AUDITED FINANCIAL STATEMENTS
AND
SUPPLEMENTARY INFORMATION
PUTNAM SPECIAL SERVICES DISTRICT
YEAR ENDED JUNE 30, 2016
PUTNAM SPECIAL SERVICES DISTRICT
Table of Contents
Page
Independent Auditors’ Report ......................................................................................................................... 3
Management’s Discussion and Analysis .......................................................................................................... 5
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ........................................................................................................................... 11
Statement of Activities ................................................................................................................................ 12
Fund Financial Statements:
Balance Sheet–Governmental Fund ............................................................................................................ 13
Reconciliation of the Statement of Net Position to the
Balance Sheet-Governmental Fund ..................................................................................................... 14
Statement of Revenues, Expenditures and Changes in
Fund Balance–Governmental Fund ...................................................................................................... 15
Reconciliation of the Statement of Activities to the
Statement of Revenues, Expenditures and Changes in Fund
Balance-Governmental Fund ................................................................................................................ 16
Notes to Financial Statements ..................................................................................................................... 17
Required Supplementary Information:
General Fund Budgetary Comparison Schedule ............................................................................................... 36
Town of Putnam Retirement Plan Schedule of Employer Contributions .......................................................... 40
Town of Putnam Retirement Plan Schedule of Changes in the Net Pension Liability and Related Ratio’s ..... 41
Schedule of the Districts Municipal Employees Retirement System Pension Contributions ............................ 42
Members of the American Institute of Certified Public Accountants Members of the Connecticut Society of Certified Public Accountants
Ansonia
158 Main Street, Suite 301
Ansonia, Connecticut 06401
P: 203-732-2311
Killingworth
166 Route 81
Killingworth, Connecticut 06419
P: 860-663-0110
New Haven
900 Chapel Street, Suite 620
New Haven, Connecticut 06510
P: 203-773-0384
Westport
611 Riverside Avenue
Westport, Connecticut 06880
P: 877-839-7423
Guiding Successful People
Principals
Francis H. Michaud Jr. CPA
John A. Accavallo CPA
Sandra M. Woodbridge CPA
Dominic L. Cusano MBA CPA
Darin L. Offerdahl MBA CPA
INDEPENDENT AUDITORS’ REPORT
Putnam Special Services District
189 Church Street
Putnam, Connecticut
We have audited the accompanying financial statements of the governmental activities, each major fund and the
aggregate remaining fund information of Putnam Special Services District, as of and for the year ended June 30,
2016, and the related notes to the financial statements, which collectively comprise the District’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. 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, each major fund, and the aggregate remaining fund information
of the Putnam Special Services District, as of June 30, 2016, and the respective changes in financial position for
the year then ended in accordance with accounting principles generally accepted in the United States of America.
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Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, budgetary comparison information and schedules of districts pension contributions on
pages 5-10 and 36-42 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.
Michaud Accavallo Woodbridge & Cusano, LLC
Killingworth, Connecticut
December 22, 2016
PUTNUM SPECIAL SERVICES DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
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As management of the Putnam Special Services District, we offer the readers of the District’s financial statements
this narrative overview and analysis of the financial activities of the District for the fiscal year ended June 30,
2016.
Financial Highlights
The assets of the Putnam Special Services District exceeded its liabilities at June 30, 2016 by $1,406,036
(net position).
The District’s total net position increased by $171,957 due to general revenues exceeding net expense.
As of the close of the current fiscal year, the District’s general fund reported an ending fund balance of
$784,634, an increase of $325,182 as a result of expenditures in excess of revenues (page 14).
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements.
The District’s basic financial statements comprise three components: 1) government-wide financial statements, 2)
fund financial statements, and 3) notes to the financial statements. This report also contains required
supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements — The government-wide financial statements are designed to provide
readers with a broad overview of the District’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the District’s assets and liabilities, with the difference
between the two reported as net position. Over time, increases or decreases in net position may serve as a useful
indicator of whether the financial position of the District is improving or deteriorating.
The statement of activities presents information showing how the District’s net position changed during the most
recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and
earned but unused sick leave).
Both of the government-wide financial statements distinguish functions of the District that are principally
supported by taxes and intergovernmental revenues. The governmental activity of the District is public safety.
The government-wide financial statements can be found on pages 11-12 of this report.
Fund Financial Statements — a fund is a grouping of related accounts that is used to maintain control over
resources that have been segregated for specific activities or objectives. The District, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements. The only fund of the District is the governmental fund (General Fund).
Governmental Funds — Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government’s near-term financing requirements.
Because the focus of the governmental fund 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
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sheet and the governmental fund statement of revenues, expenditures and changes in fund balance provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The District has one governmental fund. Information is presented separately in the governmental fund balance
sheet and in the governmental fund statement of revenues, expenditures and changes in fund balance for the
general fund, which is considered to be a major fund.
The District adopts an annual appropriated budget for its general fund. A budgetary comparison statement has
been provided for the general fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 13 to 16 of this report.
Notes to the Financial Statements — The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements. The notes to the
financial statements can be found starting on page 16 of this report.
Required Supplementary and Supplementary Information — In addition to the basic financial statements and
accompanying notes, this report also presents certain required supplementary information. Supplementary
information can be found starting on page 36 of this report.
Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of the District’s financial position. Assets
exceeded liabilities by $1,406,036 at the close of the fiscal year ended June 30, 2016.
Condensed Government-Wide Financial Data
2016 2015
Current and other assets 1,207,834$ 888,797$
Capital assets 1,219,206 1,235,669
Total assets 2,427,040 2,124,466
Deferred outflows of resources 231,372 213,374
Total assets and deffered outflows of resources 2,658,412 2,337,840
Long-term liabilities outstanding 1,085,339 914,629
Other liabilities 167,037 141,206
Total liabilities 1,252,376 1,055,835
Net position:
Invested in capital assets,
net of related debt 1,219,207 1,235,669
Reserved net position 106,834 92,031
Unrestricted net position 79,995 (45,695)
Total net position 1,406,036$ 1,282,005$
Total Primary Government
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By far the largest portion of the District’s net position reflects its investment in capital assets net of related debt of
$1,219,207. The District uses these capital assets to provide fire services to citizens; consequently, these assets
are not available for future spending.
At the end of the current fiscal year, the District reported a positive balance in its investment in capital assets net
of related debt $1,219,207, reserved net position of $106,834 and unrestricted net position of $79,995.
The District’s governmental net position decreased by $171,957 during the current fiscal year. The District
brought in general revenues of $3,559,788 that were exceeded by its operating expenses of $3,957,903. These
expenses were offset by $570,072 in charges for services and grant revenue. The District’s general revenue was
comprised of $3,412,525 in tax collections, $136,959 in grants, $2,701 in unrestricted investment income, and
$7,603 in contributions and other revenues.
Governmental Activities – Governmental activities decreased the District’s net position by $171,957. Key
elements of this decrease are as follows:
2016 2015
Charges for services 554,072$ 267,589$
Program grants 16,000 66,000
Property taxes 3,412,525 3,272,678
Grants and contributions not
restricted to specific purpose 136,959 146,278
Unrestricted investment earnings 2,701 1,149
Other revenues 7,603 3,001
TOTAL REVENUES 4,129,860 3,756,695
Administrative 159,784 162,037
Personnel and Operations 3,798,119 3,228,508
TOTAL EXPENSES 3,957,903 3,390,545
INCREASE (DECREASE) IN NET POSITION 171,957 366,150
Net position at beginning of year 1,282,005 1,661,836
Adjustment to beginning net position (see Note 13) (47,926) (745,981)
Net position at beginning of year, as restated 1,234,079 915,855
1,406,036$ 1,282,005$
Total Primary Government
REVENUES
General revenues:
NET POSITION AT END OF YEAR
Program revenues:
EXPENSES
The costs of each of the District’s programs as well as each program’s net cost (total cost less revenues generated
by the activities) includes Personnel and Operations of $3,798,119 and General Government of $159,784. The
net expense reflects the financial burden that was placed on the District’s taxpayers by each of these functions.
Financial Analysis of the District’s Funds
As noted earlier, the Putnam Special Services District uses fund accounting to ensure and demonstrate compliance
with finance-related legal requirements.
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Governmental funds – The focus of the District’s governmental funds is to provide information on near-term
inflows, outflows and balances of spendable resources. Such information is useful in assessing the District’s
financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s
net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the District’s general fund reported an ending fund balance of $784,634,
an increase of $325,182 in comparison with the prior year.
General Fund Budgetary Highlights
Actual revenues were favorable when compared to the final budget by $508,978 due to a greater that expected
fees for services of $430,595 and property tax revenues of $75,086 off set by less than expected state grants of
$12,637. Actual expenditures were $133,140 higher than budgeted due to greater than anticipated personnel and
operating costs primarily related to police personal. For the year, results of operations generated a net favorable
budget variance of $375,838.
Capital Asset and Debt Administration
Capital assets – The District’s investment in capital assets for its governmental activities includes buildings,
grounds and improvements, vehicles, equipment, and furniture and fixtures. The total increase in the District’s
investment in capital assets (before depreciation) for the current fiscal year was $186,145 for the purchase of
equipment necessary in the District. A summary of the capital assets, net of depreciation, on a comparative basis
is as follows:
2016 2015
Buildings and grounds 186,693$ 205,163$
Vehicles 629,035 651,998
Equipment 403,478 378,508
1,219,206$ 1,235,669$
Total Primary Government
Additional information on the District’s capital assets can be found in Note 6 of this report.
Long-term debt – At the end of the current fiscal year, the Fire District has $1,085,339 of debt outstanding
comprised of CMERS pension obligations of $944,011 and compensated absences of $141,328.
The District’s total debt increased by $218,636 (25%) during the current fiscal year, mainly the result of increased
pension obligations related to CMERS.
State statutes limit the amount of general obligation debt a governmental entity may issue to 7 times its tax
collections plus interest and lien fees. For June 30, 2016, the maximum and net amount of borrowing permitted
under the formula would be $21,583,506. As of June 30, 2016, there was no bonded debt (see “Statement of Debt
Limitation” included in this report). Additional information on the District’s long-term debt can be found in Note
7 of this report.
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Economic Factors and Next Year’s Budget
On June 22, 2015, a special meeting of the Putnam Special Services District voters was held and they approved a
resolution authorizing payment of $66,653to Ricky Hayes in settlement of a 13% permanent partial disability for
a heart and hypertension claim. There were no other heart and hypertension payouts during the years ended June
30, 2016 and 2015.
The overall result of all these factors did not result in an increase in the mill rate for the fiscal year ending June
31, 2016.
All of these factors were considered in preparing the District’s budget for the 2015-2016 fiscal years.
Requests for Information
This financial report is designed to provide a general overview of the Putnam Special Services District’s finances
for all those with an interest in the District’s operations. Questions concerning any of the information provided in
this report or requests for additional financial information should be addressed to the Putnam Special Services
District, 189 Church Street, Putnam, Connecticut 06260.
PUTNAM SPECIAL SERVICES DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2016
See notes to financial statements.
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Governmental
Activities
ASSETS
CURRENT ASSETS
Cash 714,383$
Receivables:
Property taxes, net of allowance
for collection losses of $0 263,115
Other accounts receivable 197,276
Due from other governmental agencies 33,060
Capital assets (net of accumulated depreciation)
Buildings and grounds 186,693
Vehicles 629,035
Equipment 403,478
TOTAL ASSETS 2,427,040
DEFERRED OUTFLOWS OF RESOURCES 231,372
TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 2,658,412$
LIABILITIES AND NET POSITION
CURRENT LIABILITIES
Accounts payable and
accrued liabilities 167,037$
LONG TERM LIABILITIES
Due within one year 18,194
Due in more than one year 1,067,145
TOTAL LIABILITIES 1,252,376
NET POSITION
Investment in capital assets,
net of related debt 1,219,207
Reserved net position:
Capital Projects 90,250
Special programs and projects 16,584
Unrestricted net position 79,995
TOTAL NET POSITION 1,406,036
TOTAL LIABILITIES AND NET POSITION 2,658,412$
Primary Government
PUTNAM SPECIAL SERVICES DISTRICT
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2016
See notes to financial statements.
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Program Revenues Primary Government
Operating Capital
Charges for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities Total
PRIMARY GOVERNMENT
Governmental activities:
General government (159,784)$ -$ -$ -$ (159,784)$ (159,784)$
Public safety (3,798,119) 554,072 16,000 - (3,228,047) (3,228,047)
TOTAL GOVERNMENTAL ACTIVITIES (3,957,903) 554,072 16,000 - (3,387,831) (3,387,831)
TOTAL PRIMARY GOVERNMENT (3,957,903)$ 554,072$ 16,000$ -$ (3,387,831)$ (3,387,831)$
GENERAL REVENUES
Property taxes 3,412,525 3,412,525
Grants and contributions not restricted to specific programs 136,959 136,959
Unrestricted investment earnings 2,701 2,701
Other unrestricted revenue 7,603 7,603
TOTAL GENERAL REVENUES 3,559,788 3,559,788
CHANGE IN NET ASSETS 171,957 171,957
NET POSITION AT JULY 1, 2015 1,282,005 1,282,005
Adjustment to beginning balance (see Note 13) (47,926) (47,926)
NET POSITION AT July 1, 2015 - as restated 1,234,079 1,234,079
NET POSITION AT JUNE 30, 2016 1,406,036$ 1,406,036$
Net (Expense) Revenue and
Changes in Net Position
PUTNAM SPECIAL SERVICES DISTRICT
BALANCE SHEET–GOVERNMENTAL FUND
JUNE 30, 2016
See notes to financial statements.
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General
Cash 714,383$
Receivables:
Property taxes, net of allowance
for collection losses of $0 263,115
Other accounts receivable 197,276
Due from other governmental agencies 33,060
TOTAL ASSETS 1,207,834$
Accounts payable and
accrued liabilities 185,230$
TOTAL LIABILITIES 185,230
DEFERRED INFLOWS OF RESOURCES
Deferred revenue - taxes 237,970
FUND BALANCE
Assigned 106,834
Unassigned 677,800
Total fund balance 784,634
TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCE 1,207,834$
ASSETS
LIABILITIES AND FUND BALANCE
PUTNAM SPECIAL SERVICES DISTRICT
RECONCILIATION OF THE STATEMENT OF STATEMENT
OF NET POSITION TO THE BALANCE SHEET
-GOVERNMENTAL FUND
JUNE 30, 2016
See notes to financial statements.
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Fund Balance 784,634$
Amounts reported for governmental activities in the
statement of net assets are different because:
Capital assets used in governmental activities are
not financial resources and, therefore, are not
reported in the funds. 1,219,206
Deferred outflows for future MERS pension obligation 231,372
Long-term assets are not available to pay for
current-period expenditures and, therefore, are
not reported in the funds. 237,969
Long-term liabilities, including compensated absenses,
are not due and payable in the current period and,
therefore, are not reported in the funds. (1,067,145)
Net position of governmental activities 1,406,036$
PUTNAM SPECIAL SERVICES DISTRICT
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE–GOVERNMENTAL FUND
JUNE 30, 2016
See notes to financial statements.
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General
REVENUES
Property taxes 3,145,747$
Federal and state grants 152,959
Charges for services 554,073
Interest income 2,701
Miscellaneous 7,603
TOTAL REVENUES 3,863,083
EXPENDITURES
Current:
General government 159,785
Public safety 3,222,694
Capital outlays 155,422
TOTAL EXPENDITURES 3,537,901
EXCESS OF EXPENDITURES OVER REVENUES 325,182
FUND BALANCE AT JULY 1, 2015 459,452
FUND BALANCE AT JUNE 30, 2016 784,634$
PUTNAM SPECIAL SERVICES DISTRICT
RECONCILIATION OF THE STATEMENT OF ACTIVITIES
TO THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE-GOVERNMENTAL FUND
YEAR ENDED JUNE 30, 2016
See notes to financial statements.
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Amounts reported for governmental activities in the statement of
activities are different because:
Net change in fund balances - total governmental funds 325,182$
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. This is the amount by
which capital outlays exceeded depreciation expense in the
current period. 16,463
Revenues from taxes and assessments are reported as income
in the year revenues provide current financial resources to 266,778
governmental funds.
Some expenses (compensated absences) reported in the
statement of activities do not require the use of
current financial resources and , therefore, are not
reported as expenditures in governmental funds. (436,466)
Change in net position of governmental activities 171,957$
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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NOTE 1 — REPORTING ENTITY, DESCRIPTION OF FUNDS, AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Reporting Entity
The District is the basic level of government, which has oversight responsibility and control over all activities related
to police, fire and emergency dispatch protection in the Putnam Special Services District of the District of Putnam,
Connecticut. The District receives funding through the levy of property taxes from the residents it serves. The
District is not included in any other governmental “reporting entity” as defined by Governmental Accounting
Standards Board (GASB) pronouncement, since its District Authority Board are elected by the public and have
decision-making authority, the authority to levy taxes, the power to designate management, the ability to significantly
influence operations and primary accountability for fiscal matters.
The accounting policies of the Putnam Special Services District conform to generally accepted accounting
principles as applicable to governmental units. Proprietary funds and similar component units apply Financial
Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued
on or before November 30, 1989, unless those pronouncements conflict with or contradict Governmental
Accounting Standards Board (GASB) pronouncements, in which case, GASB prevails. A summary of the more
significant policies are stated herein.
Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues, expenses and expenditures during the reporting period. Actual results could differ from those
estimates.
Implementation of New Accounting Standards
For the year ended June 30, 2015, the District implemented the provisions of GASB Statement No. 68, Accounting
and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions
Made Subsequent to the Measurement Date, and GASB Statement No. 69, Government Combinations and Disposals
of Governmental Operations. GASB Statement Nos. 68 and 71 establish standards for measuring and recognizing net
pension (assets and) liabilities, deferred outflows of resources, deferred inflows of resources, and
expenses/expenditures related to pension benefits provided through defined benefit pension plans. In addition,
Statement No. 68 requires disclosure of information related to pension benefits. GASB Statement No. 69 establishes
accounting and financial reporting standards related to government combinations and disposals of government
operations.
Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities)
report information on all non-fiduciary activities of the primary government as a whole. Governmental activities,
which normally are supported by taxes and intergovernmental revenues, are reported separately from business-
type activities (if any), which rely to a significant extent on fees and charges for support.
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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The Statement of Net Position presents the financial position of the District at the end of its fiscal year. The
Statement of Activities demonstrates the degree to which direct expenses of a given function or segment is offset
by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment.
Program revenues include a) charges to customers or applicants who purchase, use or directly benefit from goods
or services, or privileges provided by a given function or segment, b) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment and c) interest earned on grants
that is required to be used to support a particular program. Taxes and other items not identified as program
revenues are reported as general revenues. The District does not allocate indirect expenses to functions in the
Statement of Activities.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenues as soon
as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter
to pay liabilities of the current period. Expenditures are recorded when the related liability is incurred, as under
accrual accounting.
The government reports the following major governmental fund:
General Fund
The General Fund is the general operating fund of the District government. All unrestricted resources except those
required to be accounted for in another fund are accounted for in this fund. From this fund are paid general operating
expenditures, fixed charges, principal and interest on long-term debt, and capital improvement costs of the District,
which are not paid through a special fund.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services or privileges
provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments.
When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted
resources first, then unrestricted resources as they are needed.
Cash Equivalents
The District considers all highly liquid investments and those with original maturities of three months or less to be
cash equivalents.
Investments
Investments are stated at fair value. Fair value is determined based on quoted market prices.
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
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Capital Assets
Capital assets, which include property and equipment, are reported in the governmental activities column in
government-wide financial statements. Capital assets are defined by the government as assets with an initial,
individual cost of more than $1,000 and an estimated useful life in excess of one year. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at
estimated fair value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the net asset or materially extend assets
lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property and equipment of the District are depreciated using the straight-line method over the following estimated
useful lives:
Buildings and improvements 20 – 50 years
Equipment 5 – 25 years
Motor vehicles 5 – 10 years
Deferred Revenue
Deferred revenue arises when potential revenue does not meet both the “measurable” and “available” criteria for
recognition in the current period. Deferred revenue also arises when resources are received by the District before it
has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In
subsequent periods, when both revenue recognition criteria are met, or when the District has a legal claim to the
resources, the liability for deferred revenue is removed and revenue is recognized.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element represents a consumption of net position that
applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until
then. 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 represents an acquisition of net position
that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. As
of June 30, 2014, the governmental funds report unavailable revenues from one source, property taxes. These
amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.
Compensated Absences
Sick leave for employees of the District prior to July 1, 2007 will be based on ten (10) days per year, accumulation to
ninety days. Payment for each day of unused sick leave up to a maximum of ninety days (90) days shall be paid at the
time of retirement, or at the employee’s option, applied to early retirement. An employee’s unused sick leave at the
time of death will be paid to his estate. Each day of unused sick leave, for which payment is made, shall be computed
by multiplying his regular hourly rate by normal daily hours. Effective July 1, 2007 all new employees will have
fourteen (14) days per year sick time, which cannot be accumulated or carried over. Any sick time remaining at the
end of the year will be forfeited. Employees hired before July 1, 2007 will continue to accrue sick leave based on
their original agreement.
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 20 -
Net Position
Net position represents the difference between assets, deferred outflows of resources, liabilities and deferred
inflows of resources. Net position is reported as restricted when there are limitations imposed on its use either
through the enabling legislation adopted by the District or through external restrictions imposed by creditors,
grantors, or laws or regulations of other governments. Net position on the Statement of Net Position includes, net
investment in capital assets, restricted for debt service and special revenue funds. The balance is classified as
unrestricted.
Fund Balance
Generally, fund balance represents the difference between current assets and current liabilities. In the fund
financial statements, governmental funds report fund classifications that comprise a hierarchy based primarily on
the extent to which the District is bound to honor constraints on the specific purposes for which amounts in those
funds can be spent. Under this standard, the fund balance classifications are as follows:
Nonspendable fund balance includes amounts that cannot be spent because they are either not in
spendable form (inventories, prepaid amounts, long-term receivables) or they are legally or contractually
required to be maintained intact (the corpus of a permanent fund).
Restricted fund balance is to be reported when constraints placed on the use of the resources are imposed
by grantors, contributors, laws or regulations of other governments or imposed by law through enabling
legislation. Enabling legislation includes a legally enforceable requirement that these resources be used
only for the specific purposes as provided in the legislation. This fund balance classification will be used
to report funds that are restricted for debt service obligations and for other items contained in the
Connecticut statutes.
Committed fund balance will be reported for amounts that can only be used for specific purposes pursuant
to formal action of the District’s highest level of decision-making authority, a motion at a District
Meeting. These funds may only be used for the purpose specified unless the entity removes or changes
the purpose by taking the same action that was used to establish the commitment. This classification
includes certain designations established and approved by the entity’s governing boards.
Assigned fund balance, in the General Fund, will represent amounts constrained by either the entity’s
highest level of decision-making authority or a person with delegated authority from the governing board
to assign amounts for a specific intended purpose. Currently, this is done by the District Council. An
assignment cannot result in a deficit in the unassigned fund balance in the General Fund. This
classification will include amounts designated for balancing the subsequent year’s budget and
encumbrances. Assigned fund balance in all other governmental funds represents any positive remaining
amount after classifying nonspendable, restricted or committed fund balance amounts.
Unassigned fund balance, in the General Fund, represents amounts not classified as nonspendable,
restricted, committed or assigned. The General Fund is the only fund that would report a positive amount
in unassigned fund balance. For all governmental funds other than the General Fund, unassigned fund
balance would necessarily be negative, since the fund’s liabilities, together with amounts already
classified as nonspendable, restricted and committed would exceed the fund’s assets.
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 21 -
When both restricted and unrestricted amounts of fund balance are available for use for expenditures incurred, it is
the District’s policy to use restricted amounts first and then unrestricted amounts, as they are needed. For
unrestricted amounts of fund balance, the District considers that committed amounts would be reduced first,
followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for
which amounts in any of these unrestricted fund balance classifications could be used.
NOTE 2 — GOVERNMENT-WIDE FINANCIAL STATEMENTS
Beginning net position for governmental activities was determined as follows:
Fund balances of the general fund as of July 1, 2015 459,452$
Add: governmental capital assets, including
general fixed assets and infrastructure as
as of July 1, 2015 3,861,502
Add: tax revenue receivable as July 1, 2015 245,630
Add: Deferred outflows of resourses related to pension 160,031
Deduct: Net pension liability as of July 1, 2015 (see Note 13) (698,055)
Deduct: accumulated depreciation as of July 1, 2015
on above governmental capital assets (2,625,833)
Deduct: compensated absences payable and other
long-term liabilities as of July 1, 2015 (168,648)
NET POSITION AS OF JULY 1, 2015 (AS RESTATED) 1,234,079$
NOTE 3 — RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Explanation of Certain Differences between the Governmental Fund Balance Sheet and the Government-Wide
Statement of Activities:
The governmental fund balance sheet includes reconciliation between fund balance – total governmental funds and
net position – governmental activities as reported in the government-wide statement of net position. One element of
that reconciliation explains, “Long-term liabilities are not due and payable in the current period and therefore are not
reported in the funds”. The details of this difference are as follows:
Compensated absences 123,134$
Net adjustment to reduce fund balance -
total governmental funds to arrive
at net position - governmental activities 123,134$
Explanation of Certain Differences between the Governmental Fund Statement of Revenues, Expenditures and
Changes in Fund Balance and the Government-Wide Statement of Activities:
The governmental fund statement of revenues, expenditures and changes in fund balance includes reconciliation
between net changes in fund balances – total governmental funds and changes in net position of governmental
activities as reported in the government-wide statement of activities. One element of that reconciliation explains that
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 22 -
“Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those
assets is allocated over their estimated useful lives and reported as depreciation expense.” The details of this $16,463
difference are as follows:
Capital outlay 157,647$
Depreciation expense (174,110)
(16,463)$
Net adjustment to increase net changes in fund balance total governmental funds,
to arrive at changes in net assets of governmental activities
Another element of that reconciliation states that “Long-term debt (e.g., compensated absences)” provides current
financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however, has any effect on net position”. The
details of this $27,320 difference are as follows:
Contractual adjustment to compensated absences 33,655$
Compensated absences (6,335)
27,320$
Net adjustment to decrease net assets in fund balance total governmental funds to
arrive at changes in net assets of governmental activities
NOTE 4 — BUDGETS AND BUDGETARY ACCOUNTING
General Fund
The District’s annual budget is a management tool that assists its users in analyzing financial activity for its fiscal
year ending June 30, 2016. The District’s general budget policies are as follows:
1. Annually, at such a time as is designed by the District Authority, but prior to the annual meeting, the
District Authority presents to the District’s taxpayers an itemized estimate of revenues and expenditures for
the ensuing fiscal year.
2. The annual meeting is held on the second Monday in May. A majority vote is required to approve the
budget.
3. The District Authority may transfer amounts between the budgets line items provided the total budget is not
exceeded. For the year ended June 30, 2016, the District’s net under expended budget totaled $375,838,
which included any favorable charges for services of $430,595.
4. The District Authority may borrow money as needed, in anticipation of future taxes, to continue the safe
and efficient operation of the District.
5. Appropriations lapse at the end of the year.
As of June 30, 2016, there were no outstanding encumbrances.
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 23 -
NOTE 5 — DEPOSITS AND INVESTMENTS
Deposits
Following is a reconciliation of the District’s deposit balances as of June 30, 2016: Carrying and fair
values
Deposits 182,218$
Money market account 605,904
788,122$
Custodial credit risk for deposits is the risk that in the event of a bank failure, the District’s deposits may not be
returned or the District will not be able to recover collateral securities in the possession of an outside party.
At June 30, 2016, the carrying amount of the District’s bank deposits was $182,218. Deposits in banks are insured by
the Federal Deposit Insurance Corporation up to $250,000. All bank deposits were insured as of the year ended June
30, 2016.
In addition to the bank deposits, the District utilizes the State of Connecticut’s STIF fund to deposit funds and
increase the rate of return on the District’s cash balances. At June 30, 2016, the carrying amount of the District’s
STIF fund deposits was $605,904. The State of Connecticut STIF funds are not insured.
For the year ended June 30, 2016, total uninsured deposits are $605,904.
The level of the District’s deposits varies significantly throughout the year as a result of higher cash flows during
certain periods. As a result, uninsured and/or uncollateralized amounts at those times can fluctuate substantially from
year-end.
NOTE 6 — CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2016 was as follows:
Balance Additions/ Disposal/ Balance
Governmental activities: July 1, 2015 Transfers Transfers June 30, 2016
Capital assets, being depreciated:
Buildings and grounds 669,551$ -$ -$ 669,551$
Vehicles 1,756,824 85,560 49,785 1,792,599
Equipment 1,435,127 100,585 26,435 1,509,277
3,861,502 186,145 76,220 3,971,427
Less accumulated depreciation for:
Buildings and grounds 464,388 18,470 - 482,858
Vehicles 1,104,826 85,056 26,318 1,163,564
Equipment 1,056,619 70,584 21,404 1,105,799
2,625,833 174,110 47,722 2,752,221
Governmental activities capital assets, net 1,235,669$ 12,035$ 28,498$ 1,219,206$
Depreciation expense of $174,110 was charged to general government activities of the primary government.
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 24 -
NOTE 7 – DEBT
Changes in debt for the year ended June 30, 2016 was as follows:
July 1, 2015 Balance at Due Within
(as restated) Increases Decreases June 30, 2016 One Year
Governmental activities:
Net pension liability, CMERS 698,055$ 245,956$ -$ 944,011$ -$
Compensated absences 168,648 6,335 33,655 141,328 18,194
866,703$ 252,291$ 33,655$ 1,085,339$ 18,194$
All the long-term debt is liquidated by the General Fund of the District.
Debt Limitation
The Connecticut General Statutes provide that the District’s total outstanding and authorized debt shall not exceed
certain limitations. The following schedule details these limitations and the debt issued to date:
The Connecticut General Statutes provide that the total authorized debt of the District shall not exceed seven
times the base, or $21,583,506, nor shall the total authorized particular purpose debt exceed the individual debt
limitations reflected in the table below. As of June 30, 2016, the District had no authorized debt approved or
outstanding.
Total tax collections (including interest and lien
fees) for the year ended June 30, 2016 3,083,358$
General Urban Unfunded
Purpose Schools Sewers Renewal Pension
Debt Limitation:
2 ¼ times base 6,937,556$ - - - -
4 ½ times base - 13,875,111$ - - -
3 ¾ times base - - 11,562,593$ - -
3 ¼ times base - - - 10,020,914$ -
3 times base - - - - 9,250,074$
Total debt limitation 6,937,556$ 13,875,111$ 11,562,593$ 10,020,914$ 9,250,074$
Indebtedness:
Bonds payable - - - - -
Debt Limitation in
excess of outstanding
and authorized debt 6,937,556$ 13,875,111$ 11,562,593$ 10,020,914$ 9,250,074$
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 25 -
NOTE 8 — COMMITMENTS AND CONTINGENCIES
There are several claims pending against the District. The outcome and eventual liability of the District, if any, in
these cases are not known at this time. The District’s legal counsel estimates that potential claims against the
District not covered by insurance, resulting from such litigation would not materially affect the financial position
of the District.
NOTE 9 - RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors
and omissions; medical; workers’ compensation claims and natural disasters for which the District carries
commercial insurance. There were no significant reductions in insurance coverage from the prior year and the
amount of claim settlements have not exceeded insurance coverage for the current year or the three prior years.
The District currently is a member of the Connecticut Interlocal Risk Management Agency ("CIRMA"), a public
entity risk pool established for the purpose of administering an interlocal risk management program pursuant to
the provisions of Section 7-479a of the Connecticut General Statutes, for workers' compensation and employer
liability coverage. CIRMA is to be self-sustaining through members' premiums, but reinsurers in excess of
$1,000,000 for each insured occurrence. Members may be subject to supplemental assessment in the event of
deficiencies; however, potential assessments are limited by the by-laws.
As of June 30, 2016, there are no claims pending against the District.
NOTE 10 — EMPLOYEE RETIREMENT PLANS
Employees Other Than Police Personnel
Plan Description
The District contributes to the Town of Putnam's Retirement Plan (the Plan), a single-employer, defined benefit
pension plan that is reported as a Pension Trust Fund in the Town of Putnam's financial statements. The Plan is
accounted for using the accrual basis of accounting. Plan member contributions are recognized in the period in which
the contributions are due. Employer contributions to the Plans are recognized when due and the employer has made a
formal commitment to provide contributions. Benefits and refunds are recognized when due and payable in
accordance with the terms of the Plan.
Plan Membership
Membership in the Plan consisted of the following at July 1, 2015, the date of the most recent actuarial valuation:
Inactive plan members or beneficiaries
receiving benefits
47
Inactive plan members entitled to but not yet
receiving benefits
68
Active plan members 109
224
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 26 -
Employees of the Putnam Special Services District, other than police personnel, are eligible to participate in the
Town's Plan. Included in Plan membership above are three active plan members employed by the Putnam Special
Services District and four terminated employees of the Putnam Special Services District entitled to benefits, but not
yet receiving them.
Benefit Provisions
Employees who work more than 30 hours per week are eligible to participate in the Plan. Benefits fully vest after 5
years of service. Normal retirement date is the later of the participant's 65th birthday or the 5th anniversary of joining
the Plan.
Pension benefits for normal retirement under the Plan are based on the average monthly compensation during the five
consecutive years of service, at which the participants' earnings were at their highest level. The participant's monthly
benefit shall be equal to 1.3% of the average monthly compensation multiplied by the total number of years of
employment with the Town (limited to 40 years). The Plan permits early retirement for participants at age 55 with 15
years of service. Benefits for early retirement shall be equal to the present value of the participants' accrued benefit.
Participants are required to contribute 3% of their annual earnings.
Other Plan Provisions
The Plan does not provide for disability benefits. If an employee becomes disabled and must cease employment, he
will be entitled to the same benefits as a participant who has terminated employment. In the event of death, a
beneficiary shall receive benefits payable upon death, which is subject to certain limitations imposed by law. Death
benefits will be equal to the present value of the accrued benefits.
Fire Personnel are participants in the Towns plan but do not contribute to the pension plan under arrangements
that were established with the Town of Putnam, and became effective January 1, 1975. Firefighters who have
completed 20 years of continuous service with the Fire Department and attain the age of 62, are qualified to
receive benefits upon their retirement from service with the Putnam Special Services District's Fire Department.
Benefits are based on 40% of the annual compensation of a participant for the year preceding his/her retirement
plus $1.00 for every year of credited service with the Fire Dept. Benefits are paid every December 1st, in a lump
sum, and cease upon the death of the participant.
Benefit provisions of the Town of Putnam’s Pension Plan are established and can be amended by the District Council
of the Town of Putnam.
Funding Policy
Plan members are required to contribute 3% of their covered compensation to the Plan. The District is required to
contribute an actuarially determined amount each year. The total contribution to the Plan in relation to the actuarially
determined employer contribution (ADEC) was $185,420. The District's contributions to the Plan for the year ended
June 30, 2016 was $17,062.
Other financial information regarding the Town of Putnam’s Employee Pension Plan is included in the Town of
Putnam’s annual financial statements.
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 27 -
Investments
Investments are recorded at fair value based on quoted market prices. Short-term investments are reported at cost,
which approximates fair value. Fair value of other securities is determined by the mean of the most recent bid and
asked prices as obtained from dealers that make markets in such securities. Investments for which market quotations
are not readily available are valued at their fair values as determined by the custodian under the direction of the Town,
with the assistance of a valuation service. Securities traded on national exchanges are valued at the last reported sales
price. Investment income is recognized when earned and gains and losses on sales or exchanges are recognized on
the transaction date.
The following was the Town of Putnam’s adopted asset allocation policy as of June 30, 2016:
Asset Class
Target
Allocation
Large Cap 32%
Mid/Small Cap 12%
International 11%
Intermediate Bond 44%
Short Term Bond/Cash 1%
100%
Rate of Return
The annual money-weighted rate of return on pension plan investments, net of pension plan investment expenses was
-.8322%at June 30, 2016. The money-weighted rate of return expresses investment performance, net of investment
expense, adjusted for the changing amounts actually invested.
Administrative costs of the Plan are funded by the Town. The District's current year covered payroll for this Plan was
approximately $190,787.
Net Pension Liability
The components of the Town of Putnam’s net pension liability at June 30, 2016 were as follows:
Total pension liability 10,724,584$
Plan fiduciary net position 11,810,617
Net pension liability (1,086,033)$
Plan fiduciary net position as percentage 110.13%
of the total pension liability
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 28 -
Actuarial Assumptions
The total pension liability was determined by an actuarial valuation as of July 1, 2015, using the following actuarial
assumptions, applied to all periods included in the measurement:
Inflation 3.0%
Salary 5.0%, including inflation
Investment rate of return 7.0%
Actuarial cost method Entry Age Actuarial (level percentage of salary)
Mortality rates were based on the RP-2014 adjusted to 2006 total dataset mortality table projected to valuation dated
with scale MP-2015.
Discount Rate
The discount rate used to measure the total pension liability was 7%. The projection of cash flows used to determine
the discount rate assumed the plan members contributions will be made at the current contribution rate and that Town
contributions will be made at rates equal to the difference between actuarially determined contribution rate and the
member rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return
on pension plan investments was applied to all periods of projected benefit payments to determine the total pension
liability.
Sensitivity of the net pension liability to changes in the discount rate
The following presents the net pension liability, calculated using the discount rate of 7% as well as what the Town’s
net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (6%) or 1
percentage point higher (8%) than the current rate:
1%
Decrease
(6%)
Current
Discount
(7%)
1%
Increase
(8%)
(1,086,033)$ 252,884$ (2,224,247)$
Pension expense and deferred outflows of resources and deferred inflows of resources related to pensions
For the year ended June 30, 2016, the Town of Putnam recognized pension expense of $358,572. The Town reported
deferred outflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows of Inflows ofResources Resources
Differences between expected and actual experience -$ (361,855)$
Changes of assumptions 154,230 (124,501)
Net difference between projected and actual
earnings on pension plan investements 1,025,668 -
1,179,898$ (486,356)$
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 29 -
Amounts reported as deferred outflows (inflows) of resources related to pension expense from the recognition of
difference between expected and actual experience will be recognized in pension expense as follows:
2017 218,929$
2018 218,929
2019 218,931
2020 124,699
2021 (65,954)
Thereafter (21,992)
693,542$
Connecticut Municipal Employees’ Retirement Plan (CMERS)
Connecticut's Municipal Employees Retirement System (CMERS) is the public pension plan offered by the State of
Connecticut for municipal employees in participating municipalities. The plan was established in 1947 and is
governed by Connecticut Statute Title 7, Chapter 113. CMERS is a multiemployer pension plan administered by the
Connecticut State Retirement Commission. The State Retirement Commission is responsible for the administration of
the Connecticut Municipal Employees Retirement System (CMERS). The State Treasurer is responsible for investing
CMERS funds for the exclusive benefit of CMERS members. The District has one participating group of employees
with in this plan, Police Employees, who are covered under the Policemen and firemen with social security section of
the plan.
Plan description
Municipalities may designate which departments (including elective officers if so specified) are to be covered under
the Municipal Employees Retirement System. This designation may be the result of collective bargaining. Only
employees covered under the State Teachers Retirement System may not be included. There is no minimum age or
service requirements. Membership is mandatory for all regular full time employees of participating departments
except Police and Fire hired after age 60.
The plan has 4 sub plans as follows:
General employees with social security
General employees without social security
Policemen and firemen with social security
Policemen and firemen without social security
Benefit provisions
The plan provides retirement, disability and death benefits.
General Employees-Employees are eligible to retire at age 55 with 5 years of continuous service, or 15 years of active
aggregate service, or 25 years of aggregate service.
Policemen and Firemen-Compulsory retirement age for police and fire members is age 65. Normal Retirement: For
members not covered by social security, the benefit is 2% of average final compensation times years of service.
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 30 -
For members covered by social security, the benefit is 1 %% of the average final compensation not in excess of the
year's breakpoint plus 2% of average final compensation in excess of the year's breakpoint, times years of service.
The maximum benefit is 100% of average final compensation and the minimum benefit is $1,000 annually. Both the
minimum and the maximum include workers' compensation and social security benefits. If any member covered by
social security retires before age 62, the benefit until age 62 is reached or a social security disability award is received,
is computed as if the member is not under social security.
Early Retirement: Employees are eligible after 5 years of continuous or 15 years of active aggregate service. The
benefit is calculated on the basis of average final compensation and service to date of termination. Deferred to normal
retirement age, or an actuarially reduced allowance may begin at the time of separation.
Disability Retirement: Employees are eligible for service-related disability benefits from being permanently or totally
disabled from engaging in the service of the municipality provided such disability has arisen out of and in the course
of employment with the municipality. Disability due to hypertension or heart disease, in the case of firemen and
policemen, is presumed to have been suffered in the line of duty. Disability benefits are calculated based on
compensation and service to the date of the disability with a minimum benefit (including workers' compensation
benefits) of 50% of compensation at the time of disability.
Employees are eligible for non-service-related disability benefits with 10 years of service and being permanently or
totally disabled from engaging in gainful employment in the service of the municipality. Disability benefits are
calculated based on compensation and service to the date of the disability.
Pre-Retirement Death Benefit: The plan also offers a lump sum return of contributions with interest or surviving
spouse benefit depending on length of service.
Contributions
Employer:
Participating municipalities make annual contributions consisting of a normal cost contribution, a contribution for the
amortization of the net unfunded accrued liability and a prior service amortization payment which covers the
liabilities of the system not met by member contributions.
Employees:
For employees not covered by social security, each person is required to contribute 5% of compensation.
For employees covered by social security, each person is required to contribute 2 %% of compensation up to the
social security taxable wage base plus 5% of compensation, if any, in excess of such base.
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 31 -
Allocation methodology for Pension Liability, Pension Expense and Deferred outflows/inflows of resources
The schedules of employer allocations were calculated based upon the 2014 actuarial (expected) payroll amounts
reported by participating employers. Expected payroll adjusts actual payroll for known changes in the status of
employees, annualized salaries for partial year employees and anticipated salary increases. The employer allocations
were then applied to the net pension liability, pension expense, deferred inflows, sensitivity analysis and the deferred
inflow amounts to be recognized in fiscal years subsequent to the reporting date to determine the amount applicable to
each employer. The schedules of employer allocations reflect actuarial employer payroll for the fiscal year ended
June 30, 2014. Based upon the employer's payroll as compared to the total, an employer allocation percentage is
calculated to six decimal places and is used to allocate the elements noted above.
Pension Liability
At June 30, 2015, the District reported a liability of $944,011 for its proportionate share of the CMERS’ net pension
liability. The net pension liability was measured as of June 30, 2015. The total pension liability used to calculate the
net pension liability was determined using update procedures to roll forward the total pension liability from an
actuarial valuation as of June 30, 2014, to the measurement date of June 30, 2015.
Net Pension Liability of the District
The components of the net pension liability of the District at June 30, 2016 was as follows:
Total pension liability 12,969,230$
Plan fiduciary net assets 12,025,219
Net Pension Liability 944,011$
Plan fiduciary net position as a percentage
of the total pension liability 92.72%
Percentage of the total 3.085286%
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 32 -
Pension expense and deferred outflows/inflows of resources
For the year ended June 30, 2015, the District recognized pension expense for their portion of the CMERS of
$156,942. At June 30, 2015, the District reported deferred outflows of resources related to pensions from the
following sources:
Deferred
Outflows of
Resources
Differences between expected
and actual experience -$
Changes in assumptions -
Net difference between projected and
actual earnings on investments 71,341
Total 71,341$
Percentage of total 3.085286%
Pension Expense 198,018$
Deferred outflows of resources related to CMERS pensions will be recognized in pension expense as follows:
2017 4,499$
2018 4,499
2019 4,499
2020 57,844
Total 71,341$
Year Ending June 30,
Actuarial Assumptions
The total pension liability was determined by an actuarial valuation as of June 30, 2014, using the following
actuarial assumptions, applied to all periods included in the measurement:
Inflation 3.25%
Salary
Investment rate of return
4.25-11.00%, including inflation
8% net of pension plan investment expense, including
inflation
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 33 -
Mortality rates were based on the RP-2000 Combined Mortality Table for annuitants and non-annuitants
(set forward one year for males and set back one year for females).
The actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience
study for the period July 1, 2005 - June 30, 2010.
Future Cost-of-Living adjustments for members who retire on or after January 1, 2002 are 60% of the annual
increase in the CPI up to 6%. The minimum annual COLA is 2.5%, the maximum is 6%.
Long-term rate of return
The long-term expected rate of return on pension plan investments was determined using a log-normal
distribution analysis 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 plan's target asset allocation as of June 30, 2014 are summarized
in the following table:
Asset Class
MERS
Target
Allocation
MERS Long-Term
Expected Real Rate
of Return
Large Cap Equity 16% 5.80%
Developed non-US equities 14% 6.60%
Emerging Markets(non-US) 7% 8.30%
Core fixed income 8% 1.30%
Inflation linked bond fund 5% 1.00%
Emerging bond fund 8% 3.70%
High yield bonds 14% 3.9
Real estate 7% 5.10%
PORivate equity 10% 7.60%
Alternative investments 8% 4.10%
Liquidity fund 3% 0.40%
100%
PUTNUM SPECIAL SERVICES DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
- 34 -
Sensitivity
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 or 1-percentage-point higher than the current rate:
Net Pension Liability (Asset)
1% Decrease
to 7%
Current
Discount
Rate 8%
1% Increased
to 9%
PSSD Police-MERS $ 1,766,759 $ 944,011 $ 258,434
NOTE 11 — RELATED PARTY TRANSACTIONS
The District's Assistant Fire Chief owns a business, which provides various services to the District. Amounts paid
to this business in 2016 were $3,507. There were no amounts payable to the Assistant Chief at June 30, 2016.
NOTE 12 — SUBSEQUENT EVENTS
Subsequent events were evaluated through December 22, 2016, the date the financial statements were available to
be issued.
NOTE 13 – ACCOUNTING RESTATEMENT RELATED TO MERS
For the fiscal year ended June 30, 2015, the fiduciary net position of the CMERS plan was restated by the
Auditors of Public Accounts to include the gross amount of contributions receivable as of July 1, 2014. For the
June 30, 2014 Schedules of Pension Amounts by Employer, the present value of the contribution receivables was
included as an asset and as a result, fiduciary net position increased by %87,291,000. The gross amount of the
contribution receivable recorded as a prior period adjustment in the audited financial statements at July 1, 2014
was $226,856,000.
Therefore, the result of the restatement was to increase the July 1, 2014 fiduciary net position from the amount
reported in the prior year audited financial statements by $139,565,000.
The following schedule show the change in the beginning net position and beginning pension liability due to this
restatement as it relates to the Putnam Special Services District:
Net position June 30, 2015 Net pension liability - June 30, 2015
as previously reported 1,282,005$ as previously reported 745,981$
Net pension liability adjustment (47,926) Net pension liability adjustment (47,926)
Net position July 1, 2015, as restated 1,234,079$ Net pension liability - June 30, 2015
as restated 698,055$
PUTNAM SPECIAL SERVICES DISTRICT
GENERAL FUND BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2016
See notes to the supplemental information
- 36 -
Variance with
Final Budget-
Original Final Favorable
Budget Budget Actual (Unfavorable)
Property taxes
Property taxes 3,070,661$ 3,070,661$ 3,145,747$ 75,086$
Other Income
Federal grants 16,000 16,000 16,000 -
State grants - Housing
Authority in lieu 18,500 18,500 18,821 321
State Grants - Pilot 20,680 20,680 20,332 (348)
State grants -
Property tax releif 92,270 92,270 79,522 (12,748)
State grants - other 18,147 18,147 18,285 138
165,597 165,597 152,960 (12,637)
Charges for services
Licenses and permits 3,500 3,500 5,430 1,930
Charges for services 101,849 101,849 532,444 430,595
Fines 10,000 10,000 16,200 6,200
115,349 115,349 554,074 438,725
Investment income 2,000 2,000 2,701 701
Other income 500 500 7,603 7,103
2,500 2,500 10,304 7,804
TOTAL REVENUES 3,354,107$ 3,354,107$ 3,863,085$ 508,978$
Budgeted Amounts
PUTNAM SPECIAL SERVICES DISTRICT
GENERAL FUND BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2016
See notes to the supplemental information
- 37 -
Variance with
Final Budget-
Original Final Favorable
Budget Budget Actual (Unfavorable)
Administrative
Salaries 46,196$ 46,196$ 47,100$ (904)$
Employee Benefits 12,768 12,768 12,936 (168)
Repairs and Maintnance 1,000 1,000 1,000 -
Rent 2,300 2,300 1,987 313
Insurance 260 260 148 112
Telephone 800 800 502 298
Supplies 1,500 1,500 1,122 378
Postage 750 750 640 110
Small tools and equipment 500 500 85 415
Outside Services 97,600 97,600 94,264 3,336
Other Expenses 200 200 - 200
TOTAL ADMINISTRATIVE 163,874 163,874 159,784 4,090
Police Department
Salaries 1,130,827 1,130,827 1,110,585 20,242
Premium Salaries 203,189 203,189 434,954 (231,765)
Employee Benefits 716,972 716,972 676,042 40,930
Repairs and Maintnance 21,200 21,200 25,421 (4,221)
Rent 1 1 1 -
Insurance 35,290 35,290 45,340 (10,050)
Telephone 18,100 18,100 24,246 (6,146)
Utilities 17,500 17,500 15,862 1,638
Supplies 14,000 14,000 11,147 2,853
Postage 1,500 1,500 638 862
Small Tolls and Equipment 10,250 10,250 6,999 3,251
Narcotics Canine Expense 6,500 6,500 3,381 3,119
Motor Vehicle 61,500 61,500 50,318 11,182
Outside Services 68,500 68,500 69,746 (1,246)
Other Expenses 28,000 28,000 29,810 (1,810)
TOTAL POLICE 2,333,329 2,333,329 2,504,490 (171,161)
Budgeted Amounts
PUTNAM SPECIAL SERVICES DISTRICT
GENERAL FUND BUDGETARY COMPARISON SCHEDULE
YEAR ENDED JUNE 30, 2016
See notes to the supplemental information
- 38 -
Variance with
Final Budget-
Original Final Favorable
Budget Budget Actual (Unfavorable)
Budgeted Amounts
Fire Department
Salaries 33,910 33,910 33,910 -
Employee Benefits 86,832 86,832 62,118 24,714
Repairs and Maintnance 34,600 34,600 33,007 1,593
Insurance 12,180 12,180 11,900 280
Telephone 8,000 8,000 8,899 (899)
Utilities 15,500 15,500 14,750 750
Supplies 4,300 4,300 5,062 (762)
Small Tolls and Equipment 115,400 115,400 112,971 2,429
Motor Vehicle 20,760 20,760 16,771 3,989
Outside Services 6,493 6,493 6,524 (31)
Other Expenses 5,600 5,600 5,897 (297)
Hydrants 30,763 30,763 30,762 1
TOTAL FIRE 374,338 374,338 342,571 31,767
Dispatch
Salaries 165,271 165,271 156,877 8,394
Premium Salaries 36,030 36,030 38,429 (2,399)
Employee Benefits 49,640 49,640 37,043 12,597
Repairs and Maintnance 10,000 10,000 3,777 6,223
Insurance 275 275 260 15
Telephone 11,000 11,000 2,681 8,319
Utilities 1,050 1,050 619 431
Supplies 2,500 2,500 1,404 1,096
Small Tolls and Equipment 5,000 5,000 7,609 (2,609)
Outside Services 4,600 4,600 3,461 1,139
Other Expenses 1,200 1,200 - 1,200
TOTAL DISPATCH 286,566 286,566 252,160 34,406
STREET LIGHTS
Outside Services 117,000 117,000 123,474 (6,474)
TOTAL STREET LIGHTS 117,000 117,000 123,474 (6,474)
Capital outlay 129,654 129,654 155,422 (25,768)
TOTAL EXPENDITURES 3,404,761$ 3,404,761$ 3,537,901$ (133,140)$
NET REVENUE
OVER EXPENDITURES (50,654)$ (50,654)$ 325,184$ 375,838$
PUTNAM SPECIAL SERVICES DISTRICT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED JUNE 30, 2016
- 39 -
NOTE 1 - BUDGETARY INFORMATION
Budgets are adopted by the District Authority on a modified accrual basis. The adopted annual budget covers the
General Fund.
The department heads for Putnam Special Services District prepares and presents to the District Authority a
budget at the May board meeting. The District Authority may amend this budget, but must adopt a formal budget
by June 30. The Authority has the authority to make line item transfers and additional appropriations. Spending
by management is limited by the total amount appropriated during any fiscal year. Appropriations lapse at year-
end. The District Authority did not approved additional appropriations during the year.
Putnam Special Services District does not employ encumbrance accounting since at present it is not considered
necessary to assure budgetary control. Any excess of expenditures over revenues will be funded by either future
revenue or the respective fund balances.
NOTE 2 - COMPLIANCE - EXCESS OF EXPENDITURES OVER APPROPRIATIONS
For the year ended June 30, 2016, expenditures exceeded appropriations for the following departments (the legal
level of control):
Police department 171,161$
Capital outlay 25,768$
These excess expenditures were funded using additional unbudgeted contributions and available fund balance and
do not represent a violation of any regulatory or statutory provisions.
PUTNAM SPECIAL SERVICES DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
TOWN OF PUTNAM RETIREMENT PLAN
SCHEDULE OF EMPLOYER CONTRIBUTIONS
YEAR ENDED JUNE 30, 2016
- 40 -
Contractually required contribution 185,420$
Contributions in relation to the
cotractually required contribution (185,420)
Contribution defieciency(excess) -$
City's Covered payroll 4,304,604$
Contribtions as a percentage of covered payroll 4.31%
PUTNAM SPECIAL SERVICES DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
TOWN OF PUTNAM RETIREMENT PLAN
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
YEAR ENDED JUNE 30, 2016
- 41 -
Total Pension Liability
Service cost 386,965$
Interest on total pension liability 740,110
Defference between expected and actual experience (313,896)
Change in assumptions (147,992)
Benefit payments (249,043)
Net change in total pension liability 416,144
Total Pension Liability, beginning 10,308,440
Total pension liability, ending (a) 10,724,584
Fiduciary Net Position
Employer contributions 185,420$
Member contributions 157,128
Investment income net of investment expenses (98,416)
Benefit payments (249,043)
Administrative expenses -
Net change in plan fiduciary net position (4,911)
Fiduciary Net Position, beginning 11,815,528
Fiduciary net position, ending (b) 11,810,617
Net pension liability, ending (a)-(b) (1,086,033)$
Fiduciary net position as a % of total pension liability 110.13%
Covered payroll 4,304,604$
Net pension liability as a % of covered payroll -25.23%
Note: See notes to the financial statements for actuarial methods and assumptions
PUTNAM SPECIAL SERVICES DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE DISTRICTS MUNICIPAL EMPLOYEES RETIREMENT
SYSTEM PENSION CONTRIBTUIONS
YEAR ENDED JUNE 30, 2016
- 42 -
Contractually required contribution 231,576$
Contributions in relation to the
cotractually required contribution (231,576)
Contribution defieciency(excess) -$
District's Covered payroll 1,236,037$
Contribtions as a percentage of covered payroll 18.74%