strength: • Grades 3-5 80%of all students proficient or higher in ELA. • 2014 to 2015 ELA proficient or higher improvements • Grade 3: 67%to 85%; Grade 4: 66%to 73%. • Median SGP in 5th Grade: • ELA: 79;Math: 60. Kittredge School Areas of Concern: • 2015 MCAS:52%of SPED students scored needs improvement or lower in ELA; • 56%of SPED students scored needs improvement or lower in math. Sargent School Areas of Strength: • Continued upward trend for"All Students"in Reading/Language Arts • Positive growth for"All Students"(ELA) and"Students on IEPs"(ELA&math) • A result of hard work by Teachers and Facilitators of Collaborative Inquiry • Building-based PD • Data Teams • Collaborative time • Priority Driven Activities(PDAs) Thomson School Areas of Strength: • Advanced and proficient scores in grades 3-5 above the state average in ELA and Math. • ELA A&P scores for grades 3-5 equal the highest percentage level when looking at the last 10 years. • Mathematics A&P scores for grades 3-5 are at their highest level in the past 10 years. • CPI for Math and ELA increased by 3.1 this year.Math CPI is at its highest level over the past 4 years. Thomson School Areas of Concern: • Thomson performance levels for multiple groups of students in grades 3-5 are lower in the advanced and proficient category and higher in needs improvement when compared to all students. Curriculum and Professional Development Based on the new Superintendent's Entry Plan,the focus of curriculum planning and profes- sional development were the following areas: • A rigorous and consistent curriculum • Meeting the needs of all students with a specific focus on SpEd, ELL, and students who excel academically • Developing consistent and transparent district systems and structures: • Schedule • Intervention • Ensuring that we have the resources needed to support our system. At the elementary level, grade-level teachers continued training in the Lucy Calkins Writing Workshop with approximately half of the elementary teachers being trained by the end of the 15/16 school year. The Writing Workshop allows for differentiation for all stu- dents and inclusion of students with special needs in the writing classroom. Units of Study in Writing were provided to teachers in grades K 5.While many teachers continued to use HM math as their resource,a group of teachers were piloting GO Math,the updated version of this program.Understanding by Design(UbD)is the tool teachers will be using to create detailed curriculum units in Science/Engineering and Technology.A new program concerning finan- cial literacy called"Fit Money"will be introduced starting in the 4th grade and will use an — 80 — interdisciplinary approach linking math and social studies standards. At the middle school level, ELA and special education teachers received Units of Study in Writing. Teachers will be using literature to help students craft their writing, and classroom structures will be used that support inquiry and collaboration. Major shifts in the Science/ Engineering and Technology standards were adopted by the State in January, 2016, and a three-year transition to align MA revised STE Standards and MCAS changes has begun which will affect students in grades 6 through 8. At the high school level, subject area teachers were revising unit documents as needed. Three common assessments per trimester for courses taught at the high school level were ex- amined,and cross-district science mapping has begun.The use of protocols to look at data and student work continued in order to make adjustments to instruction,while habits of learning were reported separately from academic achievement. Elementary Schools The official elementary enrollment(Pre-K through 5)for the 2015/16 school year was 2,162, down from the previous year by 37 students due to lower kindergarten enrollment. Average class size in grades K 2 was 22.2, and for grades 3-5,the average class size was 23.9. Atkinson School 2015-16 school year was an eventful year for Atkinson Elementary.We experienced a number of"firsts"over our 180 days of class.In the fall,we had our first National(Apple)Crunch Day with Smolak Farms and Dr. Price. Students experienced their first rounds of computer-based testing with our MAP exams.A good number of Atkinson fourth graders developed our first public service announcement for the Boston Celtics and recorded it for the team's website. It was a slam dunk! Our first PTO Glow Run fundraiser was a true spectacle and a wonderful way to raise money for classroom technology and finally we had our first ever Rock-Paper- Scissor tournament in June,which was loved by all the grades. Other things that engaged our students and school community in 2015-16 were: STEM Club facilitated by Merrimack College,The Keeping Water Clean Program sponsored by vol- unteers from the Salem Sounds Coastwatch,our fifth Knights on the Run win in a row,NAHS Peer Leaders Program,RAISE Representative elections,Fancy Fridays etiquette training,5th to 6th Grade transition visits, Family Literacy and Math Nights, the spring Art and Music Fair,the annual Atkinson Variety and Talent Show and dozens of classroom-based events for students and families. Our RAISE phrase was AMAZEwith RAISE,and I think our students,staff and families did just that.We are very proud of how our community came together to support each other all year long. Franklin School During the 2015-2016 school year, the Franklin Elementary School continued their focus on the RAISE values within the school community.Through whole-school assemblies, spirit days,and a focus on academic achievement,the Franklin Dragons deepened their understand- ing, appreciation and application of our core values. Going along with that, the 2015-2016 school year had a focus on thinking about others and bringing service to those in need.Frank- lin participated in Thanksgiving food drives, sent Halloween candy overseas to our soldiers, collected warm clothes,pajamas,did neighborhood cleaning,and much more!We're all in this together, and the Dragons have continued to hold that motto close to their hearts. Kittredge School The Kittredge Elementary School celebrated RAISE values during the 2015-2016 school year. Staff, students, and parents worked Respectfully together to Achieve level one status for the sixth year in a row by Including all in the pursuit of academic excellence. Students focused on Service as they collected food for the Thanksgiving food drive,warm clothing for the Coats for Kids drive, and made holiday cards for local senior center. All strove to show — 81 — Empathy daily because in the words of Professor Simon Baron Cohen,"Empathy is a skill like any other human skill.If you get a chance to practice you get better at it."And the Kittredge School is always focused on getting better! A highlight of the 2015-2016 school year was a visit from Governor Charlie Baker on March 2. Students were thrilled that he came to their school on ReadAcrossAmerica Day and read Green Eggs and Ham. Sargent School At the Sargent in school year 2015-2016 there was electricity in the air when we had our first outdoor RAISE Assembly in late September as we celebrated Sargent's 20th birthday and recognizing all of those Sargent community members who helped build our new playground! It was a wonderful,bright and sunny day in the fall for all in attendance of this great event. We had town dignitaries, Central Office School Administration,NA CAM studios,NAHS band members, students, staff, the Sargent PTO, and even the Calzetta sisters whose family sold to the town 15 acres of land in the late 1980s.The Sargent School was built on some of the fields of the Calzetta farm where the sisters still make their home. On the land where the school now stands, apple and peach trees once grew! In 1995 the doors opened to students making Sargent the first new elementary school in North Andover in 38 years.It was a great time had by all!Among the 3 R's ("R"eading,"R"iting and"R"ithmetic), RAISE is alive and well at the Sargent School. Thomson School The Private Albert E.Thomson Elementary School welcomed their new principal, Christo- pher Raymond,for the 2015-2016 school year.Mr. Raymond met with all staff, students and groups of parents per his entry plan to understand the strengths, challenges and traditions at Thomson.We participated in the first ever Apple Crunch Day with Smolak Farms and Dr. Price in the fall.We were proud to celebrate the dedication of our new buddy bench on the Thomson playground. Our guidance counselor taught lessons on inclusion about the buddy bench, and we look forward to students using the new bench when they need to have a friend or friends to play with. Thomson rounded out the fall with another Thomson tradition, a terrific Veteran's Day Program.We recognized Assistant Superintendent Gregg Gilligan at our program for all his work through the year on behalf of veterans.We want to thank all our veterans for their service. Our school continued to support RAISE values in many ways. We conducted regular grade-level meetings to teach RAISE values and developed a matrix of expected behaviors for all settings in the school.Through the efforts of our grade 5 student council members,we held several spirit days, collected winter coats, held a food drive and conducted a Pennies for Patients campaign. Our small school shattered expectations by collecting almost $2,000 for the Leukemia and Lymphoma society through the pennies campaign. In addition, we were proud of our grade 4 students who visited the senior center for an intergenerational lunch and conversation. Our grade 4 students certainly kept talking about that experience! Finally, with the addition of our new chromebooks, we increased student time on the computers in our lab and piloted the MAP test on the computers in reading and math. Over- all, it was an exciting and busy year, and with our dedicated staff, great students, excellent PTO and amazing parent community,we look ahead with excitement to the future. Middle School In 2016 NAMS was fortunate to expand world language in 6th and 7th grade with the addi- tion of a French teacher for the 16-17 school year.This allows for French, Spanish and Ger- man exposure for all of our students.The NAMS school council prioritized student motiva- tion and connectedness to school in 2015,which resulted in targeted outside experiences for all three grade levels. Specifically,NAMS 8th grade students and teachers attended Nature's Classroom over night for three days in the fall of 2016.Overall,feedback was overwhelmingly positive and the trip will continue for the 2017-2018 school year — 82 — High School North Andover High School had plenty to celebrate in 2015-2016. For co-curricular activi- ties, the DECA (Distributive Education Clubs of America) program qualified 65 students for the state competition, 11 for nationals and had a top 10 finisher in the category of com- munity service.DECA is a business program that prepares students to be successful leaders in both college and their future careers. High School students participated in the Relay for Life fundraising project.The event was hosted at Crozier gymnasium and raised over$31,000 for the American Cancer Society. Once again a Knights Robotics team distinguished itself,with Team 8568A finishing 6th overall for robot skills at the 2016 VEX World Championships where students from 500 teams and 31 countries competed. Athletically, the Golf and Girl's Lacrosse teams won North State Sectional Champion- ships.The Boys Indoor Track team won the D2 State Relay Championship.The track team had an athlete break the state pole vault record and win the New England championship while being recognized as an All-American.The high school track was dedicated to Alexander P. Farese during a wonderful community ceremony. In performing arts, our chorus and band programs won an impressive four golds at the Worldstrides Heritage Music Festival. Six music students were recognized as MMEA All-State participants. Building Respectful Community (BRC) The Building Respectful Community Committee, consisting of community members, par- ents, teachers and staff of the North Andover Public Schools, supports social and emotional learning in North Andover. The essential question for the BRC is: How can we as a BRC District Committee support the community ofNorth 14ndover by including and celebrating diversity and cultural differences?The five elementary schools, the Middle School and High School continued their philanthropic activities through community clean ups, random acts of kind- ness, street hockey fundraisers,food and clothing drives, etc.Anti-bullying lessons were con- ducted throughout the district,and a new program called Understanding Our Differences was launched in the elementary schools to cultivate disability awareness. Associated Programs Scarlet Knights Academy Scarlet Knight Academy is an alternative to the traditional high school program, offering evening classes that are designed to meet the specific needs of individual students. Scarlet Knight Academy provides rigorous curriculum,delivered through dynamic instruction within small student-centered classes.With an emphasis on supporting the whole student,we strive to create an environment where individuals can take risks and challenge themselves both aca- demically and personally. Students enrolled in the Scarlet Knight Academy will earn a North Andover High School diploma, and as such, must meet graduation requirements outlined for all students which include passing the ELA, Math and Science MCAS exams. In addition, all Scarlet Knight Academy students must participate in the work-study/community involvement program. Stu- dents must participate in a minimum of ten(10) hours per week of paid or volunteer work. Community Programs Community Programs continues to offer before and after school programs for North Andover students.Programs run from 7:00 a.m.until 6:00 p.m.The Breakfast Club Program is located at all five elementary schools and serves a healthy breakfast beginning at 7:00 a.m. and runs until school opens at 8:25 a.m. Activities include organized games/activities and free play until the beginning of the school day. The Kid's Stop after School Program is located at all five elementary schools, as well as the Middle School, and is open until 6:00 p.m.The pro- gram is designed to offer children the opportunity to extend learning beyond the school day. Community Programs also offers Excel Enrichment Programs for students with an exciting medley of mini courses for Elementary,Middle and High School Students.Excel Enrichment — 83 — Programs for Elementary and Middle School Students include the Robotics League, Lego Robotics, Sewing, Pottery,Yoga, Fencing, Bowling, Stem Programs and the Ski and Snow- board Program. Excel Enrichment Programs for High School students include the SAT/ ACT PREP Course,College Readiness Seminar and Driver's Ed. Summer Programs include the following:TipToe into Kindergarten, Leap into Literacy,Mad Science, Camp Invention, Boys and Girls Basketball,Soccer,Lacrosse,Track,Field Hockey and Tennis.Visit the Com- munity Program website to view a complete list of current and upcoming programs: http:// www.northandoverpublicschools.com/departments/community-program s Early Childhood Center North Andover's Early Childhood Program, under the direction of Marylou Connors, is a fee-based program for children ages 3 to 5. It integrates children of all abilities and includes specific programs for children with autism spectrum disorders and children who have signifi- cant medical/physical needs. Morning and afternoon sessions run Monday through Thurs- day, and financial help is available for those who qualify. — 84 — School Enrollment Enrollment by Grade (2015-2016) Grade PK K 1 2 3 4 5 6 7 8 9 10 11 12 SP Total Early Childhood 129 129 Center Annie L. Sargent 0 75 89 93 89 92 85 0 523 School Atkinson 0 68 65 71 78 65 64 0 411 I 00 Franklin 0 66 81 78 66 101 99 0 491 (J, I Kittredge 0 38 52 49 54 50 51 0 294 Thomson 0 55 45 67 50 49 48 0 314 North Andover Middle 0 0 384 412 350 0 1146 North Andover High 0 0 389 365 317 319 0 1390 Scarlet Knight A 3 21 24 Academy District 129 302 332 358 337 357 347 384 412 350 389 365 320 340 0 4722 Annual Town Election March 29, 2016 PRECINCT % OF SELECTMAN 1 2 3 4 5 6 7 8 TOTALS VOTE SELECTMAN BLANKS 2 6 1 1 4 4 3 2 23 1% BLANKS ROSEMARY CONNELLY 213 379 187 228 123 203 151 205 1689 59% ROSEMARY CONNELLY SMEDILE SMEDILE CHRIS NOBILE 139 205 94 154 92 160 162 133 1139 40% CHRIS NOBILE 00 ON WRITE-INS 1 1 0 0 0 0 0 0 2 0% WRITE-INS I PRECINCT TOTAL 355 591 282 383 219 367 316 340 2853 100% PRECINCT TOTAL PRECINCT % OF SCHOOL COMMITTEE 1 2 3 4 5 6 7 8 TOTALS VOTE SCHOOL COMMITTEE BLANKS 26 37 26 31 17 24 22 29 212 7% BLANKS CATHERINE ANN KOCH 93 140 108 147 82 152 132 197 1051 37% CATHERINE ANN KOCH AMY T. MABLEY 236 414 148 205 120 191 162 114 1590 56% AMY T. MABLEY WRITE-INS 0 0 0 0 0 0 0 0 0 0% WRITE-INS PRECINCT TOTAL 355 591 282 383 219 367 316 340 2853 100% PRECINCT TOTAL PRECINCT NORTH ANDOVER % OF NORTH ANDOVER HOUSING AUTHORITY 1 2 3 4 5 6 7 8 TOTALS VOTE HOUSING AUTHORITY BLANKS 32 84 34 41 33 56 49 53 382 13% BLANKS LAURIE A. BURZLAFF 141 173 110 177 96 150 131 161 1139 40% LAURIE A. BURZLAFF FRANCIS McCARTY 181 333 138 165 87 161 136 126 1327 47% FRANCIS McCARTY WRITE-INS 1 1 0 0 3 0 0 0 5 0% WRITE-INS PRECINCT TOTAL 355 591 282 383 219 367 316 340 2853 100% PRECINCT TOTAL Total Number of Registered 18,549 Voters I Percent of Registered Voters 15% Voting Today Annual Town Meeting Minutes May 1O, 2O16 Town Moderator Mark S.DiSalvo called the 2016 Annual Town Meeting to order at 7:06 PM in the Auditorium of the North Andover High School 430 Osgood Street on Tuesday May 10, 2016.The Town Moderator recognized Dr.William Campbell, North Andover resident and Nobel Prize winner in Medicine as well as students from the North Andover Middle School who are also working on projects in medicine.Moderator DiSalvo introduced Board and Com- mittee members and participating Town Officials. He summarized the Simplified Rules of Parliamentary Procedure which are printed in their entirety in the Report of the Finance Com- mittee. There is no quorum requirement for any Annual or Special Town Meeting as estab- lished by Article 14 of the 1999 Annual Town Meeting and approved by the Attorney General on July 27, 1999.Moderator DiSalvo explained the voting procedure using raised cards for vot- ing and the implementation of the bylaw allowing votes to be declared by the Moderator for is- sues requiring a two-thirds vote at each session.Check lists showed a total of 483 voters present. A motion was made by Tracy M. Watson, 9 William Street, Chairman of the Board of Selectmen, seconded by Rosemary Connelly Smedile 65 Greene Street, to dispense with the reading of the warrant,and with the reading of the constable's return of service of that warrant and further moved that the Moderator not be required to read articles of the warrant verbatim, but to be allowed to refer to articles by number and by subject matter;and further that amend- ments need not be read but are to be voted upon as displayed or otherwise provided,in print, to the voters in attendance.Motion unanimously approved. The Annual Town Meeting was adjourned into the Special Town Meeting which was called by separate warrant and called to order by Moderator DiSalvo at 7:22PM after Article 8 of the Annual Town Meeting.A motion was made by Tracy M.Watson, 9 William Street, Chairman of the Board of Selectmen, seconded by Rosemary Connelly Smedile 65 Greene Street, to dispense with the reading of the warrant, and with the reading of the constable's return of service of that warrant and further moved that the Moderator not be required to read articles of the warrant verbatim,but to be allowed to refer to articles by number and by subject matter; and further that amendments need not be read but are to be voted upon as displayed or otherwise provided, in print, to the voters in attendance. Motion unanimously approved. Voters who registered to vote after April 20,2016 and before April 30, 2016 were eligible to vote only in the Special Town Meeting and received separate voting cards. The May 10,2016 Special Town Meeting dissolved by unanimous vote at 7:22PM on May 19,2016 with all articles voted. The 2016 Annual Town Meeting dissolved by unanimous vote at 9:OOPM on May 10, 2016 with all articles voted. Article 1. Reports of Special Committees. UNANIMOUS VOTE to hear and/or accept the reports of any appointed special committees,if any.No reports given. Article 2. Reports of Receipts and Expenditures. UNANIMOUS VOTE to accept the reports of receipts and expenditures as presented by the Selectmen in the 2015 Annual Town Report. — 88 — Article 3. Authorization of the Town Manager or Superintendent of Schools Regarding Contracts in Excess of Three Years. UNANIMOUS VOTE in accordance with the provisions of Massachusetts General Laws Chapter 30B, §12(b),to authorize the Town Manager or the Superintendent of Schools to solicit and award contracts, except personnel contracts,for terms exceeding three years,including any renewal,extension or option, provided in each instance the longer term is determined to be in the best interest of the Town by vote of at least four(4)members of the Board of Selectmen or the School Committee,as appropriate. Article 4. Authorization to Accept Grants of Easements. UNANIMOUS VOTE to authorize the Board of Selectmen and the School Committee to accept grants of easements for access,water, drainage, sewer,roadway and utility purposes or any public purpose on terms and conditions the Board and Committee deem in the best interest of the Town. Article 5. Authorization to Grant Easements. UNANIMOUS VOTE to authorize the Board of Selectmen and the School Committee to grant easements for access,water, drainage, sewer,roadway and utility purposes or any public purpose on terms and conditions the Board and Committee deem in the best interest of the Town. Article 6. Amend General Bylaws—Chapter 88 Dogs. UNANIMOUS VOTE to amend the Town of North Andover General Bylaws, Chapter 88—Dogs, as follows: Section 88-5 is hereby amended by inserting"however the designee shall not be the ACO"so that Section 88-1 shall read: 88-5 Hearing Authority The Hearing Authority shall be the Police Chief or his or her designee;however the designee shall not be the ACO. Approved by Attorney General.June 15,2016—Posted June 20,2016 Article 7. Authorization to Initiate the Process to Aggregate Electrical Load. MAJORITY VOTE pursuant to M.G.L. c. 164, § 134(a)to authorize the Board of Selectmen to initiate the process to aggregate electrical load and become an aggregator of electric power on behalf of its residential and business electric customers and to reestablish such plan if its operation is suspended; and to negotiate and enter into such contracts for power supply pursuant to the plan or services for such plan,with the understanding that if a power supply contract is executed,individual consumers would retain the option not to participate in the aggregation plan and,instead,to choose any electricity alternatives they desire. Article 8. Add New General Bylaw Chapter 78 - Stretch Energy Code. UNANIMOUS VOTE to add Chapter 78 to the Town of North Andover General Bylaws, entitled "Stretch Energy Code"for the purpose of regulating the design and construction of buildings for the effective use of energy,pursuant to Appendix 115.AA of the Massachusetts Building Code, 780 CMR, the Stretch Energy Code,including future additions, amendments or modifications thereto, as follows: — 89 — Chapter 78-Stretch Energy Code 78.1 Definitions International Energy Conservation Code(IECC) The International Energy Conservation Code(IECC)is a building energy code created by the International Code Council.It is a model code adopted by many state and municipal governments in the United States for the establishment of minimum design and construction requirements for energy efficiency, and is updated on a three year cycle.The baseline energy conservation requirements of the MA State Building Code are the IECC with Massachusetts amendments, as approved by the Board of Building Regulations and Standards. Stretch Energy Code Codified by the Board of Building Regulations and Standards as 780 CMR Appendix 115.AA of the 81h edition Massachusetts building code, the Stretch Energy Code is an appendix to the Massachusetts build- ing code,based on further amendments to the International Energy Conservation Code(IECC)to improve the energy efficiency of buildings built to this code. 78.2 Purpose The purpose of 780 CMR 115.AA is to provide a more energy efficient alternative to the Base Energy Code applicable to the relevant sections of the building code for both new construction and existing buildings. 78.3 Applicability This code applies to residential and commercial buildings.Buildings not included in this scope shall comply with 780 CMR 13,34,51, as applicable. 78.4 Stretch Code The Stretch Code,as codified by the Board of Building Regulations and Standards as 780 CMR Appendix 115.AA, including any future editions, amendments or modifications, is herein incorporated by reference into the Town of North Andover General Bylaws, Chapter 78. The Stretch Code is enforceable by the inspector of buildings or building commissioner. 78.5 Effective Date The effective date of this bylaw shall be January 1,2017. Approved by Attorney General June 15,2016—Posted June 20,2016 Article 9. Amend Zoning Bylaw—Section 8: Supplementary Regulations. TWO-THIRD VOTE DECLARED BY THE MODERATOR to amend the Town of North Andover Zoning Bylaw, Section 8—Supplementary Regulations,by making the following amendments to Subsection 8.3 (by identifying text which is deleted as strikethrough and text added as underlined), as follows: 3. Site Plan Review 5. Information Required a) Special Permit Application Form, along with any fees as may be set by the Town Bylaw; b) Drawings prepared at a scale of one inch equals forty feet(1"=40')or larger,or at a scale as approved in advance by the Town Planner. Revised plans shall contain a notation listing and describing all revisions, additions, and deletions made to the originally submitted plans and the date of each. c) All site plans shall be prepared by a certified architect,landscape architect, and/or a civil engineer registered in the Commonwealth of Massachusetts.All landscape plans shall be prepared by a cer- tified landscape architect registered in the Commonwealth of Massachusetts.All building eleva- tions shall be prepared by a certified architect registered in the Commonwealth of Massachusetts. All stormwater management plans and drainage calculations must be submitted with the stamp — 90 — and signature of a Professional Engineer(PE)licensed to conduct such work in the Common- wealth of Massachusetts. d) The times for submission of the site plans for review by the Planning Board are specified in Section 10.3 of the Zoning Bylaws (Special Permit Regulations) e) The following information must be submitted along with the application: i. NORTH ARROW/LOCATION MAP:A north arrow and a location map showing surrounding roadways and land uses adjacent to the site(1"=1500'). Location Map should show at least one intersection of two existing Town roadways. ii. SURVEY OF LOT/PARCEL:A boundary survey conforming to the requirements of the Essex County Registry of Deeds Office.The survey shall be dated and include any revision made to the survey or site plan.Any change in the survey shall be recorded before site plan approval may be granted. iii. NAME/DESCRIPTION OF PROJECT.The name of the development and the names, addresses and telephone numbers of the project listing tenants,land uses, development phases, or other pertinent information necessary to evaluate the proposed development plan. iv. EASEMENTS/LEGAL CONDITIONS:Identification of easement(s) or legal encumbrances(s)that are related to the sites physical development, and a listing of any condition(s)placed upon the site by the Board of Appeals, Planning Board, Conservation Commission, or any public body or agency,with the authority to place conditions on the sites development. V. TOPOGRAPHY.The present and proposed topography of the site,utilizing two foot (T) contour intervals. Existing topography fifty feet(50')beyond the perimeter of the parcel as it appears on the most current Town of North Andover topographic mapping shall also be shown. vi. ZONING INFORMATION:All applicable Zoning Bylaw information shall be provided regarding the site's development.This information shall be placed in a table and list all parking, setbacks, percent of lot coverage,floor-area-ratio, number of dwelling units,total amount of square feet, size of signs and any other applicable zoning information necessary for the proper review of the site plan by the Town Planner and Planning Board. vii. DRAINAGE AREA MAP:A drainage area map showing 12re and post construction watersheds, subwatersheds and stormwater flow paths,including municipal drainage system flows; viii. STORMWATER MANAGEMENT PLAN:All applications for Site Plan Review shall include the submittal of a Stormwater Management Plan prepared in accordance with the latest version of the Massachusetts Stormwater Handbook and additional criteria established herein and demonstrating full compliance with the Massachusetts Stormwater Standards and the North Andover Stormwater Management and Erosion Control Regulations promulgated under Chapter 160 of the Town Bylaws(Stormwater Management and Erosion Control Bylaw); titilized by the site shftll be shown Oil the site p6n. Storm wftter dmiriftge eftletilfttions which support the design of the control facilities shown the piftri shftll be submitted to the7- Depftrtrnent of Public Works for review ftrid ftpprorfti. Gftletilftfions shftll show ft rnitigfttiorr ix. BUILDING LOCATION:Identification of all existing and proposed structure(s)located on the site.The number of stories, overall height in feet and gross floor area in square feet of all structure shall be indicated. X. BUILDING ELEVATION:A drawing of the exterior of the building, as viewed from the front(street view) must be submitted.The Planning Board may request side and rear views if relevant to the Board's review.This drawing must be at least 8"x 11"in size. xi. LOCATION OF PARKING/WALKWAYS:Identification of the location of all existing and proposed parking and walkways areas,including curb cuts that will be used to access the site from adjacent roadways, or access points. — 91 — xii. LOCATION OF WETLANDS/NOTICE OF INTENT.All resource areas as defined in M.G.L. Chapter 131, Section 40 and/or the Town of North Andover Wetland Protection Bylaw Ch. 178), shall be shown on the site plan.If applicable,the applicant shall file a Notice of Intent with NACC concurrently with the application to the Planning Board for Site Plan Review. xiii. LOCATION OF WALLS/SIGNS:Identification of the location,height and materials to be used for all retaining walls and signs located on the site. Signs will be reviewed using the guidelines set forth in Section 6.7(H) of the Zoning Bylaw. xiv. LOCATION OF ROADWAYS/DRIVES:Identification of all right-of-ways and driveways including the type of curb and gutter to be used, and their dimensions. Distances to all the nearest roadways and/or curb cuts shall be shown for both sides of any streets which is adjacent to the site. xv. OUTDOOR STORAGE/DISPLAY AREAS:Identification of the location and type of outdoor storage and display areas on the site. xvi. LANDSCAPING PLAN:The general outline of existing vegetation,wooded areas, significant trees,unique species and tree clusters and the extent of all vegetation,wooded areas, significant mature trees (> 12 inches DBH),unique species and/or tree clusters to be removed and identification of the location and landscape schedule of all perimeter and interior landscaping,including but not limited to proposed paving materials for walkways, fences, stonewalls and all planting materials to be placed on the site.in ftdclition, ftil existing trees over 12 inches DBI 1, to be sftred or rernored shftll be shown on the site p6n. Any landscaping required by the Town Bylaws shall be indicated on the site plan in tabular form showing the amount required and the amount provided. xvii. REFUSE AREAS:Identification of the location of each outdoor refuse storage area, including the method of storage and screening.All refuse areas must be fully enclosed. xviii. LIGHTING FACILITIES:Identification of the proposed illumination,indicating the direction and the degree of illumination offered by the proposed lighting facilities, including an example of the light fixture to be used. xix. xx. TRAFFIC IMPACT STUDY.Identification of existing traffic levels, along with the expected traffic impacts to occur based upon the proposed project. Projects which access state highways, a traffic impact study shall be filed with MEPA concurrently with the Planning Board review.A copy of the MEPA study shall be filed with the application to the Planning Board. xxi. COMMONWEALTH REVIEW.Any information required and submitted to any agency of the Commonwealth, shall be filed with the Planning Board upon the initial submission of the project for Board review. xxii. UTILITIES:All utilities,including water line locations, sewer line locations and profiles, and storm drainage systems; xxiii. FISCAL IMPACT. Projections of costs rising from increased demand for public services and infrastructure; provisions of benefits from increased tax revenues, employment and infrastructure improvements; and impacts on adjacent property values. xxiv. COMMUNITY IMPACT.Analysis of the project's impact on the surrounding neighborhood in terms of architectural consistency,pedestrian movement and overall character;impacts on nearby historic structures or site; and an evaluation of the proposed project's consistency and compatibility with existing local and regional plans. f) If the site plan review application is for the construction of any new wireless service facility on a previously permitted facility as set forth in Section 8.9(3)(a)9II)Wireless Service Facilities Use Regulations, the information required by Section 8.9(5) must also be submitted.The SPCA may grant a waiver from these submittal requirements if it finds that such information is not needed for a thorough review of a proposed personal wireless service facility(1998/38). — 92 — 6. Review Criteria/Design Guidelines a) The following criteria and design guidelines shall be used by the Planning Board in evaluating the site plan review and all information submitted as part of the application. i) General a) Conformance with all appropriate provisions of the Zoning Bylaw. b) Protection of abutting properties from detrimental site characteristics. ii) Environmental a) Protection of unique or important natural,historic or scenic features. b) Adequacy of proposed methods of refuse disposal. c) Ability of proposed sewage disposal and water supply systems within and adjacent to the site to serve the proposed use. d) Adequacy of the proposed drainage system to mitigate runoff increases and protect water ua ality. development. e) Provision of adequate landscaping,including the screening of adjacent residential uses, provision of street trees, landscape islands in the parking lot and a landscape buffer along the street frontage. f) Adequacy of the soil erosion plan and any plan for protection of steep slopes,both during and after construction. g) Protection of adjacent properties by minimizing the intrusion of lighting,Including parking lot and building exterior lighting. h) The proposed development must not present a demonstrable adverse impact on the surrounding area resulting from excessive noise, dust, smoke, or vibration which are higher than levels now experienced from uses permitted in the surrounding area. iii)Design a) Buildings shall be located with respect to setbacks placement of parking landscaping and entrances and exits with surrounding buildings and development. b) The buildings shall relate harmoniously to each other in architectural style,the location and building exits and entrances. c) Screening shall be provided for storage areas,loading docks, dumpsters,rooftop equipment, utility buildings and similar features. d) Electric,telephone, cable t.v., and other such lines and equipment must be placed underground. e) Demonstrate that the scale,massing and detailing of buildings are compatible with those prevalent in the surrounding area. iv)Traffic/Parking a) The location and number of curb cuts shall be minimized to reduce turning movements, and hazardous exits and entrances. b) Provision for access to adjoining properties shall be provided as appropriate. c) Driveways shall be located opposite each other wherever possible. d) Joint access driveways between adjoining properties shall be encouraged. e) Internal circulation and egress shall provide for traffic safety, and access to and from minor streets servicing one family dwellings shall be minimized. v) Stormwater Management a) At a minimum all projects subject to Site Plan Review shall comlly with the criteria, specifications, and performance standards of the most recent version of Massachusetts Stormwater Management Standards and accompan)�ing Stormwater Management Handbook.The Lake Cochichewick Watershed Area shall be considered a Critical Area in terms of applicability of the standards. b) Projects subject to the Bylaw shall also comlly with the requirements and criteria outlined in Sections 7.0 through 10.0 of the North Andover Stormwater Management and Erosion Control Regulations promulgated under Chapter 160 of the Town Bylaws(Stormwater Management and Erosion Control Bylaw). — 93 — vi)Landscape Design a) Landscape designs shall be developed based on soil,light and other site specific conditions. Plant species shall be chosen for their ability to thrive in the post-development soil,water and use conditions of the site without significant supplemental water or fertilizer, once established. b) Plant species shall be native to inland Essex County or shall be cultivars of these native species. Amended Section 8.3 Site Plan Review to read as follows: 4. Site Plan Review 5. Information Required f) Special Permit Application Form, along with any fees as may be set by the Town Bylaw; g) Drawings prepared at a scale of one inch equals forty feet(1"=40') or larger, or at a scale as approved in advance by the Town Planner. Revised plans shall contain a notation listing and describing all revisions,additions,and deletions made to the originally submitted plans and the date of each. h) All site plans shall be prepared by a certified architect,landscape architect, and/or a civil engineer registered in the Commonwealth of Massachusetts.All landscape plans shall be prepared by a certified landscape architect registered in the Commonwealth of Massachusetts. All building elevations shall be prepared by a certified architect registered in the Commonwealth of Massachusetts.All stormwater management plans and drainage calculations must be submitted with the stamp and signature of a Professional Engineer(PE)licensed to conduct such work in the Commonwealth of Massachusetts. i) The times for submission of the site plans for review by the Planning Board are specified in Section 10.3 of the Zoning Bylaws(Special Permit Regulations) j) The following information must be submitted along with the application: xxv. NORTH ARROW/LOCATION MAP:A north arrow and a location map showing surrounding roadways and land uses adjacent to the site(1"=1500'). Location Map should show at least one intersection of two existing Town roadways. xxvi. SURVEY OF LOT/PARCEL:A boundary survey conforming to the requirements of the Essex County Registry of Deeds Office.The survey shall be dated and include any revision made to the survey or site plan.Any change in the survey shall be recorded before site plan approval may be granted. xxvii.NAME/DESCRIPTION OF PROJECT.The name of the development and the names, addresses and telephone numbers of the project listing tenants,land uses, development phases, or other pertinent information necessary to evaluate the proposed development plan. xxviii.EASEMENTS/LEGAL CONDITIONS:Identification of easement(s) or legal encumbrances(s)that are related to the sites physical development, and a listing of any condition(s)placed upon the site by the Board of Appeals, Planning Board, Conservation Commission, or any public body or agency,with the authority to place conditions on the sites development. xxix. TOPOGRAPHY.The present and proposed topography of the site,utilizing two foot(T) contour intervals.Existing topography fifty feet(50')beyond the perimeter of the parcel as it appears on the most current Town of North Andover topographic mapping shall also be shown. xxx. ZONING INFORMATION:All applicable Zoning Bylaw information shall be provided regarding the site's development.This information shall be placed in a table and list all parking, setbacks, percent of lot coverage,floor-area-ratio, number of dwelling units,total amount of square feet, size of signs and any other applicable zoning information necessary for the proper review of the site plan by the Town Planner and Planning Board. xxxi. DRAINAGE AREA MAP:A drainage area map showing pre and post construction watersheds,subwatersheds and stormwater flow paths,including municipal drainage system flows; — 94 — xxxii.STORMWATER MANAGEMENT PLAN:All applications for Site Plan Review shall include the submittal of a Stormwater Management Plan prepared in accordance with the latest version of the Massachusetts Stormwater Handbook and additional criteria established herein and demonstrating full compliance with the Massachusetts Stormwater Standards and the North Andover Stormwater Management and Erosion Control Regulations promulgated under Chapter 160 of the Town Bylaws(Stormwater Management and Erosion Control Bylaw); xxxiii.BUILDING LOCATION:Identification of all existing and proposed structure(s)located on the site.The number of stories, overall height in feet and gross floor area in square feet of all structure shall be indicated. xxxiv.BUILDING ELEVATION:A drawing of the exterior of the building, as viewed from the front(street view) must be submitted.The Planning Board may request side and rear views if relevant to the Board's review.This drawing must be at least 8"x 11"in size. xxxv. LOCATION OF PARKING/WALKWAYS:Identification of the location of all existing and proposed parking and walkways areas,including curb cuts that will be used to access the site from adjacent roadways, or access points. xxxvi.LOCATION OF WETLANDS/NOTICE OF INTENT.All resource areas as defined in M.G.L. Chapter 131, Section 40 and/or the Town of North Andover Wetland Protection Bylaw Ch. 178), shall be shown on the site plan. If applicable,the applicant shall file a Notice of Intent with NACC concurrently with the application to the Planning Board for Site Plan Review. xxxvii.LOCATION OF WALLS/SIGNS:Identification of the location,height and materials to be used for all retaining walls and signs located on the site. Signs will be reviewed using the guidelines set forth in Section 6.7(H) of the Zoning Bylaw. xxxviii.LOCATION OF ROADWAYS/DRIVES:Identification of all right-of-ways and driveways including the type of curb and gutter to be used, and their dimensions. Distances to all the nearest roadways and/or curb cuts shall be shown for both sides of any streets which is adjacent to the site. xxxix.OUTDOOR STORAGE/DISPLAY AREAS:Identification of the location and type of outdoor storage and display areas on the site. xl. LANDSCAPING PLAN:The general outline of existing vegetation,wooded areas, significant trees, unique species and tree clusters and the extent of all vegetation, wooded areas,significant mature trees(> 12 inches DBH),unique species and/or tree clusters to be removed and identification of the location and landscape schedule of all perimeter and interior landscaping,including but not limited to proposed paving materials for walkways,fences, stonewalls and all planting materials to be placed on the site..Any landscaping required by the Town Bylaws shall be indicated on the site plan in tabular form showing the amount required and the amount provided. xli. REFUSE AREAS:Identification of the location of each outdoor refuse storage area, including the method of storage and screening.All refuse areas must be fully enclosed. xlii. LIGHTING FACILITIES:Identification of the proposed illumination,indicating the direction and the degree of illumination offered by the proposed lighting facilities, including an example of the light fixture to be used. xliii. TRAFFIC IMPACT STUDY.Identification of existing traffic levels, along with the expected traffic impacts to occur based upon the proposed project. Projects which access state highways, a traffic impact study shall be filed with MEPA concurrently with the Planning Board review.A copy of the MEPA study shall be filed with the application to the Planning Board. xliv. COMMONWEALTH REVIEW.Any information required and submitted to any agency of the Commonwealth, shall be filed with the Planning Board upon the initial submission of the project for Board review. xlv. UTILITIES:All utilities,including water line locations, sewer line locations and profiles, and storm drainage systems; — 95 — xlvi. FISCAL IMPACT. Projections of costs rising from increased demand for public services and infrastructure; provisions of benefits from increased tax revenues, employment and infrastructure improvements; and impacts on adjacent property values. xlvii. COMMUNITY IMPACT.Analysis of the project's impact on the surrounding neighborhood in terms of architectural consistency,pedestrian movement and overall character;impacts on nearby historic structures or site; and an evaluation of the proposed project's consistency and compatibility with existing local and regional plans. f) If the site plan review application is for the construction of any new wireless service facility on a previously permitted facility as set forth in Section 8.9(3)(a)9II)Wireless Service Facilities Use Regulations, the information required by Section 8.9(5) must also be submitted.The SPCA may grant a waiver from these submittal requirements if it finds that such information is not needed for a thorough review of a proposed personal wireless service facility(1998/38). 6. Review Criteria/Design Guidelines b) The following criteria and design guidelines shall be used by the Planning Board in evaluating the site plan review and all information submitted as part of the application. i) General a) Conformance with all appropriate provisions of the Zoning Bylaw. b) Protection of abutting properties from detrimental site characteristics. ii) Environmental a) Protection of unique or important natural,historic or scenic features. b) Adequacy of proposed methods of refuse disposal. c) Ability of proposed sewage disposal and water supply systems within and adjacent to the site to serve the proposed use. d) Adequacy of the proposed drainage system to mitigate runoff increases and protect water quality. e) Provision of adequate landscaping,including the screening of adjacent residential uses, provision of street trees, landscape islands in the parking lot and a landscape buffer along the street frontage. f) Adequacy of the soil erosion plan and any plan for protection of steep slopes,both during and after construction. g) Protection of adjacent properties by minimizing the intrusion of lighting,Including parking lot and building exterior lighting. h) The proposed development must not present a demonstrable adverse impact on the surrounding area resulting from excessive noise, dust, smoke, or vibration which are higher than levels now experienced from uses permitted in the surrounding area. iii)Design f) Buildings shall be located with respect to setbacks placement of parking landscaping and entrances and exits with surrounding buildings and development. g) The buildings shall relate harmoniously to each other in architectural style,the location and building exits and entrances. h) Screening shall be provided for storage areas,loading docks, dumpsters,rooftop equipment, utility buildings and similar features. i) Electric,telephone,cable t.v.,and other such lines and equipment must be placed underground. j) Demonstrate that the scale,massing and detailing of buildings are compatible with those prevalent in the surrounding area. iv)Traffic/Parking f) The location and number of curb cuts shall be minimized to reduce turning movements, and hazardous exits and entrances. g) Provision for access to adjoining properties shall be provided as appropriate. h) Driveways shall be located opposite each other wherever possible. i) Joint access driveways between adjoining properties shall be encouraged. j) Internal circulation and egress shall provide for traffic safety, and access to and from minor streets servicing one family dwellings shall be minimized. — 96 — v) Stormwater Management c) At a minimum all projects subject to Site Plan Review shall comply with the criteria, specifications,and performance standards of the most recent version of Massachusetts Stormwater Management Standards and accompanying Stormwater Management Handbook.The Lake Cochichewick Watershed Area shall be considered a Critical Area in terms of applicability of the standards. d) Projects subject to the Bylaw shall also comply with the requirements and criteria outlined in Sections 7.0 through 10.0 of the North Andover Stormwater Management and Erosion Control Regulations promulgated under Chapter 160 of the Town Bylaws (Stormwater Management and Erosion Control Bylaw). vi)Landscape Design c) Landscape designs shall be developed based on soil,light and other site specific conditions.Plant species shall be chosen for their ability to thrive in the post- development soil,water and use conditions of the site without significant supplemental water or fertilizer,once established. d) Plant species shall be native to inland Essex County or shall be cultivars of these native species. Approved by Attorney General.June 15,2016—Posted June 20,2016 Article 10. Amend Zoning Bylaw—Section 13: Continuing Care Retirement Center. UNANIMOUS VOTE to amend the Town of North Andover Zoning Bylaw, Section 13—Continuing Care Retirement Center(CCRC),by making the following amendments to Subsections 13.1, 13.2, and 13.5(b) (by identifying text which is deleted as strikethrough and text added as underlined), as follows: SECTION 13 CONTINUING CARE RETIREMENT CENTER 13.1 Establishment There is established a Continuing Care Retirement Center(CCRC) as a permitted use under the Special Permit provision of this Bylaw. Such permitted use may only be authorized in existing Residence 1 Residence 2 and Village Residential Districts.A CCRC parcel may include land which is in the Residential-1 District,providing provided that no development shall be permitted in the Residential-1 portion of a CCRC parcel in excess of ten percent(10%) of the lot areas of the Residential-1 portion within such CCRC parcel.The authorization will empower the Planning Board to review and approve a definitive plan under the Special Permit provisions in Section 10.3 and as in otherwise provided for in this section.A CCRC shall include a nursing home care facility and congregate housing units and may also include independent dwelling units and assisted living units.A CCRC may also only include any or all of the foregoing housing types provided it is affiliated with a nursing home. 13.2 Purpose The purpose of the CCRC is to provide for the development and use of specialized housing and nursing care for the elderly on the basis of the Planning Board to issue a Special Permit in the permitted District {2 Districts with greater flexibility from the pattern otherwise permitted in such districts.It is intended to create health care,including home health care,housing and other supportive services designed to meet the needs of the elderly population and to enable that population to live independently.It is further intended to encourage the preservation of open spaces; to allow for new nursing care facilities and housing that causes relatively little demand on Town services; and to preserve the Town's residential character.In creating an alternative to existing nursing and housing possibilities for the elderly,the CCRC is intended to allow for a greater mixture of buildings, structures and uses with regard to density than is otherwise permitted thereby allowing for the nursing care of the elderly and the relief of the physical, economic and emotional stress associated with the maintenance and care of traditional nursing home and residential properties. — 97 — 5. Standards and Restrictions b. Permissible Density.Unless in compliance with the bonus density provisions of subsection 6.,the dwelling unit density shall not exceed an average of four(4)units per acre in a parcel which is located within the Residential-1 District or Residential-2 District and five(5)units per acre in a parcel which is located within the Village Residential District exclusive of the nursing care facility.When a parcel is located in a combined portion of either the Residential-2 and Residential-1 Districts or the Village Residential and Residential-1 Districts, a density factor of 2 units per acre shall be applicable to the portion in the Residential-1 District. However,in no instance shall any development such as the construction of buildings,roads and parking lots be permitted in excess of ten percent(10%) of the lots area in that portion of the CCRC parcel located in the Residential-1 District, nor shall any development in Residential-2 or Village Residential District adversely impact the Residential-1 District. For parcels which are located in a combined portion of the Residential-1 or Residential-2 Districts and the Village Residential District, the permissible density for each District shall be applicable.Also,in no event shall the total number of independent dwelling units exceed fifteen(15) percent of the total number of dwelling units otherwise allowed in any CCRC parcel. Further,in no instance shall the Floor Area ration of the entire project exceed 0.25, nor shall the total number of dwelling units exceed 2-59 300 for any parcel regardless of total acreage or density bonuses provided under paragraph 6. Section 13 as amended to read as follows: SECTION 13 CONTINUING CARE RETIREMENT CENTER 13.1 Establishment There is established a Continuing Care Retirement Center(CCRC) as a permitted use under the Special Permit provision of this Bylaw. Such permitted use may only be authorized in existing Residence 1,Residence 2 and Village Residential Districts.A CCRC parcel may include land which is in the Residential-1 District provided that no development shall be permitted in the Residential-1 portion of a CCRC parcel in excess of ten percent(10%)of the lot areas of the Residential-1 portion within such CCRC parcel.The authorization will empower the Planning Board to review and approve a definitive plan under the Special Permit provisions in Section 10.3 and as otherwise provided for in this section. A CCRC shall include a nursing home care facility and congregate housing units and may also include independent dwelling units and assisted living units.A CCRC may also only include any or all of the foregoing housing types provided it is affiliated with a nursing home. 13.2 Purpose The purpose of the CCRC is to provide for the development and use of specialized housing and nursing care for the elderly on the basis of the Planning Board to issue a Special Permit in the permitted Districts with greater flexibility from the pattern otherwise permitted in such districts.It is intended to create health care,including home health care,housing and other supportive services designed to meet the needs of the elderly population and to enable that population to live independently.It is further intended to encourage the preservation of open spaces; to allow for new nursing care facilities and housing that causes relatively little demand on Town services; and to preserve the Town's residential character.In creating an alternative to existing nursing and housing possibilities for the elderly,the CCRC is intended to allow for a greater mixture of buildings, structures and uses with regard to density than is otherwise permitted thereby allowing for the nursing care of the elderly and the relief of the physical, economic and emotional stress associated with the maintenance and care of traditional nursing home and residential properties. 6. Standards and Restrictions b.Permissible Density.Unless in compliance with the bonus density provisions of subsection 6.,the dwelling unit density shall not exceed an average of four(4)units per acre in a parcel which is located within the Residential-1 District or Residential-2 District and five(5)units per acre in a parcel which is located within the Village Residential District exclusive of the nursing care facility.When a parcel is located in a combined portion of either the Residential-2 and Residential-1 Districts or the — 98 — Village Residential and Residential-1 Districts, a density factor of 2 units per acre shall be applicable to the portion in the Residential-1 District. However,in no instance shall any development such as the construction of buildings,roads and parking lots be permitted in excess of ten percent(10%) of the lots area in that portion of the CCRC parcel located in the Residential-1 District, nor shall any development in Residential-2 or Village Residential District adversely impact the Residential-1 District. For parcels which are located in a combined portion of the Residential-1 or Residential-2 Districts and the Village Residential District,the permissible density for each District shall be applicable.Also,in no event shall the total number of independent dwelling units exceed fifteen(15) percent of the total number of dwelling units otherwise allowed in any CCRC parcel. Further,in no instance shall the Floor Area ration of the entire project exceed 0.25, nor shall the total number of dwelling units exceed 300 for any parcel regardless of total acreage or density bonuses provided under paragraph 6. Approved by Attorney General.June 15,2016—Posted June 20,2016 Article 11. Amend North Andover Zoning Bylaw—Section 16: Corridor Development District. UNANIMOUS VOTE to amend the Town of North Andover Zoning Bylaw, Section 16—Corridor Development District,by making the following amendments to Subsection 16.4 in order to allow light manufacturing as a permitted use within the Corridor Development District 3 (CDD3) and to Subsection16.5 in order to allow contractor yards, landscaping,lumber or other building materials, including outdoor sales and outdoor storage of material, equipment, and supplies within the CDD3 subject to a Special Permit(by identifying text which is deleted as strikethrough and text added as underlined) as follows: 16.4 Corridor Development District 3 (CDD3) -Permitted Uses In the Corridor Development District 3, no building or structure shall be reconstructed, erected, altered or used for any other purpose than the following: 1. Retail uses provided there is no outdoor sales or storage of materials and products. However, auto sales and repair are not allowed. 2. Restaurants excluding drive-through facilities. 3. Personal service establishments. 4. Indoor recreation,fitness, and health care facility. 5. Indoor place of amusement or assembly. 6. Outdoor place of amusement or assembly. 7. Public building or use and Public Service Corporation. 8. Professional offices including,but not limited to banks,real estate offices,insurance offices,physician offices, dentists, attorneys, architects, engineers or accountants. One drive-through facility shall be permitted every 500 linear feet of street or highway as measured along centerline. 9. Medical Center. 10. Research and Development Facility not to exceed 25,000 square feet. 11. Printing and Reproduction. 12.Warehousing and Wholesaling. 13.Motel and Hotel. 14. Art Gallery. 15. Cultural Center or Museum. 16. Place of worship. 17. Day Care Center. 18. Same-structure/On-site Mixed Use Developments: a. Residential uses shall not be located on the first floor of a structure or building. b. Apartments and condominiums shall be allowed where such use is not more than fifty percent (50%) of the gross square feet for a two(2) story building and seventy-five percent(75%) of the gross square feet for a three(3) story building. — 99 — 19. Light manufacturing, including manufacturing, fabrication,processing,finishing, assemblypacking- or treatment of articles or merchandise provided such uses are conducted solely within a building and further provided that such uses are not offensive, noxious, detrimental, or dangerous to surrounding_ areas or the town by reason of dust, smoke, fumes, odor, noise,vibration,light or other adverse environmental effect. 16.5 Uses Subject to a Special Permit 4. Contractor's yard,landscaping,lumber or other building materials, including outdoor sales and outdoor storage of material, equipment, and supplies within the CDD3 District provided: a. The products, material or goods displayed, stored or sold outdoors must not be visible from anX residential use b. The goods,materials and products permissible for outdoor storage,display and sales hereunder,shall explicitly exclude automobiles, motorcycles, or other wheeled vehicles and include only goods, ma- terials,and products,which are customarily stored,displayed,or sold outdoors without the necessity for cover from the weather.Fertilizers and other toxic,hazardous chemicals are also excluded herein. c. The amount of area designated for outdoor storage shall be included in the dimensional require- ments for maximum lot coverage d. The entire outdoor storage area shall be enclosed by a wall of solid opaque material such as masonry or solid wood fencing which,in the opinion of the Planning Board,will not derogate from the sur- rounding area. Sufficient landscaping shall be provided around the perimeter of the storage area at the discretion of the Planning Board. e. Onl leg plants can be higher than the surrounding vertical structural screening. And further that the non-substantive changes to the numbering of this bylaw by the Town Clerk be permitted in order that it be in compliance with the numbering format of the Zoning Bylaws of the Town of North Andover. Section 16.4 Corridor Development District 3(CDD3)-Permitted Uses as amended to read as follows: 16.4 Corridor Development District 3 (CDD3) -Permitted Uses In the Corridor Development District 3, no building or structure shall be reconstructed, erected, altered or used for any other purpose than the following: 1. Retail uses provided there is no outdoor sales or storage of materials and products. However, auto sales and repair are not allowed. 2. Restaurants excluding drive-through facilities. 3. Personal service establishments. 4. Indoor recreation,fitness, and health care facility. 5. Indoor place of amusement or assembly. 6. Outdoor place of amusement or assembly. 7. Public building or use and Public Service Corporation. 8. Professional offices including,but not limited to banks,real estate offices,insurance offices,physician offices, dentists, attorneys, architects, engineers or accountants. One drive-through facility shall be permitted every 500 linear feet of street or highway as measured along centerline. 9. Medical Center. 10. Research and Development Facility not to exceed 25,000 square feet. 11. Printing and Reproduction. 12.Warehousing and Wholesaling. 13.Motel and Hotel. 14. Art Gallery. 15. Cultural Center or Museum. 16. Place of worship. — 100 — 17. Day Care Center. 18. Same-structure/On-site Mixed Use Developments: a. Residential uses shall not be located on the first floor of a structure or building. b. Apartments and condominiums shall be allowed where such use is not more than fifty percent (50%) of the gross square feet for a two(2) story building and seventy-five percent(75%) of the gross square feet for a three(3) story building. 19.Light manufacturing,including manufacturing,fabrication,processing,finishing,assembly, packing or treatment of articles or merchandise provided such uses are conducted solely within a building and further provided that such uses are not offensive,noxious,detrimental,or dangerous to surrounding areas or the town by reason of dust,smoke,fumes,odor,noise,vibration,light or other adverse environmental effect. 16.5 Uses Subject to a Special Permit 4. Contractor's yard,landscaping,lumber or other building materials,including outdoor sales and outdoor storage of material,equipment,and supplies within the CDD3 District provided: a. The products,material or goods displayed,stored or sold outdoors must not be visible from any residential use b. The goods,materials and products permissible for outdoor storage,display and sales hereunder, shall explicitly exclude automobiles, motorcycles, or other wheeled vehicles and include only goods,materials,and products,which are customarily stored,displayed,or sold outdoors with- out the necessity for cover from the weather.Fertilizers and other toxic,hazardous chemicals are also excluded herein. c. The amount of area designated for outdoor storage shall be included in the dimensional require- ments for maximum lot coverage d. The entire outdoor storage area shall be enclosed by a wall of solid opaque material such as ma- sonry or solid wood fencing which,in the opinion of the Planning Board,will not derogate from the surrounding area.Sufficient landscaping shall be provided around the perimeter of the stor- age area at the discretion of the Planning Board. e. Only living plants can be higher than the surrounding vertical structural screening. Approved by Attorney General June 15,2016—Posted June 20,2016 Article 12. Acceptance of a Public Way—Hitching Post Road. UNANIMOUS VOTE to accept and name Hitching Post Road as a public way as laid out by the Board of Selectmen and accept deeds to the street and all related easements, as shown on plan entitled"Definitive Subdivision Plan Hitching Post Road North Andover", owner Neil C. &Margaret M. Patnaude, 197 Appleton Street,North Andover,Mass, applicant Charles McLaughlin, 1046 Great Pond Road,North Andover MA.,August 6, 1987, Scale 1"= 80',Andover Consultants Inc., 1 East River Place,Methuen, Mass.,recorded with North Essex Registry of Deeds as Plan No. 11013. Article 13. Acceptance of a Public Way—Stanton Way. UNANIMOUS VOTE to accept and name Stanton Way as a public way, as laid out by the Board of Selectmen, and as shown on a plan entitled"Street Layout Plan of Stanton Way located in North Andover,MA,prepared by Christiansen and Sergi, Inc., 160 Summer Street, Haverhill,MA 01830, Scale 1"=50',December 1,2015"and to accept deeds to the street and all related easements, shown on plan entitled"Definitive Subdivision Plan,Tax Map 61 Lots 16&34, &Tax Map 34 Lot 31, 1679 Osgood Street&Bradford Street,North Andover,MA, Prepared for G.M.Z. Realty Trust, 1679 Osgood Street, No.Andover,MA 01845,Jones &Beach Engineers,Inc. 85 Portsmouth Avenue, PO Box 219, Stratham, NH 03885",recorded with the North Essex Registry of Deeds as Plan No. 16957 and on the above referenced Street Layout Plan. — 101 — Article 14. Citizen's Petition—Petition to the Town of North Andover-Authorize and Appropriate Consumer Testing Services for the benefit of the people of the Town of North Andover. To see if the Town will vote to adopt the article, as printed in the warrant to authorize the Town of North Andover to take action to authorize and appropriate Consumer Testing Services to benefit the people of the Town of North Andover to accommodate, educate and protect consumers as they approach the consumer marketplace.Appropriation of$10,000,000 with a 100%daily interest rate on the principle balance of an ongoing trust account is to be authorized to take any other action relative thereto by approval of the voters to invest in labor and materials to administrate consumer benefit programs,invest in resource development, educate, train and provide employment to benefit the people of the Town of North Andover. Petition of Joseph Toolan, et al ARTICLE 14 DEFEATED Article 15. Citizen's Petition-Petition to the Town of North Andover-To see if the Town will vote to eliminate its local option meals tax. To see if the Town will vote to eliminate its local option meals tax. Petition of Stan Novak, et al ARTICLE 15 DEFEATED Article 16. Citizen's Petition-Petition to the Town of North Andover-Amend Zoning Bylaw—Miscellaneous. To see if the Town will vote to amend the Town of North Andover Zoning Bylaw,by amending the following Sections as follows:Amendment shown by adding underlined language and deleting language as strikethrough. Amend Zoning Bylaw, Section 4.127(Business 2 Zoning District), Subsection 15,by inserting the term "....by the Planning Board."So that subsection 15 shall read as follows: "15.Multi-family dwelling and town houses (with Special Permit by the Planning Board.) Amend Section 7.4(Building Heights),by inserting after subparagraph 5, a new sub-paragraph 6. So that Section 7.4 shall now read as follows: 7.4.Building Heights Maximum heights of buildings and structures shall be as set forth in Table 2.The foregoing limitations of height in feet in the designated zoning districts shall not apply to: 1. Farm buildings on farms of not less than ten(10) acres. 2. Nor shall they apply to chimneys,ventilators, skylights,tanks,bulkheads,penthouses, processing towers, and other accessory structural features usually erected at a height greater than the main roofs of any buildings. 3. Nor to domes,bell towers, or spires of churches or other buildings,provided all features are in no way used for living purposes. 4. And further provided that no such structural feature of any non-manufacturing building shall exceed a height of sixty five(65) feet from the ground. 5. Nor of a manufacturing building a height of eighty five(85) feet from the ground, or pharmaceutical manufacturing silo having a height one hundred-fifteen(115)feet from the ground, or 6. — 102 — determirifttion,bftsed upon considerfttion of site design, the neighborhood Context, torogmPhy ftrld'�Dr other eircurnstftnees thftt such-irftiver shftll riot be substftntiftily more detrimentft!to the neighborhood thftri existing eondifions..A parcel or parcels collectively comprisingat.leastfive(5)acres of land located within aBusiness 2(B 2)Zoning District eligiblefor a waiver of the maximum heightjor residential multifitinily dwellings and town houses,described und err Table 2;provided tha t.such height waiver shall not permit a structure to exceed more than four stories and 55:feet in height,and .further provided that.such waiveris granted by the PlanningBoard,as Special Permit Granting.Authority,after the Planning Board has Anade a determination based upon con sideration of the special permit criteria described under Section 1.0.31.of the Zoning ,Bylaw. Petition of John Smolak, et al VOTED YES-247 NO-89: TWO-THIRD VOTE DECLARED Approved by Attorney General June 15,2016—Posted June 20,2016 Article 17. Set Salaries and Compensation of Elected Officials. MAJORITY VOTE to fix the salary and compensation of the elected officers of the Town, as provided by Massachusetts General Laws Chapter 41, §108 as follows: Board of Selectmen/Licensing Commissioners, per person,per annum $5,000 Chairman of Board of Selectmen, per annum,in addition $500 School Committee,per person,per annum $5,000 Chairman, School Committee, per annum,in addition $500 Moderator, For Annual Town Meeting $500 For each Special Town Meeting $250 Article 18. Continue and Approve Revolving Funds. UNANIMOUS VOTE to authorize the following revolving funds for certain Town departments under Massachusetts General Laws, Chapter 44, §53E 1/2 for the Fiscal Year beginning July 1,2016, Revolving Fund Accounts Account Revolving Authorized Revenue FY 2016 Number Fund to Spend Use of Funds Source Limit 1 2023 Wheelabrator Director - Air quality Wheelabrator $ 35,000 Planning Community monitoring Host Development Community Agreement 2. 2024 Wheelabrator Director - To enforce Wheelabrator $ 20,000 Public Safety Community Trash Truck Host Development regulations Community Agreement — 103 — Revolving Fund Accounts 3. 2025 Health Dept- Director - Food Inspection $ 30,000 Food Community Consultant fees Fees Inspections Development and expenses related to program 4. 2026 Health Dept- Director - Septic Inspection $ 20,000 Septic Community Consultant fees Fees Inspections Development and expenses related to program 5. 2027 Field Director - Field Field rental $ 5,000 Maintenance Division of maintenance, fees, Grants, Public Works upgrade Donations, and and related related Fund- expenses raising proceeds 6. 2028 Health Dept Director - Clinic supplies Clinic $ 30,000 Revolving Community and other participant Development related fees, Grants, materials Donations, and related Fundraising proceeds 7. 2029 Youth and Director - All programs Participants' $ 300,000 Recreation Division of and activities, fees, Grants, Services Public Works expense, part Donations, and Revolving time help related Fund- raising proceeds 8. 2030 Elder Services Director of Senior Participants' $ 20,000 - COA Revol Human programs, fees, Grants, Services classes and Donations, and activities related Fund- raising proceeds 9. Stormwater Director - Review, test Review Fees $ 50,000 Bylaw Community and inspect Development Stormwater reports TOTAL $510,000 — 104 — Revolving Fund Account Fees and Expenses EXPENDITURES ACCOUNT BALANCE FY15 FY15 BALANCE RECEIPTS THRU THRU NUMBER REVOLVING FUND 7/1/14 RECEIPTS EXPENDITURES 6/30/15 2/28/16 2/28/16 BALANCE 1 2023 Wheelabrator $100,675 $25,000 $(14,277) $111,398 $25,000 $(11,086) $125,312 Planning 2 2024 Wheelabrator $69,884 $13,650 $(27169) $817365 $147300 $(27695) $927971 Public Safety 3 2025 Health Dept- $817669 $277785 $(457469) $637985 $277260 $(217162) $707083 Food Inspections 4 2026 Health Dept- $197406 $267685 $(357686) $107405 $157870 $(187027) $87248 Septic Inspections 5 2027 Field Maintenance $47484 $850 $(17154) $47180 $- $(37780) $400 6 2028 Health Dept $337144 $157553 $(177277) $317420 $107906 $(217959) $207366 Revolving 7 2029 Youth and $2237371 $3217968 $(2787996) $2667343 $1327500 $(2297799) $1697044 Recreation Services Revolving 8 2030 Elder Services $177313 $207917 ($287721) $97510 $117604 $(147803) $67310 -COA Revol Article 19. Approve Payment of Prior Years Unpaid Bills UNANIMOUS VOTE to authorize payment of the following unpaid bills from prior year(s),by the respective department,using appropriations of the current fiscal year. Prior Year Invoices FY15 Vendor Amount Department Andover Electric $ 2,240.00 Police Verizon $ 307.40 Police Air-Gas Inc. $ 76.40 Fire Crest $ 14,161.05 School Total $ 16,784.85 Article 20. Appropriation-General fund for Fiscal Year 2017. UNANIMOUS VOTE to raise and appropriate funds for Fiscal Year 2017 as shown below: — 105 — General Government $ 2,522,509 Public Safety $ 10,541,191 Education $ 45,226,141 Snow and Ice Removal $ 890,500 All Other Public Works $ 3,729,491 Health and Human Services $ 1,245,377 Culture and Recreation $ 1,024,035 Support Services $ 1,760,354 Debt Service $ 6,208,389 Employee Benefits $ 16,321,707 Liability Insurance $ 420,000 Regional Schools $ 594,960 Other (OPEB Trust) $ 50,000 for a total appropriation of$90,534,654 and to transfer to the General Fund from Special Revenue— GLSD $146,703. Article 21. Appropriation—Water Enterprise Fund for Fiscal Year 2017. UNANIMOUS VOTE to appropriate the amount of$4,984,020 in aggregate,for the purpose listed under column«FY17 Recommendation:Town Manager, Board of Selectmen, Finance Committee»for the Fiscal Year beginning July 1,2016 and ending June 30,2017;without regards to individual line items, and to operate the Water Enterprise Fund,that$4,984,020 be raised from Water receipts and from these receipts $946,308 be transferred to the General Fund for indirect cost and $475,000 to Capital Projects. WATER ENTERPRISE Fiscal Fiscal Year 2017 Fiscal Year Recommendation Year 2017 Town Manager 2016 Department Board of Selectmen Budget Request Finance Committee Personnel 940,600 936,376 939,290 Expense 1,541,165 1,603,665 1,600,751 Debt Service 1,282,276 1,022,670 1,022,670 Sub-Total Direct Expenditures 3,764,041 3,562,711 3,562,711 Transfer to Capital Projects 635,000 475,000 475,000 Admin/Indirect 923,227 946,308 946,308 Total Water Enterprise 5,322,268 4,984,020 4,984,020 Article 22. Appropriation—Sewer Enterprise Fund for Fiscal Year 2017. UNANIMOUS VOTE to appropriate the amount of$4,628,412 in aggregate,for the purpose listed under the column"FY17 Recommendation:Town Manager, Board of Selectmen, Finance Committee"for the Fiscal Year beginning July 1,2016 and ending June 30,2017;without regards to individual line items, and to operate the Sewer Enterprise Fund,that$4,628,412 be raised from sewer receipts and from these — 106 — receipts $445,321 be transferred to the General Fund for indirect expenses and $150,000 to Capital Projects. SEWER ENTERPRISE Fiscal Fiscal Year 2017 Fiscal Year Recommendation Year 2017 Town Manager 2016 Department Board of Selectmen Budget Request Finance Committee Personnel 406,459 381,788 383,649 Expense 322,970 306,870 305,010 GLSD Assessment 1,721,200 2,000,000 2,000,000 Debt Service 1,549,847 1,344,433 1,344,433 Sub-Total Direct Expenditures 4,000,476 4,033,091 4,033,091 Transfer to Capitol Project 80,000 150,000 150,000 Admin/Indirect 434,460 445,321 445,321 Total Sewer Enterprise 4,514,936 4,628,412 4,628,412 Article 23. Appropriation-Stevens Estate Enterprise Fund for Fiscal Year 2017. UNANIMOUS VOTE to appropriate the amount of$475,702 in aggregate,for the purpose listed under the column"FY17 Recommendation:Town Manager, Board of Selectmen, Finance Committee"for the Fiscal Year beginning July 1,2016 and ending June 30,2017;without regards to individual line items, and to operate the Stevens Estate at Osgood Hill Enterprise Fund that$475,702 be raised from Stevens Estate at Osgood Hill Fund and from these receipts $50,032 be transferred to the General Fund for indirect expenses and$125,000 be transferred from Retained Earnings to Capital Projects. STEVENS ESTATE AT OSGOOD HILL ENTERPRISE Fiscal Fiscal Year 2017 Fiscal Year Recommendation Year 2017 Town Manager 2016 Department Board of Selectmen Budget Request Finance Committee Personnel 127,801 143,162 143,162 Expense 146,069 157,508 157,508 Debt Service 0 0 0 Sub-Total Direct Expenditures 273,870 300,670 300,670 Transfer to Capital Direct 0 125,000 125,000 Admin/Indirect 48,812 48,812 50,032 Total Stevens Estate Enterprise 322,682 474,482 475,702 Article 24. Appropriation-Capital Improvement Plan for Fiscal Year 2017. TWO-THIRD VOTE DECLARED BY THE MODERATOR to fund the Capital Improvement Program as listed under the heading"Board of Selectmen/Finance Committee/Town Manager Recommendations" and with the language included. - 107 - Article 25. Transfer to Stabilization. UNANIMOUS VOTE to transfer$60,017 from available funds or free cash into the Stabilization Fund. Article 26. Transfer to Capital Stabilization. UNANIMOUS VOTE to transfer$350,000 from available funds or free cash into the Capital Stabilization Fund. Article 27. Transfer of funds from Health Insurance Trust Fund to Other Post- Employment Benefits (OPEB) Liability Trust Fund. UNANIMOUS VOTE to transfer a sum of$250,000 from the Health Insurance Trust Fund into the Other Post-Employment Benefits(OPEB) Liability Trust Fund. Article 28. Report of the Community Preservation Committee—Appropriation from Community Preservation Committee Fund. UNANIMOUS VOTE to receive the report of the Community Preservation Committee and to raise, transfer and/or appropriate from the Community Preservation Fund in accordance with the provisions of Massachusetts General Laws, Chapter 44B, a sum of money to be spent under the direction of the Community Preservation Committee as shown in the List of Approved Projects in Article 28; and,with regard to the appropriation of$325,000 for the Leonhard Farm Conservation Restriction Project,to authorize an expenditure not to exceed$325,000 for the purchase of a conservation restriction or other interest from Byron C. Leonhard and George A. Leonhard, Successor Trustees of the North Andover Boxford Realty Trust, or its nominee or successor in title,in certain parcels of land,which parcels are a portion of the parcels of land described in deeds recorded with North Essex Registry of Deeds in Book 4172, Page 1, and with South Essex Registry of Deeds in Book 12837, Page 418 and which are shown on North Andover Assessor's Map 104A, Parcels 9, 10, 11,28, 34, 35 and 37, and expenses incidental and related thereto for purposes of the purchase of a conservation restriction or other interest, and that the Town Manager be authorized to file on behalf of the Town any applications for funds in any way connected with the scope of the acquisition of said conservation restriction,that the Board of Selectmen be authorized to determine the final purchase price of the restriction and any other interests which may be acquired for the purposes stated herein and such purposes are authorized by Massachusetts General Laws Chapter 44B, and that the Town Manager and the Board of Selectmen be authorized to enter into all agreements and execute all instruments,including but not limited to grant agreements, easements and conservation restrictions in accordance with Massachusetts General Laws Chapter 184 or any other applicable statute or regulation, on terms and conditions they deem to be in the best interest of the Town and as may be necessary on behalf of the Town of North Andover to affect the purchase of said conservation restriction or other interest; and,with regard to the appropriation of$1,200,000 for the purchase of a fee interest or other interest from Robert E.Atwood and Albertine L.Atwood or their nominee or successor in title,in a parcel of land with the buildings thereon at 45 Milk Street in North Andover,which parcel of land and buildings thereon are described in deeds recorded with North Essex Registry of Deeds in Book 1294, Page 429 and Book 1294, Page 586 and which are shown on North Andover Assessors Map 59, Lot 36, and expenses related thereto, and that the Town Manager be authorized to file on behalf of the Town any applications for funds in any way connected with the scope of the acquisition of said property,that the Board of Selectmen be authorized to determine the final purchase price of the property and any other interests which may be acquired for the purposes stated herein and such purposes as are authorized by Massachusetts General Laws Chapter 44B, and that the Town Manager and the Board of Selectmen be authorized to enter into all agreements and execute all instruments,including but not limited to grant agreements, easements and conservation restrictions in accordance with Massachusetts General Laws Chapter 184 or any other applicable statute or regulation, on terms and conditions they deem to be in the best interest of the Town and as may be necessary on behalf of the Town of North Andover to affect the purchase of the property and any other interests; and, — 108 — with regard to the other appropriations listed in said Article 28, that the Town Manager and Board of Selectmen be authorized to enter into all agreements and execute all instruments,included but not limited to deeds, easements, and restrictions in accordance with Massachusetts General Laws Chapter 184, or any other applicable statue or regulation, on terms and conditions as they deem to be in the best interest of the Town, to carry out the purposes of M.G.L. Chapter 44B. LIST OF APPROVED PROJECTS—COMMUNITY PRESERVATION FUND Description Amount Category 45 Milk Street Preservation $900,000 Open Space &Affordable Housing Affordable Housing Trust $100,000 Affordable Housing Senior Housing Refurbishment—Bingham $480,213 Affordable Housing Way, Foulds Terrace, and O'Connor Heights Leonard Farm Conservation Restriction $325,000 Open Space—Recreation Library Roof Repair $400,000 Historical Preservation Parson Barnard Barn Structural Renovation $148,000 Historical Preservation Kittredge School Playground $100,000 Open Space—Recreation Ridgewood Cemetary Restoration $550,000 Historical Preservation Administrative Costs $30,000 Administrative and Operating Expenses Total for Requested Projects $3,033,213 Community Preservation Committee Article 29. PEG Access and Cable Related Fund UNANIMOUS VOTE that the town accept General Laws Chapter 44, Section 53F3/a,which establishes a special revenue fund known as the PEG Access and Cable Related Fund,to reserve cable franchise fees and other cable-related revenues for appropriation to support PEG access services and oversight and renewal of the cable franchise agreement,the fund to begin operation for fiscal year 2017,which begins on July 1,2016. Special Town Meeting Minutes May 10, 2016 Article 1. Transfer funds from Special Education Stabilization Fund to Fiscal Year 2016 School Department budget. UNANIMOUS VOTE to transfer a sum of$150,000.00 from the Special Education Stabilization Fund to the Fiscal Year 2016 School Department Budget. School Committee Respectfully Submitted, Joyce A. Bradshaw, CMMC,Town Clerk — 109 — - 110 - TOWN OF NORTH ANDOVER MASSACHUSETTS lllfrrrrrrrrrlf��%�/� ��f�f�WJ COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2016 J1/i frlyiri %%%ad !i /,,,,,,,,, ,,,. Merrimack College Campus Board of Selectmen Town Manager 14 ii� iiii I N&IIiii iiili�ii!nRrt�R Front row:Rosemary C.Smedile,Andrew Maylor(Town Mgr),Tracy M.Watson Back row:Richard M.Vaillancourt,Phil DeCologero,Donald B.Stewart TOWN OF NORTH ANDOVER, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2016 ,i I' Prepared by: Lyne M. Savage, Finance Director/Town Accountant TOWN OF NORTH ANDOVER, MASSACHUSETTS COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2016 TABLE OF CONTENTS IntroductorySection.........................................................................................................................................................1 Letterof transmittal ......................................................................................................................................................3 Organizationalchart.....................................................................................................................................................8 Principaltown officials..................................................................................................................................................9 Certificate of achievement for excellence in financial reporting.................................................................................10 Distinguished budget presentation award..................................................................................................................11 FinancialSection ...........................................................................................................................................................13 Independent auditor's report......................................................................................................................................15 Management's discussion and analysis ....................................................................................................................17 Basic financial statements .........................................................................................................................................26 Statementof net position........................................................................................................................................27 Statementof activities............................................................................................................................................28 Governmental funds— balance sheet ....................................................................................................................30 Reconciliation of the governmental funds balance sheet total fund balances to the statement of net position.....31 Governmental funds—statement of revenues, expenditures and changes in fund balances ...............................32 Reconciliation of the statement of revenues, expenditures, and changes in fund balances of governmental funds to the statement of activities.........................................................................................................................33 Proprietary funds—statement of net position.........................................................................................................34 Proprietary funds—statement of revenues, expenses and changes in net position..............................................35 Proprietary funds—statement of cash flows..........................................................................................................36 Fiduciary funds—statement of fiduciary net position.............................................................................................37 Fiduciary funds—statement of changes in fiduciary net position...........................................................................38 Notes to basic financial statements........................................................................................................................39 Required supplementary information.........................................................................................................................71 General fund budgetary comparison schedule ......................................................................................................72 Schedule of revenues, expenditures and changes in fund balance—general fund —budget and actual..........74 Pensionplan schedules .........................................................................................................................................76 Schedule of the Town's proportionate share of the net pension liability............................................................77 Schedule of Town contributions .........................................................................................................................78 Schedule of the special funding amounts of the net pension liability.................................................................79 Other postemployment benefit plan schedules......................................................................................................81 Other postemployment benefit plan schedule of funding progress and schedule of employer contributions....82 Other postemployment benefit plan actuarial methods and assumptions..........................................................83 Notes to required supplementary information ........................................................................................................84 Combining and individual fund statements................................................................................................................87 Nonmajor governmental funds...............................................................................................................................88 Nonmajor governmental funds—combining balance sheet...............................................................................90 Nonmajor governmental funds—combining statement of revenues, expenditures, and changes in fund balances .............................................................................................................................................................94 Agencyfund ...........................................................................................................................................................97 Agency fund—statement of changes in assets and liabilities............................................................................98 StatisticalSection ..........................................................................................................................................................99 Net position by component—last ten years.............................................................................................................100 Changes in net position — last ten years..................................................................................................................101 Fund balances, governmental funds—last ten years..............................................................................................103 Changes in fund balances, governmental funds— last ten years............................................................................104 Assessed value and actual value of taxable property by classification and tax rates—last ten years....................105 Principal taxpayers—current year and nine years ago ...........................................................................................106 Property tax levies and collections—last ten years.................................................................................................107 Ratios of outstanding debt and general bonded debt—last ten years ....................................................................108 Direct and overlapping governmental activities debt—as of June 30, 2016. ..........................................................109 Computation of legal debt margin — last ten years ..................................................................................................110 Demographic and economic statistics— last ten years............................................................................................111 Principal employers (excluding Town)—current year and nine years ago..............................................................112 Full-time equivalent Town employees— last ten years............................................................................................113 Operating indicators by function/program— last ten years......................................................................................114 Capital asset statistics by function/program—last ten years...................................................................................117 AdditionalInformation..................................................................................................................................................119 Enterprise funds—schedule of revenues, expenses and changes in net position — budgetary basis— budgetand actual ....................................................................................................................................................120 Introductory Section r Lake Cochichewick Introductory Section Town of North Andover, Massachusetts 1 Comprehensive Annual Financial Report This page intentionally left blank. Town of North Andover, Massachusetts 2 Comprehensive Annual Financial Report Town of North Andover 4g 120 Main Street North Andover, Massachusetts 01845 (978) 688-9523 FAX (978) 688-9522 Letter of Transmittal November 22, 2016 To Members of the Board of Selectmen and Citizens of the Town of North Andover: At the close of each fiscal year, state law requires the Town of North Andover to publish a complete set of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP), and that are audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report (CAFR)of the Town of North Andover, Massachusetts, for the fiscal year ending June 30, 2016 for your review. This report consists of management's representations concerning the finances of the Town of North Andover. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the Town of North Andover has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Town of North Andover's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Town of North Andover's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements for the fiscal year ended June 30, 2016, are fairly presented in conformity with GAAP. The Town of North Andover's financial statements have been audited by Powers &Sullivan, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Town of North Andover for the fiscal year ended June 30, 2016 are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the Town of North Andover's financial statements for the fiscal year ended June 30, 2016, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the Town of North Andover was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of Town of North Andover, Massachusetts 3 Comprehensive Annual Financial Report the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the Town of North Andover's separately issued Single Audit Report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement that analysis and should be read in conjunction with it. The Town of North Andover's MD&A can be found immediately following the report of the independent auditors. Profile of the Town The Town of North Andover is located in Essex County, approximately 24 miles north of Boston. The Town is 26.63 square miles and lies along the banks of the Merrimack River and is surrounded by the Towns of Boxford, Andover, Middleton, North Reading, and the Cities of Lawrence, Methuen and Haverhill. The settlement of the Town began in 1640 and was incorporated as Andover in 1646. The community was split into the North Parish (now North Andover) and South Parish (now Andover) in 1709 and North Andover was incorporated as a separate entity in 1855. Although North Andover contains several Commercial Office Parks, the Town has retained a rural character and contains over 3,000 acres of preserved open space and farmland. North Andover is served by the following interstates: Route 495, Route 125, Route 133 and Route 114. North Andover is a thriving community with an excellent school system, efficient services and a strong commitment to its citizens. As of the 2010 U.S Census the Town's population is 28,382. The Town provides general governmental services for its citizens, including police and fire protection, collection and disposal of refuse, public education for pre-kindergarten through grade twelve, water and sewer services, parks and recreation, health and social services, libraries/culture as well as maintenance of streets and other infrastructures. North Andover is governed by an open Town Meeting form of government, a five-member Board of Selectmen and a Town Manager pursuant to a Home Rule Charter that went into effect in 1986. Town Meeting is defined as the Legislative body, Board of Selectmen as the Executive body and the Town Manager as the chief administrative officer. In accordance with Chapter 2 of the Town Charter "the legislative powers of the town shall be exercised by a town meeting open to all registered voters of the town". As defined in Chapter 3 "the Board of Selectmen shall serve as the chief goal-setting and policy-making agency of the town and, as such, shall not normally administer the day-to-day affairs of the town, but shall instead regularly direct the Town Manager to help it in carrying out its administrative duties, and make recommendations to the town meeting relating to actions required to be taken by that body." As defined in Chapter 4 "the Town Manager shall be the chief administrative officer of the town and shall be responsible for administering and coordinating all employees, activities and departments placed by general law, this charter or by-law under the control of the Board of Selectmen and of the Town Manager." The School Committee has general charge and superintendence of the public schools of the Town. The School Committee is comprised of five members elected at large. The School Committee has the power to select and terminate a superintendent of schools, along with all the powers and duties given to school committees by the laws of the Commonwealth. The School Committee is responsible for establishing educational goals and policies for the schools consistent with the laws of the Commonwealth and standards established by the Commonwealth. In addition to being shaped and influenced by the Town's elected officials and appointed staff, Town policy and programs are impacted by the actions of the Town's Boards and Commissions. The size, responsibility and source of authority of the Town's Boards and Commissions vary. With the exception of those members who derive their appointments as a result of their position in Town government and the Town Charter mandating their membership, the Board of Selectmen and Town Manager appoint members in accordance with the Town Charter or Massachusetts General Law. Town of North Andover, Massachusetts 4 Comprehensive Annual Financial Report The Town provides a full array of high quality services to the general public, including: full-time police and fire protection; schools for grades pre- kindergarten through 12, (one pre-kindergarten, five elementary, one middle, one senior high, and one regional vocational technical high school); solid waste disposal and recycling; street maintenance and snow removal; public health and natural resource protection; community development and planning; elder, youth and veteran services; a full service library; and various parks, playgrounds, conservation lands, and recreational programs. The Town also operates its own water supply, purification, and distribution system, and provides sanitary waste disposal via connections to a regional treatment facility(Greater Lawrence Sanitary District). Thirty percent of the Town's land area is designated conservation land and/or open space. The Town has more than seventy miles of recreational trails. During the summer months the Town operates Steven's Pond, a family and youth oriented recreation area located off Pleasant Street, which includes recreational and instructional swimming, shaded picnic tables, volleyball, horseshoe pits and a children's playground. The Merrimack Valley Regional Transit Authority ("MVRTA") provides bus coverage for certain routes around the Town with connections to the surrounding communities within the Merrimack Valley area. The MVRTA also provides a commuter bus service directly to and from the Town and Boston. The Town of North Andover is committed to a high degree of community responsiveness, providing high quality services to its citizens, and conducting all its affairs in a professional manner. Factors Affecting Economic Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Town of North Andover operates. Local economy North Andover is most well-known for its residential friendly neighborhoods and rich natural beauty however, the Town also has a well-balanced mix of commercial development situated in three distinct areas. The Downtown/Historic Mill district is centered on Main and High Streets and serves the local community with small retail and office space as well as providing a mix of fast food and full service restaurants. This district is also home to a large mix-use mill complex that houses larger companies, rental housing, manufacturing, restaurants and offices. North Andover is bisected by two state highways that connect to an interstate highway. These two corridors, which comprise the other commercial districts, boast three industrial parks that serve larger national and international businesses. The state highways also provide a mix of regional commercial and retail businesses that serve residents and neighboring communities. Located at the intersection of the two state highways, on a 220- acre campus, is Merrimack College with over 3,000 undergraduate students and 450 graduate students. The college has recently embarked on a major infrastructure improvement campaign and was ranked as one of the nation's best regional liberal arts colleges. Long-term financial planning The Town of North Andover is committed to maintaining a solid financial position in all economies and has steadily improved its financial position during the past five years. As a result, in FY16 the Town received an "AAA" bond rating from Standard and Poor's for the first time in its history. The Town's financial actions are generally guided by a number of formal financial policies and strengthened by long range planning tools such as a five year Capital Improvement Program, Five Year Financial Forecast, pay-as-you go financing strategies, Facilities Master Plan, and long-term planning for all liabilities including pension and health insurance reserves. Using the lessons learned during the difficult times of the first decade of this century, the Town has been able to maximize municipal and school services through a combination of prudent budgeting, user fee adjustments, strong tax collections, modification of employee health benefits and continued property growth. Over the last few Town of North Andover, Massachusetts 5 Comprehensive Annual Financial Report years the Town has been able to make transfers from Free Cash into existing reserves as well as establish and fund new reserve accounts such as the Capital Stabilization Fund, OPEB Trust Fund, OPEB Stabilization Fund, and the Special Education Stabilization Fund. As of June 2016, the Stabilization Fund undesignated fund balance is $4,301,116, the Capital Stabilization Fund balance is $672,682, the OPEB Stabilization Trust Fund undesignated fund balance is $1,016,557, the OPEB Trust Fund undesignated fund balance is $518,110, and the Special Education Stabilization undesignated fund balance is $602,931. The Town is currently managing approximately$51.7 million worth of long debt. This indebtedness consists of approximately$37.6 million of general obligation bonds. Approximately$7.2 million or 13.9%of the $51.7 million is scheduled to be paid by the end of fiscal 2017 and the remaining $44.5 million by fiscal 2036. Approximately $14.1 million is self-supported through enterprise fund revenues. The Town of North Andover has enhanced its revenue flexibility by establishing enterprise funds and many other user supported programs. This has allowed the Town to shift the operating costs to the users of certain services so that little or no tax support goes towards providing these services. By doing so, the Town is able to provide the maximum tax dollars available to all other services. In May 2004, Town Meeting adopted an article which established the Revenue/Fixed Cost Review Committee whose main purpose is to advise the Town Manager and other Town officials on projected revenues, other financial sources and fixed costs to facilitate the annual budget development process. Cash management policies and practices It is the policy of the Town of North Andover to comply with the laws of the Commonwealth of Massachusetts regarding the investment of public funds while achieving the highest return with the maximum security and meeting the daily cash flow demands of the Town. As of June 30, 2016, General Fund cash and cash equivalents totaled $25.4 million, while the balance of unrestricted cash and cash equivalents for all government funds totaled $57.3 million. Risk management The Town of North Andover manages its risk through premium based coverage with commercial insurance carriers. With the move from the Town's self-insured health plan to the Group Insurance Commission (GIC)the Town has further reduced their risk related to health insurance claims. The Town is exposed to various risks of loss related to general liability, property and casualty, workers' compensation and unemployment compensation claims. Buildings and property are fully insured against fire, theft and natural disaster to the extent that losses exceed the Town's deductible per incident. These deductibles vary by type of incident, none of which exceed $25,000. Pension and other post-employment benefits The Town of North Andover contributes to the Essex Regional Retirement System (ERRS)who manages retirement benefits for all employees other than those covered by the Massachusetts Teachers' Retirement System. ERRS recently reported that the Net Pension Liability (NPL)for the pension plan increased from$339.3 million as of December 31, 2014 to $363.3 million as of December 31, 2015, using an estimated 8% annual return on funds. This follows a $9.5 million decrease in NPL from December 31, 2013 to December 31, 2014 and a 35% increase from January 1, 2011 to December 31, 2013. North Andover's share of this liability is determined annually based on payroll cost and as of December 31, 2015 was approximately 14.8%which extrapolates to an unfunded liability of$53.8 million. Town of North Andover, Massachusetts 6 Comprehensive Annual Financial Report The Town of North Andover also provides postemployment health care benefits for certain retirees and their dependents. There were 402 retired employees receiving these benefits, which are financed on a pay-as-you-go basis for its unfunded liability. For Fiscal 2016, the Town conducted an actuarial valuation to determine the unfunded liability of$107,321,707 which is an increase of$20,653,967 from the previous actuarial done in 2015. $14.4 million of this increase was attributable to a reporting change required by the Actuarial Standards of Practice (ASOP) number 6 to include the "implicit subsidy". Additionally, updated mortality tables and trend rates added more than $6 million to the unfunded liability since Fiscal 2015. On a positive note, the rates negotiated with the Public Employee Committee and the January 2014 migration to the Group Insurance Commission (GIC) health insurance plans decreased the Town's liability by$3.2 million in Fiscal 2016. The Town established an Other Postemployment Benefit Stabilization (OPEB)fund in 2014, which to date has been funded with $1 million. In addition, in May 2015 the Town Meeting approved an OPEB Trust Fund and funded that account with $500,000 with a transfer in Fiscal 2016 from the internal service Health Insurance Trust Fund. The Town added to the OPEB Trust Fund in Fiscal 2017 with an additional transfer of$250,000 approved in May 2016 and at the same time the Town Meeting approved a Fiscal 2017 operating budget appropriation of$25,000 for the same fund. The Town will continue to contribute to these funds based on the Financial Reserve Policy as last amended in February 2015. Additional information on the Town of North Andover's pension and post-employment benefits can be found in the notes to the financial statements. Annual budget process and controls The Town Manager is responsible for preparing and presenting the budget to the Board of Selectmen and the Finance Committee. The Selectmen review all requests and Town wide issues and present a budget to Town Meeting for approval. A nine member Finance Committee reviews the budget and makes its independent recommendations to Town Meeting. The level of budgetary control is established by Town Meeting and this approval defines the level at which expenditures may not exceed appropriations. The Town Accountant is responsible for ensuring all payroll and invoices are within the budgetary control level before authorizing payment. Additional appropriations may be approved at subsequent Town Meetings. These controls ensure compliance with the budget approved by residents at Town Meeting. Awards and Acknowledgements The Town is committed to reporting information in a transparent and professional manner following accepted best practices. As evidence of this the Town has complied with the standards set forth by the Government Finance Officers Association of the United States and Canada and been awarded both the Distinguished Budget Presentation Award and Comprehensive Annual Financial Report Award for the past four consecutive years beginning with FY12. The preparation of this report would not have been possible without the efficient and dedicated services of the Finance and Accounting department staffs. We would like to express our appreciation to all the members of the departments who assisted and contributed to the preparation of this report. Credit must also be given to the Board of Selectmen, Finance Committee and Audit Committee for their unfailing support for maintaining the highest standards of professionalism in the management of the Town of North Andover's finances. Respectfully submitted, Andrew W. Maylor Lyne M. Savage Town Manager Finance Director/Town Accountant Town of North Andover, Massachusetts 7 Comprehensive Annual Financial Report Organizational Chart Citizens,of North Andover Town meeting \\\\\\\\\\\\\\\\\\\\\ \\ Fin -committeeBo3rdaf Selectmen SchWo[committee Scheal Superintendent ' ......... ...... ....._ Assistant wo Manager}Purehasong_ �......... ...... ...... .. .. \ Community Sewices Community Finance Public Works AdministrationL \ ; U Emergen�+Management development Human l=ina�a ,acts, . . CFtx`1 Ulce r ..fstaliius�t€xt Head. Ftt�tltt � Psitc��: FMt}ir3rGEnr a itesourtE s 6irecEar ., .::a; StreeisjSidewalks ,.Clef ,,'srnslt ns=. P!a nrn 0 et 5ervrces . A�Ag TreesjCnli Fleet Ma rtt ne anFfeet r - Caeiservatmn - Stevens trhrary ] YGteransServt€ s tfeelth �mg .Sofa! lAt # lcyng;'. A Human Resources Inspectional FNSteCfSeWer C \�� Sterms Estee, Engineenng[GIS YouthlRecueatron Town of North Andover, Massachusetts 8 Comprehensive Annual Financial Report Principal Town Officials Elected Officials Board of Selectmen Tracy M. Watson, Chairman Phil DeCologero, Clerk Rosemary Connelly Smedile Donald B. Stewart Richard M. Vaillancourt, Licensing Chairman Town Moderator Mark DiSalvo School Committee Brian Gross, Chair Andrew McDevitt, Vice Chair Stan Limpert, Clerk David Torrisi, Member Zora Warren, Member Appointed Officials— by School Committee Superintendent Jennifer Price Appointed Officials— by Board of Selectmen Town Manager Andrew W. Maylor Town Accountant Lyne M. Savage Fire Chief William McCarthy Police Chief Paul J. Gallagher Town Counsel Urbelis & Fieldsteel, LLP Appointed Officials— by Town Manager Assistant Town Manager/Purchasing Raymond Santilli Community Development Director Eric Kfoury Conservation Administrator Jennifer A Hughes Director of Elder Services Irene M. O'Brien Finance Director Lyne M. Savage Facilities Director Steve Foster Human Resources Cathy J. Darby Inspector of Building Gerald A. Brown Library Director Kathleen Keenan Public Works Director Bruce D. Thibodeau Public Health Director Susan Y. Sawyer Town Clerk Joyce A. Bradshaw Town Treasurer Gail Tierney Town Planner Vacant Veterans Director Gerry McGuire Youth Services Director Richard Gorman Town of North Andover, Massachusetts 9 Comprehensive Annual Financial Report Government Finance, Officers Association Certificate of Achievement for Excellence ire Financial Reporting Presented to Town of North Andover Massachusetts For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2015 Executive Director/CEO Town of North Andover, Massachusetts 10 Comprehensive Annual Financial Report GOVERNMENT FONANCE OFFICERS ASSOCIATION D is tingu is ed Budget Presentation Award PRESENTED To Town of North Andover Massachusetts For tare Fiscal Year Beginning July 1, 2015 Exeevaive Director Town of North Andover, Massachusetts 11 Comprehensive Annual Financial Report This page intentionally left blank. Town of North Andover, Massachusetts 12 Comprehensive Annual Financial Report Financial Section �Illlli�l�l i�� s North Andover Central Fire Station Financial Section Town of North Andover, Massachusetts 13 Comprehensive Annual Financial Report This page intentionally left blank. Town of North Andover, Massachusetts 14 Comprehensive Annual Financial Report Powers & Sullivan, LI.,C Certified Public Accountants �,.. i lilt) uann�xp"witt Parkway Auditor's Report SkOw 101 To the Honorable Board of Selectmen 'ilrakdidd,NIA 01880 'r". 7s:1-914-17oo Town of North Andover, Massachusetts R 781-914-1 7tG1 ww wwwv.pnwvc:atiarwlstrlllirrau.a��ui Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of North Andover, Massachusetts, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Town's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 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, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Town of North Andover, Massachusetts 15 Comprehensive Annual Financial Report Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town of North Andover, Massachusetts' basic financial statements. The introductory section, combining and individual fund statements, statistical section, and additional information are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section, statistical section and additional information section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 22, 2016, 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 in considering the Town of North Andover, Massachusetts' internal control over financial reporting and compliance. November 22, 2016 Town of North Andover, Massachusetts 16 Comprehensive Annual Financial Report Management's Discussion and Analysis Town of North Andover, Massachusetts 17 Comprehensive Annual Financial Report Management's Discussion and Analysis As management of the Town of North Andover, we offer readers of these financial statements this narrative overview and analysis of the financial activities for the year ended June 30, 2016. We encourage readers to consider the information presented in this report. All amounts, unless otherwise indicated, are expressed in whole dollars. The Governmental Accounting Standards Board (GASB) is the authoritative standard setting body that provides guidance on how to prepare financial statements in conformity with generally accepted accounting principles (GAAP)for states and local governmental entities. Users of these financial statements (such as investors, rating agencies and management) rely on the GASB to establish consistent reporting standards for all governments in the United States. This consistent application is the only way users (including citizens, the media, legislators and others)can assess the financial condition of one government compared to others. Financial Overview • The assets and deferred outflows of resources of the Town of North Andover exceeded the liabilities at the close of the most recent year by$95.2 million (net position). • At the close of the current year, the Town's general fund reported a fund balance of$19.8 million, an increase of$5.8 million in comparison with the prior year. Total fund balance represents 21% of general fund expenditures. • The Town's governmental debt (short-term and long-term combined) increased by$1.1 million during the current year. This change was due to the issuance of$7.5 million of long-term debt, the payment of$4.8 million in principal payments on long-term debt and the defeasance of$1.6 of existing debt. • The Town's business-type debt (short-term and long-term combined)decreased by$1.7 million during the current year. This change was due to the issuance of$871,000 of long-term debt, offset by$2.5 million in principal payments. • In order to take advantage of favorable interest rates, the Town issued $1.7 million of general obligation refunding bonds on June 2, 2016. The transaction resulted in an economic gain of$191,000 and a reduction of$212,000 in future debt service payments. • The Town made an initial contribution to the OPEB trust fund in 2016, which totaled $500,000 and was funded by the health insurance internal service fund. Town of North Andover, Massachusetts 18 Comprehensive Annual Financial Report Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the Town of North Andover's basic financial statements. These basic financial statements comprise of three components: 1)government-wide financial statements, 2)fund financial statements, and 3) notes to the financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of finances, in a manner similar to private-sector business. The statement of net position presents information on all assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position is improving or deteriorating. The statement of activities presents information showing how the government's net position changed during the most recent year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions 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). The governmental activities include general government, public safety, education, public works, health and human services, culture and recreation, support services, and interest. The business-type activities include the activities of the water, sewer, and Osgood Hill Estate operations. 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. Fund accounting is used to ensure and demonstrate compliance with finance-related legal requirements. All of the funds can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the governmental-wide financial statements. However, unlike the government-wide financial statements, governmental fund statements focus on near-term inflows of spendable resources, as well as on balances of spendable resources available at the end of the year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Town of North Andover adopts an annual appropriated budget for its general fund. A budget to actual schedule has been provided for the general fund to demonstrate compliance with this budget. Town of North Andover, Massachusetts 19 Comprehensive Annual Financial 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. The Town of North Andover adopts annual appropriated budgets for each enterprise fund. A budget to actual schedule has been provided, as additional information, to demonstrate compliance with these budgets. 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 active employees' and retirees' health insurance; however in 2013 the Town joined the Commonwealth of Massachusetts' group insurance plan which is a premium based health insurance plan. Since that time, the internal service fund has accounted for residual health insurance claims and assisted in the funding of the OPEB Trust. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the Town's own programs. The accounting used for fiduciary funds is much like that used for propriety 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. 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. Government-wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. North Andover's assets and deferred outflows of resources exceeded liabilities by$95.2 million at the close of 2016. Net position includes $151.8 million as the net investment in capital assets (e.g., land, buildings and building improvements, machinery and equipment and infrastructure); less any related debt used to acquire those assets that are still outstanding. The Town uses these capital assets 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 its 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. An additional portion of the net position, $8.7 million, represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position has a year-end deficit balance of $65.3 million. The primary reason for this deficit balance is the recognition of the $56.2 million OPEB liability and the $53.8 million net pension liability. At the end of the current year, the Town is able to report positive balances in two of the three categories of net position, for the Town as a whole and for its governmental activities. Its business-type activities report positive balances in all categories. The governmental activity and business-type activity components of the Town are presented on the following pages. Town of North Andover, Massachusetts 20 Comprehensive Annual Financial Report Governmental Activities. The Town of North Andover's assets and deferred outflows of resources exceeded liabilities for governmental activities by$43.1 million at the close of 2016. 2016 2015 Assets: Current assets............................................................ $ 50,942,668 $ 46,373,719 Capital assets............................................................ 141,768,885 139,763,991 Total assets.......................................................... 192,711,553 186,137,710 Deferred Outflows of Resources: Deferred charges on refunding...................................... 158,936 135,258 Deferred outflows of resources related to pensions............ 2,933,212 - Total deferred outflows of resources....................... 3,092,148 135,258 Liabilities: Current liabilities(excluding debt)................................... 8,501,405 8,384,461 Noncurrent liabilities(excluding debt).............................. 106,565,273 96,109,682 Current debt.............................................................. 5,141,262 4,857,786 Noncurrent debt.......................................................... 32,445,864 31,674,706 Total liabilities...................................................... 152,653,804 141,026,635 Deferred Inflows of Resources: Deferred inflows of resources related to pensions.............. - 209,218 Net Position: Net investment in capital assets..................................... 107,911,523 108,245,924 Restricted.................................................................. 8,704,385 8,473,982 Unrestricted............................................................... (73,466,011) (71,682,791) Total net position.................................................. $ 43,149,897 $ 45,037,115 Program Revenues: Charges for services.................................................... $ 7,870,840 $ 7,071,850 Operating grants and contributions................................. 20,331,273 16,630,896 Capital grants and contributions..................................... 1,537,180 1,080,649 General Revenues: Real estate and personal property taxes.......................... 66,710,623 63,877,139 Tax liens................................................................... 206,966 698,405 Motor vehicle and other excise taxes.............................. 5,174,947 4,957,476 Penalties and interest on taxes...................................... 517,616 390,837 Payments in lieu of taxes.............................................. 2,012,598 1,975,835 Community preservation taxes....................................... 1,532,548 1,466,141 Grants and contributions not restricted to specific programs.................................................... 2,351,147 2,368,601 Unrestricted investment income..................................... 251,408 206,490 Gain on sale of capital assets........................................ - 175,692 Total revenues...................................................... 108,497,146 100,900,011 Expenses: General government.................................................... 4,239,113 3,682,360 Public safety.............................................................. 16,423,843 15,498,592 Education.................................................................. 74,777,232 69,182,129 Public works.............................................................. 8,202,158 7,659,238 Health and human services........................................... 2,706,412 2,420,603 Culture and recreation............................................. 2,636,723 2,530,792 Support services......................................................... 1,834,555 1,914,306 Interest..................................................................... 970,827 1,004,030 Total expenses..................................................... 111,790,863 103,892,050 Excess(deficiency)before transfers................................ (3,293,717) (2,992,039) Transfers...................................................................... 1,406,499 1,345,945 Change in net position............................................... (1,887,218) (1,646,094) Net position,beginning of year....................................... 45,037,115 46,683,209 Net position,end of year................................................ $ 43,149,897 $ 45,037,115 Town of North Andover, Massachusetts 21 Comprehensive Annual Financial Report The governmental expenses totaled $111.8 million of which $29.7 million (27%)was directly supported by program revenues consisting of charges for services, operating and capital grants and contributions. General revenues totaled $78.8 million, primarily coming from property taxes, motor vehicle excise, payments in lieu of taxes, community preservation taxes and non-restricted state aid. The governmental net position decreased by$1.9 million during the current year. This decrease was due to several offsetting factors including a $6.7 million increase in the other postemployment benefits liability, a $4.0 million increase in the net pension liability and a $678,000 decrease in the health insurance internal service fund. These decreases were offset by a $3.1 million increase in deferred outflows of resources related to pensions, positive general fund operating results totaling $5.1 million and the recognition of$1.5 million in capital grants. Business-type Activities. The Town of North Andover's assets and deferred outflows of resources exceeded liabilities for business-type activities by$52.0 million at the close of 2016. 2016 2015 Assets: Current assets.............................................................. $ 13,219,844 $ 11,333,438 Noncurrent assets (excluding capital)................................ 374,679 476,636 Capital assets.............................................................. 56,816,096 56,349,158 Total assets............................................................ 70,410,619 68,159,232 Deferred Outflows of Resources: Deferred charges on refunding........................................ 71,641 102,663 Deferred outflows of resources related to pensions.............. 98,570 - Total deferred outflows of resources......................... 170,211 102,663 Liabilities: Current liabilities (excluding debt)..................................... 462,546 413,186 Noncurrent liabilities (excluding debt)................................ 3,939,008 3,619,158 Current debt................................................................ 2,098,202 2,529,601 Noncurrent debt............................................................ 12,050,115 13,277,633 Total liabilities........................................................ 18,549,871 19,839,578 Deferred Inflows of Resources: Deferred inflows of resources related to pensions............... - 7,031 Net Position: Net investment in capital assets....................................... 43,893,005 43,397,442 Unrestricted................................................................. 8,137,954 5,017,844 Total net position.................................................... $ 52,030,959 $ 48,415,286 Town of North Andover, Massachusetts 22 Comprehensive Annual Financial Report 2015 2015 Program Revenues: Charges for services..................................................... $ 11,770,044 $ 11,048,263 Operating grants and contributions................................... 37,003 112,149 Capital grants and contributions....................................... 121,434 - Total revenues........................................................ 11,928,481 11,160,412 Expenses: Water......................................................................... 3,236,724 3,463,307 Sewer......................................................................... 3,286,077 3,481,106 Osgood Hill ................................................................. 383,508 386,961 Total expenses....................................................... 6,906,309 7,331,374 Excess (deficiency) before transfers.................................. 5,022,172 3,829,038 Transfers........................................................................ (1,406,499) (1,345,945) Change in net position................................................. 3,615,673 2,483,093 Net position, beginning of year......................................... 48,415,286 45,932,193 Net position, end of year.................................................. $ 52,030,959 $ 48,415,286 Business-type net position of$43.9 million represents the net investment in capital assets and $8.1 million is unrestricted. The Town's business-type activities net position increased by$3.6 million in the current year. The water enterprise fund net position increased by$1.8 million. This increase was due to $948,000 of positive budgetary results, debt service principal payments exceeding depreciation expense by$231,000 and $635,000 of capital appropriations that were raised in the rates. The sewer enterprise fund net position increased by$1.6 million. This increase was due to $985,000 of positive budgetary results and debt service principal payments exceeding depreciation expense by$576,000. The Osgood Hill enterprise fund net position increased by$146,000 which was due to positive budgetary results totaling $227,000 and a capital contribution from the CPA fund totaling $50,000. These increases were offset by $128,000 of depreciation expense. Financial Analysis of the Governmental Funds As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the Town of North Andover's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town of North Andover's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the year. As of the end of the current year, governmental funds reported combined ending fund balances of$34.6 million, of which $19.8 million is for the general fund, $6.9 million is for the community preservation fund, $3.3 million is for municipal capital projects fund, and $4.6 million is for nonmajor governmental funds. Cumulatively there was an increase of$5.4 million in fund balances from the prior year. Town of North Andover, Massachusetts 23 Comprehensive Annual Financial Report The general fund is the chief operating fund. At the end of the current year, unassigned fund balance of the general fund totaled $18 million, while total fund balance was $19.8 million. $624,000 of fund balance was restricted for debt service while $596,000 has been assigned for encumbrances and $525,000 has been assigned for subsequent years' expenditures. Total fund balance represents 21% of general fund expenditures. The Town's general fund increased by$5.8 million in 2016. This was due to $3.6 million of better than anticipated revenue collections, such as property taxes, tax liens, motor vehicle and other excise taxes, penalties and interest on taxes, intergovernmental revenues, and departmental receipts. Also contributing to the increase was various underspent appropriations totaling $2.4 million of which $1.7 million relates to employee benefits. The community preservation fund increased by$433,000 in 2016, which is due to timing differences between the receipt and expenditure of surcharge and state grant revenues. The highway chapter 90 fund recognized revenues and expenditures totaling $1.1 million and accordingly did not reflect a net change in fund balance at year-end. The municipal capital project fund decreased by$1.1 million in 2016, which is due to a timing difference between the receipt and expenditure of bond proceeds. The nonmajor governmental funds increased by$242,000 in 2016, which is due to a timing difference between the receipt and expenditure of bond proceeds, as well as state and federal grant funds. General Fund Budgetary Highlights The original 2016 approved budget for the General Fund authorized $89.1 million in appropriations and other amounts to be raised. This includes $293,000 of encumbrances and continuing appropriations carried forward from the prior year. Capital Asset and Debt Administration Capital Assets. In conjunction with the annual operating budget, the Town annually prepares a capital budget for the upcoming year and a five-year Capital Improvement Plan (CIP)that is used as a guide for future capital expenditures. The Town's investment in capital assets for its governmental and business-type activities as of June 30, 2016, amounts to $198.6 million (net of accumulated depreciation). This investment in capital assets includes land, construction in progress, land improvements, buildings and building improvements, machinery and equipment, library books, vehicles, a water treatment plant, pump stations, and other infrastructure. The Town invested $2.5 million for capital asset additions in 2016. The major governmental capital asset events during the current year include various improvements to Town buildings in connection with the facilities master plan, the purchase of vehicles, as well as various sidewalk and roadway improvements. The major business-type capital asset events during the current year consisted of improvements to water and sewer pump stations, other infrastructure and technology improvements as well as bathroom and carriage house improvements at the Stevens Estate. Town of North Andover, Massachusetts 24 Comprehensive Annual Financial Report Debt Administration. Outstanding gross long-term governmental debt, as of June 30, 2016, totaled $37.6 million, a decrease of$1.1 million from the prior year. This was due to the issuance of general obligation bonds and premiums totaling $5.8 million, refunding bonds totaling $1.7 million, principal payments totaling $4.8 million and defeased debt totaling $1.6 million. There was no outstanding governmental short-term debt as of year-end. Outstanding gross long-term debt of the water enterprise fund, as of June 30, 2016, totaled $6.8 million, a decrease of$1.1 million from the prior year. This was due to principal payments totaling $1.1 million. Outstanding gross long-term debt of the sewer enterprise fund, as of June 30, 2016, totaled $7.4 million, a decrease of$569,000. This was due to principal payments totaling $1.4 million and $871,000 of proceeds from general obligation bonds. In order to take advantage of favorable interest rates, the Town issued $1,695,000 of general obligation refunding bonds on June 2, 2016. $1,615,000 of general obligation bonds were advance refunded by placing the proceeds of the refunding bonds in an irrevocable trust to provide for all future debt service payments of the refunded bonds. This advance refunding was undertaken to reduce total debt service payments over the next 13 years by $211,538. Please refer to notes 4, 7 and 8 to the basic financial statements for further discussion of the major capital and debt activity. Requests for Information This financial report is designed to provide a general overview of the Town of North Andover's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director, Town Hall, 120 Main Street, North Andover, Massachusetts 01845. Town of North Andover, Massachusetts 25 Comprehensive Annual Financial Report Basic Financial Statements Town of North Andover, Massachusetts 26 Comprehensive Annual Financial Report STATEMENT OF NET POSITION JUNE 30,2016 Primary Government Governmental Business-type Activities Activities Total ASSETS CURRENT: Cash and cash equivalents....................................... $ 43,274,579 $ 9,934,839 $ 53,209,418 Investments.......................................................... 738,615 - 738,615 Receivables,net of allowance for uncollectibles: Real estate and personal property taxes.................. 1,095,167 - 1,095,167 Tax and utility liens............................................. 2,090,248 49,682 2,139,930 Motor vehicle and other excise taxes...................... 371,734 - 371,734 User charges..................................................... - 3,133,366 3,133,366 Community preservation...................................... 17,971 - 17,971 Departmental and other....................................... 666,553 - 666,553 Intergovernmental............................................... 2,032,773 101,957 2,134,730 Tax foreclosures.................................................... 655,028 - 655,028 Total current assets........................................ 50,942,668 13,219,844 64,162,512 NONCURRENT: Receivables,net of allowance for uncollectibles: Intergovernmental............................................... - 374,679 374,679 Capital assets,nondepreciable.................................. 25,205,804 6,366,466 31,572,270 Capital assets,net of accumulated depreciation............ 116,563,081 50,449,630 167,012,711 Total noncurrent assets................................... 141,768,885 57,190,775 198,959,660 TOTAL ASSETS........................................................ 192,711,553 70,410,619 263,122,172 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on refunding.................................. 158,936 71,641 230,577 Deferred outflows of resources related to pensions........ 2,933,212 98,570 3,031,782 TOTAL DEFERRED OUTFLOWS OF RESOURCES......... 3,092,148 170,211 3,262,359 LIABILITIES CURRENT: Warrants payable................................................... 2,005,494 311,832 2,317,326 Accrued payroll...................................................... 3,169,943 - 3,169,943 Tax refunds payable................................................ 2,282,000 - 2,282,000 Accrued interest..................................................... 223,159 112,714 335,873 Other liabilities....................................................... 82,649 - 82,649 Liabilities due depositors.......................................... 106,160 - 106,160 Compensated absences.......................................... 632,000 38,000 670,000 Bonds payable....................................................... 5,141,262 2,098,202 7,239,464 Total current liabilities...................................... 13,642,667 2,560,748 16,203,415 NONCURRENT: Compensated absences.......................................... 473,000 29,000 502,000 Other postemployment benefits................................. 53,997,473 2,159,373 56,156,846 Net pension liability................................................. 52,094,800 1,750,635 53,845,435 Bonds payable....................................................... 32,445,864 12,050,115 44,495,979 Total noncurrent liabilities................................. 139,011,137 15,989,123 155,000,260 TOTAL LIABILITIES.................................................... 152,653,804 18,549,871 171,203,675 NET POSITION Net investment in capital assets.................................... 107,911,523 43,893,005 151,804,528 Restricted for: Debt service.......................................................... 624,472 - 624,472 Community preservation.......................................... 7,395,806 - 7,395,806 Gifts and grants...................................................... 684,107 - 684,107 Unrestricted.............................................................. (73,466,011) 8,137,954 (65,328,057) TOTAL NET POSITION............................................... $ 43,149,897 $ 52,030,959 $ 95,180,856 See notes to basic financial statements. Town of North Andover, Massachusetts 27 Comprehensive Annual Financial Report STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2016 Program Revenues Operating Capital Charges for Grants and Grants and Net(Expense) Functions/Programs Expenses Services Contributions Contributions Revenue Primary Government: Governmental Activities: General government.................. $ 4,239,113 $ 608,276 $ 55,511 $ $ (3,575,326) Public safety............................ 16,423,843 3,548,098 110,470 (12,765,275) Education................................ 74,777,232 3,482,776 18,949,612 (52,344,844) Public works............................ 8,202,158 104,212 439,112 1,064,924 (6,593,910) Health and human services......... 2,706,412 117,826 736,196 - (1,852,390) Culture and recreation............... 2,636,723 9,652 40,372 472,256 (2,114,443) Support services....................... 1,834,555 - - - (1,834,555) Interest................................... 970,827 - - (970,827) Total Governmental Activities... 111,790,863 7,870,840 20,331,273 1,537,180 ¢$ ,q 1,,510, Business-Type Activities: Water..................................... 3,236,724 5,977,800 19,327 - 2,760,403 Sewer..................................... 3,286,077 5,265,490 15,735 71,502 2,066,650 Osgood Hill.............................. 383,508 526,754 1,941 49,932 195,119 Total Business-Type Activities.. 6,906,309 11,770,044 37,003 121,434 510 ,17 + Total Primary Government....... $ 118,697,172 $ 19,640,884 $ 20,368,276 $ 1,658,614 $...........rj,t�,gt� 1 1, See notes to basic financial statements. (Continued) Town of North Andover, Massachusetts 28 Comprehensive Annual Financial Report STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 Primary Government Governmental Business-Type Activities Activities Total Changes in net position: Net(expense) revenue from previous page.... $........ ,0170;; $ „ $.......;.(77,0 �, � , General revenues: Real estate and personal property taxes, net of tax refunds payable.................... 66,710,623 - 66,710,623 Tax liens.............................................. 206,966 - 206,966 Motor vehicle and other excise taxes......... 5,174,947 - 5,174,947 Penalties and interest............................. 517,616 - 517,616 Payments in lieu of taxes........................ 2,012,598 - 2,012,598 Community preservation taxes................. 1,532,548 - 1,532,548 Grants and contributions not restricted to specific programs............................... 2,351,147 - 2,351,147 Unrestricted investment income................ 251,408 - 251,408 Transfers, net.......................................... 1,406,499 (1,406,499) - Total general revenues and transfers............ 80,164,352 (1,406,499) 78,757,853 Change in net position......................... (1,887,218) 3,615,673 1,728,455 Net Position: Beginning of year................................... 45,037,115 48,415,286 93,452,401 End of year.......................................... $ 43,149,897 $ 52,030,959 $ 95,180,856 (Concluded) Town of North Andover, Massachusetts 29 Comprehensive Annual Financial Report GOVERNMENTALFUNDS BALANCE SHEET JUNE 30,2016 Municipal Nonmajor Total Community Highway Capital Governmental Governmental General Preservation Chapter 90 Projects Funds Funds ASSETS Cash and cash equivalents..................................... $ 25,425,032 $ 7,035,904 $ - $ 4,027,891 $ 3,882,787 $ 40,371,614 Investments......................................................... - - - 738,615 738,615 Receivables,net of uncollectibles: Real estate and personal property taxes................ 1,095,167 - 1,095,167 Tax liens......................................................... 2,090,248 2,090,248 Motor vehicle and other excise taxes.................... 371,734 - 371,734 Community preservation.................................... - 17,971 - 17,971 Departmental and other..................................... 546,015 - - 120,538 666,553 Intergovernmental............................................. - 441,000 1,477,052 114,721 2,032,773 Tax foreclosures................................................... 655,028 - - - 655,028 Due from other funds............................................. 858,927 858,927 TOTALASSETS.................................................. $ 31,042,151 $ 7,494,875 $ 1,477,052 $ 4,027,891 $ 4,856,661 $ 48,898,630 LIABILITIES Warrants payable............................................. $ 1,076,565 $ 99,069 $ 1,714 $ 723,953 $ 104,193 $ 2,005,494 Accrued payroll................................................ 3,169,943 - - - - 3,169,943 Tax refunds payable.......................................... 2,282,000 2,282,000 Liabilities due depositors.................................... 106,160 106,160 Other liabilities................................................. 82,649 - - 82,649 Due to other funds............................................ 780,640 78,287 858,927 TOTAL LIABILITIES.............................................. 6,717,317 99,069 782,354 723,953 182,480 8,505,173 DEFERRED INFLOWS OF RESOURCES Unavailable revenues........................................ 4,550,355 458,970 694,698 120,538 5,824,561 FUND BALANCES Restricted....................................................... 624,472 6,936,836 - 3,303,938 4,553,643 15,418,889 Assigned........................................................ 1,120,696 - - - 1,120,696 Unassigned..................................................... 18,029,311 18,029,311 TOTAL FUND BALANCES..................................... 19,774,479 6,936,836 3,303,938 4,553,643 34,568,896 TOTAL LIABILITIES,DEFERRED INFLOWS OF RESOURCES,AND FUND BALANCES................ $ 31,042,151 $ 7,494,875 $ 1,477,052 $ 4,027,891 $ 4,856,661 $ 48,898,630 See notes to basic financial statements. Town of North Andover, Massachusetts 30 Comprehensive Annual Financial Report RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION JUNE 30,2016 Total governmental fund balances.................................................................................. $ 34,568,896 Capital assets(net)used in governmental activities are not financial resources and,therefore,are not reported in the funds............................................................... 141,768,885 Accounts receivable are not available to pay for current-period expenditures and,therefore,are unavailable in the funds.............................................. 5,824,561 Certain changes in the net pension liability are required to be included in pension expense over future periods. These changes are reported as deferred outflows of resources or(deferred inflows of resources)related to pensions..................................... 2,933,212 The internal service fund is used by management to account for health insurance activities.The assets and liabilities of the internal service fund are included in the governmental activities in the statement of net position....................... 2,902,965 In the statement of activities,interest is accrued on outstanding long-term debt, whereas in governmental funds interest is not reported until due.................................... (223,159) Long-term liabilities are not due and payable in the current period and,therefore, are not reported in the governmental funds. Bonds payable.................................................................................................. (37,587,126) Deferred charges on refunding............................................................................. 158,936 Other postemployment benefits............................................................................ (53,997,473) Net pension liability............................................................................................ (52,094,800) Compensated absences..................................................................................... (1,105,000) Net effect of reporting long-term liabilities......................................................... (144,625,463) Net position of governmental activities............................................................................. $ 43,149,897 See notes to basic financial statements. Town of North Andover, Massachusetts 31 Comprehensive Annual Financial Report GOVERNMENTALFUNDS STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30,2016 Municipal Nonmajor Total Community Highway Capital Governmental Governmental General Preservation Chapter 90 Projects Funds Funds REVENUES: Real estate and personal property taxes, net of tax refunds................................ $ 66,508,637 $ $ $ $ $ 66,508,637 Tax and utility liens.................................. 746,632 746,632 Payments in lieu of taxes.......................... 1,868,503 144,095 2,012,598 Community preservation taxes................... - 1,535,312 - 1,535,312 Motor vehicle and other excise taxes........... 5,412,047 - - 5,412,047 Charges for services................................ 959,662 4,139,633 5,099,295 Penalties and interest on taxes.................. 517,616 - 517,616 Licenses and permits............................... 179,217 136,290 315,507 Fines and forfeitures................................ 59,352 - - 59,352 Intergovernmental................................... 17,837,862 485,256 1,104,899 4,053,942 23,481,959 Departmental and other............................ 2,276,434 - - 179,594 2,456,028 Contributions.......................................... - - 699,321 699,321 Investment income................................. 137,942 42,145 - 76,442 256,529 TOTAL REVENUES........................ 96,503,904 2,062,713 1,104,899 9,429,317 109,100,833 EXPENDITURES: Current: General government............................ 2,342,228 - - 2,032,469 169,779 4,544,476 Public safety...................................... 10,223,053 3,284,399 979,392 14,486,844 Education.......................................... 43,925,696 132,445 7,239,218 51,297,359 Public works....................................... 4,316,626 1,104,899 1,078,642 52,924 6,553,091 Health and human services................... 1,135,702 - - 815,057 1,950,759 Culture and recreation.......................... 938,853 1,629,927 - 90,895 2,659,675 Support Services................................. 1,577,395 - 18,998 - 1,596,393 Pension benefits................................. 11,068,695 - 11,068,695 Property and liability insurance............... 443,580 443,580 Employee benefits............................... 10,079,081 10,079,081 State and county charges......................... 397,195 397,195 Debt service: Principal............................................ 4,785,624 4,785,624 Interest............................................. 1,031,689 - 1,031,689 TOTAL EXPENDITURES.................. 92,265,417 1,629,927 1,104,899 6,546,953 9,347,265 110,894,461 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES............. 4,238,487 432,786 - (6,546,953) 82,052 (1,793,628) OTHER FINANCING SOURCES(USES): Issuance of bonds................................... - - 5,454,484 304,881 5,759,365 Issuance of refunding bonds...................... 1,695,000 - - 1,695,000 Premium from issuance of bonds............... 73,055 73,055 Payments to refunded bond escrow agent.... (1,723,863) (1,723,863) Transfers in............................................ 1,551,391 1,551,391 Transfers out.......................................... - (144,892) (144,892) TOTAL OTHER FINANCING SOURCES(USES)...................... 1,595,583 5,454,484 159,989 7,210,056 NET CHANGE IN FUND BALANCES.............. 5,834,070 432,786 (1,092,469) 242,041 5,416,428 FUND BALANCES AT BEGINNING OFYEAR.............................................. 13,940,409 6,504,050 4,396,407 4,311,602 29,152,468 FUND BALANCES AT END OF YEAR............ $ 19,774,479 $ 6,936,836 $ $ 3,303,938 $ 4,553,643 $ 34,568,896 See notes to basic financial statements. Town of North Andover, Massachusetts 32 Comprehensive Annual Financial Report RECONCILIATION OF THE STATEMENT OF REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30,2016 Net change in fund balances-total governmental funds................................................... $ 5,416,428 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. Capitaloutlay.............................................................................................. 8,612,014 Depreciation expense.................................................................................... (6,607,120) Net effect of reporting capital assets......................................................... 2,004,894 Revenues in the Statement of Activities that do not provide current financial resources are unavailable in the Statement of Revenues,Expenditures and Changes in Fund Balances. Therefore,the recognition of revenue for various types of accounts receivable(i.e.,real estate and personal property,motor vehicle excise,etc.)differ between the two statements. This amount represents the net change in unavailable revenue.................................................................. (603,687) 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 effect on net position. Also,governmental funds report the effect of premiums,discounts,and similar items when debt is first issued,whereas these amounts are deferred and amortized in the Statement of Activities. Issuance of bonds........................................................................................ (5,759,365) Issuance of refunding bonds........................................................................... (1,695,000) Premium from issuance of bonds..................................................................... (73,055) Amortization of premium from issuance of bonds................................................ 72,161 Payments to refunded bond escrow agent......................................................... 1,723,863 Debt service principal payments...................................................................... 4,785,624 Net effect of reporting long-term debt........................................................ (945,772) Some expenses reported in the Statement of Activities do not require the use of current financial resources and,therefore,are not reported as expenditures in the governmental funds. Net change in compensated absences accrual................................................... 438,000 Net change in accrued interest on long-term debt................................................ 73,886 Net change in other postemployment benefits..................................................... (6,658,427) Net change in deferred outflow/(inflow)of resources related to pensions.................. 3,142,430 Net change in net pension liability.................................................................... (3,992,164) Amortization of deferred charges on refunding.................................................... (85,184) Net effect of recording long-term liabilities.................................................. (7,081,459) The internal service funds are used by management to account for health insurance activities. The net activity of internal service fund is reported with governmental activities......... (677,622) Change in net position of governmental activities............................................................ $ (1,887,218) See notes to basic financial statements. Town of North Andover, Massachusetts 33 Comprehensive Annual Financial Report PROPRIETARY FUNDS STATEMENT OF NET POSITION JUNE 30,2016 Governmental Business-type Activities-Enterprise Funds Activities Health Insurance Osgood Internal Service Water Sewer Hill Total Fund ASSETS CURRENT: Cash and cash equivalents.......................................... $ 5,408,524 $ 4,055,203 $ 471,112 $ 9,934,839 $ 2,902,965 Receivables,net of allowance for uncollectibles: Userfees............................................................. 1,608,060 1,525,306 - 3,133,366 - Utility liens............................................................ 35,240 14,442 49,682 Intergovernmental.................................................. - 101,957 - 101,957 - Total current assets............................................ 7,051,824 5,696,908 471,112 13,219,844 2,902,965 NONCURRENT: Receivables,net of allowance for uncollectibles: Intergovernmental.................................................. - 374,679 - 374,679 - Capital assets,nondepreciable..................................... 2,100,305 266,161 4,000,000 6,366,466 Capital assets,net of accumulated depreciation............... 26,529,517 22,067,496 1,852,617 50,449,630 Total noncurrent assets....................................... 28,629,822 22,708,336 5,852,617 57,190,775 - TOTAL ASSETS............................................................ 35,681,646 28,405,244 6,323,729 70,410,619 2,902,965 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on refunding...................................... 6,533 65,108 - 71,641 - Deferred outflows of resources related to pensions........... 70,217 28,353 98,570 TOTAL DEFERRED OUTFLOWS OF RESOURCES............ 76,750 93,461 - 170,211 LIABILITIES CURRENT: Warrants payable...................................................... 95,818 210,836 5,178 311,832 Accrued interest........................................................ 32,492 80,222 - 112,714 Compensated absences.............................................. 21,000 16,000 1,000 38,000 Bonds payable.......................................................... 860,037 1,238,165 - 2,098,202 Total current liabilities......................................... 1,009,347 1,545,223 6,178 2,560,748 NONCURRENT: Compensated absences.............................................. 12,000 16,000 1,000 29,000 Other postemployment benefits..................................... 1,295,027 864,346 - 2,159,373 Net pension liability.................................................... 1,247,071 503,564 1,750,635 Bonds payable.......................................................... 5,907,466 6,142,649 12,050,115 Total noncurrent liabilities.................................... 8,461,564 7,526,559 1,000 15,989,123 TOTAL LIABILITIES....................................................... 9,470,911 9,071,782 7,178 18,549,871 NET POSITION Net investment in capital assets........................................ 21,868,852 16,171,536 5,852,617 43,893,005 - Unrestricted.................................................................. 4,418,300 3,255,720 463,934 8,137,954 2,902,965 TOTAL NET POSITION.................................................. $ 26,287,152 $ 19,427,256 $ 6,316,551 $ 52,030,959 $ 2,902,965 See notes to basic financial statements. Town of North Andover, Massachusetts 34 Comprehensive Annual Financial Report PROPRIETARY FUNDS STATEMENT OF REVENUES,EXPENSES AND CHANGES IN NET POSITION YEAR ENDED J U N E 30,2016 Governmental Business-type Activities-Enterprise Funds Activities Health Insurance Osgood Internal Service Water Sewer Hill Total Fund OPERATING REVENUES: Charges for services................................................... $ 5,956,818 $ 5,245,640 $ 526,754 $ 11,729,212 $ Penalties and interest.................................................. 20,982 19,850 - 40,832 TOTAL OPERATING REVENUES.............................. 5,977,800 5,265,490 526,754 11,770,044 OPERATING EXPENSES: Cost of service and administration.................................. 2,134,363 559,609 255,245 2,949,217 GLSD assessment...................................................... - 1,490,042 - 1,490,042 Repairs and maintenance............................................. 52,110 93,056 - 145,166 Depreciation.............................................................. 859,315 863,487 128,263 1,851,065 - Employee benefits...................................................... - - - - 688,225 TOTAL OPERATING EXPENSES.............................. 3,045,788 3,006,194 383,508 6,435,490 688,225 OPERATING INCOME(LOSS)................................... 2,932,012 2,259,296 143,246 5,334,554 (688,225) NONOPERATING REVENUES(EXPENSES): Investment income...................................................... 19,327 15,735 1,941 37,003 10,603 Interest expense......................................................... (190,936) (279,883) - (470,819) - TOTAL NONOPERATING REVENUES(EXPENSES),NET................................ (171,609) (264,148) 1,941 (433,816) 10,603 INCOME(LOSS)BEFORE CONTRIBUTIONS AND TRANSFERS................................................ 2,760,403 1,995,148 145,187 4,900,738 (677,622) CAPITAL CONTRIBUTIONS AND TRANSFERS: Capital contributions.................................................... - 71,502 49,932 121,434 Transfers out............................................................. (923,227) (434,460) (48,812) (1,406,499) TOTAL CAPITAL CONTRIBUTIONS AND TRANSFERS., (923,227) (362,958) 1,120 (1,285,065) CHANGE IN NET POSITION...................................... 1,837,176 1,632,190 146,307 3,615,673 (677,622) NET POSITION AT BEGINNING OF YEAR........................ 24,449,976 17,795,066 6,170,244 48,415,286 3,580,587 NET POSITION AT END OF YEAR.................................. $ 26,287,152 $ 19,427,256 $ 6,316,551 $ 52,030,959 $ 2,902,965 See notes to basic financial statements. Town of North Andover, Massachusetts 35 Comprehensive Annual Financial Report PROPRIETARY FUNDS STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30,2016 Business-type Activities-Enterprise Funds Governmental Activities- Health Insurance Osgood Internal Service Water Sewer Hill Total Fund CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers and users..................................................... $ 5,858,427 $ 5,143,692 $ 526,754 $ 11,528,873 $ Payments to vendors........................................................................ (1,296,162) (1,500,715) (135,556) (2,932,433) Payments to employees.................................................................... (882,528) (368,065) (118,962) (1,369,555) Payments for interfund services used................................................... (197,600) NET CASH FROM OPERATING ACTIVITIES............................................ 3,679,737 3,274,912 272,236 7,226,885 (197,600) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out.................................................................................. (923,227) (434,460) (48,812) (1,406,499) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from the issuance of bonds.................................................. - 870,683 870,683 Acquisition and construction of capital assets........................................ (619,553) (1,648,518) (2,268,071) Principal payments on bonds............................................................. (1,090,275) (1,338,477) (2,428,752) Interest expense.............................................................................. (189,992) (197,131) (387,123) NET CASH FROM CAPITAL AND RELATED FINANCING ACTIVITIES.......... (1,899,820) (2,313,443) (4,213,263) - CASH FLOWS FROM INVESTING ACTIVITIES: Investment income........................................................................... 19,327 15,735 1,941 37,003 10,603 NET CHANGE IN CASH AND CASH EQUIVALENTS................................. 876,017 542,744 225,365 1,644,126 (186,997) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR..................... 4,532,507 3,512,459 245,747 8,290,713 3,089,962 CASH AND CASH EQUIVALENTS AT END OF YEAR................................ $ 5,408,524 $ 4,055,203 $ 471,112 $ 9,934,839 $ 2,902,965 RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH FROM OPERATING ACTIVITIES: Operating income(loss).................................................................... $ 2,932,012 $ 2,259,296 $ 143,246 $ 5,334,554 $ (688,225) Adjustments to reconcile operating income(loss)to net cash from operating activities: Depreciation............................................................................... 859,315 863,487 128,263 1,851,065 Deferred(outflows)/inflows related to pensions.................................. (75,225) (30,376) - (105,601) Changes in assets and liabilities: User fees............................................................................... (137,319) (126,035) (263,354) Utility liens.............................................................................. 17,613 4,570 22,183 - Working capital deposit............................................................. - - - 492,202 Warrants payable.................................................................... (99,237) 187,698 (1,273) 87,188 (1,577) Unavailable revenues............................................................... 333 (333) - - Accrued compensated absences................................................ (23,000) (6,000) 2,000 (27,000) Other postemployment benefits.................................................. 109,679 84,015 - 193,694 Net pension liability.................................................................. 95,566 38,590 - 134,156 Total adjustments................................................................ 747,725 1,015,616 128,990 1,892,331 490,625 NET CASH FROM OPERATING ACTIVITIES............................................ $ 3,679,737 $ 3,274,912 $ 272,236 $ 7,226,885 $ (197,600) NONCASH INVESTING,CAPITAL,AND FINANCING ACTIVITIES: Intergovernmental debt service subsidy(MCWT)................................... $ - $ 100,848 $ $ 100,848 $ Net change in deferred charges.......................................................... 8,234 22,788 31,022 See notes to basic financial statements. Town of North Andover, Massachusetts 36 Comprehensive Annual Financial Report FIDUCIARY FUNDS STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2016 Private OPEB Purpose Agency Trust Fund Trust Funds Funds ASSETS CURRENT: Cash and cash equivalents........................................ $ - $ 112,172 $ 3,971,509 PRIT..................................................................... 518,110 - - TOTAL ASSETS.......................................................... 518,110 112,172 3,971,509 LIABILITIES Liabilities due depositors........................................... - - 3,971,509 NET POSITION Held in trust for OPEB benefits................................... 518,110 - - Held in trust for other purposes................................... - 112,172 - $ 518,110 $ 112,172 $ - See notes to basic financial statements. Town of North Andover, Massachusetts 37 Comprehensive Annual Financial Report FIDUCIARY FUNDS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED JUNE 30, 2016 Private OPEB Purpose Trust Fund Trust Funds ADDITIONS: Contributions: Employer................................................................ $ 500,000 $ - Net investment income: Net change in fair value of investments......................... 6,170 - Interest and dividends............................................... 13,396 7,914 Total investment income (loss)................................ 19,566 7,914 Less: investment expense......................................... (1,456) - Net investment income (loss)...................................... 18,110 7,914 CHANGE IN NET POSITION.................................. 518,110 7,914 NET POSITION AT BEGINNING OF YEAR....................... - 104,258 NET POSITION AT END OF YEAR................................. $ 518,110 $ 112,172 See notes to basic financial statements. Town of North Andover, Massachusetts 38 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying basic financial statements of the Town of North Andover, Massachusetts (Town) 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 recognized standard-setting body for establishing governmental accounting and financial reporting principles. The significant accounting policies are described herein. A. Reporting Entity The Town is a municipal corporation that is governed by an elected Board of Selectmen (Board). For financial reporting purposes, the Town has included all funds, organizations, agencies, boards, commissions and institutions. 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 significance of their relationship with the Town are such that exclusion would cause the basic financial statements to be misleading or incomplete. As required by GAAP, these basic financial statements present the Town (the primary government)and its component units. It has been determined that there are no component units that meet the requirements for inclusion in the Town's financial statements. Joint Venture Ajoint venture is an organization (resulting from a contractual arrangement)that is owned, operated and 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 Sanitary 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 year ended June 30, 2016, the Town's assessment totaled $1,490,042. 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 Town is a member of the GLRTVS that serves the members' students seeking an education in academic and technical. 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 year ended June 30, 2016, the Town's assessment totaled $347,896. Separate financial statements may be obtained by writing to the Treasurer of the GLRTVS at 57 River Road, Andover, MA 01810. Town of North Andover, Massachusetts 39 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 B. Government-Wide and Fund Financial Statements Government-Wide Financial Statements The government-wide financial statements (i.e., statement of net position and the statement of changes in net position) report information on all of the 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-type activities, which are supported primarily by user fees and charges. 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. Major Fund Criteria Major funds must be reported if the following criteria are met: • If the total assets, deferred outflows of resources, liabilities, deferred inflows of resources, revenues, or expenditures/expenses of an individual governmental or enterprise fund are at least 10 percent of the corresponding element (assets, deferred outflows of resources, liabilities, deferred inflows of resources, etc.)for all funds of that category or type (total governmental or total enterprise funds), and • If the total assets, deferred outflows of resources, liabilities, deferred inflows of resources, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding element for all governmental and enterprise funds combined. Additionally, any other governmental or enterprise fund that management believes is particularly significant to the basic financial statements may be reported as a major fund. Fiduciary funds are reported by fund type. C. Measurement Focus, Basis of Accounting and Financial Statement Presentation 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 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 particular 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. Town of North Andover, Massachusetts 40 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 • Grants and contributions that are restricted to meeting the operational requirements of a particular function or segment. • Grants and contributions that are restricted to meeting the capital requirements of a particular function or segment. Taxes and other items not identifiable as program revenues are reported as general revenues. For the most part, the effect of interfund activity has been removed from the government-wide financial statements. However, the effect of interfund services provided and used between functions is not eliminated as the elimination of these charges would distort the direct costs and program revenues reported for the functions affected. Fund Financial Statements Governmental fund 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 year-end. 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 fund is the primary operating fund. It is used to account for all financial resources, except those that are required to be accounted for in another fund. 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 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 highway chapter 90 fund is a capital projects fund used to account for activities reimbursed through the State's Chapter 90 highway improvement program. The municipal capital projects fund is used to account for the acquisition of non-school related capital assets that are funded through both appropriations and borrowings. Town of North Andover, Massachusetts 41 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 The nonmajor governmental funds consist of other special revenue and capital project funds that are aggregated and presented in the nonmajorgovernmental 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 and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than capital projects. The capital projects fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets of the governmental funds. Proprietary fund financial statements are reported using the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, 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 principle 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 active employees' and retirees' health insurance; however in 2013 the Town joined the Commonwealth of Massachusetts' group insurance plan which is a premium based health insurance plan. Since that time, the internal service fund has accounted for residual health insurance claims and assisted in the funding of the OPEB Trust. Fiduciary fund financial statements are reported using the flow of economic resources measurement focus and use the accrual basis of accounting, except for agency funds which have no measurement focus. Fiduciary funds are used to account for assets held in a trustee capacity for others that cannot be used to support the governmental programs. The following fiduciary fund types are reported: The other postemployment benefit trust fund accumulates resources to provide funding for future OPEB (other postemployment benefits) liabilities. The private-purpose trust fund is used to account for trust arrangements that exclusively benefit individuals, private organizations, or other governments. Some of these trusts have donor restrictions and trustee policies that do not allow the endowment portion and any unrealized appreciation to be spent. The donor restrictions and trustee policies only allows the trustees to authorize spending of the realized investment earnings. The Town's educational scholarship trusts are accounted for in this fund. Town of North Andover, Massachusetts 42 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 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. D. 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. E. Fair Value Measurements The Town reports required types of financial instruments in accordance with the fair value standards. These standards require an entity to maximize the use of observable inputs (such as quoted prices in active markets) and minimize the use of unobservable inputs (such as appraisals or valuation techniques)to determine fair value. Fair value standards also require the government to classify these financial instruments into a three-level hierarchy, based on the priority of inputs to the valuation technique or in accordance with net asset value practical expedient rules, which allow for either Level 2 or Level 3 depending on lock up and notice periods associated with the underlying funds. Instruments measured and reported at fair value are classified and disclosed in one of the following categories: Level 1 —Quoted prices are available in active markets for identical instruments as of the reporting date. Instruments, which are generally included in this category, include actively traded equity and debt securities, U.S. government obligations, and mutual funds with quoted market prices in active markets. Level 2— Pricing inputs are other than quoted in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Certain fixed income securities, primarily corporate bonds, are classified as Level 2 because fair values are estimated using pricing models, matrix pricing, or discounted cash flows. Level 3— Pricing inputs are unobservable for the instrument and include situations where there is little, if any, market activity for the instrument. The inputs into the determination of fair value require significant management judgment or estimation. In some instances the inputs used to measure fair value may fall into different levels of the fair value hierarchy and is based on the lowest level of input that is significant to the fair value measurement. Market price is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Instruments with readily available active quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. It is reasonably possible that change in values of these instruments will occur in the near term and that such changes could materially affect amounts reported in these financial statements. For more information on the fair value of the Town's financial instruments, see Note 2 Cash and Investments— Fair Value Measurements. Town of North Andover, Massachusetts 43 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 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 the proprietary funds and fiduciary funds financial statements are reported under the accrual basis of accounting. The recognition of revenue related to accounts receivable reported in the governmental funds financial statements are reported under the modified accrual basis of accounting. Real Estate, 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 1 st, November 1 st, February 1 st and May 1 st and are subject to penalties and interest if they are not paid by the respective due date. Real estate tax liens are processed one year after the close of the valuation year on delinquent properties and are recorded as receivables in the year they are processed. Real estate receivables are secured via the tax lien process and are considered 100% collectible. Accordingly, an allowance for uncollectibles is not reported. Personal property taxes cannot be secured through the lien process. The allowance for uncollectibles is estimated based on historical trends and specific account analysis. Motor Vehicle Excise Motor vehicle excise taxes are assessed annually for each vehicle registered and are recorded as receivables in the year of the levy. The Commonwealth is responsible for reporting the number of vehicles registered and the fair values of those vehicles. The tax calculation is the fair value of the vehicle multiplied by$25 per$1,000 of value. The allowance for uncollectibles is estimated based on historical trends and specific account analysis. Community Preservation Surcharges Community preservation surcharges are levied annually at a rate of 3%of resident's 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 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 year of the levy. Since the receivables are secured via the lien process, these accounts are considered 100% collectible and therefore do not report an allowance for uncollectibles. 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 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 year of the levy. Town of North Andover, Massachusetts 44 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Since the receivables are secured via the lien process, these accounts are considered 100% collectible and therefore do not report an allowance for uncollectibles. Departmental and Other Departmental and other receivables consist primarily of amounts due from ambulance charges and police details. These receivables are recorded when the applicable service has been performed. The allowance for uncollectibles is estimated based on historical trends and specific account analysis. Intergovernmental Various federal and state grants for operating and capital purposes are applied for and received annually. For non-expenditure driven grants, receivables are recorded as soon as all eligibility requirements imposed by the provider have been met. For expenditure driven grants, receivables are recorded when the qualifying expenditures are incurred and all other grant requirements are met. These receivables are considered 100% collectible and therefore do not report an allowance for uncollectibles. G. 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. H. Capital Assets Government-Wide and Proprietary Fund Financial Statements Capital assets, which include land, land improvements, buildings and improvements, machinery and equipment, library books, vehicles, infrastructure (e.g., roads, treatment plants, pump stations ,sewer mains and similar items) and construction-in-progress, are reported in the applicable governmental or business-type activity column of the government-wide financial statements and in the proprietary fund 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. Except for the capital assets of the governmental activities column in the government-wide financial statements, construction period interest is capitalized on constructed capital assets. 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. Town of North Andover, Massachusetts 45 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Capital assets (excluding land) are depreciated on a straight-line basis. The estimated useful lives of capital assets are as follows: Estimated Useful Capital Asset Type Life (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 year of the purchase. 1. Deferred Outflows/Inflows of Resources Government-Wide Financial Statements (Net Position) In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s)and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Town has reported deferred charges on refunding and deferred inflows of resources related to pensions in this category. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s)and so will not be recognized as an inflow of resources (revenue) until that time. The Town currently has no elements that qualify for reporting in this category. Governmental Fund Financial Statements In addition to liabilities, the governmental funds balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents assets that have been recorded in the governmental fund financial statements but the revenue is not available and so will not be recognized as an inflow of resources (revenue) until it becomes available. The Town has reported unavailable revenues from property taxes in this category. Town of North Andover, Massachusetts 46 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 J. Interfund Receivables and Payables During the course of its operations, transactions occur between and within individual 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 position. Any residual balances outstanding between the governmental activities and business-type activities are reported in the statement of net position 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. K. Interfund Transfers During the course of its operations, resources are permanently reallocated between and within funds. These transactions are reported as transfers in and transfers out. Government-Wide Financial Statements Transfers between and within governmental funds are eliminated from the governmental activities in the statement of net position. Any residual balances outstanding between the governmental activities and business- type activities are reported in the statement of activities as "Transfers, net". 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. L. Net Position and Fund Eguitv Government-Wide Financial Statements (Net Position) Net position reported as "net investment in capital assets" includes capital assets, net of accumulated depreciation, less the principal balance of outstanding debt used to acquire capital assets. Unspent proceeds of capital related debt are not considered to be capital assets. Net position is reported as restricted when amounts that are not available for appropriation or are legally restricted by outside parties for a specific future use. Net position has 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 life of the loans. "Community preservation" represents amounts restricted for the purpose of ongoing community preservation activities. Town of North Andover, Massachusetts 47 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 "Gifts and grants" represents restrictions placed on assets from outside parties. Sometimes the Town will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds)and unrestricted resources. In order to calculate the amounts to report as restricted— net position and unrestricted— net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the Town's policy to consider restricted — net position to have been depleted before unrestricted —net position is applied. Fund Financial Statements (Fund Balances) Governmental fund balances are classified as nonspendable, restricted, committed, assigned, or unassigned based on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. The governmental fund balance classifications are as follows: "Nonspendable"fund balance includes amounts that cannot be spent because they are either not in spendable form or they are legally or contractually required to be maintained intact. "Restricted" fund balance includes amounts subject to constraints placed on the use of resources that are either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or that are imposed by law through constitutional provisions or enabling legislation. "Committed"fund balance includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government's highest level of decision-making authority. Town Meeting is the highest level of decision-making authority for the government that can, by adoption of an article prior to the end of the year, commit fund balance. Once adopted, the limitation imposed by the article remains in place until a similar action is taken to remove or revise the limitation. "Assigned" fund balance includes amounts that are constrained by the Town's intent to be used for specific purposes, but are neither restricted nor committed. Town Meeting may assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment. "Unassigned"fund balance includes the residual classification for the general fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the general fund. The Town's spending policy is to spend restricted fund balance first, followed by committed, assigned and unassigned fund balance. Most governmental funds are designated for one purpose at the time of their creation. Therefore, any expenditure from the fund will be allocated to the applicable fund balance classifications in the order of the aforementioned spending policy. The general fund and certain other funds may have more than one purpose. Town of North Andover, Massachusetts 48 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 M. Long-term debt Government-Wide and Proprietary Fund Financial Statements Long-term debt is reported as liabilities in the government-wide and proprietary fund statement of net position. 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. 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. N. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Essex Regional Retirement System and the Massachusetts Teachers Retirement System and additions to/deductions from the Systems fiduciary net position have been determined on the same basis as they are reported by the Systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. O. Investment Income Investment income derived from major and nonmajor governmental funds is legally assigned to the general fund unless otherwise directed by Massachusetts General Law (MGL). P. Compensated Absences Employees are granted vacation and sick leave in varying amounts based on collective bargaining agreements, state laws and executive policies. Compensated absence liabilities related to both governmental and business- type activities are normally paid from the funds reporting payroll and related expenditures. Compensated absences are reported in governmental funds only if they have matured. 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 maturity of the liability. Q. 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 Town of North Andover, Massachusetts 49 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 and liabilities at the date of the basic financial statements and the reported amounts of the revenues and expenditures/expenses during the year. Actual results could vary from estimates that were used. R. 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 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 -CASH AND INVESTMENTS A cash and investment pool is maintained that is available for use by all funds. Each fund type's portion of this pool is displayed on the balance sheet as "Cash and Cash Equivalents." The deposits and investments of the trust funds are held separately from those of other funds. Statutes authorize the investment in obligations of the U.S. Treasury, agencies, and instrumentalities, certificates of deposit, repurchase agreements, money market accounts, bank deposits and the State Treasurer's Investment Pool (Pool). The Treasurer may also invest trust funds in securities, other than mortgages or collateral loans, which are legal for the investment of funds of savings banks under the laws of the Commonwealth. In addition, there are various restrictions limiting the amount and length of deposits and investments. The Pool meets the criteria of an external investment pool. The Pool is administered by the Massachusetts Municipal Depository Trust(MMDT), which was established by the Treasurer of the Commonwealth who serves as Trustee. The fair value of the position in the Pool is the same as the value of the Pool shares. The Town participates in the Pension Reserve Investment Trust (PRIT), which meets the criteria of an external investment pool. PRIT is administered by the Pension Reserves Investment Management Board, which was established by the Treasurer of the Commonwealth of Massachusetts who serves as Trustee. The fair value of the position in the PRIT is the same as the value of the PRIT shares. Custodial Credit Risk—Deposits In the case of deposits, this is the risk that in the event of a bank failure, the Town's deposits may not be returned to it. The Town's policy is to minimize custodial credit risk by only investing in highly rated banks, which is determined through the utilization of a bank rating service. At year-end, the carrying amount of deposits totaled $51,363,658 and the bank balance totaled $54,370,166. Of the bank balance, $2,401,541 was covered by Federal Depository Insurance, $35,768,005 was covered by the Depositor's Insurance Fund, $15,518,649 was collateralized and $681,971 was exposed to custodial credit risk because it was uninsured and uncollateralized. Town of North Andover, Massachusetts 50 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Interest Rate Risk The Town's investment policy limits investment maturities to one year as a means of managing its exposure to fair value losses arising from increasing interest rates. The Town participates in MMDT, which maintains a cash portfolio and a short-term bond fund with combined average maturities of approximately three months. The Town participates in PRIT. The effective weighted duration rate for PRIT investments ranged from .14 to 24.23 years. As of June 30, 2016, the Town had the following investments and maturities: Maturities Investment Type Fair Value 1-5 Years 6-10 Years Debt Securities Bond mutual funds........................... $ 68,886 $ - $ 68,886 Other Investments Equity mutual funds............................... 669,729 Money market mutual funds............... 33,981 Repurchase agreements................... 1,400,000 MMDT........................................... 4,495,460 PRIT............................................. 518,110 Total investments................................... $ 7,186,166 Custodial Credit Risk— Investments For an investment, this is the risk that, in the event of a failure by the counterparty, the Town will not be able to recover the value of its investments or collateral security that are in the possession of an outside party. The Town did not have investments that were exposed to custodial credit risk. The Town's policy to minimize custodial credit risk is to obtain from brokerage houses and broker/dealers 1)audited financial statements, 2) proof of National Association of Security Dealers certification, 3)a statement that the dealer has read the Town's investment policy and will comply with it and 4) be in business for no less than five years and have a minimum capitalization of$10 million. Credit Risk Standard and Poor's Investors Service rated the $68,886 of bond mutual funds AA. The $1,400,000 of repurchase agreements, $4,495,460 of MMDT deposits and $33,981 of money market mutual funds are unrated. The Town's investment policy limits investments in debt securities to U.S. Treasuries and U.S. Agency Obligations, which are AA rated and like-kind investments that are fully collateralized. Concentration of Credit Risk The Town limits the amount the Town may invest in any one issuer to 10%. The Town does not have investments in corporate bonds or equity securities and therefore does not have exposure to concentration of credit risk. Town of North Andover, Massachusetts 51 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Fair Market Value of Investments The Town holds investments that are measured at fair value on a recurring basis. Because investing is not a core part of the Town's mission, the Town determines that the disclosures related to these investments only need to be disaggregated by major type. The Town chooses a tabular format for disclosing the levels within the fair value hierarchy. The Town categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Town has the following recurring fair value measurements as of June 30, 2016: Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs I nvestme nt Type 6/30/16 (Level 1) (Level 2) (Level3) Investments by Fair Value Level Debt Securities: Bond mutual funds...................................................... $ 68,886 $ - $ 68,886 $ - Other investments: Equity mutual funds.................................................... 669,729 669,729 - - Money market mutual funds.......................................... 33,981 33,981 - - Repurchase agreements.............................................. 1,400,000 1,400,000 - - Total other investments............................................. 2,103,710 2,103,710 - - Total investments by fair value level............................. 2,172,596 $ 2,103,710 $ 68,886 $ - Investments Measured at the Net Asset Value(NAV) PRIT........................................................................ 518,110 Investments Measured at Amortized Cost M M DT...................................................................... 4,495,460 Total investments..................................................... $ 7,186,166 Repurchase agreements, equity mutual funds and money market mutual funds classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Bond mutual funds classified in Level 2 of the hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. PRIT investments are valued using the net asset value. This investment pool was established by the Treasurer of the Commonwealth of Massachusetts, who serves as Trustee. PRIT is administered by the Pension Reserves Investment Management Board (PRIM). The fair values of the positions in each investment Pool are the same as the value of each Pool's shares. The Town does not have the ability to control any of the investment decisions relative to its funds in PRIT. Town of North Andover, Massachusetts 52 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 MMDT investments are valued at amortized cost. Under the amortized cost method, an investment is valued initially at its cost and adjusted for the amount of interest income accrued each day over the term of the investment to account for any difference between the initial cost and the amount payable at its maturity. If amortized cost is determined not to approximate fair value, the value of the portfolio securities will be determined under procedures established by the Advisor. NOTE 3 -RECEIVABLES At June 30, 2016, receivables for the individual major and non-major governmental funds including the applicable allowances for uncollectible accounts are as follows: Allowance Gross for Net Amount Uncollectibles Amount Receivables: Real estate and personal property taxes......................... $ 1,233,167 $ (138,000) $ 1,095,167 Tax liens.................................................................. 2,090,248 - 2,090,248 Motor vehicle and other excise taxes.............................. 770,734 (399,000) 371,734 Community preservation surcharges.............................. 17,971 - 17,971 Departmental and other............................................... 1,105,038 (438,485) 666,553 Intergovernmental...................................................... 2,032,773 - 2,032,773 Total...................................................................... $ 7,249,931 $ (975,485) $ 6,274,446 At June 30, 2016, receivables for the water and sewer enterprise funds are as follows: Allowance Gross for Net Amount Uncollectibles Amount Receivables: User charges.............................................................$ 3,133,366 $ - $ 3,133,366 Utility liens................................................................ 49,682 - 49,682 Intergovernmental...................................................... 476,636 - 476,636 $ 3,659,684 $ - $ 3,659,684 Governmental funds report unavailable revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At the end of the current year, the various components of unavailable revenue reported in the governmental funds were as follows: Other General Governmental Fund Funds Total Receivable and other asset type: Real estate and personal property taxes......................... $ 887,330 $ - $ 887,330 Tax liens.................................................................. 2,090,248 - 2,090,248 Motor vehicle and other excise taxes.............................. 371,734 - 371,734 Community preservation surcharges.............................. - 17,971 17,971 Departmental and other............................................... 546,015 120,538 666,553 Intergovernmental (highway construction assistance)........ - 694,697 694,697 Intergovernmental (CPA state match)............................. - 441,000 441,000 Tax foreclosures........................................................ 655,028 - 655,028 Total...................................................................... $ 4,550,355 $ 1,274,206 $ 5,824,561 Town of North Andover, Massachusetts 53 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 NOTE 4 -CAPITAL ASSETS Capital asset activity for the year ended June 30, 2016, is as follows: Beginning Ending Governmental Activities: Balance Increases Decreases Balance Capital assets not being depreciated: Land.........................................................$ 22,145,413 $ - $ - $ 22,145,413 Construction in progress............................... 3,615,272 2,692,055 (3,246,936) 3,060,391 Total capital assets not being depreciated.... 25,760,685 2,692,055 (3,246,936) 25,205,804 Capital assets being depreciated: Land improvements..................................... 4,942,232 197,431 - 5,139,663 Buildings and building improvements............... 145,053,950 6,748,603 - 151,802,553 Machinery and equipment............................. 9,673,464 308,541 (47,476) 9,934,529 Library books............................................. 4,517,199 98,061 - 4,615,260 Vehicles.................................................... 6,239,457 426,249 (165,614) 6,500,092 Infrastructure.............................................. 41,708,987 1,388,010 - 43,096,997 Total capital assets being depreciated......... 212,135,289 9,166,895 (213,090) 221,089,094 Less accumulated depreciation for: Land improvements..................................... (2,593,957) (175,150) - (2,769,107) Buildings and improvements.......................... (58,975,223) (3,090,805) - (62,066,028) Machinery and equipment............................. (6,815,459) (686,348) 47,476 (7,454,331) Library books............................................. (4,141,725) (55,158) - (4,196,883) Vehicles.................................................... (3,788,306) (533,223) 165,614 (4,155,915) Infrastructure.............................................. (21,817,313) (2,066,436) - (23,883,749) Total accumulated depreciation.................. (98,131,983) (6,607,120) 213,090 (104,526,013) Total capital assets being depreciated, net........... 114,003,306 2,559,775 - 116,563,081 Total governmental activities capital assets, net.....$ 139,763,991 $ 5,251,830 $ (3,246,936) $ 141,768,885 Town of North Andover, Massachusetts 54 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Ending Ending Business-Type Activities: Balance Increases Decreases Balance Capital assets not being depreciated: Land.........................................................$ 6,097,262 $ - $ - $ 6,097,262 Construction in progress............................... 741,120 269,204 (741,120) 269,204 Total capital assets not being depreciated.... 6,838,382 269,204 (741,120) 6,366,466 Capital assets being depreciated: Land improvements..................................... 232,105 - - 232,105 Buildings and improvements.......................... 2,887,501 846,422 - 3,733,923 Machinery and equipment............................. 2,704,288 113,638 - 2,817,926 Vehicles.................................................... 593,023 39,142 - 632,165 Treatment plants......................................... 16,573,234 - - 16,573,234 Pump stations............................................ 5,021,633 1,703,841 - 6,725,474 Reservoirs................................................. 1,477,296 - - 1,477,296 Infrastructure.............................................. 55,450,120 86,876 - 55,536,996 Total capital assets being depreciated......... 84,939,200 2,789,919 - 87,729,119 Less accumulated depreciation for: Land improvements..................................... (137,825) (8,369) - (146,194) Buildings and improvements.......................... (1,069,817) (163,826) - (1,233,643) Machinery and equipment............................. (1,477,984) (525,389) - (2,003,373) Vehicles.................................................... (389,164) (50,153) - (439,317) Treatment plants......................................... (11,576,424) (409,621) - (11,986,045) Pump stations............................................ (2,574,708) (120,550) - (2,695,258) Reservoirs................................................. (1,298,693) (20,472) - (1,319,165) Infrastructure.............................................. (16,903,809) (552,685) - (17,456,494) Total accumulated depreciation.................. (35,428,424) (1,851,065) - (37,279,489) Total capital assets being depreciated, net........... 49,510,776 938,854 - 50,449,630 Total business-type activities capital assets, net.... $ 56,349,158 $ 1,208,058 $ (741,120) $ 56,816,096 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: General government................................................. $ 310,088 Public safety........................................................... 651,349 Education............................................................... 2,550,126 Public works........................................................... 2,744,809 Human services....................................................... 150,922 Culture and recreation............................................... 199,826 Total depreciation expense-governmental activities............ $ 6,607,120 Business-Type Activities: Water..................................................................... $ 859,315 Sewer..................................................................... 863,487 Osgood Hill.............................................................. 128,263 Total depreciation expense- business-type activities............ $ 1,851,065 Town of North Andover, Massachusetts 55 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 NOTE 5- INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS Interfund receivables and payables totaled $858,927 as of June 30, 2016 and consisted of amounts due to the general fund from the highway chapter 90 fund and the education federal and state grants fund totaling $780,640 and $78,287, respectively. The outstanding balance resulted from the time lag between the dates that reimbursable expenditures are incurred and reimbursements are received. Interfund transfers for the year ended June 30, 2016, are summarized as follows: Operating Transfers In: General Operating Transfers Out: Fund Nonmajor Governmental Funds............... $ 144,892 (1) Water Enterprise Fund........................... 923,227 (2) Sewer Enterprise Fund.......................... 434,460 (2) Osgood Hill Enterprise Fund................... 48,812 (2) Total.................................................. $ 1,551,391 (1) Budgeted transfers to the general fund from available funds. (2) Budgeted transfers to the general fund for indirect costs. NOTE 6— LEASES Operating Lease The Town entered into a commercial lease for temporary office space due to the renovation of Town Hall. The remaining lease payments total $40,564 as of June 30, 2016 and the lease expires on October 31, 2016. 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 or tax anticipation notes (RANS or TANS). • Capital project costs and other approved expenditures incurred prior to obtaining permanent financing through issuance of bond anticipation notes (BANS)or grant anticipation notes (GANS). Short-term loans are general obligations and carry maturity dates that are limited by statute. Interest expenditures and expenses for short-term borrowings are accounted for in the general fund and enterprise funds, respectively. The Town did not have any short-term debt outstanding as of June 30, 2016. Town of North Andover, Massachusetts 56 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 NOTE 8 - LONG-TERM DEBT State law permits the Town, under the provisions of Chapter 44, Section 10, to authorize indebtedness up to a limit of 5% of its equalized valuation. Debt issued in accordance with this section of the law is designated as being "inside the debt limit." In addition, however, a Town may authorize debt in excess of that limit for specific purposes. Such debt, when issued, is designated as being 'outside the debt limit." In order to take advantage of favorable interest rates, the Town issued $1,695,000 of general obligation refunding bonds on June 2, 2016. $1,615,000 of general obligation bonds were advance refunded by placing the proceeds of the refunding bonds in an irrevocable trust to provide for all future debt service payments of the refunded bonds. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the statement of net position. The reacquisition price exceeded the net carrying amount of the old debt by $108,863. This amount is being amortized over the life of the refunding debt, which is the same as the remaining life of the refunded debt. This advance refunding was undertaken to reduce total debt service payments over the next 13 years by$211,538 and resulted in an economic gain of$190,743. At June 30, 2016, $1,615,000 of bonds outstanding from the advance refunding is considered defeased. Details related to the outstanding indebtedness at June 30, 2016, and the debt service requirements are as follows: Bonds Payable-Governmental Funds Original Interest Maturities Loan Rate Beginning Ending Project Through Amount (%) Balance Additions Reductions Balance Municipal Purpose Loan of 2004................... 2016 $ 12,705,555 2.00-5.00 $ 40,498 $ $ 40,498 $ Municipal Purpose Loan of 2007................... 2016 406,805 3.60-4.50 39,950 39,950 Municipal Purpose Loan of 2008................... 2028 1,486,026 4.00-4.40 414,330 124,443 289,887 Land Acquisition-Refunding........................ 2018 2,960,000 3.00-4.00 990,000 315,000 675,000 Municipal Purpose Loan of 2008-Refunding... 2019 9,540,000 3.00-4.00 3,365,000 1,010,000 2,355,000 Municipal Purpose Loan of 2009................... 2029 7,122,134 2.75-5.00 3,679,765 2,165,554 1,514,211 Municipal Purpose Loan of 2010................... 2029 4,171,222 2.25-4.00 2,610,000 190,000 2,420,000 Municipal Purpose Loan of 2011................... 2021 4,365,353 2.00-3.75 2,355,000 502,500 1,852,500 Municipal Purpose Loan of 2012................... 2029 3,255,348 2.00-2.50 2,152,901 364,700 1,788,201 Municipal Purpose Loan of 2013................... 2022 926,199 2.00-3.00 568,650 178,460 390,190 Municipal Purpose Loan of 2014-Refunding... 2026 4,010,000 2.00-3.25 3,630,000 375,000 3,255,000 Municipal Purpose Loan of 2014................... 2034 8,181,497 2.00-3.25 7,649,248 528,564 7,120,684 Municipal Purpose Loan of 2015-Refunding... 2028 68,526 2.00-4.00 68,526 955 67,571 Municipal Purpose Loan of 2015................... 2035 8,365,000 2.00-4.00 8,365,000 565,000 7,800,000 Municipal Purpose Loan of 2016-Refunding... 2029 1,695,000 2.00-3.00 - 1,695,000 - 1,695,000 Municipal Purpose Loan of 2016................... 2036 5,759,364 2.00-3.00 - 5,759,364 5,759,364 Sub-total.............................................................................................................. 35,928,868 7,454,364 6,400,624 36,982,608 Unamortized premium............................................................................................ 603,624 73,055 72,161 604,518 Total governmental bonds payable............................................................................$ 36,532,492 $ 7,527,419 $ 6,472,785 $ 37,587,126 Town of North Andover, Massachusetts 57 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Debt service requirements for principal and interest for Governmental bonds payable in future years are as follows: Year Principal Interest Total 2017.......... $ 5,063,902 $ 880,711 $ 5,944,613 2018.......... 4,853,870 804,056 5,657,926 2019.......... 3,279,067 677,755 3,956,822 2020.......... 2,654,736 588,434 3,243,170 2021.......... 2,514,736 520,305 3,035,041 2022.......... 1,997,236 460,466 2,457,702 2023.......... 1,939,218 410,043 2,349,261 2024.......... 1,934,249 360,684 2,294,933 2025.......... 1,840,899 320,111 2,161,010 2026.......... 1,500,899 282,444 1,783,343 2027.......... 1,345,025 248,249 1,593,274 2028.......... 1,323,773 216,723 1,540,496 2029.......... 1,304,998 186,430 1,491,428 2030.......... 915,000 155,845 1,070,845 2031.......... 920,000 131,902 1,051,902 2032.......... 930,000 106,331 1,036,331 2033.......... 935,000 79,281 1,014,281 2034.......... 935,000 52,070 987,070 2035.......... 560,000 23,668 583,668 2036.......... 235,000 7,050 242,050 Totals........ $ 36,982,608 $ 6,512,558 $ 43,495,166 Bonds Payable-Water Enterprise Fund Original Interest Maturities Loan Rate Beginning Ending Project Through Amount (%) Balance Additions Reductions Balance Municipal Purpose Loan of 2004-Refunding... 2016 $ 985,438 2.00-4.20 $ 94,499 $ $ 94,499 $ Municipal Purpose Loan of 2007................... 2016 815,000 3.60-4.50 81,500 81,500 - MCWT..................................................... 2028 5,532,288 2.00 3,847,649 261,770 3,585,879 Municipal Purpose Loan of 2008................... 2018 1,000,000 3.70-5.0 0 300,000 100,000 200,000 Municipal Purpose Loan of 2008-Refunding... 2018 1,888,108 3.00-4.00 120,000 40,000 80,000 Municipal Purpose Loan of 2009................... 2019 450,000 2.75-5.00 180,000 45,000 135,000 Municipal Purpose Loan of 2010................... 2030 2,025,000 2.25-4.00 1,360,000 150,000 1,210,000 Municipal Purpose Loan of 2011................... 2021 225,000 2.00-3.75 135,000 22,500 112,500 Municipal Purpose Loan of 2012................... 2022 1,175,000 2.00-2.50 822,500 117,500 705,000 Municipal Purpose Loan of 2013................... 2022 795,000 2.00-3.00 621,350 86,540 534,810 Municipal Purpose Loan of 2014-Refunding... 2016 119,056 2.00-3.25 59,528 59,528 - Municipal Purpose Loan of 2014................... 2024 267,191 2.00-3.25 235,752 31,438 204,314 Total Water Enterprise bonds payable....................................................................... $ 7,857,778 $ $ 1,090,275 $ 6,767,503 Town of North Andover, Massachusetts 58 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Debt service requirements for principal and interest for Water Enterprise fund bonds and notes payable in future years are as follows: Year Principal Interest Total 2017.......... $ 860,037 $ 162,634 $ 1,022,671 2018.......... 860,432 139,129 999,561 2019.......... 721,077 115,857 836,934 2020.......... 627,255 98,111 725,366 2021.......... 607,983 84,023 692,006 2022.......... 591,328 70,943 662,271 2023.......... 388,108 57,973 446,081 2024.......... 394,191 49,064 443,255 2025.......... 378,397 39,708 418,105 2026.......... 384,730 30,777 415,507 2027.......... 391,188 21,717 412,905 2028.......... 397,777 12,528 410,305 2029.......... 65,000 6,600 71,600 2030.......... 100,000 4,000 104,000 Totals........ $ 6,767,503 $ 893,063 $ 7,660,566 Bonds Payable-Sewer Enterprise Fund Original Interest Maturities Loan Rate Beginning Ending Project Through Amount (%) Balance Additions Reductions Balance MCWT...................................................... 2021 $ 7,356,555 3.70-5.40 $ 2,053,454 $ $ 378,455 $ 1,674,999 Municipal Purpose Loan of 2007.................... 2016 720,000 3.60-4.50 93,550 93,550 - Municipal Purpose Loan of 2008.................... 2028 3,925,290 3.70-5.00 1,685,673 205,557 1,480,116 Municipal Purpose Loan of 2008-Refunding.... 2019 1,156,892 3.00-4.00 350,233 109,446 240,787 Municipal Purpose Loan of 2010.................... 2022 3,830,001 2.75-5.00 1,890,001 340,000 1,550,001 Municipal Purpose Loan of 2010-Refunding.... 2020 250,000 2.25-3.50 125,000 25,000 100,000 Municipal Purpose Loan of 2012.................... 2022 78,000 2.00-2.50 54,600 7,800 46,800 Municipal Purpose Loan of 2013-Refunding.... 2018 1,145,000 2.00-3.00 654,999 225,000 429,999 Municipal Purpose Loan of 2014-Refunding.... 2016 80,944 2.00-3.25 40,472 40,472 - Municipal Purpose Loan of 2015-Refunding.... 2028 1,001,474 2.00-4.00 1,001,474 14,045 987,429 Municipal Purpose Loan of 2016.................... 2026 870,683 2.00-3.00 - 870,683 - 870,683 Total Sewer Enterprise bonds payable....................................................................... $ 7,949,456 $ 870,683 $ 1,439,325 $ 7,380,814 Town of North Andover, Massachusetts 59 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Debt service requirements for principal and interest for Sewer Enterprise fund bonds and notes payable in future years are as follows: Year Principal Interest Total 2017.......... $ 1,238,165 $ 243,745 $ 1,481,910 2018.......... 1,253,152 203,553 1,456,705 2019.......... 1,062,813 156,586 1,219,399 2020.......... 1,001,581 116,780 1,118,361 2021.......... 751,582 83,109 834,691 2022.......... 586,581 59,651 646,232 2023.......... 293,782 39,333 333,115 2024.......... 288,751 28,911 317,662 2025.......... 284,101 23,136 307,237 2026.......... 274,101 17,250 291,351 2027.......... 184,977 9,822 194,799 2028.......... 161,228 4,272 165,500 Totals........ $ 7,380,814 $ 986,148 $ 8,366,962 The Sewer Enterprise Fund is scheduled to be subsidized by the Massachusetts Clean Water Trust (MCWT)on a periodic basis for principal in the amount of$476,636 and interest costs of$165,971. Thus, net MCWT loan repayments, including interest, are scheduled to be $1,317,195. The principal subsidies are guaranteed and therefore a $476,636 intergovernmental receivable has been reported in the proprietary fund financial statements. Since the Town is legally obligated for the total amount of the debt, such amounts have been recorded in the accompanying basic financial statements. The 2016 principal and interest subsidies totaled $100,848 and $70,392, respectively. 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, 2016, the Town had the following authorized and unissued debt. Purpose Amount Fire chief vehicle.................................................. $ 4,727 Energy efficiency improvements to buildings.............. 775,598 Municipal information technology............................. 50,000 Building maintenance............................................ 225,000 School information technology................................ 100,000 Roadway improvements........................................ 410,000 Sidewalk reconstruction......................................... 75,000 Sweeper............................................................. 185,000 Water and High Street intersection and streetscape.... 325,000 6 Wheel dump truck.............................................. 180,000 Facilities master plan implementation....................... 4,620,885 Playground improvements...................................... 50,000 Integrated public safety reporting system.................. 208,875 Replace ambulance.............................................. 268,197 Total................................................................ $ 7,478,282 Town of North Andover, Massachusetts 60 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Changes in Long-term Liabilities During the year ended June 30, 2016, the following changes occurred in long-term liabilities: Beginning Ending Due within Balance Additions Reductions Balance One Year Governmental Activities: Long-term bonds.......................... $ 35,928,868 $ 7,454,364 $ (6,400,624) $ 36,982,608 $ 5,063,902 Unamortized premium................... 603,624 73,055 (72,161) 604,518 77,360 Bonds payable, net....................... 36,532,492 7,527,419 (6,472,785) 37,587,126 5,141,262 Other postemployment benefits....... 47,339,046 10,296,624 (3,638,197) 53,997,473 - Compensated absences................ 1,543,000 437,000 (875,000) 1,105,000 632,000 Net Pension Liability..................... 48,102,636 10,437,718 (6,445,554) 52,094,800 - Total governmental....................... $ 133,517,174 $ 28,698,761 $ (17,431,536) $ 144,784,399 $ 5,773,262 Beginning Ending Due within Balance Additions Reductions Balance One Year Business-Type Activities: Long-term bonds.......................... $ 15,807,234 $ 870,683 $ (2,529,600) $ 14,148,317 $ 2,098,202 Other postemployment benefits....... 1,965,679 299,529 (105,835) 2,159,373 - Compensated absences................ 94,000 30,000 (57,000) 67,000 38,000 Net Pension Liability..................... 1,616,479 350,621 (216,465) 1,750,635 - Total business-type....................... $ 19,483,392 $ 1,550,833 $ (2,908,900) $ 18,125,325 $ 2,136,202 The governmental activities long-term liabilities are generally liquidated by the general fund and the business-type activities long-term liabilities are generally liquidated by the applicable enterprise fund. NOTE 9—GOVERNMENTAL FUND BALANCE CLASSIFICATIONS GASB 54 provides for two major types of fund balances, which are nonspendable and spendable. Nonspendable fund balances are balances that cannot be spent because they are not expected to be converted to cash or they are legally or contractually required to remain intact. Examples of this classification are prepaid items, inventories, and principal (corpus)of an endowment fund. The Town has reported principal portions of endowment funds as nonspendable. In addition to the nonspendable fund balance, GASB 54 has provided a hierarchy of spendable fund balances, based on a hierarchy of spending constraints. • Restricted: fund balances that are constrained by external parties, constitutional provisions, or enabling legislation. • Committed: fund balances that contain self-imposed constraints of the government from its highest level of decision making authority. • Assigned: fund balances that contain self-imposed constraints of the government to be used for a particular purpose. • Unassigned: fund balance of the general fund that is not constrained for any particular purpose Town of North Andover, Massachusetts 61 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Massachusetts General Law Ch.40 §513 allows for the establishment of stabilization funds for one or more different purposes. The creation of a fund requires a two-thirds vote of the legislative body and must clearly define the purpose of the fund. Any change to the purpose of the fund along with any additions to or appropriations from the fund requires a two-thirds vote of the legislative body. At year-end, the balance of the general stabilization fund, capital stabilization fund, OPEB stabilization fund and special education stabilization fund was $4,301,116, $672,682, $1,016,557 and $602,931, respectively. All of which are reported as unassigned fund balance within the general fund. The Town has classified its fund balances with the following hierarchy. Municipal Nonmajor Total Community Capital Governmental Governmental General Preservation Projects Funds Funds FUND BALANCES Restricted for: Municipal federal and state grants..............$ $ $ $ 121,545 $ 121,545 Education federal and state grants............. 10,263 10,263 Receipts reserved for appropriations.......... 149,799 149,799 Municipal revolving funds......................... 548,781 548,781 Education revolving funds......................... 660,306 660,306 School lunch funds................................. 342 342 Other special revenue funds..................... 1,181,403 1,181,403 Affordable housing trust fund.................... 897,686 897,686 Other trust funds..................................... 933,544 933,544 Education capital projects......................... 49,974 49,974 Other permanent funds............................ - - Debt service.......................................... 624,472 624,472 CPA fund.............................................. - 6,936,836 6,936,836 Municipal capital projects......................... - - 3,303,938 3,303,938 Assigned to: Encumbrances: General government................................ 9,970 - 9,970 Public safety.......................................... 40,750 40,750 Education.............................................. 379,517 379,517 Public works.......................................... 151,380 151,380 Human and human services..................... 408 408 Culture and recreation............................. 1,325 1,325 Support services.................................... 10,617 10,617 Property and liability insurance.................. 1,912 1,912 Free cash used for subsequent years'expenditures............................... 524,817 524,817 Unassigned................................................... 18,029,311 - - - 18,029,311 TOTAL FUND BALANCES...................................$ 19,774,479 $ 6,936,836 $ 3,303,938 $ 4,553,643 $ 34,568,896 Town of North Andover, Massachusetts 62 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 NOTE 10 - 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 employees. Health Insurance In 2013, the Town joined the Commonwealth of Massachusetts' group insurance plan which is a premium based health insurance plan. Since that time the internal service fund has accounted for residual health insurance claims. As of June 30, 2016, there was no remaining liability for incurred but not reported claims. The amount of claim settlements has not exceeded insurance coverage in any of the three preceding years. NOTE 11 -PENSION PLAN The Town is a member of the Essex Regional Retirement System (ERRS), a cost-sharing multiple-employer defined benefit pension plan covering eligible employees of the 47 member units. The system is administered by five board members (Board)on behalf of all current employees and retirees except for current teachers and retired teachers. Chapter 32 of the MGL assigns authority to establish and amend benefit provisions of the plan. The audited financial report may be obtained by visiting http://www.essexregional.com. The Town is a member of the Massachusetts Teachers' Retirement System (MTRS), a cost-sharing multi- employer defined benefit plan. MTRS is managed by the Commonwealth of Massachusetts (Commonwealth)on behalf of municipal teachers and municipal teacher retirees. The Commonwealth is a nonemployer contributor and is responsible for 100%of the contributions and future benefit requirements of the MTRS. The MTRS covers certified teachers in cities (except Boston), towns, regional school districts, charter schools, educational collaboratives and Quincy College. The MTRS is part of the Commonwealth's reporting entity and the audited financial report may be obtained by visiting http://www.mass.gov/osc/publications-and-reports/financial-reports/. Special Funding Situation The Commonwealth is a nonemployer contributor and is required by statute to make 100% of all actuarially determined employer contributions on behalf of the Town to the MTRS. Therefore, the Town is considered to be in a special funding situation as defined by GASB Statement No. 68, Accounting and Financial Reporting for Pensions and the Commonwealth is a nonemployer contributor in MTRS. Since the Town does not contribute directly to MTRS, there is no net pension liability to recognize. The total of the Commonwealth provided contributions have been allocated based on each employer's covered payroll to the total covered payroll of employers in MTRS as of the measurement date of June 30, 2015. The Town's portion of the collective pension expense, contributed by the Commonwealth, of$6,997,282 is reported in the general fund as intergovernmental revenue and pension expense in the current fiscal year. The portion of the Commonwealth's collective net pension liability associated with the Town is $86,270,207 as of the measurement date. Town of North Andover, Massachusetts 63 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 Benefits Provided Both Systems provide retirement, disability, survivor and death benefits to plan members and beneficiaries. Massachusetts Contributory Retirement System benefits are, with certain minor exceptions, uniform from system to system. The System provides for retirement allowance benefits up to a maximum of 80% of a member's highest three-year average annual rate of regular compensation. For persons who became members on or after April 2, 2012, average salary is the average annual rate of regular compensation received during the five consecutive years that produce the highest average, or, if greater, during the last five years (whether or not consecutive) preceding retirement. Benefit payments are based upon a member's age, length of creditable service, level of compensation, and group classification. Members become vested after ten years of creditable service. There were no changes in benefit terms that affected the measurement of the total pension liability at December 31, 2015. Employees who resign from service and who are not eligible to receive a retirement allowance or are under the age of 55 are entitled to request a refund of their accumulated total deductions. Survivor benefits are extended to eligible beneficiaries of members whose death occurs prior to or following retirement. Cost-of-living adjustments granted between 1981 and 1997 and any increase 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 approved by the Board and are borne by the System. Contributions Chapter 32 of the MGL governs the contributions of plan members and member units. Active plan members are required to contribute to the System at rates ranging from 5% to 9% of gross regular compensation with an additional 2% contribution required for compensation exceeding $30,000. The percentage rate is keyed to the date upon which an employee's membership commences. The member units are required to pay into the ERRS a legislatively mandated actuarial determined contribution that is apportioned among the employers based on active current payroll. The Town's proportionate share of the required contribution was $29,104 less than its actual contribution for the year ended December 31, 2015 which was $4,100,517, 20.94% of covered payroll, actuarially determined as an amount that, when combined with plan member contributions, is expected to finance the costs of benefits earned by plan members during the year, with an additional amount to finance any unfunded accrued liability. Pension Liabilities At June 30, 2016, the Town reported a liability of$53,845,435 for its proportionate share of the net pension liability. The net pension liability was measured as of December 31, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of January 1, 2014. Accordingly, update procedures were used to roll forward the total pension liability to the measurement date. The Town's proportion of the net pension liability was based on a projection of the Town's long-term share of contributions to the pension plan relative to the projected contributions of all participating members. At December 31, 2015, the Town's proportion was 14.8%, which was an increase of 0.1% from its proportion measured at December 31, 2014. Pension Expense For the year ended June 30, 2016, the Town recognized pension expense of$4,978,806. At June 30, 2016, the Town reported deferred outflows of resources related to pensions of$3,031,782, from the net difference between projected and actual investment earnings on pension plan investments and changes in proportions and Town of North Andover, Massachusetts 64 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 differences between employer contributions and proportionate share of contributions. Since the System performs an actuarial valuation bi-annually, there are no reported differences between expected and actual experience or a change of assumptions as of December 31, 2015. Actuarial Assumptions The total pension liability in the January 1, 2014 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement that was updated to December 31, 2015: Valuation date......................................... January 1,2014 Actuarial cost method................................ Entry Age Normal Cost Method. Amortization method................................. Closed-Approximate level percent of payroll. Remaining amortization period.................... 20 years for the fresh start base Asset valuation method............................. Market value adjusted by accounts payable and receivables adjusted to phase in over 5 years investment gains or losses above or below the expected rate of investment return. The actuarial value of assets must be no less than 90%of the adjusted market value nor more than 110%of the adjusted market value. Projected salary increases......................... Select and Ultimate. 7.5%year one,6.5%year two,6% year three, 5.5%year four, 5%year five, 3.75%ultimate rate. Cost of living adjustments.......................... 3.0%of the first$13,000 of a member's retirement allowance is assumed to be granted every year. Rates of retirement................................... Varies based upon age for general employees, police and fire employees. Rates of disability..................................... Disability is assumed to be 45%ordinary and 55%accidental for Group 1 and 2 and 10%ordinary and 90%accidental for Group 4. Mortality Rates: Pre-Retirement......................... The RP-2000 mortality table(sex-distinct)projected with scale BB and Generational Mortality. During employment the healthy employee mortality table is used. Post-employment the healthy annuitant table is used. Disabled Retiree....................... The RP-2000 mortality table for healthy annuitants(sex-distinct) projected with scale BB and Generational Mortality set-forward by 2 years. Death is assumed to be due to the same cause as the disability 40%of the time. Investment rate of return/Discount rate......... 8.00%per year The balances of deferred outflows at June 30, 2016 consist of the following: Deferred Outflows Deferred Category of Resources Difference between projected and actual earnings.................. $ 2,880,892 Changes in proportionate share of contributions.................... 150,890 Total deferred outflows of resources.................................... $ 3,031,782 Town of North Andover, Massachusetts 65 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 The Town's net deferred outflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2017......................................................$ 742,516 2018...................................................... 742,516 2019...................................................... 742,516 2020...................................................... 797,047 2021...................................................... 7,187 Total......................................................$ 3,031,782 Investment policy The pension plan's policy in regard to the allocation of invested assets is established by PRIT and the Board. Plan assets are managed on a total return basis with a long-term objective of achieving a fully funded status for the benefits provided through the pension plan. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of January 1, 2014 are summarized in the following table: Long-Term Expected Target Asset Class Real Rate of Return Allocation Core Bonds............................... 0.97% 13.00% Value-Added Bonds.................... 3.80% 10.00% Large Cap Equities..................... 4.61% 14.50% Mid/Small Cap Equities............... 4.85% 3.50% International Equities................... 5.10% 16.00% Emerging Markets Equities........... 6.31% 6.00% Private Equity............................ 6.55% 10.00% Real Estate............................... 3.40% 10.00% Timber/Natural Resources........... 3.64% 4.00% Hedge Funds............................. 3.64% 9.00% Cash/Portfolio Completion........... 0.00% 4.00% Rate of return For the year ended December 31, 2015, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 1.04%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Discount rate The discount rate used to measure the total pension liability was 8.00%. The projection of cash flows used to determine the discount rate assumed plan member contributions will be made at the current contribution rate and that contributions will be made at rates equal to the actuarially determined contribution rated. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future Town of North Andover, Massachusetts 66 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate The following presents the net pension liability, calculated using the discount rate of 8.00%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower(7.00%)or 1-percentage-point higher(9.00%)than the current rate: Current 1% Decrease Discount 1% Increase (7.00%) (8.00%) (9.00%) The Town's proportionate share of the net pension liability....... $ 66,196,746 $ 53,845,435 $ 44,299,393 NOTE 12— POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS Plan Description—The Town of North Andover administers a single-employer defined benefit healthcare plan (the "Retiree Health Plan"). The plan provides lifetime healthcare insurance for eligible retirees and their spouses through the Town's group health insurance plan, which covers both active and retired members. Chapter 32B of the MGL assigns authority to establish and amend benefit provisions of the plan. Benefit provisions are negotiated between the Town and the unions representing Town employees and are renegotiated each bargaining period. The Retiree Health Plan does not issue a publicly available financial report. Funding Policy—Contribution requirements are also negotiated between the Town and union representatives. The required contribution is based on a pay-as-you-go financing requirement. The Town contributes a variable portion of the cost of current-year premiums, which varies by plan, for eligible retired plan members and their spouses. Plan members receiving benefits contribute the remaining portion of their premium costs. For 2016, the Town contributed $3.7 million to the plan. Annual OPEB Cost and Net OPEB Obligation—The Town's annual other postemployment benefit (OPEB)cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities (or funding excess)over a period not to exceed thirty years. The components of the Town's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Town's net OPEB obligation are summarized in the following table: Annual required contribution........................................ $ 10,478,966 Interest on net OPEB obligation.................................... 2,218,713 Adjustment to annual required contribution...................... (2,101,526) Annual OPEB Cost(expense)...................................... 10,596,153 Contributions made.................................................... (3,744,032) Increase in net OPEB obligation................................... 6,852,121 Net OPEB obligation- beginning of year......................... 49,304,725 Net OPEB obligation-end of year................................. $ 56,156,846 Town of North Andover, Massachusetts 67 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 The Town's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2016 and the two preceding years was as follows: Percentage of Year Annual Annual OPEB Net OPEB Ended OPEB Cost Cost Contributed Obligation 6/30/2016 $ 10,596,153 35% $ 56,156,846 6/30/2015 8,078,253 36% 49,304,725 6/30/2014 8,433,756 32% 44,144,715 At June 30, 2016, the Plan's membership consisted of the following: Current retirees, beneficiaries, and dependents............... 402 Current active members.............................................. 757 Total................................................................... 1159 Funded Status and Funding Progress—As of July 1, 2015, the actuarial accrued liability for benefits was $107.3 million, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $52.8 million, and the ratio of the UAAL to the covered payroll was 203.1 percent. The Town contributed $500,000 to the OPEB trust fund in 2016 and the net position totaled $518,110 at June 30, 2016. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions—Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members)and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the July 1, 2015, actuarial valuation, actuarial liabilities were determined using the projected unit credit cost method. The actuarial assumptions included a 4.5% investment return assumption, which is based on the expected yield on the assets of the Town, calculated based on the funded level of the plan at the valuation date, a 3% inflation rate assumption, and an annual health care trend rate of 9% initially, graded to 5%over 9 years. The UAAL is being amortized with a level percentage of pay over a 30 year period on an open basis. The remaining amortization period at June 30, 2016, is 30 years on an open basis. NOTE 13—COMMITMENTS The Town has entered into, or is planning to enter into, contracts totaling approximately$4.6 million for implementation of the facilities master plan. Town of North Andover, Massachusetts 68 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 The Town has entered into, or is planning to enter into, contracts totaling approximately$2.9 million for various other Town and School projects. NOTE 14—CONTINGENCIES The Town participates in a number of federal award programs. Although the grant programs have been audited in accordance with the provisions of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, these programs are still subject to financial and compliance audits. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although it is expected such amounts, if any, to be immaterial. Various legal actions and claims are pending against the Town. Litigation is subject to many uncertainties, and the outcome of individual litigated matters is not always predictable. Although the amount of liability, if any, at June 30, 2016, cannot be ascertained, management believes any resulting liability should not materially affect the financial position of the Town at June 30, 2016. NOTE 15—SUBSEQUENT EVENTS Management has evaluated subsequent events through November 22, 2016, which is the date the financial statements were available to be issued. NOTE 16— IMPLEMENTATION OF NEW GASB PRONOUNCEMENTS During 2016, the following GASB pronouncements were implemented: • GASB Statement#72, Fair Value Measurement and Application. Notes to the basic financial statements were changed to provide additional disclosure on fair value measurement. • The GASB issued Statement#73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. The provisions of this Statement are effective for 2016—except those provisions that address employers and governmental non-employer contributing entities for pensions that are not within the scope of Statement 68, which is required to be implemented in 2017. This pronouncement did not impact the basic financial statements. • GASB Statement#76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. This pronouncement did not impact the basic financial statements. • The GASB issued Statement#79, Certain External Investment Pools and Pool Participants. The basic financial statements and related notes were updated to be in compliance with this pronouncement. The following GASB pronouncements will be implemented in the future: • The GASB issued Statement#74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, which is required to be implemented in 2017. Town of North Andover, Massachusetts 69 Comprehensive Annual Financial Report Notes to Basic Financial Statements Year Ended June 30, 2016 • The GASB issued Statement#75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, which is required to be implemented in 2018. • The GASB issued Statement#77, Tax Abatement Disclosures, which is required to be implemented in 2017. • The GASB issued Statement#78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans, which is required to be implemented in 2017. • The GASB issued Statement#80, Blending Requirements for Certain Component Units—an amendment of GASB Statement#14, which is required to be implemented in 2017. • The GASB issued Statement#81, Irrevocable Split-Interest Agreements, which is required to be implemented in 2018. • The GASB issued Statement#82, Pension Issues—an amendment of GASB Statements#67, #68, and #73, which is required to be implemented in 2018. Management is currently assessing the impact the implementation of these pronouncements will have on the basic financial statements. Town of North Andover, Massachusetts 70 Comprehensive Annual Financial Report Required Supplementary Information Town of North Andover, Massachusetts 71 Comprehensive Annual Financial Report General Fund Budgetary Comparison Schedule The General Fund is the general operating fund of the Town. It is used to account for all the financial resources, except those required to be accounted for in another fund. Town of North Andover, Massachusetts 72 Comprehensive Annual Financial Report This page intentionally left blank. Town of North Andover, Massachusetts 73 Comprehensive Annual Financial Report GENERALFUND SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE- BUDGET AND ACTUAL YEAR ENDED JUNE 30,2016 Budgeted Amounts Amounts Current Year Carried forward Initial Original Final From Prior Year Budget Budget Budget REVENUES: Real estate and personal property taxes, net of tax refunds.......................................................... $ $ 66,553,734 $ 66,553,734 $ 66,553,734 Taxliens......................................................................... - - - Payments in lieu of taxes.................................................... 1,894,004 1,894,004 1,894,004 Motor vehicle and other excise taxes..................................... 4,195,000 4,195,000 4,195,000 Charges for services.......................................................... 880,000 880,000 880,000 Penalties and interest on taxes............................................ 318,000 318,000 318,000 Licenses and permits......................................................... 270,200 270,200 270,200 Fines and forfeitures.......................................................... 102,900 102,900 102,900 Intergovernmental............................................................. 10,479,129 10,479,129 10,479,129 Departmental and other...................................................... 1,137,230 1,137,230 1,137,230 Investment income............................................................ 121,000 121,000 121,000 TOTAL REVENUES.................................................. 85,951,197 85,951,197 85,951,197 EXPENDITURES: Current: General government...................................................... 30,433 2,355,457 2,385,890 2,385,890 Public safety................................................................ 52,287 10,432,514 10,484,801 10,484,801 Education.................................................................... 64,968 44,070,277 44,135,245 44,311,625 Public works................................................................ 99,169 4,482,958 4,582,127 4,582,127 Health and human services............................................. - 1,220,533 1,220,533 1,220,533 Culture and recreation.................................................... - 974,850 974,850 974,850 Support services........................................................... 43,664 1,564,360 1,608,024 1,608,024 Pension benefits........................................................... - 4,071,413 4,071,413 4,071,413 Property and liability insurance........................................ - 567,571 567,571 476,686 Employee benefits......................................................... 2,889 11,712,246 11,715,135 11,779,640 State and county charges................................................... - 431,900 431,900 431,900 Debt service: Principal...................................................................... 4,786,240 4,786,240 4,786,240 Interest....................................................................... - 1,072,278 1,072,278 1,072,278 TOTAL EXPENDITURES........................................... 293,410 87,742,597 88,036,007 88,186,007 EXCESS(DEFICIENCY)OF REVENUES OVER EXPENDITURES...................................................... (293,410) (1,791,400) (2,084,810) (2,234,810) OTHER FINANCING SOURCES(USES): Premium from issuance of bonds......................................... - - - Transfers in..................................................................... 1,551,391 1,551,391 1,701,391 Transfers out.................................................................... (1,027,412) (1,027,412) (1,027,412) TOTAL OTHER FINANCING SOURCES(USES)............ 523,979 523,979 673,979 NET CHANGE IN FUND BALANCE........................................... (293,410) (1,267,421) (1,560,831) (1,560,831) BUDGETARY FUND BALANCE,Beginning ofyear....................... - 10,178,307 10,178,307 10,178,307 BUDGETARY FUND BALANCE,End of year............................... $ (293,410) $ 8,910,886 $ 8,617,476 $ 8,617,476 See notes to required supplementary information. Town of North Andover, Massachusetts 74 Comprehensive Annual Financial Report Actual Amounts Variance Budgetary Carried Forward To Final Amounts To Next Year Budget $ 66,673,798 $ $ 120,064 746,632 746,632 1,868,503 (25,501) 5,412,047 1,217,047 959,662 79,662 517,616 199,616 179,217 (90,983) 59,352 (43,548) 10,840,580 361,451 2,217,551 1,080,321 93,173 (27,827) 89,568,131 3,616,934 2,312,208 9,970 63,712 10,223,053 40,750 220,998 43,925,696 379,517 6,412 4,316,626 151,380 114,121 1,135,702 408 84,423 938,853 1,325 34,672 1,577,395 10,617 20,012 4,071,413 - - 443,580 1,912 31,194 10,079,081 - 1,700,559 397,195 34,705 4,785,624 616 1,031,689 - 40,589 85,238,115 595,879 2,352,013 4,330,016 (595,879) 5,968,947 73,055 73,055 1,701,391 - (1,027,412) - 747,034 73,055 5,077,050 (595,879) 6,042,002 10,178,307 - $ 15,255,357 $ (595,879) $ 6,042,002 Town of North Andover, Massachusetts 75 Comprehensive Annual Financial Report Pension Plan Schedules The Schedule of the Town's Proportionate Share of the Net Pension Liability presents multi-year trend information on the Town's net pension liability and related ratios. The Schedule of Contributions presents multi-year trend information on the Town's required and actual contributions to the pension plan and related ratios. The Schedule of the Special Funding Amounts of the Net Pension Liability for the Massachusetts Teachers Contributory Retirement System presents multi-year trend information on the liability and expense assumed by the Commonwealth of Massachusetts on behalf of the City along with related ratios. These schedules are intended to present information for ten years. Until a ten year trend is compiled, information is presented for those years for which information is available. Town of North Andover, Massachusetts 76 Comprehensive Annual Financial Report SCHEDULE OF THE TOWN'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY ESSEX REGIONAL RETIREMENT SYSTEM December 31, December 31, 2014 2015 Town's proportion of the net pension liability(asset)...................... 14.655% 14.820% Town's proportionate share of the net pension liability(asset)......... $ 49,719,115 $ 53,845,435 Town's covered employee payroll (*).......................................... $ 18,809,056 $ 19,581,065 Net pension liability as a percentage of covered-employee payroll................................................................................ 264.34% 274.99% Plan fiduciary net position as a percentage of the total pension liability.............................................................. 52.27% 51.01% Note: this schedule is intended to present information for 10 years. Until a 10-year trend is compiled, information is presented for those years for which information is available. See notes to required supplementary information. Town of North Andover, Massachusetts 77 Comprehensive Annual Financial Report SCHEDULE OF TOWN CONTRIBUTIONS ESSEX REGIONAL RETIREMENT SYSTEM December 31, December 31, 2014 2015 Actuarially determined contribution.................................... $ 3,759,115 $ 4,071,413 Contributions in relation to the actuarially determined contribution............................................... 3,759,115 4,100,517 Contribution deficiency(excess).................................. $ - $ (29,104) Covered-employee payroll............................................... $ 18,809,056 $ 19,581,065 Contributions as a percentage of covered- employee payroll....................................................... 19.99% 20.94% Note: this schedule is intended to present information for 10 years. Until a 10-year trend is compiled, information is presented for those years for which information is available. See notes to required supplementary information. Town of North Andover, Massachusetts 78 Comprehensive Annual Financial Report SCHEDULE OF THE SPECIAL FUNDING AMOUNTS OF THE NET PENSION LIABILITY MASSACHUSETTS TEACHERS' RETIREMENT SYSTEM The Commonwealth of Massachusetts is a nonemployer contributor and is required by statute to make all actuarially determined employer contributions on behalf of the member employers which creates a special funding situation. Since the Town does not contribute directly to MTRS, there is no net pension liability to recognize. This schedule discloses the Commonwealth's 100% share of the collective net pension liability that is associated with the Town; the portion of the collective pension expense as both a revenue and pension expense recognized by the Town; and the Plan's fiduciary net position as a percentage of the total liability. Commonwealth's Town's Expense 100% Share of the and Revenue Net Pension Recognized for Plan Fiduciary Net Liability the Position as a Associated with Commonwealth's Percentage of the Fiscal Year the Town Support Total Liability 2015....................................... $ 65,734,720 $ 4,566,906 61.64% 2016....................................... 86,270,207 6,997,282 55.38% Note: this schedule is intended to present information for 10 years. Until a 10-year trend is compiled, information is presented for those years for which information is available. See notes to required supplementary information. Town of North Andover, Massachusetts 79 Required Supplementary Information This page intentionally left blank. Town of North Andover, Massachusetts 80 Comprehensive Annual Financial Report Other Postemployment Benefit Plan Schedules The Schedule of Funding progress compares, over time, the actuarial accrued liability for benefits with the actuarial value of accumulated plan assets. The Schedule of Employer Contributions compares, overtime, the annual required contributions to the actual contributions made. The Schedule of Actuarial Methods and Assumptions presents factors that significantly affect the identification of trends in the amounts reported. Town of North Andover, Massachusetts 81 Comprehensive Annual Financial Report OTHER POSTEMPLOYMENT BENEFIT PLAN SCHEDULE OF FUNDING PROGRESS AND SCHEDULE OF EMPLOYER CONTRIBUTIONS Schedule of Funding Progress Actuarial Accrued UAAL as a Actuarial Liability(AAL) Unfunded Percentage Actuarial Value of Projected AAL Funded Covered of Covered Valuation Assets Unit Credit (UAAL) Ratio Payroll Payroll Date (A) (B) (B-A) (A/B) (C) ((B-A)/C) 07/01/15 $ - $ 107,321,707 $ 107,321,707 0.0% $ 52,830,686 203.1% 07/01/13 - 86,605,373 86,605,373 0.0% 43,951,748 197.0% 07/01/12 - 100,068,844 100,068,844 0.0% 41,265,503 242.5% Schedule of Employer Contributions Annual Actual Year Required Contributions Percentage Ended Contribution Made Contributed 6/30/16 $ 10,478,966 $ 3,744,032 35.7% 6/30/15 7,973,330 2,918,243 36.6% 6/30/14 8,342,451 2,704,289 32.4% 6/30/13 10,674,564 3,252,186 30.5% 6/30/12 12,141,886 4,184,956 34.5% 6/30/11 12,441,414 3,839,408 30.9% See notes to required supplementary information. Town of North Andover, Massachusetts 82 Comprehensive Annual Financial Report OTHER POSTEMPLOYMENT BENEFIT PLAN ACTUARIAL METHODS AND ASSUMPTIONS Actuarial Methods: Valuation date................................................... 7/1/15 Actuarial cost method......................................... Projected Unit Credit Amortization method.......................................... Level percentage of pay over thirty years based on an open group. Remaining amortization period............................. 30 years, open basis Actuarial Assumptions: Investment rate of return..................................... 4.5% Inflation rate assumption..................................... 3.0% Medical/drug cost trend rate................................. 9.0% graded to 5.0% over 9 years Plan Membership: Current retirees, beneficiaries, and dependents....... 402 Current active members...................................... 757 Total............................................................... 1,159 See notes to required supplementary information. Town of North Andover, Massachusetts 83 Comprehensive Annual Financial Report Notes to Required Supplementary Information Year Ended June 30, 2016 NOTE A-STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY 1. Budgetary Information Municipal Law requires the Town to adopt a balanced budget that is approved by Town Meeting. 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 individual line item, adopts the expenditure budget by majority vote. Increases or transfers between departments subsequent to the approval of the annual budget, requires majority Town Meeting approval via a supplemental appropriation. The majority of the Town's appropriations are non-continuing which lapse at the end of each year. Others are continuing appropriations for which the governing body has authorized that an unspent balance from a prior year be carried forward and made available for spending in the current year. These carry forwards are included as part of the subsequent year's original budget. Generally, expenditures may not exceed the legal level of spending authorized for an appropriation account. However, the Town is statutorily required to pay debt service, regardless of whether such amounts are appropriated. Additionally, expenditures for disasters, natural or otherwise, and final judgments may exceed the level of spending authorized by majority vote of the Town Meeting. The Town adopts an annual budget for the general fund in conformity with the guidelines described above. The original 2016 approved budget for the general fund authorized $89.1 million in appropriations and other amounts to be raised. During the year, the Town approved supplemental appropriations totaling $150,000 for educational costs. The Town Accountant's office has the responsibility to ensure that budgetary control is maintained on an individual line item appropriation account basis. Budgetary control is exercised through the Town's accounting system. 2. Budgetary- GAAP Reconciliation For budgetary financial reporting purposes, the Uniform Municipal Accounting System basis of accounting (established by the Commonwealth of Massachusetts) 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 year ended June 30, 2016, is presented below: Net change in fund balance - budgetary basis.............................................. $ 5,077,050 Perspective difference: Activity of the stabilization funds recorded in the general fund for GAAP.......................................................................... 922,181 Basis of accounting differences: Net change in recording 60 day receipts.................................................... 96,839 Net change in recording tax refunds payable.............................................. (262,000) Recognition of revenue for on-behalf payments.......................................... 6,997,282 Recognition of expenditures for on-behalf payments.................................... (6,997,282) Net change in fund balance -GAAP basis................................................... $ 5,834,070 Town of North Andover, Massachusetts 84 Comprehensive Annual Financial Report Notes to Required Supplementary Information Year Ended June 30, 2016 NOTE B— PENSION PLAN A. Schedule of the Town's Proportionate Share of the Net Pension Liability The Schedule of the Town's Proportionate Share of the Net Pension Liability details the Town's allocated percentage of the net pension liability(asset), the Town's proportionate share of the net pension liability, and the Town's covered employee payroll. It also demonstrates the Town's net position as a percentage of the Town's pension liability and the Town's net pension liability as a percentage of the Town's covered payroll. B. Schedule of Town's Contributions Governmental employers are required to pay an annual appropriation as established by PERAC. The Town's appropriation includes the amounts to pay the pension portion of each member's retirement allowance, an amount to amortize the actuarially determined unfunded liability to zero in accordance with the system's funding schedule, and additional appropriations in accordance with adopted early retirement incentive programs. The Town's appropriations are payable on July 1 and January 1. The Town may choose to pay the entire appropriation in July at a discounted rate. Accordingly, actual Town contributions may be less than the "total appropriation". The pension fund appropriation is allocated to the Town based on covered payroll. C. Schedule of the Special Funding Amounts of the Net Pension Liabilities The Commonwealth of Massachusetts is a nonemployer contributor and is required by statute to make all actuarially determined employer contributions on behalf of the member employers which creates a special funding situation. Since the Town does not contribute directly to MTRS, there is no net pension liability to recognize. This schedule discloses the Commonwealth's 100% share of the collective net pension liability that is associated with the Town; the portion of the collective pension expense as both revenue and pension expense recognized by the Town; and the Plan's fiduciary net position as a percentage of the total liability. D. Changes of Assumptions- None E. Changes of Plan Provisions - None NOTE C—OTHER POSTEMPLOYMENT BENEFITS PLAN The Town administers a single-employer defined benefit healthcare plan ("The Retiree Health Plan"). The plan provides lifetime healthcare insurance for eligible retirees and their spouses through the Town's group health insurance plan, which covers both active and retired members. Additionally, retired teachers and their spouses receive health insurance through the Group Insurance Commission of the Commonwealth of Massachusetts (GIC). Each participating municipality is assessed for the governmental share of health and life insurance premiums paid on behalf of its teacher retirees by the state. The Town currently finances its other postemployment benefits (OPEB)on a pay-as-you-go basis. As a result, the funded ratio (actuarial value of assets expressed as a percentage of the actuarial accrued liability) is 0%. In accordance with Governmental Accounting Standards, the Town has recorded its OPEB cost equal to the actuarially determined annual required contribution (ARC)which includes the normal cost of providing benefits for the year and a component for the amortization of the total unfunded actuarial accrued liability of the plan. The Schedule of Funding Progress presents multi-year trend information which compares, over time, the actuarial accrued liability for benefits with the actuarial value of accumulated plan assets. The Schedule of Employer Contributions compares, overtime, the annual required contributions to the actual contributions made. Town of North Andover, Massachusetts 85 Comprehensive Annual Financial Report Notes to Required Supplementary Information Year Ended June 30, 2016 Projections of benefits for financial reporting purposes are based on the substantive plan and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The Schedule of Actuarial Methods and Assumptions presents factors that significantly affect the identification of trends in the amounts reported. Town of North Andover, Massachusetts 86 Comprehensive Annual Financial Report Combining and Individual Fund Statements Town of North Andover, Massachusetts 87 Comprehensive Annual Financial Report Nonmajor Governmental Funds Special Revenue Funds Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes. Municipal Federal and State Grants—This fund is used to account for grant funds received from state and federal governments which are designated for specific non-school related programs. Education Federal and State Grants—This fund is used to account for grant funds received from state and federal governments which are designated for specific education related programs. Receipts Reserved for Appropriation—This fund is used to account for receipts from a specific revenue source that by law is accounted for separately from the general fund and must be spent by appropriation. Municipal Revolving Funds—This fund is used to account for various municipal department's revolving funds established in accordance with MGL Chapter 44, Section 53E 'h and other applicable statutes. Education Revolving Funds—This fund is used to account for the school department's revolving funds established in accordance with MGL Chapter 44, Section 53E 'h and Chapter 71. School Lunch Funds—This fund is used to account for all cafeteria activities and is funded by user charges, federal and state grants, and commodities received. Other Special Revenue Funds—This fund is used to account for the activity of donated funds, gifts, and public safety details. Affordable Housing Trust Fund—This fund is used to account for activities relating to the preservation and creation of affordable housing in the Town. Other Trust Funds—This fund is used to account for activities of conservation and public safety trust funds. Capital Projects Funds Capital projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds and trust funds. Education Capital Projects—This fund is used to account for the acquisition of school related capital assets that are funded through both appropriations and borrowings. Town of North Andover, Massachusetts 88 Comprehensive Annual Financial Report This page intentionally left blank. Town of North Andover, Massachusetts 89 Comprehensive Annual Financial Report NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30,2016 Special Revenue Funds Municipal Education Receipts Municipal Federal and Federal and Reserved for Revolving State Grants State Grants Appropriation Funds ASSETS Cash and cash equivalents................................ $ 121,714 $ $ 149,799 $ 559,265 Investments.................................................... - - - Departmental and other................................ 120,538 Intergovernmental........................................ - 114,721 - TOTAL ASSETS............................................. $ 121,714 $ 114,721 $ 149,799 $ 679,803 LIABILITIES Warrants payable........................................ $ 169 $ 26,171 $ - $ 10,484 Due to other funds....................................... - 78,287 - TOTAL LIABILITIES......................................... 169 104,458 10,484 DEFERRED INFLOWS OF RESOURCES Unavailable revenues................................... - - - 120,538 FUND BALANCES Restricted.................................................. 121,545 10,263 149,799 548,781 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES,AND FUND BALANCES........... $ 121,714 $ 114,721 $ 149,799 $ 679,803 Town of North Andover, Massachusetts 90 Comprehensive Annual Financial Report Special Revenue Funds Education School Other Affordable Other Revolving Lunch Special Revenue Housing Trust Funds Funds Funds Trust Fund Funds Subtotal $ 684,779 $ 6,027 $ 1,218,614 $ 897,686 $ 194,929 $ 3,832,813 - - - - 738,615 738,615 - 120,538 - - - - - 114,721 $ 684,779 $ 6,027 $ 1,218,614 $ 897,686 $ 933,544 $ 4,806,687 $ 24,473 $ 5,685 $ 37,211 $ - $ - $ 104,193 - - - 78,287 24,473 5,685 37,211 182,480 - - - - - 120,538 660,306 342 1,181,403 897,686 933,544 4,503,669 $ 684,779 $ 6,027 $ 1,218,614 $ 897,686 $ 933,544 $ 4,806,687 (Continued) Town of North Andover, Massachusetts 91 Comprehensive Annual Financial Report NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET JUNE 30,2016 Capital Project Funds Total Education Nonmajor Capital Governmental Projects Funds ASSETS Cash and cash equivalents................................................... $ 49,974 $ 3,882,787 Investments...................................................................... - 738,615 Departmental and other................................................... 120,538 Intergovernmental.......................................................... - 114,721 TOTAL ASSETS................................................................ $ 49,974 $ 4,856,661 LIABILITIES Warrants payable........................................................... $ - $ 104,193 Due to other funds......................................................... 78,287 TOTAL LIABILITIES........................................................... 182,480 DEFERRED INFLOWS OF RESOURCES Unavailable revenues..................................................... - 120,538 FUND BALANCES Restricted..................................................................... 49,974 4,553,643 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES,AND FUND BALANCES............................. $ 49,974 $ 4,856,661 (Concluded) Town of North Andover, Massachusetts 92 Comprehensive Annual Financial Report This page intentionally left blank. Town of North Andover, Massachusetts 93 Comprehensive Annual Financial Report NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30,2016 Special Revenue Funds Municipal Education Receipts Municipal Federal and Federal and Reserved for Revolving State Grants State Grants Appropriation Funds REVENUES: Payments in lieu of taxes............................................ $ $ $ $ - Charges for services.................................................. 666,944 Licenses and permits................................................. 46,032 90,258 Intergovernmental..................................................... 192,860 3,461,333 - - Departmental and other.............................................. - - 18,499 Contributions............................................................ - 409,372 Investment income.................................................... 67 - TOTAL REVENUES........................................... 192,927 3,461,333 46,032 1,185,073 EXPENDITURES: Current: General government.............................................. - - 42,714 19,862 Public safety......................................................... 105,962 - - 758,937 Education............................................................ - 3,451,070 - Public works......................................................... - - 15,591 Human services.................................................... 46,892 404,380 Culture and recreation............................................ 24,388 - - TOTAL EXPENDITURES.................................... 177,242 3,451,070 42,714 1,198,770 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES............................... 15,685 10,263 3,318 (13,697) OTHER FINANCING SOURCES(USES): Issuance of bonds and notes....................................... - - - Transfers out............................................................ TOTAL OTHER FINANCING SOURCES(USES)..... NET CHANGE IN FUND BALANCES................................ 15,685 10,263 3,318 (13,697) FUND BALANCES AT BEGINNING OF YEAR.................... 105,860 146,481 562,478 FUND BALANCES AT END OF YEAR.............................. $ 121,545 $ 10,263 $ 149,799 $ 548,781 Town of North Andover, Massachusetts 94 Comprehensive Annual Financial Report Special Revenue Funds Education School Other Affordable Other Revolving Lunch Special Revenue Housing Trust Funds Funds Funds Trust Fund Funds Sub-total $ - $ - $ 144,095 $ $ $ 144,095 2,354,722 1,117,967 - 4,139,633 - - - 136,290 8,213 291,536 100,000 4,053,942 55,122 6,973 99,000 179,594 161,456 128,493 - 699,321 - - - 5,121 71,254 76,442 2,579,513 1,117,967 571,097 204,121 71,254 9,429,317 - - 107,203 - - 169,779 - - 13,435 101,058 979,392 2,217,789 1,152,739 124,465 - 6,946,063 - - 37,333 - 52,924 25,701 338,084 - 815,057 - - 27,078 39,429 90,895 2,217,789 1,152,739 335,215 338,084 140,487 9,054,110 361,724 (34,772) 235,882 (133,963) (69,233) 375,207 (144,892) (144,892) - (144,892) (144,892) 361,724 (34,772) 90,990 (133,963) (69,233) 230,315 298,582 35,114 1,090,413 1,031,649 1,002,777 4,273,354 $ 660,306 $ 342 $ 1,181,403 $ 897,686 $ 933,544 $ 4,503,669 (Continued) Town of North Andover, Massachusetts 95 Comprehensive Annual Financial Report NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30,2016 Capital Project Funds Total Education Nonmajor Capital Governmental Projects Funds REVENUES: Payments in lieu of taxes....................................................................$ $ 144,095 Charges for services.......................................................................... 4,139,633 Licenses and permits......................................................................... 136,290 Intergovernmental............................................................................. 4,053,942 Departmental and other...................................................................... 179,594 Contributions.................................................................................... 699,321 Investment income............................................................................ 76,442 TOTAL REVENUES................................................................... 9,429,317 EXPENDITURES: Current: General government...................................................................... 169,779 Public safety................................................................................. 979,392 Education.................................................................................... 293,155 7,239,218 Public works................................................................................. - 52,924 Human services............................................................................ 815,057 Culture and recreation.................................................................... - 90,895 TOTAL EXPENDITURES............................................................ 293,155 9,347,265 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)EXPENDITURES....................................................... (293,155) 82,052 OTHER FINANCING SOURCES(USES): Issuance of bonds and notes............................................................... 304,881 304,881 Transfers out.................................................................................... - (144,892) TOTAL OTHER FINANCING SOURCES(USES)............................. 304,881 159,989 NET CHANGE IN FUND BALANCES........................................................ 11,726 242,041 FUND BALANCES AT BEGINNING OF YEAR............................................ 38,248 4,311,602 FUND BALANCES AT END OF YEAR......................................................$ 49,974 $ 4,553,643 (Concluded) Town of North Andover, Massachusetts 96 Comprehensive Annual Financial Report Agency Fund This fund is used to account for assets held by the Town in a trustee capacity or as an agent for individuals, private organizations, and other governmental units. The majority of the assets in the agency fund relate to conservation, highway and planning board bid deposits as well as student activity deposits. Town of North Andover, Massachusetts 97 Comprehensive Annual Financial Report AGENCYFUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES YEAR ENDED JUNE 30, 2016 Beginning End of Year Additions Deletions of Year ASSETS CURRENT: Cash and cash equivalents................... $ 3,773,141 $ 6,258,275 $ (6,059,907) $ 3,971,509 LIABILITIES Warrants payable................................$ 822 $ - $ (822) $ - Guaranteed deposits........................... 3,285,889 3,817,783 (3,730,957) 3,372,715 Other deposits.................................... 236,612 397,522 (394,486) 239,648 Student activities................................. 249,818 2,042,970 (1,933,642) 359,146 TOTAL LIABILITIES................................$ 3,773,141 $ 6,258,275 $ (6,059,907) $ 3,971,509 Town of North Andover, Massachusetts 98 Comprehensive Annual Financial Report Statistics Section i rt r Stevens Memorial Library Statistical Section This part of the comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the Town's overall financial health. Financial Trends • These schedules contain trend information to help the reader understand how the Town's financial performance and well-being have changed over time. Revenue Capacity • These schedules contain information to help the reader assess the Town's most significant local revenue source, the property tax. Debt Capacity • These schedules present information to help the reader assess the affordability of the Town's current levels of outstanding debt and the Town's ability to issue additional debt in the future. Demographic and Economic Information • These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town's financial activities take place. Operating Information • These schedules contain service and infrastructure data to help the reader understand how the information in the Town's financial report relates to the services the Town provides and the activities it performs. SOURCES: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. Town of North Andover, Massachusetts 99 Comprehensive Annual Financial Report Net Positions By Component Last Ten Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Governmental activities Net investment in capital assets......................$ 96,211,743 $ 98,468,392 $ 98,988,296 $ 100,868,439 $ 102,754,256 $ 105,155,466 $ 106,453,985 $ 106,117,880 $ 108,245,924 $ 107,911,523 Restricted................................................... 5,327,670 8,491,986 8,753,852 6,539,198 7,574,263 8,225,177 8,207,148 9,444,583 9,473,982 8,704,385 Unrestricted................................................ 9,472,994 8,427,511 3,498,800 (2,610,402) (11,696,666) (17,137,468) (20,131,341) (20,876,449) (71,682,791) (73,466,011) Total governmental activities net position..................$ 111,012,407 $ 115,387,889 $ 111,240,948 $ 104,797,235 $ 98,631,853 $ 96,243,175 $ 94,529,792 $ 94,686,014 $ 46,037,115 $ 43,149,897 Business-type activities Net investment in capital assets...................... 28,849,317 29,977,126 32,209,814 32,898,415 36,443,088 37,264,739 40,243,610 42,012,200 43,397,442 43,893,005 Unrestricted................................................ 2,407,297 3,278,409 1,616,637 3,608,473 2,479,721 4,418,053 4,273,747 5,533,117 5,017,844 8,137,954 Total business-type activities net position.................$ 31,256,614 $ 33,255,535 $ 33,826,451 $ 36,506,888 $ 38,922,809 $ 41,682,792 $ 44,517,357 $ 47,545,317 $ 48,415,286 $ 52,030,959 Primary government Net investment in capital assets...................... 125,061,060 128,445,518 131,198,110 133,766,854 139,197,344 142,420,205 146,697,595 148,130,080 151,643,366 151,804,528 Restricted................................................... 5,327,670 8,491,986 8,753,852 6,539,198 7,574,263 8,225,177 8,207,148 9,444,583 8,473,982 8,704,385 Unrestricted................................................ 11,880,291 11,705,920 5,115,437 998,071 (9,216,945) (12,719,415) (15,857,594) (15,343,332) (66,664,947) (65,328,057) Total primary government net position..................... $ 142,269,021 $ 148,643,424 $ 145,067,399 $ 141,304,123 $ 137,554,662 $ 137,925,967 $ 139,047,149 $ 142,231,331 $ 93,452,401 $ 95,180,856 Town of North Andover, Massachusetts 100 Comprehensive Annual Financial Report Changes in Net Positions Last Ten Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Expenses Governmental activities: General government............................................. $ 3,299,710 $ 3,531,917 $ 4,123,262 $ 4,021,067 $ 4,559,013 $ 3,794,618 $ 3,665,170 $ 3,685,321 $ 3,682,360 $ 4,239,113 Public safety....................................................... 12,241,105 12,929,068 14,509,962 14,654,536 15,134,400 14,825,939 15,017,342 15,242,286 15,498,592 16,423,843 Education........................................................... 52,015,222 57,679,448 64,495,293 66,409,142 70,860,920 69,540,668 70,340,318 70,591,546 69,182,129 74,777,232 Public works........................................................ 5,496,347 6,097,048 7,382,073 6,227,974 6,485,227 5,715,405 6,963,935 6,719,915 7,659,238 8,202,158 Health and human services.................................... 1,697,653 1,766,854 2,041,742 2,054,742 2,080,778 2,146,195 2,162,118 2,228,573 2,420,603 2,706,412 Culture and recreation........................................... 1,931,878 1,953,619 2,052,225 2,109,924 2,192,035 2,015,651 1,679,351 1,453,223 2,530,792 2,636,723 Support services.................................................. - - - - - 1,266,046 1,281,204 1,444,333 1,914,306 1,834,555 Interest.............................................................. 2,720,892 2,178,255 1,202,891 1,506,325 1,370,287 1,354,251 1,192,955 1,025,900 1,004,030 970,827 Total government activities expenses.............................. 79,402,807 86,136,209 95,807,448 96,983,710 102,682,660 100,658,773 102,302,393 102,391,097 103,892,050 111,790,863 Business-type activities: Water................................................................. 2,929,823 3,222,251 3,591,641 2,972,303 3,188,559 3,180,102 3,033,371 3,200,373 3,463,307 3,236,724 Sewer................................................................ 3,418,575 3,423,734 3,878,647 3,644,464 3,877,585 3,572,401 3,517,562 3,238,708 3,481,106 3,286,077 Osgood Hill......................................................... 515,640 474,413 381,463 259,595 325,092 295,606 332,189 344,001 386,961 383,508 Total business-type activities expenses............................ 6,864,038 7,120,398 7,851,751 6,876,362 7,391,236 7,048,109 6,883,122 6,783,082 7,331,374 6,906,309 Total primary government expenses................................ $ 86,266,845 $ 93,256,607 $ 103,659,199 $ 103,860,072 $ 110,073,896 $ 107,706,882 $ 109,185,515 $ 109,174,179 111,223,424 118,697,172 Program Revenues Governmental activities: Public safety charges for services............................ $ 2,609,422 $ 3,028,126 $ 2,682,759 $ 2,266,216 $ 2,536,254 $ 2,851,539 $ 2,798,269 $ 2,495,472 2,943,349 3,548,098 Education charges for services............................... 2,137,410 3,328,079 3,204,499 3,229,655 3,165,842 3,443,280 3,409,555 3,648,664 3,304,534 3,482,776 Other charges for services..................................... 1,699,407 982,438 670,781 716,819 862,199 875,080 767,042 866,165 823,967 839,966 Education operating grants and contributions............. 12,305,566 13,281,265 14,454,951 15,206,781 17,480,918 16,720,192 17,289,331 17,983,068 15,410,239 18,949,612 Other operating grants and contributions................... 1,854,031 3,213,290 2,048,360 1,241,709 1,372,095 1,489,093 1,302,947 1,010,960 1,220,657 1,381,661 Education capital grants and contributions................. 2,985,922 - - - - 960,154 696,209 30,932 - - Public works capital grants and contributions............. 287,274 975,861 2,235,219 455,022 1,026,557 - 1,449,134 949,933 497,030 1,064,924 Other capital grants and contributions....................... - - 7,792 - 829,740 579,896 411,518 826,907 583,619 472,256 Total government activities program revenues.................... 23,879,032 24,809,059 25,304,361 23,116,202 27,273,605 26,919,234 28,124,005 27,812,101 24,783,395 29,739,293 Business-type activities: Water charges for services.................................... 5,174,840 5,670,444 4,541,749 5,327,867 5,750,569 5,436,873 5,387,685 5,237,290 5,550,719 5,977,800 Sewer charges for services.................................... 3,425,722 3,873,561 4,294,388 4,682,139 4,797,301 5,015,808 4,964,813 4,945,962 5,014,766 5,265,490 Osgood Hill charges for services............................. 471,173 257,694 193,103 285,188 239,200 280,068 335,770 337,551 482,778 526,754 Other operating grants and contributions................... 227,214 252,266 201,398 177,861 141,724 234,388 127,545 122,529 112,149 37,003 Osgood Hill capital grants and contributions............... - - - - - - - - - 121,434 Total business-type activities program revenues................. 9,298,949 10,053,965 9,230,638 10,473,055 10,928,794 10,967,137 10,815,813 10,643,332 11,160,412 11,928,481 Total primary government program revenues..................... $ 33,177,981 $ 34,863,024 $ 34,534,999 $ 33,589,257 $ 38,202,399 $ 37,886,371 $ 38,939,818 $ 38,455,433 35,943,807 41,667,774 Net(Expense)/Program Revenue Governmental activities................................................. $ (55,523,775) $ (61,327,150) $ (70,503,087) $ (73,867,508) $ (75,409,055) $ (73,739,539) $ (74,178,388) $ (74,578,996) (79,108,655) (82,051,570) Business-type activities................................................ 2,434,911 2,933,567 1,378,887 3,596,693 3,537,558 3,919,028 3,932,691 3,860,250 3,829,038 5,022,172 Total primary government net(expense)/program revenue... $ (53,088,864) $ (58,393,583) $ (69,124,200) $ (70,270,815) $ (71,871,497) $ (69,820,511) $ (70,245,697) $ (70,718,746) (75,279,617) (77,029,398) (Continued) Town of North Andover, Massachusetts 101 Comprehensive Annual Financial Report Changes in Net Positions Last Ten Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 General Revenues and other Changes in Net Positions Governmental activities: Real estate and personal property taxes, net of tax refunds payable.................................... $ 49,146,112 $ 52,131,731 $ 54,443,171 $ 55,855,205 $ 57,726,043 $ 60,060,304 $ 60,284,114 $ 62,195,623 63,877,139 66,710,623 Tax liens............................................................. 290,057 293,055 85,265 908,371 576,219 355,176 401,204 570,085 698,405 206,966 Motor vehicle and other excise taxes........................ 3,432,710 4,148,303 4,033,853 3,165,811 3,748,360 3,923,189 4,462,710 4,673,160 4,957,476 5,174,947 Penalties and interest on taxes............................... 305,539 292,512 307,534 277,662 223,861 258,471 316,019 501,903 390,837 517,616 Payment in lieu of taxes......................................... 1,623,750 1,704,677 1,815,176 1,838,821 1,867,094 1,903,510 1,974,424 2,008,020 1,975,835 2,012,598 Community preservation surcharge.......................... 1,249,235 1,240,697 511,703 1,263,566 1,312,401 1,363,553 1,390,831 1,433,013 1,466,141 1,532,548 Grants and contributions not restricted to specific programs............................................... 3,589,640 4,071,414 3,847,997 2,748,904 2,222,543 2,133,066 2,338,662 2,279,506 2,368,601 2,351,147 Unrestricted investment income.............................. 1,136,035 888,152 504,476 449,199 445,515 194,547 198,915 241,618 206,490 251,408 Gain on sale of capital assets................................. 1,770 - - - - - - - 175,692 - Transfers............................................................ 819,980 931,091 807,971 916,256 1,121,637 1,159,045 1,098,126 832,290 1,345,945 1,406,499 Total governmental activities.......................................... 61,594,828 65,701,632 66,357,146 67,423,795 69,243,673 71,350,861 72,465,005 74,735,218 77,462,561 80,164,352 Business-type activities: Transfers............................................................ (819,980) (931,091) (807,971) (916,256) (1,121,637) (1,159,045) (1,098,126) (832,290) (1,345,945) (1,406,499) Total primary government general revenues and other changes in net positions........................................ $ 60,774,848 $ 64,770,541 $ 65,549,175 $ 66,507,539 $ 68,122,036 $ 70,191,816 $ 71,366,879 $ 73,902,928 76,116,616 78,757,853 Changes in Net Position Governmental activities................................................. $ 6,071,053 $ 4,374,482 $ (4,145,941) $ (6,443,713) $ (6,165,382) $ (2,388,678) $ (1,713,383) $ 156,222 (1,646,094) (1,887,218) Business-type activities................................................ 1,614,931 2,002,476 570,916 2,680,437 2,415,921 2,759,983 2,834,565 3,027,960 2,483,093 3,615,673 Total primary government changes in net positions............. $ 7,685,984 $ 6,376,958 $ (3,575,025) $ (3,763,276) $ (3,749,461) $ 371,305 $ 1,121,182 $ 3,184,182 836,999 1,728,455 * In 2012,the Town consolidated support services into a separate functional line-item. Prior to 2012,support services were blended within the general government functional line-item. (Concluded) Town of North Andover, Massachusetts 102 Comprehensive Annual Financial Report Fund Balances,Governmental Funds Last Ten Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 General Fund Reserved..................................... $ 1,670,515 $ 1,927,584 $ 1,422,665 $ 1,369,510 $ $ $ $ $ $ Unreserved................................... 2,799,586 1,684,514 168,993 658,689 Restricted.................................... - - - - 1,033,892 964,966 896,040 762,324 693,398 624,472 Assigned...................................... 184,314 411,861 173,989 366,486 293,410 1,120,696 Unassigned.................................. 3,455,866 5,412,549 6,618,601 8,981,055 12,953,601 18,029,311 Total general fund.............................. $ 4,470,101 $ 3,612,098 $ 1,591,658 $ 2,028,199 $ 4,674,072 $ 6,789,376 $ 7,688,630 $ 10,109,865 $ 13,940,409 $ 19,774,479 All Other Governmental Funds Reserved..................................... $ 584,112 $ 1,619,701 $ 29,028 $ 29,111 $ - $ - $ - $ - $ - $ - Unreserved,reported in: Special revenue funds............... 5,607,342 6,917,728 9,953,042 9,055,517 Capital projects funds............... 3,369,779 1,532,240 2,107,039 3,163,123 Permanent funds..................... 533,644 531,528 447,756 459,616 - - - - - - Restricted.................................... - - - - 10,344,631 11,744,070 9,735,016 14,050,760 15,212,059 14,794,417 Unassigned.................................. - - (193,926) - - - Total all other governmental funds......... $ 10,094,877 $ 10,601,197 $ 12,536,865 $ 12,707,367 $ 10,344,631 $ 11,744,070 $ 9,541,090 $ 14,050,760 $ 15,212,059 $ 14,794,417 The Town implemented GASB 54 in year 2011,fund balances prior to year 2011 have been reported in the pre-GASB 54 format. Town of North Andover, Massachusetts 103 Comprehensive Annual Financial Report Changes in Fund Balances,Governmental Funds Last Ten Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Revenues: Real estate and personal property taxes, net of tax refunds................................................ $ 48,777,621 $ 51,648,818 $ 54,496,257 $ 56,703,210 $ 57,423,755 $ 59,803,225 $ 60,311,614 $ 61,992,217 $ 64,109,047 $ 66,508,637 Motor vehicle and other excise taxes........................... 3,477,581 4,068,018 3,727,728 3,515,205 3,790,515 3,917,020 4,260,419 4,866,192 4,627,106 5,412,047 Intergovernmental................................................... 30,272,942 30,502,211 20,016,089 19,834,322 21,826,135 22,241,592 22,474,244 22,294,860 20,433,361 23,481,959 Departmental and other............................................ 10,020,527 11,396,570 11,108,856 10,602,746 11,104,508 11,466,482 11,500,455 12,439,870 12,027,264 13,441,661 Interest income....................................................... 1,343,385 1,062,356 521,278 516,898 445,515 194,547 198,915 241,618 206,490 256,529 Total Revenue................................................ 93,892,056 98,677,973 89,870,208 91,172,381 94,590,428 97,622,866 98,745,647 101,834,757 101,403,268 109,100,833 Expenditures: General government................................................ 4,255,964 3,262,011 2,949,377 2,710,315 3,102,753 2,864,390 2,317,174 5,850,866 8,855,710 4,544,476 Public safety........................................................... 9,209,888 10,619,206 12,133,006 11,844,721 13,085,968 9,430,923 10,115,031 10,317,017 10,303,669 14,486,844 Education.............................................................. 37,410,950 42,270,522 45,280,664 44,325,754 46,382,790 45,775,410 48,191,658 46,902,298 50,163,628 51,297,359 Public works........................................................... 4,577,335 6,541,888 6,238,578 5,669,065 5,405,654 5,409,310 6,024,483 6,189,779 7,378,944 6,553,091 Health and human services....................................... 1,098,927 1,182,780 1,664,490 1,363,830 1,347,082 1,428,586 1,462,526 1,568,456 1,693,064 1,950,759 Culture and recreation.............................................. 1,468,542 1,544,228 1,642,496 3,903,682 2,325,296 2,212,683 2,995,960 2,139,225 3,267,785 2,659,675 Support services..................................................... - - - - - 1,039,174 1,101,281 1,342,321 1,793,051 1,596,393 Pension benefits...................................................... 7,212,850 7,978,462 8,632,667 8,959,530 9,537,508 9,969,374 10,452,145 10,837,358 8,326,021 11,068,695 Property and liability insurance................................... 415,406 322,592 321,675 294,085 276,258 271,059 290,896 301,405 293,178 443,580 Employee benefits................................................... 7,957,488 8,890,836 9,389,284 7,636,441 9,415,481 11,100,080 11,250,204 11,599,341 9,663,907 10,079,081 State and county charges.......................................... 2,170,566 2,200,498 2,267,181 2,307,758 2,115,484 1,813,511 1,788,615 1,254,988 436,946 397,195 Debt service: Principal............................................................. 6,588,374 6,094,566 6,362,702 5,348,471 5,574,681 5,995,123 5,219,330 5,366,746 4,583,967 4,785,624 Principal-current refunding.................................... - - - - - - - 4,168,651 - - Interest.............................................................. 2,742,094 2,180,794 1,275,869 1,299,581 1,352,790 1,254,252 1,114,259 957,719 980,877 1,031,689 Total Expenditures................................................... 85,108,384 93,088,383 98,157,989 95,663,233 99,921,745 98,563,875 102,323,562 108,796,170 107,740,747 110,894,461 Excess of revenues over(under)expenditures............... 8,783,672 5,589,590 (8,287,781) (4,490,852) (5,331,317) (941,009) (3,577,915) (6,961,413) (6,337,479) (1,793,628) Other Financing Sources(Uses) Issuance of bonds................................................... 129,000 1,486,026 7,122,134 4,171,222 4,365,353 3,255,348 926,199 8,181,497 8,365,000 5,759,365 Issuance of refunding bonds...................................... - 12,500,000 - - - - - 4,010,000 68,526 1,695,000 Premium from issuance of bonds................................ 3,726 12,615 202,338 10,417 127,464 41,359 24,215 143,149 291,987 73,055 Premium from issuance of refunding bonds................... - 182,792 - - - - - 218,946 - - Payments to refunded bond escrow agent.................... - (21,053,797) - - - - - - (68,427) (1,723,863) Sale of capital assets............................................... 1,770 - - - - - - - 300,041 - Transfers in............................................................ 1,393,334 2,555,701 1,100,814 3,121,748 1,322,517 1,819,046 1,556,007 1,598,653 2,800,148 1,551,391 Transfers out.......................................................... (573,354) (1,624,610) (222,277) (2,205,492) (200,880) (660,001) (232,232) (259,927) (427,953) (144,892) Total other financing sources(uses)................................ 954,476 (5,941,273) 8,203,009 5,097,895 5,614,454 4,455,752 2,274,189 13,892,318 11,329,322 7,210,056 Net change in fund balance........................................... $ 9,738,148 $ (351,683) $ (84,772) 607,043 $ 283,137 $ 3,514,743 $ (1,303,726) $ 6,930,905 $ 4,991,843 $ 5,416,428 Debt service as a percentage ofnoncapital expenditures..... 11.23% 9.23% 8.17% 7.49% 7.45% 7.71% 6.59% 6.44% 5.74% 5.69% * In 2012,the Town consolidated support services into a separate functional line-item. Prior to 2012,support services were blended within the general government functional line-item. Town of North Andover, Massachusetts 104 Comprehensive Annual Financial Report Assessed Value and Actual Value of Taxable Property by Classification and Tax Rates Last Ten Years Assessed and Actual Values and Tax Rates Total Total Total Residential Residential Commercial Industrial Personal Commercial Commercial Direct Town Year Value Tax Rate Value Value Property Value Tax Rate Rate Value 2007 (1) $ 4,113,245,116 $ 10.45 $ 286,085,303 $ 174,371,400 $ 77,931,290 $ 538,387,993 $ 12.63 $ 10.70 $ 4,651,633,109 2008 $ 4,001,584,703 $ 11.40 $ 283,789,944 $ 167,088,600 $ 82,002,220 $ 532,880,764 $ 13.78 $ 11.68 $ 4,534,465,467 2009 $ 3,910,976,509 $ 11.76 $ 280,591,491 $ 163,741,100 $ 99,814,430 $ 544,147,021 $ 16.69 $ 12.36 $ 4,455,123,530 2010 (1) $ 3,670,178,348 $ 12.74 $ 286,494,949 $ 168,247,500 $ 108,138,260 $ 562,880,709 $ 17.69 $ 13.40 $ 4,233,059,057 2011 $ 3,563,558,199 $ 13.52 $ 283,140,851 $ 162,024,800 $ 112,827,760 $ 557,993,411 $ 18.63 $ 14.21 $ 4,121,551,610 2012 $ 3,586,332,274 $ 13.92 $ 278,839,111 $ 158,456,800 $ 121,400,010 $ 558,695,921 $ 19.16 $ 14.63 $ 4,145,028,195 2013 (1) $ 3,713,065,744 $ 13.72 $ 278,124,243 $ 161,446,600 $ 116,997,715 $ 556,568,558 $ 18.85 $ 14.39 $ 4,269,634,302 2014 $ 3,652,658,906 $ 14.41 $ 276,804,384 $ 155,524,200 $ 123,301,890 $ 555,630,474 $ 19.45 $ 15.08 $ 4,208,289,380 2015 $ 3,745,570,341 $ 14.39 $ 277,858,269 $ 147,834,600 $ 123,012,880 $ 548,705,749 $ 20.29 $ 15.14 $ 4,294,276,090 2016 $ 3,897,630,578 $ 14.27 $ 292,994,947 $ 147,568,900 $ 120,842,040 $ 561,405,887 $ 20.47 $ 15.05 $ 4,459,036,465 Total Assessed Value by Classification Total Assessed Value by Classification Year Ended June 30,2015 Year Ended June 30,2016 3%3% 3%3% 40 40 ®Residential ■Commercial ❑Industrial ❑Personal Property ®Residential -Commercial ❑Industrial -Personal Property Commercial Value as % of Total Value 18.0% 16.0% 14.0% 12.0% 10.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (1)Revaluation year. Source: Assessor's Department,Town of North Andover All property in the Commonwealth of Massachusetts is assessed at 100%of fair cash value. Note:Chapter 59,Section 21C of the Massachusetts General Laws,known as"Proposition 2 1/2",imposes 2 separate limits on the annual tax levy of the Town. The primary limitation is that the tax levy cannot exceed 2 1/2 percent of the full and fair cash value. The secondary limitation is that the tax levy cannot exceed the maximum levy limit for the preceding year as determined by the State Commissioner of Revenue by more than 2 1/2 percent,subject to an exception for property added to the tax rolls and for certain substantial valuation increases other than as part of a general revaluation. The secondary limit may be exceeded in any year by a majority vote of the voters,however it cannot exceed the primary limitation. Town of North Andover, Massachusetts 105 Comprehensive Annual Financial Report Principal Taxpayers Current Year and Nine Years Ago 2016 2007 Percentage of Percentage of Total Taxable Total Taxable Property Assessed Assessed Assessed Assessed Name Type Valuation Rank Value Valuation Rank Value AIMCO(Royal Crest) Apartments $ 56,770,150 1 1.38% $ 59,984,180 2 1.33% National Grid Utility $ 45,428,040 2 1.10% $ - 0.00% Edgewood Retirement Community Congregate Care/Nursing Home $ 40,876,250 3 0.99% $ 27,399,980 4 0.61% SHP IV North Andover Assisted Living $ 12,546,200 8 0.30% $ - 0.00% Delta/Delta Realty Trust Shopping Mall $ 20,519,640 5 0.50% $ 15,811,930 6 0.35% Ozzy Properties Office $ 17,681,600 6 0.43% $ 20,742,200 5 0.46% Wood Ridge Homes Co-op Housing $ 13,613,910 7 0.33% $ 10,958,890 7 0.24% RCG North Andover Mills Office $ 28,091,600 4 0.68% $ - 0.00% Eaglewood Properties Retail $ 11,232,700 9 0.27% $ 0.00% 700 Chickering Road Assisted Living $ 9,328,800 10 0.23% $ - 0.00% NAM Partners Limited Office/Manufacturing $ - - $ 61,272,900 1 1.36% Mass Electric Utility $ $ 27,542,180 3 0.61% Jefferson Equity Partners Office Par $ $ 9,835,020 8 0.22% BF No,Andover Office Park Office $ $ 9,763,400 9 0.22% D&L Andover Prop.LLC Office Park $ - $ 7,044,400 10 0.16% Totals $256,088,890 6.21% $250,355,080 5.57% Source: Official Statement for Sale of Bonds Town of North Andover, Massachusetts 106 Comprehensive Annual Financial Report Property Tax Levies and Collections Last Ten Years Percent of (2) Less (2) First Year Percent of Delinquent Total Total Tax Total Abatements& Net Current Net Levy Tax Tax Collections to Year Tax Levy Exemptions Tax Levy Tax Collections Collected Collections Collections Net Tax Levy 2007 (1) $ 49,783,252 $ 461,962 $ 49,321,290 $ 48,595,456 98.53% $ 629,876 $ 49,225,332 99.81% 2008 $ 52,961,163 $ 353,952 $ 52,607,211 $ 51,348,979 97.61% $ 981,762 $ 52,330,741 99.47% 2009 $ 55,074,898 $ 319,197 $ 54,755,701 $ 53,651,783 97.98% $ 677,142 $ 54,328,925 99.22% 2010 (1) $ 56,715,432 $ 371,669 $ 56,343,763 $ 55,671,800 98.81% $ 179,361 $ 55,851,161 99.13% 2011 $ 58,574,724 $ 316,384 $ 58,258,340 $ 57,441,580 98.60% $ 368,558 $ 57,810,138 99.23% 2012 $ 60,626,359 $ 459,973 $ 60,166,386 $ 59,454,694 98.82% $ 491,295 $ 59,945,989 99.63% 2013 (1) $ 61,434,579 $ 629,707 $ 60,804,872 $ 60,215,656 99.03% $ 294,902 $ 60,510,558 99.52% 2014 $ 63,441,828 $ 556,638 $ 62,885,189 $ 62,596,596 99.54% $ 288,593 $ 62,885,189 100.00% 2015 $ 65,031,997 $ 530,315 $ 64,501,682 $ 63,940,660 99.13% $ 300,581 $ 64,241,241 99.60% 2016 $ 67,111,167 $ 557,433 $ 66,553,734 $ 66,233,113 99.52% $ - $ 66,233,113 99.52% Real Estate Tax Levies vs.First Year Collections Last Ten Years 110,000,000 100,000,000 90,000,000 80,000,000 70,000,000 c 60,000,000 0 =_ 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Real Estate Tax Levy ■First Year Current Tax Collections (1)Revaluation year. (2)Includes tax liens. Source:Assessor's Department,Town of North Andover Town of North Andover, Massachusetts 107 Comprehensive Annual Financial Report Ratios of Outstanding Debt and General Bonded Debt Last Ten Years Governmental Activities General Less Net General Percentage Percentage U.S.Census Personal Assessed Obligation Amounts Obligation Per of Personal of Assessed Year Population Income Value Bonds Available Bonds Capita Income Value 2007 27,412 $ 1,102,755,288 $ 4,651,633,109 $ 50,577,395 $ $ 50,577,395 $ 1,845 4.59% 1.09% 2008 27,566 $ 1,131,129,553 $ 4,534,465,467 $ 38,148,855 $ $ 38,148,855 $ 1,384 3.37% 0.84% 2009 27,753 $ 1,161,578,875 $ 4,455,123,530 $ 38,908,287 $ $ 38,908,287 $ 1,402 3.35% 0.87% 2010 28,352 $ 1,210,382,515 $ 4,233,059,057 $ 37,731,038 $ $ 37,731,038 $ 1,331 3.12% 0.89% 2011 28,352 $ 1,234,590,165 $ 4,121,551,610 $ 36,521,710 $ $ 36,521,710 $ 1,288 2.96% 0.89% 2012 28,352 $ 1,259,281,969 $ 4,145,028,195 $ 33,781,935 $ $ 33,781,935 $ 1,192 2.68% 0.81% 2013 28,352 $ 1,284,467,608 $ 4,269,634,302 $ 29,488,804 $ $ 29,488,804 $ 1,040 2.30% 0.69% 2014 28,422 $ 1,313,380,620 $ 4,208,289,380 $ 32,506,999 $ $ 32,506,999 $ 1,144 2.48% 0.77% 2015 28,510 $ 1,343,818,850 $ 4,294,276,090 $ 36,532,492 $ $ 36,532,492 $ 1,281 2.72% 0.85% 2016 29,217 $ 1,404,686,161 $ 4,459,036,465 $ 37,587,126 $ $ 37,587,126 $ 1,286 2.68% 0.84% Business-type Activities(1) Total Primary Government General Total Percentage Percentage Obligation Net Debt Per of Personal of Assessed Year Bonds Outstanding Capita Income Value 2007 $ 30,818,817 $ 81,396,212 $ 2,969 7.38% 1.75% 2008 $ 35,338,363 $ 73,487,218 $ 2,666 6.50% 1.62% 2009 $ 32,424,871 $ 71,333,158 $ 2,570 6.14% 1.60% 2010 $ 30,944,105 $ 68,675,143 $ 2,422 5.67% 1.62% 2011 $ 27,115,434 $ 63,637,144 $ 2,245 5.15% 1.54% 2012 $ 24,743,238 $ 58,525,173 $ 2,064 4.65% 1.41% 2013 $ 23,085,993 $ 52,574,797 $ 1,854 4.09% 1.23% 2014 $ 19,010,294 $ 51,517,293 $ 1,813 3.92% 1.22% 2015 $ 15,807,234 $ 52,339,726 $ 1,836 3.89% 1.22% 2016 $ 14,148,317 $ 51,735,443 $ 1,771 3.68% 1.16% (1)Water and Sewer Funds Source: Audited Financial Statements, U.S.Census, Division of Local Services Town of North Andover, Massachusetts 108 Comprehensive Annual Financial Report Direct and Overlapping Governmental Activities Debt As of June 30, 2016 Estimated Estimated Share of Debt Percentage Overlapping Town of North Andover, Massachusetts Outstanding Applicable Debt Debt repaid with property taxes Greater Lawrence Regional Vocational Technical School District... $ 17,965,000 0.8% $ 594,960 Town direct debt....................................................................... 37,587,126 Total direct and overlapping debt................................................. $ 38,182,086 Methodologies used to calculate overlapping debt: Greater Lawrence Regional Vocational Technical School District: The Town's overlap is based on pupil enrollment. Source: Official Statement for Sale of Bonds Note: Overlapping governments are those that coincide, at least in part, with geographic boundaries of the Town. This schedule estimates the portion of outstanding debt of those overlapping governments that is borne by the taxpayers of the town. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the property taxpayers should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. Town of North Andover, Massachusetts 109 Comprehensive Annual Financial Report Computation of Legal Debt Margin Last Ten Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Equalized Valuation................................. $4,648,968,500 $4,648,968,500 $4,913,038,200 $4,913,038,200 $4,460,344,100 $4,460,344,100 $4,446,186,000 $4,446,186,000 $4,337,534,000 $4,337,534,000 Debt Limit-5%of Equalized Valuation......... $ 232,448,425 $ 232,448,425 $ 245,651,910 $ 245,651,910 $ 223,017,205 $ 223,017,205 $ 222,309,300 $ 222,309,300 $ 216,876,700 $ 216,876,700 Less: Outstanding debt applicable to limit.......... 48,332,581 44,809,719 45,804,952 44,477,844 45,590,789 35,050,079 30,545,849 33,116,011 36,746,119 38,444,272 Authorized and unissued debt................. 7,993,738 12,765,223 10,111,025 3,391,000 6,688,916 1,970,568 182,659 1,124,027 931,008 7,478,282 Legal debt margin................................... $ 176,122,106 $ 174,873,483 $ 189,735,933 $ 197,783,066 $ 170,737,500 $ 185,996,558 $ 191,580,792 $ 188,069,262 $ 179,199,573 $ 170,954,146 Total debt applicable to the limit as a percentage of debt limit................... 24.23% 24.77% 22.76% 19.49% 23.44% 16.60% 13.82% 15.40% 17.37% 21.17% Source: Official Statement for Sale of Bonds Town of North Andover, Massachusetts 110 Comprehensive Annual Financial Report Demographic and Economic Statistics Last Ten Years Per Capita Population Personal Personal Median Unemployment Year Estimates Income Income Age Rate 2007 27,412 $ 1,102,755,288 $ 40,229 37 3.8% 2008 27,566 $ 1,131,129,553 $ 41,034 37 5.5% 2009 27,753 $ 1,161,578,875 $ 41,854 37 7.7% 2010 28,352 $ 1,210,382,515 $ 42,691 40 7.2% 2011 28,352 $ 1,234,590,165 $ 43,545 40 7.0% 2012 28,352 $ 1,259,281,969 $ 44,416 40 5.7% 2013 28,352 $ 1,284,467,608 $ 45,304 40 5.7% 2014 28,422 $ 1,313,380,620 $ 46,210 40 4.7% 2015 28,510 $ 1,343,818,850 $ 47,135 40 4.1% 2016 29,217 $ 1,404,686,161 $ 48,078 40 4.1% Source: Commonwealth of Mass, Division of Local Services, Executive Office of Labor and Workforce Development. Median age is based on most recent census data. Town of North Andover, Massachusetts 111 Comprehensive Annual Financial Report Principal Employers(excluding Town) Current Year and Nine Years Ago 2016 2007 Nature Percentage of Percentage of of Total Town Total Town Employer Business Employees Rank Employment Employees Rank Employment Merrimack College Higher Education 675 1 2% 500 3 2% Demoulas Supermarkets,Inc. Grocery Store 400 2 1% 230 8 1% Edgewood Retirement Community Heathcare 360 3 1% n/a n/a n/a Watts Regulators Manufacturing 250 4 1% n/a n/a n/a National Grid(formely Mass Electic) Utility Services 225 5 1% 300 5 1% Lawrence Eagle Tribune Newspaper 205 6 1% 375 4 1% Brooks School Education 200 7 1% n/a n/a n/a Ophir Optics Manufacturing 160 8 1% n/a n/a n/a Genesis Healthcare Healthcare 150 9 1% n/a n/a n/a Stop&Shop Grocery Store 150 10 1% n/a n/a n/a Lucent Technoligies Manufacturing n/a n/a n/a 625 1 2% A.E.G Schneider Electronic Controls n/a n/a n/a 540 2 2% Sweetheart Plastics Plastics Manufacturing n/a n/a n/a 300 6 1% Morton International Inc Manufacturing n/a n/a n/a 250 7 1% Solectron Corp Contractor n/a n/a n/a 200 9 1% Source:Massachusetts Department of Workforce Development Town of North Andover, Massachusetts 112 Comprehensive Annual Financial Report Full-Time Equivalent Town Employees Last Ten Years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Full-Time Equivalents Town................................................. 25 25 25 26 26 27 26 26 27 26 Public Safety...................................... 112 113 113 114 114 112 112 112 113 114 School............................................... 441 442 446 449 451 443 479 479 479 481 Public works....................................... 24 24 23 23 23 23 23 23 23 24 Community services............................. 11 13 13 14 14 14 14 14 15 15 Support Services ................................ 3 4 4 4 8 9 9 9 10 12 Library............................................... 11 12 12 12 12 12 12 12 14 15 Total ................................................. 627 634 637 641 647 639 675 675 681 687 Source: Annual Budget Report, School Dept Town of North Andover, Massachusetts 113 Comprehensive Annual Financial Report Operating Indicators by Function/Program Last Ten Years Function/Program 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 General Government Population............................................................... 27,412 27,566 27,753 28,352 28,352 28,352 28,352 28,422 28,510 29,217 Registered Voters,Annual Town Election...................... 16,400 16,787 18,059 18,169 17,256 18,307 18,598 18,247 17,050 18,968 Town Clerk Births............................................................... 304 310 291 285 285 263 289 289 280 302 Marriages........................................................... 84 87 78 95 84 74 86 115 83 83 Deaths............................................................... 278 310 268 296 279 183 251 250 298 330 Dogs licensed...................................................... 2,348 2,308 2,396 2,314 2,361 2,110 2,390 2,132 2,101 2,907 Business Certificates............................................ 78 89 110 87 91 84 92 87 95 92 New Voter Registrations........................................ 785 1,746 612 1,099 866 1,523 1,450 797 1,251 1,171 Passport Applications............................................ 755 783 786 773 745 701 920 885 875 798 Assessors Single Family...................................................... n/a n/a 6,164 6,173 6,181 6,198 6,217 6,239 6,258 6,274 Condominiums.................................................... n/a n/a 1,898 1,915 1,929 1,951 1,985 2,028 2,059 2,084 Misc Rec............................................................ n/a n/a 27 28 30 31 30 29 29 29 Two Family......................................................... n/a n/a 426 423 420 419 421 417 414 408 Three Family....................................................... n/a n/a 43 43 44 44 43 44 45 47 Four-eight Family................................................. n/a n/a 48 48 50 50 51 52 52 52 Vacant land......................................................... n/a n/a 512 492 468 489 462 441 432 429 Residential/Commercial......................................... n/a n/a 37 38 36 37 36 35 34 33 Commerical buildings and land............................... n/a n/a 435 490 491 492 491 494 508 511 Industrial buildings and land................................... n/a n/a 82 84 84 84 8 83 83 82 Personal Property Accounts................................... n/a n/a 844 818 847 882 906 881 902 830 Chapter 61 -Forestry Property................................ n/a n/a 7 7 7 7 7 7 7 7 Chapter 61A-Farm Property.................................. n/a n/a 143 145 139 137 137 137 137 142 Chapter 61 B-Recreational Land............................. n/a n/a 9 9 8 7 7 7 7 7 Exempt buildings and land..................................... n/a n/a 438 436 452 460 464 468 471 421 Public Utilities...................................................... n/a n/a 4 4 4 4 4 4 4 4 Utilities valued by State......................................... n/a n/a 6 5 5 6 6 6 6 6 Public Safety Police Complaints Issued................................................ 153 127 140 110 86 434 589 729 654 635 Arrests............................................................... 410 400 406 409 396 285 364 312 291 323 Summons/Hearings.............................................. 385 132 132 368 286 149 214 303 329 290 Citations............................................................ 5,004 4,399 3,742 3,748 2,953 2,938 3,646 2,707 2,278 2,283 Parking tickets issued........................................... 821 920 680 624 645 548 484 496 504 504 Total number of animal complaints......................... 214 253 271 295 297 383 489 623 467 467 Fire Incidents Fire and Rescue............................................ 2,247 1,564 1,612 3,986 1,358 1,515 1,396 1,283 1,383 1,755 Ambulance Calls.............................................. 2,624 2,885 2,650 2,616 2,444 2,663 2,745 2,379 2,500 2,460 (continued) Town of North Andover, Massachusetts 114 Comprehensive Annual Financial Report Operating Indicators by Function/Program Last Ten Years Function/Program 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Permits/certificates issued Smoke Detectors............................................. 501 385 406 327 401 322 444 613 543 629 Carbon Monoxide Detectors............................... 392 349 377 314 377 295 412 587 520 595 Fireworks Display Permits................................. 1 1 1 1 1 1 1 1 1 1 Liquid Gas Storage Permits............................... 40 40 28 38 29 19 27 65 67 54 Open Air Burning Permits.................................. - - - - - - - 345 321 321 Oil Burner Install Permits................................... 40 35 46 70 45 26 47 26 20 16 Sprinkler Inspections........................................ 81 49 23 13 27 23 32 35 30 19 Underground Tank Installation............................ 7 11 6 22 26 8 6 27 21 23 Underground Tank Removals............................. 3 4 13 6 7 8 2 5 - 1 Building Department Permits issued..................................................... 2,381 2,456 2,214 2,470 2,375 2,774 3,080 3,207 3,583 3,583 Education Public school enrollment............................................ 4,624 4,546 4,604 4,614 4,638 4,766 4,783 4,801 4,839 4,788 Human Services Planning Plan reviews....................................................... 13 12 8 2 5 27 33 18 19 16 Board of Health Inspections Food Est.(related permits&reviews)................... 192 198 198 179 288 225 234 352 319 258 Septic(all related reviews/permits/inspections)...... 67 53 30 49 46 22 140 202 115 213 OFFA Haulers/Trash Haulers&Placards.................. 133 131 257 237 250 256 241 273 263 226 Commercial Permits............................................. 264 246 256 254 262 266 241 295 250 260 Professional Permits............................................. 70 75 75 83 82 89 53 101 66 62 Council on Aging Home delivered meals served................................. 17,605 18,527 19,685 15,106 15,541 18,369 17,519 16,230 17,001 20,294 Outreach Case Management.................................. 4,510 3,062 4,243 4,532 8,203 8,895 8,094 9,981 9,828 7,384 Community Education........................................... 3,619 3,698 3,900 7,078 6,708 7,682 8,635 8,417 8,458 7,496 Recreation.......................................................... 10,781 12,983 8,013 9,961 11,221 21,796 13,414 18,005 20,524 12,162 Transportation..................................................... 1,174 2,242 3,379 4,234 4,285 4,598 6,822 6,377 6,472 4,614 Libraries Program attendance.................................................. 2,225 3,304 8,060 3,867 4,489 4,122 4,938 6,631 8,358 8,358 Number of Library Card Holders................................ 27,384 28,155 29,883 16,465 16,779 17,604 19,094 20,143 20,418 20,418 Circulation .............................................................. 206,606 201,961 213,598 212,970 213,517 206,362 185,419 176,385 193,799 193,799 PC&Internet Use..................................................... 698 804 896 914 1,221 1,295 1,273 1,281 1,186 1,186 Reference Questions................................................. 23,380 24,549 26,758 28,069 28,503 29,318 29,081 30,744 29,848 29,848 Inter-Library Loans.................................................... 53,021 59,939 49,302 54,073 53,367 56,569 57,952 60,559 59,416 59,416 (continued) Town of North Andover, Massachusetts 115 Comprehensive Annual Financial Report Operating Indicators by Function/Program Last Ten Years Function/Program 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Youth&Recreation Services Memberships....................................................... n/a n/a 611 646 656 694 709 691 684 672 Summer Programs................................................ n/a n/a 75 792 814 854 798 832 876 971 Overall Services.................................................... n/a n/a n/a 2,973 2,961 3,098 3,179 3,215 3,263 3,410 Sewer Service connections.................................................. 45 32 31 46 58 14 54 43 34 32 Water Daily consumption(in million gallons)........................... 2.8126 2.9669 2.7371 2.8675 3.0120 2.6328 2.2101 3.0600 3.3100 3.2500 Source:Various Town Departments and Annual Town Report (concluded) N/A: Information not available Town of North Andover, Massachusetts 116 Comprehensive Annual Financial Report Capital Asset Statistics by Function/Program Last Ten Years Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 General Government Number of Buildings.................... 13 13 13 13 13 13 13 13 13 13 13 Police Number of Stations..................... 1 1 1 1 1 1 1 1 1 1 1 Fire Number of Stations..................... 2 2 2 2 2 2 2 2 2 2 2 Education School administration building....... n/a n/a n/a n/a n/a n/a n/a n/a n/a 1 1 Number of elementary schools...... 5 5 5 5 5 5 5 5 5 5 5 Number of middle schools............ 1 1 1 1 1 1 1 1 1 1 1 Number of high schools............... 1 1 1 1 1 1 1 1 1 1 1 Public Works Water mains (miles).................... 147 147 147 148 148 148 148 148 148 148 148 Fire hydrants............................. 1,475 1,477 1,479 1,487 1,489 1,511 1,515 1,515 1,515 1,515 1,515 Sanitary sewers (miles)................ 87 88 88 89 89 90 90 90 90 90 90 Storm sewers (miles)................... 99 99 99 99 99 99 99 99 99 99 99 Culture and Recreation Playgrounds.............................. 17 17 17 17 17 17 17 17 17 17 17 Parks....................................... 2 2 2 2 2 2 2 2 2 2 2 Playgrounds-Acreage................ 90 90 90 90 90 90 90 90 90 90 90 Parks-Acreage......................... 11 11 11 11 11 11 11 11 11 11 11 Public beaches.......................... 1 1 1 1 1 1 1 1 1 1 1 Ball fields.................................. 39 39 39 39 39 39 39 39 39 39 39 Tennis courts............................. 6 6 6 6 6 6 6 6 6 6 6 Source:Various Town Departments N/A: Information not available Town of North Andover, Massachusetts 117 Comprehensive Annual Financial Report This page intentionally left blank. Town of North Andover, Massachusetts 118 Comprehensive Annual Financial Report Additional Information Town of North Andover, Massachusetts 119 Comprehensive Annual Financial Report ENTERPRISE FUND SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN NET POSITION BUDGETARY BASIS-BUDGET AND ACTUAL YEAR ENDED JUNE 30,2016 Water Fund Amounts Actual Carried Variance Original Final Budgetary Forward To To Final Budget Budget Amounts Next Year Budget OPERATING REVENUES: Charges for services........................................................................ $ 5,286,324 $ 5,286,324 $ 5,837,447 $ $ 551,123 Penalties and interest........................................................................ 22,444 22,444 20,982 (1,462) TOTAL OPERATING REVENUES.................................................. 5,308,768 5,308,768 5,858,429 549,661 OPERATING EXPENSES: Cost of service and administration....................................................... 2,519,653 2,519,653 2,089,183 9,300 421,170 GLSD assessment............................................................................ - - - - - TOTAL OPERATING EXPENSES................................................... 2,519,653 2,519,653 2,089,183 9,300 421,170 OPERATING INCOME(LOSS)........................................................ 2,789,115 2,789,115 3,769,246 (9,300) 970,831 NONOPERATING REVENUES(EXPENSES): Investment income........................................................................... 13,500 13,500 19,327 5,827 Debt service-principal...................................................................... (1,090,276) (1,092,284) (1,092,284) - Debt service-interest expense........................................................... (192,000) (189,992) (189,992) - TOTAL NONOPERATING REVENUES(EXPENSES),NET.................................................... (1,268,776) (1,268,776) (1,262,949) 5,827 INCOME(LOSS)BEFORE TRANSFERS.......................................... 1,520,339 1,520,339 2,506,297 (9,300) 976,658 TRANSFERS: Transfers out................................................................................... (1,558,227) (1,558,227) (1,558,227) - CHANGE IN NET POSITION.......................................................... (37,888) (37,888) 948,070 (9,300) 976,658 NET POSITION AT BEGINNING OF YEAR............................................... 2,827,818 2,827,818 2,827,818 - NET POSITION AT END OF YEAR.......................................................... $ 2,789,930 $ 2,789,930 $ 3,775,888 $ (9,300) $ 976,658 Town of North Andover, Massachusetts 120 Comprehensive Annual Financial Report Sewer Fund Osgood Hill Fund Amounts Amounts Actual Carried Variance Actual Carried Variance Original Final Budgetary Forward To To Final Original Final Budgetary Forward To To Final Budget Budget Amounts Next Year Budget Budget Budget Amounts Next Year Budget $ 4,480,381 $ 4,480,381 $ 5,123,844 $ $ 643,463 $ 322,682 $ 322,682 $ 526,754 $ $ 204,072 24,555 24,555 19,850 (4,705) - 4,504,936 4,504,936 5,143,694 638,758 322,682 322,682 526,754 204,072 902,540 902,540 657,338 134,775 110,427 274,887 274,887 253,245 4,065 17,577 1,561,200 1,561,200 1,490,042 - 71,158 - - - - - 2,463,740 2,463,740 2,147,380 134,775 181,585 274,887 274,887 253,245 4,065 17,577 2,041,196 2,041,196 2,996,314 (134,775) 820,343 47,795 47,795 273,509 (4,065) 221,649 10,000 10,000 15,581 5,581 - - 1,941 1,941 (1,315,022) (1,315,022) (1,315,022) - - - (234,825) (234,825) (197,131) 37,694 - (1,539,847) (1,539,847) (1,496,572) 43,275 - 1,941 1,941 501,349 501,349 1,499,742 (134,775) 863,618 47,795 47,795 275,450 (4,065) 223,590 (514,460) (514,460) (514,460) (48,812) (48,812) (48,812) - (13,111) (13,111) 985,282 (134,775) 863,618 (1,017) (1,017) 226,638 (4,065) 223,590 2,306,055 2,306,055 2,306,055 - 237,556 237,556 237,556 - $ 2,292,944 $ 2,292,944 $ 3,291,337 $ (134,775) $ 863,618 $ 236,539 $ 236,539 $ 464,194 $ (4,065) $ 223,590 Town of North Andover, Massachusetts 121 Comprehensive Annual Financial Report TOWN OF NORTH ANDOVER, MASSACHUSETTS REPORTS ON FEDERAL AWARD PROGRAMS YEAR ENDED JUNE 30, 2016 TOWN OF NORTH ANDOVER, MASSACHUSETTS REPORTS ON FEDERAL AWARD PROGRAMS YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS PAGE Report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with Government Auditing Standards...........1 Report on compliance for each major federal program; report on internal control over compliance; and report on schedule of expenditures of federal awards required by The Uniform Guidance .............3 Schedule of expenditures of federal awards.................................................................................................5 Notes to schedule of expenditures of Federal awards..................................................................................6 Schedule of findings and questioned costs...................................................................................................7 Powers & Sullivan, LI.,C Certified l'ublle Accountants �, F �,.. REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING ii�ar ��n�i�i, �o Parkway AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT nap 01 OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH ti akdidd,NIA 01880 GOVERNMENT AUDITING STANDARDS �.'aa�..6>�tavan�;ainlstrllliMaua.�t�rn Independent Auditor's Report To the Honorable Board of Selectmen Town of North Andover, Massachusetts We have audited, in accordance with the 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, the 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 year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Town of North Andover, Massachusetts' basic financial statements, and have issued our report thereon dated November 22, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Town of North Andover, Massachusetts' internal control over financial reporting (internal control)to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of North Andover, Massachusetts' internal control. Accordingly, we do not express an opinion on the effectiveness of the Town of North Andover, Massachusetts' internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town of North Andover, Massachusetts' financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 1 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. /4411Z �I, /,z November 22, 2016 2 Powers & Sullivan, LL C,LrtlfledPublic Accountants REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON 100 Qua""3apfiwitt Parkway SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY skliwc 101 THE UNIFORM GUIDANCE Wakefidd,htrl 01880 T 7X1-944-1700 F, 781-914-1701 Independent Auditor's Report N%w w.4>>wersai,tist,llrii,r„i.c>i, To the Honorable Board of Selectmen Town of North Andover, Massachusetts Report on Compliance for Each Major Federal Program We have audited the Town of North Andover, Massachusetts' compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Town of North Andover, Massachusetts' major federal programs for the year ended June 30, 2016. The Town of North Andover, Massachusetts' major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the Town of North Andover, Massachusetts' major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Town of North Andover, Massachusetts' compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Town of North Andover, Massachusetts' compliance. Opinion on Each Major Federal Program In our opinion, the Town of North Andover, Massachusetts complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. Report on Internal Control Over Compliance Management of the Town of North Andover, Massachusetts, is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Town of North Andover, Massachusetts' 3 internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Town of North Andover, Massachusetts' internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the 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 the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Town of North Andover, Massachusetts's basic financial statements. We issued our report thereon dated November 22, 2016 which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. November 22, 2016 4 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30,2016 Federal Pass-Through Amount Passed CFDA Entity Identifying Through to Federal Grantor/Program Title Number Number Sub-Recipients Expenditures CHILD NUTRITION CLUSTER: U.S.DEPARTMENT OF AGRICULTURE: Passed through Massachusetts Department of Elementary and Secondary Education: Non-Cash Assistance(Commodities): National School Lunch Program........................... 10.555 05-211 $ $ 97,446 Cash Assistance: School Breakfast Program.................................. 10.553 05-211 25,578 National School Lunch Program........................... 10.555 05-211 322,292 TOTAL CHILD NUTRITION CLUSTER............. 445,316 SPECIAL EDUCATION CLUSTER: U.S.DEPARTMENT OF EDUCATION: Passed through Massachusetts Department of Elementary and Secondary Education: Special Education Grants to States(IDEA,Part B) ..... 84.027 240-323-6-0211 978,785 Special Education Grants to States(IDEA,Part B) ..... 84.027 274-024-6-0211 33,419 Special Education Grants to States(IDEA,Part B) ..... 84.027 240-206-5-0211 46,846 Special Education Grants to States(IDEA,Part B) ..... 84.027 274-037-5-0211 8,617 Passed through Massachusetts Department of Early Education and Care: Special Education-Preschool Grants...................... 84.173 26216NORTHANDOV 25,290 TOTAL SPECIAL EDUCATION CLUSTER........ 1,092,957 PASS-THROUGH PROGRAMS: U.S.DEPARTMENT OF TRANSPORTATION: Passed through the Massachusetts Executive Office of Public Safety and Security: State and Community Highway Safety...................... 20.600 18X920405DMA16 4,990 U.S.DEPARTMENT OF EDUCATION: Passed through Massachusetts Department of Elementary and Secondary Education: Title I Grants to Local Educational Agencies.............. 84.010 305-078064-2016-0211 313,969 Title I Grants to Local Educational Agencies.............. 84.010 305-048110-2015-0211 14,943 Title I Grants to Local Educational Agencies.............. 84.010 305-018120-2014-0211 7,858 Improving Teacher Quality State Grants................... 84.367 140-092825-2016-0211 50,807 Preschool Development Grants.............................. 84.419 701-165-4-0211-0 105,610 TOTAL EDUCATION.................................... 493,187 U.S.DEPARTMENT OF HOMELAND SECURITY: Passed through Massachusetts Emergency Management Agency: Disaster Grants-Public Assistance (Presidentially Declared Disasters)....................... 97.036 CTFEMA4214NANDO00292 384,532 TOTAL....................................................... $ $ 2,420,982 See notes to schedule of expenditures of federal awards. Town of North Andover, Massachusetts 5 Reports on Federal Award Programs Schedule of Findings and Questioned Costs Year Ended June 30, 2015 Note 1 -Definition of Reporting Entity The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal award activity of the Town of North Andover, Massachusetts under programs of the federal government for the year ended June 30, 2016. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Town of North Andover, Massachusetts, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Town of North Andover, Massachusetts. Note 2 -Significant Accounting Policies The accounting and reporting policies of the Town of North Andover, Massachusetts are set forth below: (a) Basis of Presentation —The accompanying Schedule of Expenditures of Federal Awards is presented on the modified accrual basis of accounting. Accordingly, expenditures are recognized when the liability is incurred. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. (b) Cash Assistance—National School Lunch Program and School Breakfast Program— Program expenditures represent federal reimbursement for meals provided during the fiscal year. (c) Non-Cash Assistance (Commodities)— National School Lunch Program— Program expenditures represent the value of donated foods received during the fiscal year. (d) Disaster Grants have been recorded in the year the grant was approved. (e) The Town of North Andover, Massachusetts has not elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. 6 Schedule of Findings and Questioned Costs Year Ended June 30, 2015 A. Summary of Auditor's Results 1. The auditor's report expresses an unmodified opinion on the financial statements of the Town of North Andover, Massachusetts. 2. No significant deficiencies relating to the audit of the basic financial statements are reported in the Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. 3. No instances of noncompliance material to the financial statements of the Town of North Andover, Massachusetts, were disclosed during the audit. 4. No significant deficiencies relating to the audit of the major federal award programs are reported in the Report On Compliance For Each Major Federal Program; Report On Internal Control Over Compliance; And Report On Schedule Of Expenditures Of Federal Rewards Required By The Uniform Guidance. 5. The auditor's report on compliance for the major federal award programs for the Town of North Andover, Massachusetts, expresses an unmodified opinion on all major federal award programs. 6. There were no audit findings relative to the major federal award programs for the Town of North Andover, Massachusetts. 7. The program tested as a major grant is the Special Education cluster. 8. The threshold for distinguishing Types A and B programs was $750,000. 9. The Town of North Andover, Massachusetts was determined to be a low-risk auditee. B. Findings-Financial Statements Audit None. C. Finding and Questioned Costs— Major Federal Award Programs None. D. Prior Year Audit Findings and Questioned Costs None. 7 TOWN OF NORTH ANDOVER, MASSACHUSETTS MANAGEMENT LETTER JUNE 30, 2016 Powers & Sullivan, LI.,C Certified Public Accountants �,.. i lilt) uannap"wvitt Parkway SkOw 101 To the Honorable Board of Selectmen r.7s]-914-17oo Town of North Andover, Massachusetts: R 781-914-1701 wwww.pnw ersart lstillliwran a(,)ni In planning and performing our audit of the 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' (the "Town") as of and for the year ended June 30, 2016, in accordance with auditing standards generally accepted in the United States of America, we considered the Town's internal control over financial reporting (internal control)as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town's internal control. Accordingly, we do not express an opinion on the effectiveness of the Town's internal control. However, during our audit we became aware of matters that are opportunities for strengthening internal controls and enhancing operating efficiency. The memorandum that accompanies this letter summarizes our comments and suggestions concerning those matters. We will review the status of these comments during our next audit engagement. We have already discussed these comments and suggestions with various Town personnel, and will be pleased to discuss them in further detail at your convenience, to perform any additional study of these matters, or to assist you in implementing the recommendations. This communication is intended solely for the information and use of management of the Town of North Andover, Massachusetts, and is not intended to be and should not be used by anyone other than these specified parties. The Town of North Andover's written response to the matters identified in our audit has not been subjected to the audit procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. November 22, 2016 TOWN OF NORTH ANDOVER, MASSACHUSETTS MANAGEMENT LETTER JUNE 30, 2016 TABLE OF CONTENTS PAGE Implement a Point-of-Sale (POS)System at Osgood Estates ........................................................................ 1 Strengthen Internal Controls at the Stevens Estate......................................................................................... 1 Improve Timeliness of Cash Reconciliation Procedures .................................................................................2 Documentation of Internal Controls .................................................................................................................2 Government Accounting Standards Board (GASB) Statements .....................................................................4 This page intentionally left blank. Implement a Point-of-Sale (POS) System at the Stevens Estate Prior Year Comment In the prior year, we indicated that the Town could enhance internal controls over the receipt collection process at the Stevens Estate by utilizing a point of sale (POS)system similar to the systems utilized by private wedding venues, restaurants, and other organizations. A POS system would allow the Stevens Estate to collect, record, and monitor both cash and credit card receipts during hosted events in real time. A POS system can also enhance control over different areas of event operations such as inventory control, event scheduling, reporting, and analysis. For example, a POS system would enable tracking of inventory quantities on-hand, enable cashiers to process transactions quickly and efficiently, allow managers to maintain tight controls over transactions by providing a structured reconciliation process, as well as generate sales reports by register, batch, and receipt number. We recommended that the Town implement a POS system to improve internal controls over the receipt collection process and the overall control environment. We also recommended that procedures be implemented to improve controls over liquor inventory either through the use of a POS System or another process that would track quantities on hand and perform periodic spot checks to actual quantities on-hand. Current Status It is our understanding that a POS system was purchased in July 2016 and is anticipated to be implemented in the fall of 2016. No procedures have implemented to track liquor inventory and reconcile to actual quantities on- hand. Strengthen Internal Controls at the Stevens Estate Comment The Town contracted with a consultant to review the internal controls of the Stevens Estate cash receipts process in June of 2015. As a result of that engagement, several recommendations were made to strengthen internal controls. Based on our review of the status of these recommendations, the following matters were noted that had not been addressed by Management as of September 2016. 1. A police escort was recommended for night deposits at the bank after an event. It is our understanding that police escorts are not being utilized for night deposits. 2. Implementation of a standardized form was recommended for cash bar activities that would include a beginning and ending cash drawer balance to facilitate reconciliation to the cash register tape. The form should be signed by management and the bartender. This process was not implemented at the time of our review. 3. It was recommended that payment for the variable open bar be in the form of cash or credit card and that no personal checks be accepted to prevent an insufficient funds check. Based on discussion with the Director, the Stevens Estate had a personal check recently denied for insufficient funds. Since that time, a new procedure has been put in place requiring that a credit card be put on file to protect against an insufficient funds check. In addition, based on our review of the booking report, it did not clearly show that a balance was due from the customer. We recommend that the format of the report be reviewed to ensure that it indicates total amount due from customer, total amount paid, and any residual unpaid balance if applicable. 1 4. A standardized form was recommended to document the cash count at the end of an event including the signature of the individual completing the count. This process was not implemented at the time of our review. 5. Upon completion of an event, it was recommended that a reconciliation of the Booking Report receipt activity be reconciled to the event folder. This reconciliation should be documented and signed by the preparer and reviewer. This process was not implemented at the time of our review. Recommendation We recommend that the Stevens Estate implement procedures to address the recommendations noted above. Improve Timeliness of Cash Reconciliation Procedures Comment Due to turnover in the Treasurer/Collector position in 2016, we noted that cash was not reconciled on a timely basis throughout the year and at year-end. However, all of the cash accounts were reconciled between the bank and the general ledger balances subsequent to year-end. In conjunction with the hiring of a new Treasurer/Collector procedures are being established to ensure that monthly reconciliations are completed between the bank and the general ledger balances. A lack of timely reconciliation procedures increases the likelihood that material errors may occur and not be detected and corrected on a timely basis. During 2016, along with the implementation of the new accounting system the Town implemented a cash reconciliation module available in the new accounting system. Similar to the previous accounting system, this module offers an integrated approach to cash management where the Treasurer's utilizes the general ledger balances as the Treasurer's book balances. We believe that this approach to cash management is a best practice and will facilitate an accurate and efficient cash reconciliation process. Recommendation We recommend that the Treasurer/Collector implement procedures to ensure that all bank accounts are reconciled to the applicable general ledger balances on a monthly basis Documentation of Internal Controls Comment In December 2013, the U.S. Office of Management and Budget (OMB) issued Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) in an effort to (1) streamline guidance for federal awards while easing the administrative burden and (2)to strengthen oversight over the expenditure of federal funds and to reduce the risks of waste, fraud and abuse. The Uniform Guidance supersedes and streamlines requirements from eight different federal grant circulars (including OMB Circular A-133) into one set of guidance. Local governments are required to implement the new administrative requirements and cost principles for all new federal awards and to additional funding to existing awards made after December 26, 2014 (fiscal year 2016). In conformance with Uniform Guidance, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal 2 award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States (the Green Book)and the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The COSO internal control framework is generally accepted as a best practice within the industry including the best practices prescribed by the Government Finance Officers Association (GFOA). COSO is a joint initiative of 5 private sector organizations dedicated to providing thought leadership through the development of frameworks and guidance on enterprise risk management, internal control and fraud deterrence. The original COSO framework was published in 1992 and has been revised several times for changes in operations, technology, and audit risk. The most recent updates to the COSO Internal Control- Integrated Framework were issued in 2013 and are available at www.coso.org. Management is responsible for internal control and to see that the entity is doing what needs to be done to meet its objectives. Governments have limited resources and constraints on how much can be spent on designing, implementing, and conducting systems of internal control. The COSO Framework can help management consider alternative approaches and decide what action it needs to take to meet its objectives. Depending on circumstances, these approaches and decisions can contribute to efficiencies in the design, implementation, and conduct of internal control. With the COSO Framework, management can more successfully diagnose issues and assert effectiveness regarding their internal controls and, for external financial reporting, help avoid material weaknesses or significant deficiencies. The COSO internal control framework incorporates 5 major components of internal control, which are supported by 17 principles of internal control as follows: 1. CONTROL ENVIRONMENT 1) Demonstrates commitment to integrity and ethical values 2) Exercises oversight responsibility 3) Establishes structure, authority, and responsibility 4) Demonstrates commitment to competence 5) Enforces accountability 2. RISK ASSESSMENT 6) Specifies suitable objectives 7) Identifies and analyzes risk 8) Assesses fraud risk 9) Identifies and analyzes significant change 3. CONTROL ACTIVITIES 10) Selects and develops control activities 11) Selects and develops general controls over technology 12) Deploys through policies and procedures 4. INFORMATION &COMMUNICATION 13) Uses relevant information 14) Communicates internally 3 15) Communicates externally 5. MONITORING 16) Conducts ongoing and/or separate evaluations 17) Evaluates and communicates deficiencies Management should evaluate and assess the government's internal control system to determine whether: each of the five essential elements of a comprehensive framework of internal control is present throughout the organization; whether each element addresses all of the associated principles; and whether all five elements effectively function together. Recommendation We recommend management follow the best practice for establishing and documenting their internal control system using the COSO Internal Control Framework. Government Accounting Standards Board (GASB) Statements Comment The GASB has issued new pronouncements that will significantly affect the accounting and reporting requirements for Other Postemployment Benefits (OPEB). These new standards will start to phase in during 2017 and will substantially impact the Town's financial statements and will also affect the requirements for accumulating the necessary data to meet the reporting requirements. The new standards that have been issued and their effective dates are as follows: • The GASB issued Statement#74, Financial Reporting for Postemployment Benefit Plans Other Than Pensions, which is required to be implemented in 2017. • The GASB issued Statement#75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, which is required to be implemented in 2018. See below for a brief summary of these new standards: • GASB#74 and#75 will substantially change the reporting for other postemployment benefit liabilities and expenses. Changes in the other postemployment benefits liability will be immediately recognized as other postemployment benefits expense or reported as deferred outflows/inflows of resources depending on the nature of the changes. Substantial changes to methods and assumptions used to determine actuarial information for GAAP reporting purposes will be required. Employers will report in their financial statements a net other postemployment benefit liability(asset) determined annually as of the measurement date. Net other postemployment benefit liability(asset) equals the total other Postemployment benefit liability for the plan net of the plan net position. The other postemployment benefit liability is the actuarial present value of projected benefits attributed to past service. The plan net position is the accumulated plan assets net of any financial statement liabilities of the plan. The Town should expect to record significant OPEB liabilities in the future. 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