AUDIT - 2013

REPORT OF AUDIT

BOROUGH OF MILFORD

COUNTY OF HUNTERDON

DECEMBER 31, 2013

BOROUGH OF MILFORD, N.J. TABLE OF CONTENTS

YEAR ENDED DECEMBER 31, 2013

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 - 15

TRUST FUND B

Comparative Balance Sheet - Regulatory Basis

16

GENERAL CAPITAL FUND C

Comparative Balance Sheet - Regulatory Basis

17 18

C-1 Comparative Schedule of Fund Balance - Regulatory Basis

WATER UTILITY FUND D

Comparative Balance Sheet - Regulatory Basis

19 - 20

D-1 Comparative Statement of Operations and Changes in Fund Balance Regulatory Basis D-2 Comparative Statement of Fund Balance - Regulatory Basis

21 22 22 23

D-3 Statement of Revenues - Regulatory Basis D-4 Statement of Expenditures - Regulatory Basis

SEWER UTILITY FUND E

Comparative Balance Sheet - Regulatory Basis

24 - 25

E-1 Comparative Statement of Operations and Changes in Fund Balance - Regulatory Basis E-2 Comparative Statement of Fund Balance - Regulatory Basis

26 27 27 28

E-3 Statement of Revenues - Regulatory Basis E-4 Statement of Expenditures - Regulatory Basis

PUBLIC ASSISTANCE FUND F

Comparative Balance Sheet - Regulatory Basis

29

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

30

Exhibit

Page

NOTES TO FINANCIAL STATEMENTS

31 - 52

SUPPLEMENTARY DATA

Officials in Office and Surety Bonds

53 54 55

Schedule of Expenditures of Federal Awards

Schedule of Expenditures of State Financial Assistance

Comparative Schedules

56 - 60

CURRENT FUND A-4

Schedule of Cash - Treasurer

61 62 63 64 65

Schedule of Cash - Tax Collector - Change Fund

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

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

66 67

A-10 Schedule of Interfunds Receivables/(P ayables)

A-11 Schedule of Appropriation Reserves

68 69

A-12 Schedule of Various Cash Liabilities and Reserves

70 71 72 73 74 75 76 77 78 79 80 81 82 82 83

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

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

Reserve/(Deficit) for Animal Control Trust Fund Expenditures

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

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

Schedule of Interfund Accounts Receivable (Payable) Schedule of Deferred Charges to Future Taxation - Unfunded

C-5 C-6 C-7 C-8 C-9

Schedule of Capital Improvement Fund Schedule of Improvement Authorizations

Schedule of Various Reserves

Schedule of Bond Anticipation Notes Payable C-10 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 Grants Receivable D-14 Schedule of Appropriation Reserves D-15 Schedule of Accrued Interest on Loan And Notes D-16 Schedule of Improvement Authorizations D-17 Schedule of USDA-Rural Development Loan Payable D-18 Schedule of Reserve for Amortization D-19 Schedule of Reserves D-20 Schedule of Deferred Reserve for Amortization D-21 Schedule of Bond Anticipation Notes Payable D-22 Schedule of Bonds and Notes Authorized but Not Issued

100 101 102 103 104 105 106 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120

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

121 122 123 123 124 125 126

E-18

Schedule of Capital Improvement Fund

E-19 Schedule of Reserve for Amortization

E-20 E-21

Schedule of Deferred Reserve for Amortization Schedule of Various Reserve for Sewer Capital

E-22 Schedule of Bonds and Notes Authorized but Not Issued

PUBLIC ASSISTANCE FUND

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

Schedule of Cash - Treasurer

127 128 129 130 130 131 131

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

132 - 133

Summary of Findings and Responses Summary Schedule of Prior Audit Findings

134 135

136

GENERAL COMMENTS

Cash Balances

137 137 138 139 139 139

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

Segregation of Duties

140 140 140 141

Interfunds

Payroll

Fixed Assets

RECOMMENDATIONS

142

STATUS OF PRIOR YEAR'S AUDIT FINDINGS/RECOMMENDATIONS

142

BOROUGH OF MILFORD

PART I

REPORT OF AUDIT ON FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA

YEAR ENDED DECEMBER 31, 2013

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

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

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

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 and account group of the Borough of Milford in the County of Hunterdon, as of December 31, 2013 and 2012, 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, 2013, 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.

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 I 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, 2013 and 2012, 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, 2013, and 2012, stated as $5,031,771.00 and $5,031,771.00, 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, 2013 and 2012, 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, 2013 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.

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 July 28, 2014, 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.

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

4440/40 vg- Ower90—,. elsA

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

Newton, New Jersey

July 28, 2014

4

A Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Current Fund

December 31,

Ref.

2013

2012

Assets Current Fund: Cash

A-4 A-5

966,633.54

888,584.75

Change Fund

50.00

50.00

966,683.54

888,634.75

Receivables and Other Assets with Full Reserves: Delinquent Taxes Receivable

A-6 A-7

131,435.93 80,253.00

116,094.65 73,527.71

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

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

33,713.55

29,777.42

1.13

1.03

Other Trust Fund General Capital

5,935.27 1,380.38

5,334.27 1,363.39

252,719.26

226,098.47

Deferred Charges: Over-expenditure of Appropriation

A-13

109,256.00

1,219,402.80

1,223,989.22

Federal and State Grant Fund: Interfund Receivable - General Capital

A-18

40,000.00 40,000.00

40,000.00 40,000.00

1,259,402.80

1,263,989.22

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.

2013

2012

Liabilities, Reserves and Fund Balance

Current Fund: Appropriation Reserves

A-3;A-11

134,103.93

151,135.37

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

A-9

5,643.20

5,643.20

Interfunds Payable: Sewer Operating Water Operating

A-10 A-10

8,988.72 3,103.86

352.37

40.00

Due to State of New Jersey: Marriage Surcharge

A-12 A-12

175.00

50.00

Tax Overpayments

13,994.73

9,949.27

Reserve for:

Garden State Trust

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

7,921.00 11,420.26

Prepaid Taxes

29,137.02

County Taxes Payable

701.00

415.71

District School Taxes Payable Regional School Taxes Payable

89,101.89 31,615.60 316,564.95 252,719.26 650,118.59 1,219,402.80

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: Interfund Payable - Current Fund Appropriated Reserve for Grants

A-18 A-20 A-21

33,713.55 1,250.00 5,036.45 40,000.00

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

Unappropriated Reserve for Grants

1,259,402.80

1,263,989.22

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

6

A4

Borough of Milford, N.J. Comparative Statement of Operations and Changes in Fund Balance - Regulatory Basis Current Fund Years Ended December 31,

Ref

2013

2012

Revenues and Other Income:

Fund Balance Utilized

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

148,000.00 482,651.01 117,317.21 3,499,882.53

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

Miscellaneous Revenue Anticipated Receipts from Delinquent Taxes

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

17,930.92

90,045.35

13,649.83 86,159.23

Unexpended Balance of Appropriation Reserves

A-11

69,475.31

Cancellation of Tax Overpayments

2.20

Total Revenues and Other Income

4,335,256.98

4,432,973.04

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

A-3 A-3

178,660.00 693,980.00

214,888.00 674,035.24

Other Expenses

Deferred Charges and Statutory Expenditures - Municipal - Within Caps

A-3

169,146.00

59,825.76

Operations - Excluded From CAPS: Other Expenses

A-3 A-3 A-3

88,065.00 51,000.00 233,757.67

88,907.00 61,000.00 334,367.21 11,584.87 439,704.16 1,768,703.00 648,519.42 4,308,232.57 6,697.91

Capital Improvements - Excluded from Caps Municipal Debt Service - Excluded from Caps

Grants Receivable Cancelled

Interfund Advances

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

4,554.22

County Taxes including Added Taxes

411,755.58 1,803,591.00 612,198.00 4,246,707.47

Local District School Tax Regional High School Tax

Total Expenditures

Excess (Deficit) Revenue Over Expenditures

88,549.51

124,740.47

Statutory Excess to Fund Balance

88,549.51

124,740.47

Fund Balance, January 1,

A

709,569.08

711,178.61

798,118.59

835,919.08

Decreased by: Fund Balance Utilized as Budget Revenue

148,000.00

126,350.00

Fund Balance, December 31,

A

650,118.59

709,569.08

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, 2013

Excess or (Deficit)

Ref

Budget

Realized

Fund Balance Anticipated

A-1

148,000.00

148,000.00

Miscellaneous Revenues: Licenses: Alcoholic Beverages

A-8

5,800.00

5,802.60

2.60

Fines and Costs:

Municipal Court

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

2,500.00 22,000.00 1,000.00 45,957.00 232,357.00

2,699.02 26,922.51 1,051.27 45,957.00 232,357.16

199.02

Interest and Costs on Taxes

4,922.51

Interest on Investments and Deposits

51.27

Consolidated Municipal Property Tax Relief Act

Energy Receipts Tax Garden State Trust

0.16

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

2,065.00 4,000.00

2,065.00 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

151,917.00

151,917.00

Uniform Fire Safety Act

2,180.00

1,958.45

(221.55) 4,954.01 2,317.21 7,271.22

Total Miscellaneous Revenues

477,697.00 ' 482,651.01

Receipts from Delinquent Taxes

A-1 ;A-2

115,000.00 740,697.00

117,317.21 747,968.22

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

818,773.00

816,121.95

(2,651.05)

Budget Totals

1,559,470.00 1,564,090.17

4,620.17

Non-Budget Revenue

A- 1;A-2

17,930.92

17,930.92

1,559,470.00 1,582,021.09

22,551.09

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, 2013

Analysis of Realized Revenues

Ref.

Revenue from Collections

A-1 ;A-6

3,499,882.53

Allocated to School and County Taxes

A-6

2,827,544.58

Balance for Support of Municipal Budget Appropriations

672,337.95

Add : Appropriation - Reserve for Uncollected Taxes

A-3

143,784.00

Amount for Support of Municipal Budget Appropriations

A-2

816,121.95

Receipts from Delinquent Taxes: Delinquent Taxes Taxes Receivable

A-6 A-2

117,317.21 117,317.21

Analysis of Non-budget Revenues

Miscellaneous Revenues Not Anticipated: Revenues Accounts Receivable: Borough Clerk

A-8

1,175.00

Cable T.V. Franchise Fee

5,109.00

Sr. Citizen and Veteran Admin. Fees

290.00 147.00

Centennial

Mowing Charges

2,204.60

Refunds / Reimbursements Fire Official / Fire Safety

559.00

1,772.50 5,620.72

Miscellaneous

A-4

15,702.82

Interfund Receivable

A-10

1,053.10

A-2

17,930.92

The accompanying "Notes to Financial Statements" are an integral part of these financial statements. 9

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Statement of Expenditures - Regulatory Basis

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0

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Current Fund

Year Ended December 31, 2013

Statement of Expenditures - Regulatory Basis

0

7 1 , cl " ) O

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

O

Road Repair and Maintenance Other Expenses

Recreation and Education Parks and Playgrounds Other Expenses

Other Expenses

General Liability

Streets and Roads

12

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Borough ofMilford, N.J.

Year EndedDecember 31, 2013

Statement ofExpenditures - Regulatory Basis

ce) 0 0 [VI

a)

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

Social Security System (O.A.S.I.)

oses- Within "CAPS"

Contribution to: Salaries and Wages Other Expenses (Including Contingent)

Maintenance ofFree Public Libr

Total Other Operations - Excluded From Caps

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Borough of Milford, N.J.

Year Ended December 31, 2013

va a) 0 a) a)

Statement ofExpenditures - Regulatory Basis

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SharedService Agreements MunicipalCourt P.

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Current Fund

Borough ofMilford, N.J.

Year Ended December 31, 2013

Statement ofExpenditures - Regulatory Basis

O

O

N

Interest on Notes ticipation Notes andCapitalNotes Total Municipal Debt Service - Excludedfrom "CAPS"

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

a)

Total GeneralAppropriations - ExcludedFrom "Caps" Subtotal GeneralAppropriations Reserve for Uncollected Taxes TotalGeneral Appropriations Reserve for Uncollected Taxes CashDisbursed

15

B

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Trust Funds

December 31,

Ref.

2013

2012

Assets

Animal Control Trust Fund: Cash Interfund - Sewer Operating

543.39

B-1 B-3

1,423.34

71.00

543.39

1,494.34

Other Trust Funds: Cash

B-1

164,482.91

151,187.66

165,026.30

152,682.00

Liabilities, Reserves & Fund Balance

Animal Control Fund: Reserve for Animal Control Trust Fund Expenditures

B-2 B-3 B-4

522.66

1,473.71

Interfund - Current Fund

1.13

1.03

Due to State Department of Health

19.60

19.60

543.39

1,494.34

Other Trust Fund: Interfund - Current Fund

B-3

5,935.27

5,334.27

Reserve for:

Escrow Deposits Payroll Deductions Tax Sale Premiums

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

28,280.09 2,469.52 39,600.00 88,198.03

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

COAH

164,482.91

151,187.66

165,026.30

152,682.00

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

16

C

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

General Capital Fund

December 31,

Ref.

2013

2012

Assets

Cash

C-2;C-3

992,298.75 899,503.06

1,208,947.65 1,326,898.29

Deferred Charges to Future Taxation - Unfunded

C-5

1,891,801.81

2,535,845.94

Liabilities, Reserves and Fund Balance

Interfund - Federal and State Grant Fund

C-4 C-4 C-6

40,000.00 1,380.38 80,926.92

40,000.00 1,363.39 116,422.92

Interfund - Current Fund Capital Improvement Fund Improvement Authorizations: Funded

C-7 C-7

123,900.68 693,652.03

97,915.43 983,252.40

Unfunded

Reserve for: Fire Apparatus and Equipment

C-8 C-8 C-8 C-9 C-1

110,661.60

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

Debt Service Ambulance

44,000.00 624,721.00 172,559.20

Bond Anticipation Notes Payable

Fund Balance

1,891,801.81

2,535,845.94

There were Bonds and Notes Authorized But Not Issued in the amount of $274,782.06 and 483,144.29 on December 31, 2013 and 2012 per Exhibit C-10.

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

17

C- 1

Borough of Milford, N.J.

Comparative Schedule of Fund Balance - Regulatory Basis

General Capital Fund

Year Ended December 31,

Ref.

2013

2012

Balance - January 1,

C

172,559.20

171,869.20

Increased by: Premium on Notes Issued

690.00

Balance - December 31,

C

172,559.20

172,559.20

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

18

Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Water Utility Fund

December 31,

Ref.

2013

2012

Assets

Operating Fund: Cash-Treasurer

D-5 D-7

188,663.15

172,710.18

Cash-Change Fund

50.00

50.00

188,713.15

172,760.18

Interfund Receivable: Current Fund

D-10

3,103.86

40.00

191,817.01

172,800.18

Receivables with Full Reserves: Consumers Account Receivable

D-9

31,649.48

26,837.11

Total Operating Fund

223,466.49

199,637.29

Capital Fund: Cash

D-5;D-8

205,255.24 114,256.81 2,040,670.24 2,155,000.00 427,000.00 4,942,182.29

293,789.38 94,933.26 2,040,670.24 1,205,000.00

Due from Water Operating Fund

D-10 D-11 D-12 D-13

Fixed Capital*

Fixed Capital Authorized and Uncompleted*

Grants Receivable

Total Capital Fund

3,634,392.88

Total Assets

5,165,648.78

3,834,030.17

* 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.

19

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

2013

2012

Operating Fund:

Appropriation Reserve

D-4;D-14

8,158.25 9,454.50

26,496.65 12,619.96

Accrued Interest on Loans and Notes

D-15

Interfhnd Payable: Water Capital

D-10

114,256.81 131,869.56 31,649.48 59,947.45 223,466.49

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

Reserve for Receivables

Contra

Fund Balance

D-1

Total Operating Fund

Capital Fund: Improvement Authorizations: Funded

D-16 D-16 D-17 D-18 D-19 D-20 D-21

357,789.41 1,139,166.30 842,567.59 1,707,528.65 105,868.35 427,000.00 345,574.00

Unfunded

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

Loans Payable

Reserve for Amortization Reserve for Capital Outlay

Reserve for Deferred Amortization Bond Anticipation Notes Payable

416,493.00 16,687.99

Fund Balance

D-2

16,687.99

Total Capital Fund

4,942,182.29

3,634,392.88

5,165,648.78

3,834,030.17

Footnote D: There were Bonds and Notes Authorized But Not Issued in the Amount of $873,000.00 and $350,000.00 on December 31, 2013 and 2012 as per Exhibit D-22

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

20

D-1

Borough of Milford, N.J.

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

Water Utility Operating Fund

Years Ended December 31,

Ref.

2013

2012

Revenue and Other Income Realized: Operating Surplus Anticipated

D-3 D-3

3,170.00

Rents

319,227.40

272,223.37 24,886.00 15,180.00

Additional Rents Rents- Hydrants Miscellaneous

D-3 D-3

14,100.00 2,039.74

5,032.12

Other Credits to Income: Unexpended Balance of Appropriation Reserves

17,852.44

Total Income

338,537.14

335,173.93

Expenditures: Operating

D-4 D-4

176,475.00 128,600.00

169,130.00 131,986.00

Debt Service

Deferred Charges and Statutory Expenditures

D-4

9,095.00

7,770.00

Total Expenditures

314,170.00

308,886.00

Excess in Revenue over Expenditures

24,367.14

26,287.93

Statutory Excess to Surplus

24,367.14

26,287.93

Fund Balance - January 1,

D;D-1

38,750.31

12,462.38

63,117.45

38,750.31

Decreased by: Utilized as Anticipated Revenue

3,170.00

Fund Balance - December 31,

D

59,947.45

38,750.31

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

21

D-2

Borough of Milford, N.J.

Comparative Statement of Fund Balance - Regulatory Basis

Water Utility Capital Fund

Years Ended December 31,

2013

2012

Ref.

D

16,687.99

8,874.49

Balance - January 1,

Increased by: Cancellation of Improvement Authorizations

7,813.50

D-16

16,687.99

16,687.99

D

Balance - December 31,

D-3

Statement of Revenues - Regulatory Basis

Water Utility Operating Fund

Year Ended December 31, 2013

Excess

Realized

(Deficit)

Ref.

Anticipated

3,170.00

3,170.00

D-1

Operating Surplus Anticipated

22,227.40

297,000.00 14,000.00

319,227.40 14,100.00

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

Rents

100.00

Rents- Hydrants Miscellaneous

2,039.74

2,039.74

24,367.14

314,170.00

338,537.14

Budget Totals

D-4

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

145.91

D-6

97.74

D-10

Water Capital Fund

1,796.09

D-6 D-3

Miscellaneous

2,039.74

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

22

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Borough of Milford, N.J.

Water Utility Operating Fund

Year Ended December 31,2013

O U

cf)

E ct 2 E 0 n 1 . --., •••• E d +c8 ci..., , ,_, t', E 1:,-, g4 -,°•2 E n -. ° I) 0 U

•- 'c 13 0 ; „ ,

Statement of Expenditures - Regulatory Basis

CCI in

-cs = CD

0

,,; z

CO ,9

W

0 ,,_. ,_ .,.., - 5 e E

:4O

,5 ;A cl) 0)

.,-

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,n. to -c) •-1 = cu cr3 P. 'E"71 X u- n

.2 '' AS 124

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

••. t 8 ig

c ., _4—. r.,#) cin Debt Service 5C-) t t,-. a) 'aC8 0 H 174

Accrued Interest

Total Deferred Charges and Statutory Expenditures

23

E

Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Sewer Utility Fund

December 31,

Ref.

2013

2012

Assets

Operating Fund: Cash-Treasurer

E-5 E-9 E-9

745,546.59

782,228.77

Due from Current Fund

8,988.72 2,585.90

352.37

Due from Sewer Capital Fund

10.50

757,121.21

782,591.64

Receivables with Full Reserves: Consumers Account Receivable

E-8

90,266.28

80,021.47

Total Operating Fund

847,387.49

862,613.11

Capital Fund: Cash

E-5;E-7

729,107.76 3,808,652.97 4,662,500.00

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

Fixed Capital*

E-11 E-12

Fixed Capital Authorized and Uncompleted*

Total Capital Fund

9,200,260.73

9,177,636.17

Total Assets

10,047,648.22

10,040,249.28

* 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.

24

E

Page 2 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Sewer Utility Fund

December 31,

Ref.

2013

2012

Liabilities, Reserves and Fund Balance

Operating Fund:

Appropriation Reserve

E-4;E-13

44,478.10

53,904.24

Interfund Payable: Animal Control Trust Fund

E-9

71.00

Sewer Overpayments

E-10 E-14

1,301.60 51,354.80 97,134.50 90,266.28 659,986.71 847,387.49

336.71

Accrued Interest on Notes

55,148.21

109,460.16

Reserve for Receivables

Contra

80,021.47 673,131.48 862,613.11

Fund Balance

E-1

Total Operating Fund

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

E-9

2,585.90

10.50

E-15 E-16

170,000.00 4,604,137.13

220,000.00 4,671,376.13

USDA Loan Payable

Improvement Authorizations: Funded

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

3,103.00

3,103.00

Unfunded

539,780.55 48,538.75 2,669,515.84

573,133.39 48,538.75 2,549,010.09

Capital Improvement Fund Reserve for Amortization

Reserve for Deferred Reserve for Amortization

27,500.00

27,500.00

Reserve for Various Reserves

1,102,477.06

1,052,341.81

Fund Balance

E-2

32,622.50

32,622.50

Total Capital Fund

9,200,260.73

9,177,636.17

Total Liabilities, Reserves and Fund Balances

10,047,648.22

10,040,249.28

Footnote: There were Bonds and Notes Authorized But Not Issued in the Amount of $1,000,000.00 as of December 31, 2013 and 2012 as per Exhibit E-22.

The accompanying "Notes to Financial Statements" are an integral part of these financial statements. 25

E-1

Borough of Milford, N.J.

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

Sewer Utility Operating Fund

Years Ended December 31,

Ref

2013

2012

Revenue and Other Income Realized: Operating Surplus Anticipated

E-3 E-3 E-3 E-3 E-3 E-3

42,820.00 335,045.73 204,788.59

50,318.00 320,464.66 200,000.00

Rents

Holland Township Share

842.58

1,218.21

Interest on Deposits

103,439.96

Holland Township Share of Debt Service

103,666.00 12,818.58

465.00

Miscellaneous

Other Credits to Income: Unexpended Balance of Appropriation Reserves

E-13

9,732.37

28,158.14

697,134.23

Total Income

716,643.59

Expenditures: Operating

E-4 E-4 E-4

378,800.00 20,000.00 256,379.00

371,120.00 20,000.00 296,591.00

Capital Improvements

Debt Service

Deferred Charges and Statutory Expenditures

12,280.00

E-4

11,900.00

Total Expenditures

667,459.00

699,611.00

29,675.23

Statutory Excess to Surplus

17,032.59

E;E-1

673,131.48

Fund Balance - January 1,

706,416.89

702,806.71

723,449.48

Decreased by: Utilized as Anticipated Revenue

42,820.00

50,318.00

Fund Balance - December 31,

E

659,986.71

673,131.48

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

26