AUDIT - 2015

REPORT OF AUDIT BOROUGH OF MILFORD COUNTY OF HUNTERDON DECEMBER 3L 2015

BOROUGH OF MILFORD, N.J. TABLE OF CONTENTS

YEAR ENDED DECEMBER 31, 2015

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

24 - 25

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 - 59

SUPPLEMENTARY DATA

Officials in Office and Surety Bonds

60 61 62

Schedule of Expenditures of Federal Awards - Schedule 1 Schedule of Expenditures of State Financial Assitance- Schedule 2

Comparative Schedules

63 - 67

CURRENT FUND A-4 Schedule of Cash - Treasurer

68 69 70 71 72

A-5 Schedule of Cash - Tax Collector - Change Fund

A-6 Schedule of Taxes Receivable and Analysis of Property Tax Levy

A-7 Schedule of Tax Title Liens Receivable A-8 Schedule of Revenue Accounts Receivable

A-9 Schedule of Amount Due to State of New Jersey for Veterans and Senior Citizens Deductions

73 74

A-10 Schedule of Interfunds Receivables/(Payables)

A-11 Schedule of Appropriation Reserves

75 - 76

A-12 Schedule of Various Cash Liabilities and Reserves

77 78 79 80 81 82 83 84 85 86 87 88 89 89 90

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 - Federal and State Grant Fund A-19 Schedule of Grants Receivable - Federal and State Grant Fund

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 Reserve/(Deficit) for Animal Control Trust Fund Expenditures

B-3 Schedule of Interfunds

B-4 Schedule of Due to State Department of Health

B-5 Schedule of Other Trust Funds

Exhibit

Page

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

91 92 93 94 95 96 97 98

C-4 Schedule of Interfund Accounts Receivable (Payable) C-5 Schedule of Deferred Charges to Future Taxation - Unfunded

C-6 Schedule of Capital Improvement Fund C-7 Schedule of Improvement Authorizations

C-8 Schedule of Various Reserves

C-9 Schedule of Bonds and Notes Authorized But Not Issued

WATER UTILITY FUND D-5 Schedule of Cash

99

D-6 Schedule of Water Utility Collector Cash

100 101 102 103 104 105 106 107 108 109 110 111 112 113 112 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 130 131

D-7 Schedule of Change Fund

D-8 Schedule of Water Utility Capital Cash D-9 Schedule of Consumer Accounts Receivable D-10 Schedule of Interfund Accounts Receivable (Payable)

D-11 Schedule of Water Overpayments

D-12 Schedule of Fixed Capital

D-13 Schedule of Fixed Capital Authorized and Uncompleted

D-14 Schedule of Grants Receivable D-15 Schedule of Appropriation Reserves

D-16 Schedule of Accrued Interest on Loan And Notes D-17 Schedule of Improvement Authorizations D-18 Schedule of USDA-Rural Development Loan Payable

D-19 Schedule of Reserve for Amortization

D-20 Schedule of Reserves

D-21 Schedule of Deferred Reserve for Amortization D-22 Schedule of Bond Anticipation Notes Payable D-23 Schedule of Bonds and Notes Authorized but Not Issued

SEWER UTILITY FUND E-5 Schedule of Cash

E-6 Schedule of Sewer Utility Collector Cash E-7 Schedule of Sewer Utility Capital Cash E-8 Schedule of Consumer Accounts Receivable 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 Loans and Notes E-15 Schedule of Sewer Capital Bond Anticipation Notes 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

Exhibit

Page

E-21 Schedule of Various Reserve for Sewer Capital E-22 Schedule of Bonds and Notes Authorized but Not Issued

132 133

PUBLIC ASSISTANCE FUND F-1 Schedule of Cash - Treasurer

134 135 136 137 137 138 138

F-2 Schedule of Cash and Reconciliation Per N.J.S. 40A:5-5

F-3 Schedule of Cash and Reconciliation F-4 Schedule of Revenues - Cash Basis F-5 Schedule of Expenditures - Cash Basis F-6 Schedule Reserve for Public Assistance F-7 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

139 - 140

Schedule of Findings and Responses

141

Summary Schedule of Prior Year Audit Findings

142

GENERAL COMMENTS

Cash Balances

143 143 144 145 145 145

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

146 146 146

Interfunds

Finance

RECOMMENDATIONS

147

STATUS OF PRIOR YEAR'S AUDIT FINDINGS/RECOMMENDATIONS

147

BOROUGH OF MILFORD

PART I

REPORT OF AUDIT ON FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA

YEAR ENDED DECEMBER 31, 2015

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 and account group of the Borough of Milford in the County of Hunterdon, as of December 31, 2015 and 2014, 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, 2015, 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 of New 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, 2015 and 2014, 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, 2015, and 2014, stated as $5,207,642.00 and $5,161,242.00, 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" paragraph, the financial statements referred to above present fairly, in all material respects, the regulatory basis balances sheets as of December 31, 2015 and 2014, 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, 2015 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 infotaiation 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 June 16, 2016, 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

e/vreteate,Veelld40, &weed 8i eue,a, Pidit FERRAIOLI, WIELKOTZ, CERULLO & CUVA, P.A. Certified Public Accountants

Newton, New Jersey

June 16, 2016

4

A Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Current Fund

December 31,

Ref.

2015

2014

Assets Current Fund: Cash

A-4 A-5

1,248,603.06

1,062,164.48

Change Fund

50.00

50.00

1,248,653.06

1,062,214.48

Receivables and Other Assets with Full Reserves: Delinquent Taxes Receivable

A-6 A-7

110,341.08 95,137.64

149,798.03 87,696.85

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

A-10 A-10 A-10

32,250.00

33,072.82

0.31

0.13

Other Trust Fund

5,997.43

237,729.03

276,565.26

Deferred Charges: Over-expenditure of Appropriation

A-13

1,830.31

1,488,212.40

1,338,779.74

Federal and State Grant Fund: Interfund Receivable - General Capital

A-18

40,000.00

40,000.00

1,528,212.40

1,378,779.74

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,

2015

2014

Ref.

Liabilities, Reserves and Fund Balance

Current Fund: Appropriation Reserves

A-3;A-11

111,108.07

103,443.86

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

5,869.23

5,393.20

A-9

Interfunds Payable: General Capital Fund

A-10 A-10 A-10 A-10 A-12 A-12 A-14 A-15 A-16 A-17

66,741.20 34,876.08 6,706.80 4,515.27

97,967.61

Other Trust

3,620.90 2,787.51

Sewer Operating Water Operating

Due to State of New Jersey: Marriage Surcharge

100.00

25.00

10,791.30 24,228.70

14,015.32 28,048.52

Tax Overpayments

Prepaid Taxes

County Taxes Payable

47.41

49.10

65,343.30 129,222.70 459,550.06 237,729.03 790,933.31 1,488,212.40

District School Taxes Payable Regional School Taxes Payable

129,525.70 384,876.72

Contra

276,565.26 677,337.76 1,338,779.74

Reserve for Receivables

A-1

Fund Balance

Federal and State Grant Fund: Interfund Payable - Current Fund Appropriated Reserve for Grants Unappropriated Reserve for Grants

32,250.00 1,250.00 6,500.00 40,000.00

33,072.82 1,250.00 5,677.18 40,000.00

A-18 A-20 A-21

1,528,212.40

1,378,779.74

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

6

A-i

Borough of Milford, N.J.

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

Current Fund

Years Ended December 31,

Ref.

2015

2014

Revenues and Other Income: Fund Balance Utilized

120,000.00 333,662.20 152,259.17 3,698,725.12

120,000.00 327,378.08 132,488.26 3,550,936.72

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

Miscellaneous Revenue Anticipated Receipts from Delinquent Taxes Receipts from Current Taxes Non-Budget Revenue Other Credits to Income: Interfunds Returned Unexpended Balance of Appropriation Reserves Total Revenues and Other Income Expenditures: Budget and Emergency Appropriations: Operations - Within Caps: Salaries and Wages

45,984.95

11,829.34

A-10

6,820.25

2,022.11

65,203.74

A-11

64,886.59

4,422,655.43

4,209,541.10

184,091.00 655,780.00

A-3 A-3

170,507.66 667,539.34

Other Expenses

Deferred Charges and Statutory Expenditures - Municipal - Within Caps

A-3

64,229.00

58,658.00

Operations - Excluded From CAPS: Other Expenses

A-3 A-3

88,677.18 86,000.00

87,036.45 76,000.00 105,694.13

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

A-3

98,156.00

Interfund Advances

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

0.18

62.16

County Taxes including Added Taxes

387,610.52 1,912,406.00 712,110.00 4,189,059.88

406,893.28 1,830,649.89 659,281.02 4,062,321.93

Local District School Tax Regional High School Tax

Total Expenditures

Excess

233,595.55

147,219.17

Fund Balance, January 1,

677,337.76 910,933.31

A

650,118.59 797,337.76

Decreased by: Fund Balance Utilized as Budget Revenue

120,000.00

120,000.00

Fund Balance, December 31,

A

790,933.31

677,337.76

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

7

A-2

Borough of Milford, N.J.

Page 1 of 2

Statement of Revenues - Regulatory Basis Current Fund For Year Ended December 31, 2015

Excess or (Deficit)

Ref.

Budget

Realized

120,000.00

Fund Balance Anticipated

A-1

120,000.00

Miscellaneous Revenues: Licenses: Alcoholic Beverages

A-8

5,800.00

5,802.60

2.60

Fines and Costs:

2,500.00 23,000.00

6,582.40 26,400.44

4,082.40 3,400.44

Municipal Court

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

Interest and Costs on Taxes

Interest on Investments and Deposits

500.00

573.88

73.88

Consolidated Municipal Property Tax Relief Act

39,908.00 238,406.00

39,908.00 238,406.00

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

1,677.18 4,000.00 1,300.00

1,677.18 4,000.00 2,390.70

Clean Communities

Uniform Fire Safety Act

A-8 A-1

1,090.70 8,650.02 10,259.17 18,909.19

Total Miscellaneous Revenues

325,012.18

333,662.20

142,000.00 587,012.18

Receipts from Delinquent Taxes

A-1;A-2

152,259.17 605,921.37

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

818,818.00

867,385.60

48,567.60

Budget Totals

1,405,830.18

1,473,306.97

67,476.79

Non-Budget Revenue

A-1;A-2

45,984.95

45,984.95

1,405,830.18

1,519,291.92

113,461.74

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 For Year Ended December 31, 2015

Ref.

Analysis of Realized Revenues

3,698,725.12

A-1;A-6

Revenue from Collections

3,010,236.52

A-6

Allocated to School and County Taxes

Balance for Support of Municipal Budget Appropriations

688,488.60

Add : Appropriation - Reserve for Uncollected Taxes

178,897.00

A-3

Amount for Support of Municipal Budget Appropriations

867,385.60

A-2

Receipts from Delinquent Taxes: Delinquent Taxes Taxes Receivable

152,259.17

A-2;A-6

Anal sis of Non-budget Revenues

Miscellaneous Revenues Not Anticipated: Revenues Accounts Receivable: Borough Clerk

1,547.50

A-8

5,416.00 2,625.00

Cable T.V. Franchise Fee

Land Use Board

348.40 280.00

Scrap Metal

Senior Citzen And Veterans Adminstrative Fee

4,459.60

Miscellaneous

13,129.00

A-4

31,308.45

A-10

Interfund Receivable

45,984.95

A-2

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

A-3 Page 1 of 6

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

Current Fund

Year Ended December 31, 2015

Unexpended Balance

Budget After Modification

Paid or Charged

Reserved

Cancelled

Budget

Ref.

General Appropriations

General Government:

Administrative and Executive Salaries and Wages

1,568.92 1,583.00

68,431.08 26,417.00

66,000.00 26,000.00

70,000.00 28,000.00

Other Expenses

Financial Administration Salaries and Wages

5,000.00 4,994.49

5,000.00 18,000.00

5,000.00

o

18,000.00

13,005.51

Other Expenses

Assessment of Taxes Salaries and Wages

11,250.00 1,402.93

11,250.00 1,736.88

11,000.00

333.95

800.00

Other Expenses

Collection of Taxes

12,355.00 1,431.07

12,355.00 2,000.00

12,105.00 2,000.00

Salaries and Wages

568.93

Other Expenses

Legal Services and Costs: Other Expenses

18,467.91

34,595.21

60,000.00

53,063.12

Engineering Services and Costs Other Expenses Public Buildings and Grounds Other Expenses

3,178.40

4,321.60

7,500.00

7,500.00

19,479.22

4,520.78

24,000.00

24,000.00

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

A-3 Page 2 of 6

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

Current Fund

Year Ended December 31, 2015

Unexpended Balance

Budget After Modification

Paid or Charged

Reserved

Cancelled

Budget

Ref

General Appropriations

Municipal Land Use Law (N.J.S.A. 40:55 D-1 Et Seq.) Planning Board Salaries and Wages

9,025.00 7,601.51

9,025.00 8,000.00

8,775.00 6,000.00

398.49

Other Expenses

Zoning Officer

4,288.00

4,288.00

4,038.00

Salaries and Wages

Public Safety: Fire Other Expenses

14,080.00 37,500.00

14,080.00 37,500.00

14,080.00 37,500.00

Fire Hydrant Service

Aid to Milford Volunteer Fire Company

Fire Prevention Bureau Uniform Fire Safety Inspect. (P.L. 1983, Ch. 383) Salaries and Wages

5,491.00

5,241.00 1,000.00

5,491.00 1,000.00

1,000.00

Other Expenses

Police - Crossing Guards Salaries and Wages

2,363.60

14,000.00

11,636.40

14,000.00

500.00

500.00

500.00

Other Expenses

20,473.24

11,026.76

31,500.00

31,500.00

First Aid Organization - Contribution Emergency Management Services Salaries and Wages

1,682.00

1,682.00. 1,500.00

1,432.00 1,500.00

804.67

695.33

Other Expenses

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

A-3 Page 3 of 6

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

Current Fund

Year Ended December 31, 2015

Unexpended Balance

Budget After Modification

Paid or Charged

Cancelled

Reserved

Ref.

Budget

General Appropriations

Streets and Roads

Road Repair and Maintenance Salaries and Wages

51,000.00 56,500.00 5,200.00 21,000.00

47,191.01 41,555.48 2,626.68 14,321.28

3,808.99 14,944.52 2,573.32 6,678.72

49,000.00 60,000.00 5,200.00 21,000.00

Other Expenses

Electricity

Street Lighting

Sanitation

Garbage and Trash Removal Other Expenses

8,763.98

101,000.00

98,000.00

89,236.02

Dog Regulations

275.35

2,224.65

2,500.00

2,500.00

Other Expenses

Recreation and Education Parks and Playgrounds Other Expenses

816.40

2,183.60

3,000.00

3,000.00

Insurance

22.00 15.00

73,678.00 33,485.00 129,930.95 737,215.55

73,700.00 33,500.00 134,000.00 839,871.00

73,700.00 33,500.00 134,000.00 840,871.00

General Liability

Workers Compensation Employee Group Health

4,069.05

102,655.45

Total Operations Including Contingent- Within "Caps"

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

A-3 Page 4 of 6

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

Current Fund

Year Ended December 31, 2015

Unexpended Balance Cancelled

Budget After Modification

Paid or Charged

Reserved

Ref.

Budget

General Appropriations

Detail: Salaries and Wages

7,741.51 94,913.94

176,349.49 560,866.06

176,591.00 664,280.00

184,091.00 655,780.00

A-1 A-1

Other Expenses (Including Contingent)

Statutory Expenditures Contribution to:

39,829.00 21,000.00 3,400.00

39,829.00 16,063.33 2,077.76

39,829.00 21,000.00 3,400.00

Public Employees' Retirement System Social Security System (O.A.S.I.) Unemployment Compensation Insurance

4,936.67 1,322.24

Total Deferred Charged and Statutory

6,258.91

57,970.09

64,229.00

64,229.00

A-1

Expenditures - Municipal within "CAPS"

Total General Appropriations for Municipal Purposes- Within "CAPS" Other Operations Excluded from "CAPS" Refund of Tax Appeals Council on Affordable Housing (COAH)

108,914.36

795,185.64

904,100.00

905,100.00

50,000.00

50,000.00 10,000.00 49,000.00 109,000.00

50,000.00 10,000.00 48,000.00 108,000.00

9,147.21 48,711.57 57,858.78

852.79 288.43

Maintenance of Free Public Library

50,000.00

1,141.22

Total Other Operations - Excluded From Caps

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

A-3 Page 5 of 6

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

Current Fund

Year Ended December 31, 2015

Unexpended Balance

Budget After

Paid or Charged

Reserved

Cancelled

Budget

Modification

Ref.

General Appropriations

Shared. Service Agreements Municipal Court: Other Expenses

24,000.00

22,947.51

1,052.49

24,000.00

Public and Private Programs Offset By Revenues Clean Communities Other Expenses

4,000.00

4,000.00

4,000.00

Recycling Tonnage Grant Other Expenses

1,677.18 5,677.18

1,677.18 5,677.18

1,677.18 5,677.18

Total Public and Private Programs Offset By Revenues

2,19331

50 000.00

86,483.47

138,677.18

137,677.18

Total Operations - Excluded from "CAPS"

Detail: Other Expenses

86,483.47

2,193.71

50,000.00

138,677.18

A-1

137,677.18

Capital Improvements - Excluded From "Caps" Capital Improvement Fund

60,000.00 15,000.00 11,000.00 86,000.00

60,000.00 15,000.00 11,000.00 86,000.00

60,000.00 15,000.00 11,000.00 86,000.00

Purchase of Fire Apparatus Purchase of Ambulance

A-1

Total Capital Improvements Excluded from "CAPS"

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

A-3 Page 6 of 6

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

Current Fund

Year Ended December 31, 2015

Unexpended Balance Cancelled

Budget After Modification

Paid or Charged

Reserved

Budget

Ref.

General Appropriations

Deferred Charges Ord #772-11

26,522.00 71,634.00 98,156.00

26,522.00 71,634.00 98,156.00

26,522.00 71,634.00 98,156.00

Ord #794-12

A-1

Total Deferred Charges

2,193.71

50,000.00

270,639.47

322,833.18

321,833.18

Total General Appropriations - Excluded From "Caps"

50,000.00

111,108.07

1,226,933.18 1,226,933.18 1,065,825.11

Subtotal General Appropriations

178,897.00

178,897.00

178,897.00

Reserve for Uncollected Taxes

50,000.00

111,108.07

1,405,830.18 1,405,830.18 1,244,722.11

Total General Appropriations

A

A-2

178,897.00 961,991.93 98,156.00 5,677.18 1,244,722.11

A-2 A-4

Reserve for Uncollected Taxes

Cash Disbursed

A-10 A-20

Interfunds

Reserve for Federal and State Grants

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

B

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Trust Funds

December 31,

2015

2014

Ref.

Assets

Animal Control Trust Fund: Cash

1,455.29

1,553.69

B-1

Other Trust Funds: Cash

146,468.12 34,876.08 181,344.20

152,627.26

B-1 B-3

Interfund - Current Fund

152,627.26

154,082.55

182,897.89

Liabilities, Reserves & Fund Balance

Animal Control Fund: Reserve for Animal Control Trust

1,533.78

1,435.56

B-2 B-3 B-4

Fund Expenditures Interfund - Current Fund

0.31

0.13

19.60

19.60

Due to State Department of Health

1,553.69

1,455.29

Other Trust Fund: Interfund - Current Fund

5,997.43

B-3

Reserve for:

33,407.09 19,624.66 39,200.00

30,963.09 3,116.71 13,900.00

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

Escrow Deposits Payroll Deductions Tax Sale Premiums

2.00

2.00

POAA

450.00

450.00

Public Defender

98,198.03 152,627.26

88,660.45 181,344.20

COAH

182,897.89

154,082.55

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.

2015

2014

Assets

Cash

C-2;C-3

320,222.67 66,741.20 903,350.00 1,290,313.87

324,923.80 97,967.61 1,148,947.06 1,571,838.47

Interfund - Current

C-4 C-5

Deferred Charges to Future Taxation - Unfunded

Liabilities, Reserves and Fund Balance

Interfund - Federal and State Grant Fund

C-4 C-6

40,000.00

40,000.00 25,526.92

Capital Improvement Fund Improvement Authorizations: Funded

C-7 C-7

190,003.09 773,229.54

111,838.72 1,041,252.03

Unfunded

Reserve for: Fire Apparatus and Equipment

C-8 C-8 C-1

140,661.60 66,000.00 80,419.64 1,290,313.87

125,661.60 55,000.00 172,559.20 1,571,838.47

Ambulance

Fund Balance

There were Bonds and Notes Authorized But Not Issued in the amount of $903,350.00 and $1,148,947.06 on December 31, 2015 and 2014 per Exhibit C-9.

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,

2014

Ref.

2015

172,559.20

172,559.20

C

Balance - January 1,

Increased by: Improvement Authorizations Cancelled C-7

36,111.02 208,670.22

Decreased by: 2015 Improvement Authorizations

128,250.58

C-7

172,559.20

80,419.64

C

Balance - December 31,

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

18

D Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Water Utility Fund

December 31,

Ref.

2015

2014

Assets

Operating Fund: Cash-Treasurer

D-5 D-7

99,402.85

142,692.78

Cash-Change Fund

50.00

50.00

99,452.85

142,742.78

Interfund Receivable: Current Fund

D-10

4,515.27

2,787.51

103,968.12

145,530.29

Receivables with Full Reserves: Consumers Account Receivable

D-9

32,513.77

23,550.10

Total Operating Fund

136,481.89

169,080.39

Capital Fund: Cash

D-5;D-8

358,041.68

211,093.00 50,529.86 2,040,670.24 2,155,000.00 254,661.00 4,711,954.10

Due from Water Operating Fund

5,348.83

D-10 D-12 D-13 D-14

Fixed Capital*

2,052,745.24 2,155,000.00 120,371.00 4,691,506.75

Fixed Capital Authorized and Uncompleted*

Grants Receivable

Total Capital Fund

Total Assets

4,827,988.64

4,881,034.49

* 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

2014

2015

Ref.

Operating Fund:

Appropriation Reserve: Unencumbered

40,908.88 11,445.11

D-4;D-15

19,235.34 27,607.02

D-16 D-11

Accrued Interest on Loans and Notes

632.10

Water Overpayments Interfund Payable: Water Capital

50,529.86 102,883.85 23,550.10 42,646.44 169,080.39

5,348.83 52,823.29 32,513.77 51,144.83 136,481.89

D-10

Contra

Reserve for Receivables

D-1

Fund Balance

Total Operating Fund

Capital Fund: Improvement Authorizations: Unfunded

743,727.52 824,631.59 1,796,383.65 105,868.35 427,000.00 797,655.00

723,280.17 1,325,311.48 1,901,697.76 105,868.35 427,000.00 203,736.00

D-17 D-18 D-19 D-20 D-21 D-22

Loans Payable

Reserve for Amortization Reserve for Capital Outlay

Reserve for Deferred Amortization Bond Anticipation Notes Payable

D-2

4,612.99

16,687.99

Fund Balance

4,691,506.75

4,711,954.10

Total Capital Fund

4,827,988.64

4,881,034.49

Footnote D: There were Bonds and Notes Authorized But Not Issued in the Amount of $350,000.00 on December 31, 2015 and 2014 as per Exhibit D-23

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

2015

2014

Revenue and Other Income Realized: Operating Surplus Anticipated

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

36,944.00 342,305.62 15,100.00

18,919.00 318,363.91 15,570.00

Rents

Rents- Hydrants Miscellaneous

1,005.05

277.32

Other Credits to Income: Unexpended Balance of Appropriation Reserves

D-15

19,031.47 414,386.14

127.76

Total Income

353,257.99

Expenditures: Operating

D-4

197,733.43

196,000.00 15,000.00 130,405.00

Capital Improvements

Debt Service

D-4

160,708.75

Deferred Charges and Statutory Expenditures

D-4

10,501.57 368,943.75

10,235.00 351,640.00

Total Expenditures

Statutory Excess to Surplus

45,442.39

1,617.99

Fund Balance - January 1,

D;D-1

42,646.44 88,088.83

59,947.45 61,565.44

Decreased by: Utilized as Anticipated Revenue

36,944.00

18,919.00

Fund Balance - December 31,

D

51,144.83

42,646.44

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,

2015

2014

Ref.

Balance - January 1,

D

16,687.99

16,687.99

Increased by: Cancellation of Improvement Authorizations

D-17

200.00 16,887.99

Decreased by: Appropriated to Finance Improvement Authorizations

D-13

12,275.00

Balance December 31,

D

4,612.99

16,687.99

D-3

Statement of Revenues - Regulatory Basis

Water Utility Operating Fund

Year Ended December 31, 2015

Excess

Ref.

Anticipated

Realized

(Deficit)

Operating Surplus Anticipated

D-1

36,944.00 318,000.00 14,000.00

36,944.00 342,305.62 15,100.00

Rents

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

24,305.62

Rents- Hydrants Miscellaneous Budget Totals

1,100.00 1,005.05 26,410.67

1,005.05

368,944.00

395,354.67

D-4

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

D-6

136.54

Water Capital Fund

D-10

23.76

Miscellaneous

D-6

844.75

1,005.05

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

22

D-4

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

Water Utility Operating Fund

Year Ended December 31, 2015

Budget After Modification

Expended

Unexpended Balance Cancelled

Paid or Charged

Ref.

Budget

Reserved

Operating:

Salaries and Wages

90,000.00 108,000.00 198,000.00

92,811.80 104,921.63 197,733.43

92,811.80 85,736.54 178,548.34

Other Expenses

19,185.09 19,185.09

Total Operating

D-1

Debt Service: Payment of Bond Anticipation Notes and Capital Notes

70,919.00 13,941.00 22,359.00 53,490.00 160,709.00

70,919.00 13,941.00 22,359.00 53,490.00 160,709.00

70,919.00 13,941.00 22,358.75 53,490.00 160,708.75

Interest on Notes

USDA-Rural Development Loan Principal USDA-Rural Development Loan Interest

0.25

Total Debt Service

D-1

0.25

Deferred Charges and Statutory Expenditures Statutory Expenditures: Contribution to: Public Employees' Retirement System

3,000.00 6,735.00

3,000.00 7,001.57

3,000.00 7,001.57

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

Unemployment Compensation Insurance

500.00

500.00

50.25 50.25

449.75

Total Deferred Charges and Statutory Expenditures

D-1

10,235.00

10,501.57

10,451.32

368,944.00

368,944.00

349,708.41

19,235.34

0.25

D-3

Cash Disbursed

D-5

276,904.82

Interfund - Water Capital Fund

D-10 D-16

5,372.59

Accrued Interest

67,431.00 349,708.41

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

E

Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Sewer Utility Fund

December 31,

Ref.

2015

2014

Assets

Operating Fund: Cash-Treasurer

E-5 E-9 E-9

714,235.43

649,855.28

6,706.80

3,620.90

Due from Current Fund

74.98

Due from Sewer Capital Fund

720,942.23

653,551.16

Receivables with Full Reserves: Consumers Account Receivable

E-8

63,551.86

77,460.12

784,494.09

731,011.28

Total Operating Fund

Capital Fund: Cash

925,702.00

923,351.84

E-5;E-7

E-9

634.30

Due from Sewer Operating Fund

E-11 E-12

3,856,356.47 4,662,500.00 9,445,192.77

3,808,652.97 4,662,500.00 9,394,504.81

Fixed Capital*

Fixed Capital Authorized and Uncompleted*

Total Capital Fund

10,229,686.86

10,125,516.09

Total Assets

* 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,

2014

2015

Ref.

Liabilities, Reserves and Fund Balance

Operating Fund:

18,114.13

15,853.62

E-4;E-13

Appropriation Reserve

Interfund Payable:

634.30

E-9

Sewer Capital Fund Sewer Overpayments

282.04

1,453.27 52,177.84 70,119.03

E-10 E-14

54,174.59 72,570.76

Accrued Interest on Loans and Notes

77,460.12 580,980.40

63,551.86 650,823.20

Contra

Reserve for Receivables

E-1

Fund Balance

731,011.28

784,494.09

Total Operating Fund

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

74.98

E-9

120,000.00 4,534,865.13

70,000.00

E-15 E-16

4,463,500.13

USDA Loan Payable

Improvement Authorizations: Funded

3,103.00

3,103.00

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

539,780.55 48,538.75 2,788,787.84

539,780.55 48,538.75 3,957,856.34 27,500.00 304,291.50 30,622.50 9,445,192.77

Unfunded

Capital Improvement Fund Reserve for Amortization

27,500.00

Reserve for Deferred Reserve for Amortization

1,299,232.06

Reserve for Various Reserves

32,622.50

E-2

Fund Balance

9,394,504.81

Total Capital Fund

10,125,516.09

10,229,686.86

Total Liabilities, Reserves and Fund Balances

Footnote: There were Bonds and Notes Authorized But Not Issued in the Amount of $1,000,000.00 as of December 31, 2014 and -0- as of December 31, 2015 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.

2015

2014

Revenue and Other Income Realized: Operating Surplus Anticipated

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

73,662.00 357,286.23 332,439.89

222,058.00 353,583.46 303,784.82

Rents

Holland Township Share of Operating

Interest on Deposits

676.20

725.23

Holland Township Share of Debt Service

103,441.00 999,237.06

103,441.00

Reserve for Debt Service - Sewer Capital

Miscellaneous

811.54

6,200.00

Other Credits to Income: Unexpended Balance of Appropriation Reserves

E-13

2,410.88

13,319.18

Total Income

1,869,964.80

1,003,111.69

Expenditures: Operating

E-4 E-4 E-4

406,940.00 50,000.00 256,120.00

386,300.00 200,000.00 261,120.00

Capital Improvements

Debt Service

Deferred Charges and Statutory Expenditures

E-4

1,013,400.00 1,726,460.00

12,640.00 860,060.00

Total Expenditures

Statutory Excess to Surplus

143,504.80

143,051.69

E;E-1

580,980.40 724,485.20

Fund Balance - January 1,

659,986.71 803,038.40

Decreased by: Utilized as Anticipated Revenue

73,662.00

222,058.00

Fund Balance - December 31,

E

650,823.20

580,980.40

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

26