AUDIT - 2012

REPORT OF AUDIT

BOROUGH OF MILFORD

COUNTY OF HUNTERDON

DECEMBER 31, 2012

BOROUGH OF MILFORD, N.J. TABLE OF CONTENTS

YEAR ENDED DECEMBER 31, 2012

PART I

Exhibit

Page

Independent Auditor's Report

1 - 4

CURRENT FUND A

Comparative Balance Sheet - Current Fund

5 - 6

A-1 Comparative Statement of Operations and Changes in Fund Balance - Regulatory Basis - Current Fund A-2 Statement of Revenues - Regulatory Basis A-3 Statement of Expenditures - Regulatory Basis

7

8 - 9

10 - 14

TRUST FUND B

Comparative Balance Sheet - Regulatory Basis

15

GENERAL CAPITAL FUND C Comparative Balance Sheet - Regulatory Basis C-1 Schedule of Fund Balance - Regulatory Basis

16 17

WATER UTILITY FUND D

Comparative Balance Sheet - Regulatory Basis

18 - 19

D-1 Comparative Statement of Operations and Changes in Fund Balance - Regulatory Basis

20 21 21 22

D-2 Statement of Fund Balance - Regulatory Basis D-3 Statement of Revenues - Regulatory Basis D-4 Statement of Expenditures - Regulatory Basis

SEWER UTILITY FUND E

Comparative Balance Sheet - Regulatory Basis

23 - 24

E-1 Comparative Statement of Operations and Changes in Fund Balance - Regulatory Basis E-2 Statement of Fund Balance - Regulatory Basis E-3 Statement of Revenues - Regulatory Basis E-4 Statement of Expenditures - Regulatory Basis

25 26 26 27

PUBLIC ASSISTANCE FUND F

Comparative Balance Sheet - Regulatory Basis

28

FIXED ASSETS G Comparative Statement of General Fixed Assets - Regulatory Basis

29

Exhibit

Page

NOTES TO FINANCIAL STATEMENTS

30 - 51

SUPPLEMENTARY DATA

Officials in Office and Surety Bonds

52 53 54

Schedule of Expenditures of Federal Awards

Schedule of Expenditures of State Financial Assistance

Comparative Schedules

55 - 59

CURRENT FUND A-4

Schedule of Cash - Treasurer

60 61 62 63 64

A-5 A-6 A-7 A-8 A-9

Schedule of Cash - Tax Collector - Change Fund

Schedule of Taxes Receivable and Analysis of Property Tax Levy

Schedule of Tax Title Liens Receivable Schedule of Revenue Accounts Receivable

Schedule of Amount Due to State of New Jersey for Veterans and Senior Citizens Deductions

65 66

A-10 Schedule of Interfunds Receivabl es/(P ayables)

A-11 Schedule of Appropriation Reserves

67 - 68

A-12 Schedule of Various Cash Liabilities and Reserves

69 70 71 72 73 74 75 76 77 78 79 80 81 81 82

A-13 Schedule of Deferred Charges A-14 Schedule of Prepaid Taxes A-15 Schedule of County Taxes Payable

A-16 Schedule of Local School District Taxes Payable A-17 Schedule of Regional High School Taxes Payable

A-18 Schedule of Interfunds

A-19 Schedule of Grants Receivable

A-20 Schedule of Appropriated Reserves for Grants A-21 Schedule of Unappropriated Reserves for Grants

TRUST FUNDS B-1

Schedule of Cash

Reserve/(Deficit) for Animal Control Trust Fund Expenditures

B-2 B-3 B-4 B-5

Schedule of Interfunds

Schedule of Due to State Department of Health

Schedule of Other Trust Funds

Exhibit

Page

GENERAL CAPITAL FUND C-2 Schedule of Cash C-3 Analysis of Cash C-4

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99

Schedule of Interfund Accounts Receivable (Payable)

C-5

Schedule of Grants Receivable - Delaware River Joint Toll Bridge Commission Schedule of Deferred Charges to Future Taxation - Unfunded

C-6 C-7 C-8 C-9

Schedule of Capital Improvement Fund Schedule of Improvement Authorizations

Schedule of Various Reserves C-10 Schedule of Bond Anticipation Notes Payable C-11 Schedule of Bonds and Notes Authorized But Not Issued

WATER UTILITY FUND

D-5 D-6 D-7 D-8 D-9

Schedule of Cash

Schedule of Water Utility Collector Cash

Schedule of Change Fund

Schedule of Water Utility Capital Cash

Schedule of Consumer Accounts Receivable D-10 Schedule of Interfund Accounts Receivable (Payable) D-11 Schedule of Fixed Capital D-12 Schedule of Fixed Capital Authorized and Uncompleted D-13 Schedule of Appropriation Reserves D-14 Schedule of Accrued Interest on Loan And Notes D-15 Schedule of Improvement Authorizations D-16 Schedule of USDA-Rural Development Loan Payable D-17 Schedule of Reserve for Amortization D-18 Schedule of Reserves D-19 Schedule of Deferred Reserve for Amortization D-20 Schedule of Bond Anticipation Notes Payable D-21 Schedule of Bonds and Notes Authorized but Not Issued

100 101 102 103 104 105 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119

SEWER UTILITY FUND E-5 Schedule of Cash E-6

Schedule of Sewer Utility Collector Cash Schedule of Sewer Utility Capital Cash Schedule of Consumer Accounts Receivable

E-7 E-8 E-9

Schedule of Interfund Accounts Receivable (Payable)

E-10 Schedule of Sewer Overpayments E-11 Schedule of Fixed Capital E-12 Schedule of Fixed Capital Authorized and Uncompleted E-13 Schedule of Appropriation Reserves E-14 Schedule of Accrued Interest on Notes E-15 Schedule of Sewer Capital Bond Anticipation Notes

Exhibit

Page

E-16 Schedule of U.S.D.A. Development Loan E-17 Schedule of Improvement Authorizations E-18 Schedule of Capital Improvement Fund E-19 Schedule of Reserve for Amortization E-20 Schedule of Deferred Reserve for Amortization Schedule of Various Reserve for Sewer Capital

120 121 122 122 123 124 125

E-21 E-22

Schedule of Bonds and Notes Authorized but Not Issued

PUBLIC ASSISTANCE FUND

Schedule of Cash - Treasurer

126 127 128 129 129 130 130

F-1 F-2 F-3 F-4 F-5 F-6 F-7

Schedule of Cash and Reconciliation Per N.J.S. 40A:5-5

Schedule of Cash and Reconciliation Schedule of Revenues - Cash Basis Schedule of Expenditures - Cash Basis Schedule Reserve for Public Assistance Schedule of Interfund Current Fund

PART II

Independent Auditor's 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

131 - 132

133 134

Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings

GENERAL COMMENTS

135 135 136 137 137 137

Cash Balances

Contracts and Agreements Required

Collection of Interest on Delinquent Taxes and Assessments

Delinquent Taxes and Tax Title Liens

Verification of Delinquent Taxes and Other Charges

Municipal Court

OTHER COMMENTS

138 138 138

Segregation of Duties

Interfunds

Finance

139

RECOMMENDATIONS

STATUS OF PRIOR YEAR'S AUDIT FINDINGS/RECOMMENDATIONS

139

BOROUGH OF MILFORD

PART I

REPORT OF AUDIT ON FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA

YEAR ENDED DECEMBER 31, 2012

Ferraioli, Wielkotz, Cerullo & Cuva, P.A.

Charles J. Ferraioli, Jr., MBA, CPA, RMA Steven D. Wielkotz, CPA, RMA James J. Cerullo, CPA, RMA Paul J. Cuva, CPA, RMA Thomas M. Ferry, CPA, RMA

Newton Office 100B Main Street Newton, N.J. 07860 973-579-3212 Fax 973-579-7128

Certified Public Accountants 401 Wanaque Avenue Pompton Lakes, New Jersey 07442 973-835-7900 Fax 973-835-6631

INDEPENDENT AUDITOR'S REPORT

Honorable Mayor and Members of the Borough Council Borough of Milford Milford, New Jersey 08848

Report on the Financial Statements

We have audited the accompanying balance sheets - regulatory basis of the various funds of the Borough of Milford in the County of Hunterdon, as of December 31, 2012 and 2011, the related statement of operations and changes in fund balance - regulatory basis for the years then ended, and the related statement of revenues - regulatory basis and statement of expenditures - regulatory basis of the various funds for the year ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the Borough'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 the basis of accounting prescribed by the Division of Local Government Services, Department of Community Affairs, State ofNew Jersey. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion 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, the audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (the "Division"), and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

1

Honorable Mayor and Members of the Borough Council Page 2

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.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1 of the financial statements, the financial statements are prepared by the Borough of Milford on the basis of the financial reporting provisions prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to meet the requirements of New Jersey. The effects on the financial statements of the variances between the regulatory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the "Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles" paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of each fund of the Borough of Milford as of December 31, 2012 and 2011, or changes in financial position for the years then ended.

Basis for Qualified Opinion on Regulatory Basis Accounting Principles

We are unable to obtain sufficient evidence to support the cost of fixed assets. As more fully describe in Note 1, due to the length of time over which these fixed assets were acquired, it is not practical to determine their actual costs. We are, therefore, unable to express an opinion as to the general fixed assets account group at at December 31, 2012, and 2011, stated as $5,031,771.00 and $4,532,934.00, respectively.

2

Honorable Mayor and Members of the Borough Council Page 3

Qualified Opinion on Regulatory Basis of Accounting

In our opinion, except for the effects of the matter described in "Basis for Qualified Opinion on Regulatory Basis Accounting Principles", the financial statements referred to above present fairly, in all material respects, the regulatory basis balances sheets as of December 31, 2012 and 2011, the regulatory basis statements of operations for the years then ended and the regulatory basis statements of revenues and expenditures for the year ended December 31, 2012 in accordance with the basis of financial reporting prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey as described in Note 1.

Other Matters

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Borough of Milford's basic financial statements. The supplementary information listed in the table of contents and the letter of comments and recommendations section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplemental information listed in the table of contents are the responsibility of management and were derived from and relates 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 supplemental information listed in the table of contents, are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The letter of comments and recommendations section has not been subject 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 it.

qw c

3

Honorable Mayor and Members of the Borough Council Page 4

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards ,we have also issued our report dated June 19, 2013 on our consideration of the Borough of Milford's 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 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 Borough of Milford' s internal control over financial reporting and compliance. 7'1

homas M. Ferry, C.P.A. Registered Municipal Accountant No. 497

-

.r.otoq•40t10:44 , 161

0 14—

FERRAIOLI, WIELKOTZ, CERULLO & CUVA, P.A. Certified Public Accountants

June 19, 2013

(F V V C

4

A Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Current Fund

December 31,

Ref.

2012

2011

Assets Current Fund: Cash

A-4 A-5

888,584.75

1,122,950.22

Change Fund

50.00

50.00

888,634.75

1,123,000.22

Receivables and Other Assets with Full Reserves: Delinquent Taxes Receivable

A-6 A-7

116,094.65 73,527.71

116,320.51 66,886.63

Tax Title Liens Receivable Interfund Receivables: Federal and State Grant Fund Animal Control Trust Fund

A-10 A-10 A-10 A-10

29,777.42

43,427.25

1.03

0.78

Other Trust Fund General Capital

5,334.27

1,363.39 226,098.47

226,635.17

Deferred Charges: Over-expenditure of Appropriation

A-13

109,256.00

1,223,989.22

1,349,635.39

Federal and State Grant Fund: Interfund Receivable - General Capital

A-18 A-19

40,000.00

40,000.00 11,584.87 51,584.87

Grants Receivable

40,000.00

1,263,989.22

1,401,220.26

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

5

A

Page 2 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Current Fund

December 31,

Ref.

2012

2011

Liabilities, Reserves and Fund Balance

Current Fund: Appropriation Reserves

A-3;A-11

151,135.37

112,298.82

Due to State of New Jersey: Senior Citizen and Veteran Deductions lnterfunds Payable:

A-9

5,643.20

4,643.19

General Capital Fund

A-10 A- l 0 A-10 A-10

17,124.11

Other Trust

159.66

Sewer Operating Water Operating

352.37

40.00

Due to State of New Jersey: Marriage Surcharge

A-12 A-12

50.00

50.00

Tax Overpayments

9,949.27

7,789.94

Reserve for:

Garden State Trust

A-12 A-14 A-15 A-16 A-17

7,921.00 11,420.26

7,921.00 14,542.92 1,455.99 47,762.43 198,073.55 411,821.61 226,635.17 711,178.61 1,349,635.39

Prepaid Taxes

County Taxes Payable

415.71

District School Taxes Payable Regional School Taxes Payable

74,203.83 27,190.66 288,321.67 226,098.47 709,569.08 1,223,989.22

Reserve for Receivables

Contra

Fund Balance

A-1

Federal and State Grant Fund: Intel-fund Payable - Current Fund Appropriated. Reserve for Grants Unappropriated Reserve for Grants

A-18 A-20 A-21

29,777.42 4,157.00 6,065.58 40,000.00

43,427.25 1,250.00 6,907.62 51,584.87

1,263,989.22

1,401,220.26

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

6

A-1

Borough of Milford, N.J. Comparative Statement of Operations and Changes in Fund Balance - Regulatory Basis

Current Fund December 31,

Ref.

2012

2011

Revenues and Other Income:

Fund Balance Utilized

A-2 A-2 A-2 A-2 A-2

126,350.00 519,829.24 116,223.80 3,480,713.39

128,600.00 477,845.71 114,102.76 3,689,188.85

Miscellaneous Revenue Anticipated Receipts from Delinquent Taxes

Receipts from Current Taxes Non-Budget Revenue Other Credits to Income: Interfunds Returned

90,045.35

34,058.32

A-10 A-11 A-12

13,649.83 86,159.23

72,517.44 68,802.58

Unexpended Balance of Appropriation Reserves

2.20

Cancellation of Tax Overpayments

0.25

4,432,973.04

Total Revenues and Other Income

4,585,115.91

Expenditures: Budget and Emergency Appropriations: Operations - Within Caps: Salaries and Wages

A-3 A-3

214,888.00 674,035.24

227,687.25 668,294.75

Other Expenses

Deferred Charges and Statutory Expenditures - Municipal - Within Caps

A-3

59,825.76

62,043.00

Operations - Excluded From CAPS: Other Expenses

A-3 A-3 A-3

88,907.00 61,000.00 334,367.21

86,695.00 55,500.00 257,000.56

Capital Improvements - Excluded from Caps Municipal Debt Service - Excluded from Caps Deferred Charges and Statutory Expenditures - Municipal - Excluded from Caps

19,009.50

A-10 A-10 A-15 A-16 A-17

Grants Receivable Cancelled

11,584.87 6,697.91 439,704.16 1,768,703.00 648,519.42 4,308,232.57

lnterfund Advances

0.75

County Taxes including Added Taxes

489,530.47 1,736,759.00 776,592.41 4,379,112.69

Local District School Tax Regional High School Tax

Total Expenditures

Excess (Deficit) Revenue Over Expenditures

124,740.47

206,003.22

Fund Balance, January 1,

A

711,178.61

633,775.39

835,919.08

839,778.61

Decreased by: Fund Balance Utilized as Budget Revenue

126,350.00

128,600.00

A

709,569.08

Fund Balance, December 31,

711,178.61

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

7

A-2 Page 1 of 2

Borough of Milford, N.J. Statement of Revenues - Regulatory Basis Current Fund Year Ended December 31, 2012

Excess or (Deficit)

Ref.

Budget

Realized

Fund Balance Anticipated

A-1

126,350.00

126,350.00

Miscellaneous Revenues: Licenses: Alcoholic Beverages

A-8

5,800.00

5,802.30

2.30

Fines and Costs:

Municipal Court

A-8 A-8 A-8 A-8 A-8 A-8

2,500.00 22,000.00 2,000.00 51,841.00 226,473.00

3,221.63 28,174.39 1,064.87 51,841.00 226,473.00

721.63

Interest and Costs on Taxes

6,174.39 (935.13)

Interest on Investments and Deposits

Consolidated Municipal Property Tax Relief Act

Energy Receipts Tax Garden State Trust

7,921.00

7,921.00

Special Items of General Revenue Anticipated With Prior Written Consent of Director of

Local Government Services: Public and Private Revenues: Reserve for Recycling Tonnage

A-19 A-19

2,907.00 4,000.00

2,907.00 4,000.00

Clean Communities

Other Special Items: Reserve for Debt Service - General Capital - Ord. #759-09 Bond Anticipation Note

A-8 A-8 A-1

185,813.00

185,813.00

Uniform Fire Safety Act

2,180.00

2,611.05

431.05

Total Miscellaneous Revenues

513,435.00 115,000.00 754,785.00

519,829.24 116,223.80 762,403.04

6,394.24 1,223.80 7,618.04

Receipts from Delinquent Taxes

A-1;A-2

Subtotal General Revenues

Amount to be Raised by Taxes for Support of Municipal Budget-Local Tax for Municipal Purposes Including Reserve for Uncollected Taxes A-2

806,581.00

797,039.20

(9,541.80) (1,923.76) 90,045.35 88,121.59

Budget Totals

1,561,366.00 1,559,442.24

Non-Budget Revenue

A-1;A-2

90,045.35

1,561,366.00 1,649,487.59

A-3

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

8

A-2 Page 2 of 2

Borough of Milford, N.J. Statement of Revenues - Regulatory Basis Current Fund Year Ended December 31, 2012

Ref.

Analysis of Realized Revenues

3,480,71339

A-1;A-6

Revenue from Collections

2,811,755.19

A-6

Allocated to School and County Taxes

Balance for Support of Municipal Budget Appropriations

668,958.20

Add : Appropriation - Reserve for Uncollected Taxes

128,081.00

A-3

Amount for Support of Municipal Budget Appropriations

A-2

797,039.20

Receipts from Delinquent Taxes: Delinquent Taxes Taxes Receivable

A-6 A-2

116,223.80 116,223.80

Analysis of Non-budget Revenues

Miscellaneous Revenues Not Anticipated: Revenues Accounts Receivable: Borough Clerk

994.70

A-8

5,062.00

Cable T.V. Franchise Fee

365.68 362.00

Sr. Citizen and Veteran Admin. Fees

Centennial

14,814.34 24,505.00 1,357.50 41,251.13

Water and Sewer Health Care Reimbursement

Refunds / Reimbursements Fire Official / Fire Safety

Miscellaneous

A-4

87,717.65

1,333.00

A-10

Interfund Receivable

90,045.35

A-2

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

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Statement ofExpenditures - Regulatory Basis

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Municipal Debt Service - ExcludedFrom "CAPS"

Other Expenses

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P41

Borough ofMilford, N.J.

Year Ended December 31, 2012

Statement ofExpenditures - Regulatory Basis

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

Reserve for Federal andState Grants CashDisbursed Reserve for Uncollected Taxes

14

B

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Trust Funds

December 31,

2011

Ref.

2012

Assets

Animal Control Trust Fund: Cash Interfund - Sewer Operating

1,423.34 71.00 1,494.34

1,549.30

8-1 B-3

1,549.30

Other Trust Funds: Cash

151,187.66

13-1 B-3

105,453.80

159.66

Interfund - Current Fund

151,187.66

105,613.46

152,682.00

107,162.76

Liabilities, Reserves & Fund Balance

Animal Control Fund: Reserve for Animal Control Trust Fund Expenditures

1,473.71

1,520.52

B-2 B-3 B-4

1.03

0.78

Interfund - Current Fund

19.60

28.00

Due to State Department of Health

1,494.34

1,549.30

Other Trust Fund: Interfund - Current Fund

5,334.27

B-3

Reserve for:

25,544.09 3,751.89 38,400.00 78,157.41 151,187.66

30,342.51 4,266.39 2,900.00 68,104.56 105,613.46

B-5 B-5 B-5 B-5

Escrow Deposits Payroll Deductions Tax Sale Premiums

COAH

152,682.00

107,162.76

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

15

C

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis General Capital Fund December, 31

2012

Ref.

2011

Assets

1,208,947.65

587,992.03

C-2

Cash

Grants Receivable - Delaware River Joint Toll Bridge Commission

373,791.47 17,124.11 1,623,412.52

C-5 C-4 C-6

Interfund - Current Fund

1,326,898.29

Deferred Charges to Future Taxation - Unfunded

2,535,845.94

2,602,320.13

Liabilities, Reserves and Fund Balance

40,000.00 1,363.39 116,422.92

40,000.00

C-4 C-4 C-7

Interfund - Federal and State Grant Fund

Interfund - Current Fund Capital Improvement Fund Improvement Authorizations: Funded

117,898.86

97,915.43 983,252.40

C-8 C-8

51,965.06 666,972.82

Unfunded

Reserve for: Fire Apparatus and Equipment

80,661.60 185,813.59 22,000.00 1,265,139.00 171,869.20

C-9 C-9 C-9

95,661.60 151,917.00 33,000.00 843,754.00 172,559.20

Debt Service Ambulance

C-10

Bond Anticipation Notes Payable

C-1

Fund Balance

2,535,845.94

2,602,320.13

There were Bonds and Notes Authorized But Not Issued in the amount of $483,144.29 on December 31, 2012 - Per C-11

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

16

C - 1

Borough of Milford, N.J.

Schedule of Fund Balance - Regulatory Basis

General Capital Fund

Year Ended December 31, 2012

Ref.

171,869.20

Balance - December 31, 2011

C

Increased by: Premium on Notes Issued

C-2

690.00

172,559.20

Balance - December 31, 2012

C

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

17

D Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Water Utility Fund

December 31,

Ref.

2012

2011

Assets

Operating Fund: Cash-Treasurer

D-5 D-7

172,710.18

230,709.01

Cash-Change Fund

50.00

50.00

172,760.18

230,759.01

Interfund Receivable: Current Fund

D-10

40.00

172,800.18

230,759.01

Receivables with Full Reserves: Consumers Account Receivable

D-9

26,837.11

15,315.63

Total Operating Fund

199,637.29

246,074.64

Capital Fund: Cash

D-5;D-8

293,789.38 94,933.26 2,040,670.24 1,205,000.00 3,634,392.88

218,775.18 169,947.46 1,984,883.74 1,268,600.00 3,642,206.38

Due from Water Operating Fund

D-10 D-11 D-12

Fixed Capital*

Fixed Capital Authorized and Uncompleted*

Total Capital Fund

Total Assets

3,834,030.17

3,888,281.02

* The fixed capital reported is taken from the municipal records and does not necessarily reflect the true condition of such fixed capital.

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

18

D Page 2 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Water Utility Fund

December 31,

Liabilities, Reserves and Fund Balance

Ref

2012

2011

Operating Fund:

D-4;D-13

26,496.65 12,619.96

34,075.21 14,273.96

Appropriation Reserve

D-14

Accrued Interest on Loans and Notes

Interfund Payable: Water Capital

D-10

94,933.26 134,049.87 26,837.11 38,750.31 199,637.29

169,947.46 218,296.63 15,315.63 12,462.38 246,074.64

Reserve for Receivables

Contra

D-1

Fund Balance

Total Operating Fund

Capital Fund: Improvement Authorizations: Funded

D-15 D-15 D-16 D-17 D-18 D-19 D-20

7,813.50

616,166.30 859,743.59 1,619,433.65 105,868.35

Unfunded

616,166.30 876,191.59 1,477,762.15 105,868.35 63,600.00 485,930.00

Loans Payable

Reserve for Amortization Reserve for Capital Outlay

Reserve for Deferred Amortization Bond Anticipation Notes Payable

416,493.00 16,687.99

D-2

Fund Balance

8,874.49

Total Capital Fund

3,634,392.88

3,642,206.38

3,834,030.17

3,888,281.02

Footnote D There were Bonds and Notes Authorized But Not Issued on December 31, 2012 in the amount of $350,000.00 per schedule D-21.

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

19

D-1

Borough of Milford, N.J.

Comparative Statement of Operations and Changes in Fund Balance - Regulatory Basis

Water Utility Operating Fund

December 31,

Ref.

2012

2011

Revenue and Other Income Realized: Operating Surplus Anticipated

23,663.00 271,037.06

Rents

D-3 D-3 D-3 D-3

272,223.37 24,886.00 15,180.00

Additional Rents Rents- Hydrants Miscellaneous

14,520.00 1,240.50

5,032.12

Other Credits to Income: Unexpended Balance of Appropriation Reserves

D-13

17,852A4

3,686.42

Total Income

335,173.93

314,146.98

Expenditures: Operating

D-4 D-4

169,130.00 131,986.00

168,313.00 137,897.00

Debt Service

Deferred Charges and Statutory Expenditures

D-4

7,770.00

7,450.00

Total Expenditures

308,886.00

313,660.00

Excess in Revenue over Expenditures

26,287.93

486.98

Statutory Excess to Surplus

26,287.93

486.98

Fund Balance - January 1,

D ;D-1

12,462.38

35,638.40

38,750.31

36,125.38

Decreased by: Utilized as Anticipated Revenue

23,663.00

Fund Balance - December 31,

D

38,750.31

12,462.38

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

20

D-2

Borough of Milford, N.J.

Statement of Fund Balance - Regulatory Basis

Water Utility Capital Fund

Year Ended December 31, 2012

Ref.

Balance - December 31, 2011

8,874.49

Increased by: Cancellation of Improvement Authorizations

D-15

7,813.50

Balance - December 31, 2012

16,687.99

D-3

Statement of Revenues - Regulatory Basis

Water Utility Operating Fund

Year Ended December 31, 2012

Excess

Ref.

Anticipated

Realized

(Deficit)

Rents

D-1;D-9 D-1;D-9 D-1 ;D-6 D-1 ;D-3

270,000.00 24,886.00 14,000.00

272,223.37 24,886.00 15,180.00

2,223.37

Additional Rents Rents- Hydrants Miscellaneous

1,180.00

5,032.12

5,032.12

Budget Totals

308,886.00

317,321.49

8,435.49

D-4

Analysis of Realized Revenues Miscellaneous: Interest on Deposits: Water Operating Fund

D-6

195.86 157.28

Water Capital Fund

D-10

Hook-up's

D-6 D-6 D-3

4,000.00

Miscellaneous

678.98

5,032.12

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

21

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U

Borough ofMilford, N.J.

Water Utility Operating Fund

Year Ended December 31, 2012

sz6 cl

U Urn o U E cscs nn 2 ,1 ';') Q

Statement ofExpenditures - Regulatory Basis

L--.

O• l.)

• .

N I) t7O

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The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

0 .1" :.

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22

E

Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Sewer Utility Fund

December 31,

Ref.

2012

2011

Assets

Operating Fund: Cash-Treasurer

E-5 E-9 E-9

782,228.77

793,633.33

Due from Current Fund

352.37

Due from Sewer Capital Fund

10.50

21.03

782,591.64

793,654.36

Receivables with Full Reserves: Consumers Account Receivable

E-8

80,021.47

57,641.90

Total Operating Fund

862,613.11

851,296.26

Capital Fund: Cash

E-5;E-7

709,749.95 3,805,386.22 4,662,500.00

698,240.78 3,388,210.22 5,085,500.00

Fixed Capital*

E-11 E-12

Fixed Capital Authorized and Uncompleted*

Total Capital Fund

9,177,636.17

9,171,951.00

Total Assets

10,040,249.28

10,023,247.26

* The fixed capital reported is taken from the municipal records and does not necessarily reflect the true condition of such fixed capital.

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

23

E

Page 2 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Sewer Utility Fund

December 31,

Ref

2012

2011

Liabilities, Reserves and Fund Balance

Operating Fund:

E-4;E-13

53,904.24

65,752.95

Appropriation Reserve

Interfund Payable: Animal Control Trust Fund

71.00

E-9

E-10 E-14

336.71

514.29

Sewer Overpayments

Accrued Interest on Notes

55,148.21 109,460.16 80,021.47 673,131.48 862,613.11

20,970.23 87,237.47

Contra

Reserve for Receivables

57,641.90 706,416.89 851,296.26

E-1

Fund Balance

Total Operating Fund

Capital Fund: Interfund - Sewer Operating Fund Bond Anticipation Note Payable

E-9

10.50

21.03

E-15 E-16

220,000.00 4,671,376.13

270,000.00 4,736,642.13

USDA Loan Payable

Improvement Authorizations: Funded

E-17 E-17 E-18 E-19 E-20 E-21

3,103.00

3,103.00

573,133.39 48,538.75 2,549,010.09

Unfunded

910,613.69 48,538.75 2,143,468.09 323,600.00 709,165.81

Capital Improvement Fund Reserve for Amortization

Reserve for Deferred Reserve for Amortization

27,500.00

Reserve for Various Reserves

1,052,341.81

Fund Balance

E-2

32,622.50

26,798.50

Total Capital Fund

9,177,636.17

9,171,951.00

Total Liabilities, Reserves and Fund Balances

10,040,249.28

10,023,247.26

Footnote: There were Bonds and Notes Authorized But Not Issued as of December 31, 2012 in the amount of $1,000,000.00 as per E-22.

The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

24