AUDIT - 2017

BOROUGH OF MILFORD

SUMMARY OR SYNOPSIS OF AUDIT REPORT FOR PUBLICATION

Attention is directed to the fact that a summary or synopsis of the audit report, together with the

recommendations, is the minimum required to be published pursuant to N.J.S. 40A : 5 - 7.

Summary or Synopsis of the 2017 Audit Report of the Borough of Milford,

as required by N.J.S. 40A : 5 - 7.

December 31 December 31

ASSETS

Year 2017

Year 2016

Cash, Investments and Prepaid Debt Service Taxes, Assessments, Liens and Utility Charges Receivable Accounts Receivable ( and Inventory )

4,473,326.40

4,227,131.25

319,510.90 97,794.50 5,194,984.00 5,922,500.00 6,511,625.41

417,323.73 197,169.85 5,457,415.80 6,872,500.00 5,909,101.71

General Fixed Assets

Fixed Capital Authorized and Uncompleted - Utility

Fixed Capital - Utility

Deferred Charges to Future Taxation - General Capital

643,021.05

704,021.05

TOTAL ASSETS

23,162,762.26 23,784,663.39

LIABILITIES, RESERVES AND FUND BALANCES

Bond and Notes Payable Improvement Authorizations

6,205,408.19 1,011,848.18 1,869,395.89 5,194,984.00 6,777,717.22 347,082.59 1,756,326.19

6,451,120.51 1,435,023.74 3,722,578.63 5,457,415.80 4,590,885.75 417,323.73 1,710,315.23

Other Liabilities and Special Funds Investment in General Fixed Assets Amortization of Debt for Fixed Capital Acquired or Authorized Reserve for Certain Assets Receivable

Fund Balance

TOTAL LIABILITIES, RESERVES AND SURPLUS

23,162,762.26 23,784,663.39

BOROUGH OF MILFORD, N.J. COMPARATIVE STATEMENT OF OPERATIONS AND CHANGE IN SURPLUS - CURRENT FUND

2017

2016

Revenue and Other Income Realized

Fund Balance Utilized

155,800.00

155,801.00

Miscellaneous - From Other Than Local Property Tax Levies Collection of Delinquent Taxes and Tax Title Liens

385,745.86

325,001.52

88,323.66

114,159.99 3,813,031.57 111,647.48 4,519,641.56

Collection of Current Tax Levy

3,979,715.05 181,895.52 4,791,480.09

Other Credits to Income

Total Income

Expenditures

Budget Expenditures: Municipal Purpose

1,324,141.08 414,417.80 2,822,915.00

1,147,391.31 415,032.21 2,671,594.00

County Taxes

Local and Regional School Taxes

Other Expenditures Total Expenditures

0.00

97,441.50

4,561,473.88

4,331,459.02

Excess in Revenue

230,006.21

188,182.54

Fund Balance January 1

823,314.85 1,053,321.06

790,933.31 979,115.85

Less: Utilized as Anticipated Revenue

155,800.00

155,801.00

Fund Balance December 31

897,521.06

823,314.85

BOROUGH OF MILFORD, N.J. COMPARATIVE STATEMENT OF OPERATIONS AND CHANGE IN SURPLUS - WATER UTILITY FUND

2017

2016

Revenue and Other Income Realized

Fund Balance Utilized Collection of Water Rents

35,710.00 367,787.47 17,135.59

44,351.00 373,468.22 18,385.70

Miscellaneous - From other than Water Rents

Other Credits to Income

9,782.06

4,728.54

Total Income

430,415.12

440,933.46

Expenditures

Budget Expenditures: Operating

216,600.00 20,000.00 149,210.00 14,900.00

210,229.00 15,000.00 140,797.00 11,325.00

Capital Improvements

Debt Service

Deferred Charges and Statutory Expenditures

Other Expenditures Total Expenditures

7,049.44

407,759.44

377,351.00

Statutory Excess to Surplus

22,655.68

63,582.46

Fund Balance January 1

70,376.29 93,031.97

51,144.83 114,727.29

Less: Utilized as Anticipated Revenue

35,710.00

44,351.00

Fund Balance December 31

57,321.97

70,376.29

BOROUGH OF MILFORD, N.J. CHANGE IN SURPLUS - SEWER UTILITY FUND COMPARATIVE STATEMENT OF OPERATIONS AND

2017

2016

Revenue and Other Income Realized

Fund Balance Utilized Collection of Sewer Rents

71,785.00 331,729.50 421,516.94 16,655.77 841,687.21

81,090.50 341,732.47 438,101.61

Miscellaneous - From other than Sewer Rents

Other Credits to Income

Total Income

860,924.58

Expenditures

Budget Expenditures: Operating

424,431.00 50,000.00 223,849.00 17,444.00 715,724.00

414,409.00 50,000.00 257,033.00 13,665.00 735,107.00

Capital Improvements

Debt Service

Deferred Charges and Statutory Expenditures

Total Expenditures

Statutory Excess to Surplus

125,963.21

125,817.58

Fund Balance January 1

695,550.28 821,513.49

650,823.20 776,640.78

Less: Utilized as Anticipated Revenue

71,785.00

81,090.50

Fund Balance December 31

749,728.49

695,550.28

RECOMMENDATIONS

1. That the Borough consider strengthening Internal Controls.

A Corrective Action Plan outlining actions to be taken by the Borough of Milford to correct the above findings will be prepared in accordance with federal and state guidelines. A copy of the plan will be on file and available for public inspection with the Municipal Clerk in the Borough of Milford no later than 45 days from when the audit was received in compliance with directives from the Division of Local Government Services.

* * * * * *

The above Synopsis was prepared from the Report of Audit of the Borough of Milford, County of Hunterdon, for the calendar year 2017. This Report of Audit, submitted by Thomas M. Ferry, C.P.A., R.M.A. of Ferraioli, Wielkotz, Cerullo & Cuva, P.A., is on file at the Municipal Clerk’s Office and may be inspected by any interested person.

Karen Dysart

Clerk

REPORT OF AUDIT BOROUGH OF MILFORD COUNTY OF HUNTERDON DECEMBER 31, 2017

BOROUGH OF MILFORD, N.J. TABLE OF CONTENTS

YEAR ENDED DECEMBER 31, 2017

PART I

Page

Exhibit

1 - 4

Independent Auditor's Report

CURRENT FUND A

5 - 6

Comparative Balance Sheet - Current Fund

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

7

8 - 9

A-2 A-3

Statement of Revenues - Regulatory Basis Statement of Expenditures - Regulatory Basis

10 - 15

TRUST FUND B

16

Comparative Balance Sheet - Regulatory Basis

GENERAL CAPITAL FUND C

17 18

Comparative Balance Sheet - Regulatory Basis

Comparative Schedule of Fund Balance - Regulatory Basis

C-1

WATER UTILITY FUND D

19 - 20

Comparative Balance Sheet - Regulatory Basis

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

21 22 22 23

Statement of Revenues - Regulatory Basis Statement of Expenditures - Regulatory Basis

D-3 D-4

SEWER UTILITY FUND E

24 - 25

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

E-1

26 27 27 28

E-2 E-3 E-4

Statement of Revenues - Regulatory Basis Statement of Expenditures - Regulatory Basis

PUBLIC ASSISTANCE FUND F

29

Comparative Balance Sheet - Regulatory Basis

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

30

Page

Exhibit

31 60

NOTES TO FINANCIAL STATEMENTS

SUPPLEMENTARY DATA

61 62 63

Officials in Office and Surety Bonds

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

64 - 68

Comparative Schedules

CURRENT FUND A-4

69 70 71 72 73

Schedule of Cash - Treasurer

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

74 75

Schedule of Interfunds Receivables/(Payables)

A-10 A-11 A-12 A-13 A-14 A-15 A-16 A-17 A-18 A-19 A-20 A-21

76 77

Schedule of Appropriation Reserves

78 79 80 81 82 83 84 85 86

Schedule of Various Cash Liabilities and Reserves

Schedule of Prepaid Taxes

Schedule of County Taxes Payable

Schedule of Local School District Taxes Payable Schedule of Regional High School Taxes Payable Schedule of Interfunds - Federal and State Grant Fund Schedule of Grants Receivable - Federal and State Grant Fund

Schedule of Appropriated Reserves for Grants Schedule of Unappropriated Reserves for Grants

87

Schedule of Encumbrances Payable

TRUST FUNDS B-1

88 89 90 90 91

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

Page

Exhibit

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

92 93 94 95 96 97 98 99

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

100

WATER UTILITY FUND D-5 Schedule of Cash

101 102 103 104 105 106 107 108 109 110 112 113 114 115 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 132 133

D-6 Schedule of Water Utility Collector Cash

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 Loans 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 E-21 Schedule of Various Reserve for Sewer Capital

134

Page

Exhibit

PUBLIC ASSISTANCE FUND F-1

135 136 137 137 138 138

Schedule of Cash - Treasurer

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

F-2 F-3 F-4 F-5 F-6

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

141

Schedule of Findings and Responses

142

Summary Schedule of Prior Year Audit Findings

GENERAL COMMENTS

143 143 144 145 145 145

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

146

Segregation of Duties

147

RECOMMENDATIONS

147

STATUS OF PRIOR YEAR'S AUDIT FINDINGS/RECOMMENDATIONS

BOROUGH OF MILFORD

PART I

REPORT OF AUDIT ON FINANCIAL STATEMENTS

AND SUPPLEMENTARY DATA

YEAR ENDED DECEMBER 31, 2017

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

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

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

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, 2017 and 2016, 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, 2017, 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 opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, 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. 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 deteiminable, are presumed to be material. Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

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, 2017 and 2016, or changes in financial position for the years then ended.

2

Honorable Mayor and Members of the Borough Council Page 3

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, 2017 and 2016, 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, 2017 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 infotmati on 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 22, 2018, 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

7orlaiale, 2aieffeary, emieea ea a, Prit FERRAIOLI, WIELKOTZ, CERULLO & CUVA, P.A. Certified Public Accountants

Newton, New Jersey

June 22, 2018

4

A Page 1 of 2

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Current Fund

December 31,

Ref.

2017

2016

Assets Current Fund: Cash

A-4 A-5

1,507,833.74

1,241,897.34

Change Fund

50.00

50.00

1,507,883.74

1,241,947.34

Receivables and Other Assets with Full Reserves: Delinquent Taxes Receivable

A-6 A-7

100,603.62 109,252.70

84,506.56 102,744.80

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

A-10 A-10 A-10

20,265.19

34,536.00

174.83

245.70

General Capital

82.23

94,910.11 316,943.17 1,558,890.51

230,378.57 1,738,262.31

Federal and State Grant Fund: Interfund Receivable - General Capital

A-17

40,000.00

40,000.00

1,778,262.31

1,598,890.51

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.

2017

2016

Liabilities, Reserves and Fund Balance

Current Fund: Appropriation Reserves Unencumbered

A-3;A-11 A-3;A-11

134,493.60 36,633.10

50,070.95 40,741.13

Encumbered

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

5,893.20

5,893.20

A-9

Interfunds Payable: Other Trust Sewer Operating Water Operating

A-10 A-10 A-10 A-12 A-12 A-12 A-13 A-14 A-15 A-16

25,593.94

64,556.54

33.42

3,472.76

Due to State of New Jersey: Marriage Surcharge

50.00

75.00

4,918.80 4,644.00 75,653.94 1,220.39 98,062.83 219,692.70 610,362.68 230,378.57 897,521.06 1,738,262.31

Tax Overpayments Accounts Payable

4,083.36

18,381.71

Prepaid Taxes

County Taxes Payable

37.94

75,464.96 159,327.70 418,632.49 316,943.17 823,314.85 1,558,890.51

District School Taxes Payable Regional School Taxes Payable

Reserve for Receivables

Contra

Fund Balance

A-1

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

A-17 A-19 A-20 A-21

20,265.19 6,979.00 6,389.42 6,366.39 40,000.00

34,536.00 1,250.00 4,214.00

Unappropriated Reserve for Grants

Encumbrances Payable

40,000.00

1,778,262.31

1,598,890.51

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

Years Ended December 31,

2016

2017

Ref.

Revenues and Other Income: Fund Balance Utilized

155,801.00 325,001.52 114,159.99 3,813,031.57

155,800.00 385,745.86 88,323.66 3,979,715.05

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 Appropriated Grants Cancelled Unexpended Balance of Appropriation Reserves Various Reserves Cancelled Total Revenues and Other Income Expenditures: Budget and Emergency Appropriations: Operations - Within Caps: Salaries and Wages Statutory Excess - Animal Control Trust

37,769.70

21,321.15

109,169.56

A-10

2,500.00

245.18

174.83

A-10

71,107.60

51,229.98

A-11

25.00

4,519,641.56

4,791,480.09

178,869.00 654,472.00

186,836.00 668,324.00

A-3 A-3

Other Expenses

Deferred Charges and Statutory Expenditures - Municipal - Within Caps

68,550.31

64,946.00

A-3

Operations - Excluded From CAPS: Other Expenses

89,500.00 156,000.00

162,909.00 171,000.00 70,126.08 414,417.80 1,931,752.00 891,163.00 4,561,473.88

A-3 A-3

Capital Improvements - Excluded from Caps Municipal Debt Service - Excluded from Caps A-3

97,441.50 415,032.21 1,901,163.00 770,431.00 4,331,459.02

Interfund Advances

A-14 A-15 A-16

County Taxes including Added Taxes

Local District School Tax Regional High School Tax

Total Expenditures

188,182.54

230,006.21

Excess (Deficit) Revenue Over Expenditures

790,933.31 979,115.85

823,314.85 1,053,321.06

A

Fund Balance, January 1,

Decreased by: Fund Balance Utilized as Budget Revenue

155,801.00

155,800.00

823,314.85

897,521.06

A

Fund Balance, December 31,

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, 2017

Special N.J.S.A. 40A:4-87

Excess or (Deficit)

Realized

Ref.

Budget

155,800.00

155,800.00

A-1

Fund Balance Anticipated

Miscellaneous Revenues: Licenses: Alcoholic Beverages

187.73

5,800.00

5,987.73

A-8

Fines and Costs:

4,879.70 20,348.85 1,468.57 38,423.00 239,891.00

(120.30)

5,000.00 19,500.00

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

Municipal Court

848.85 868.57

Interest and Costs on Taxes

600.00

Interest on Investments and Deposits

38,423

Consolidated Municipal Property Tax Relief Act

239,891.00

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: Hazardous Discharge Site Remediation - A&L Oil Company

24,695.00

24,695.00 4,214.00

A-18 A-18

4,214.00

Clean Communities

Other Special Items: Cell Tower Lease

29,573.00 350,922.00 71,660.00 578,382.00

37,917.01 385,745.86 88,323.66 629,869.52

8,344.01 10,128.86 16,663.66 26,792.52

A-8 A-1

24,695.00

Total Miscellaneous Revenues

Receipts from Delinquent Taxes

A-1;A-2

24,695.00

Subtotal General Revenues

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

862,057.25

21,289.25

840,768.00

A-2

48,081.77

1,419,150.00

24,695.00 1,491,926.77

Budget Totals

21,321.15

21,321.15

Non-Budget Revenue

A-1;A-2

69,402.92

24,695.00 1,513,247.92

1,419,150.00

A-3

A-3

The accompanying "Notes to Financial Statements" are an integral part of these financial statements. 8

A-2

Borough of Milford, N.J.

Page 2 of 2

Statement of Revenues - Regulatory Basis Current Fund For Year Ended December 31, 2017

Ref.

Analysis of Realized Revenues

3,979,715.05

A-1;A-6

Revenue from Collections

3,237,332.80

A-6

Allocated to School and County Taxes

Balance for Support of Municipal Budget Appropriations

742,382.25

Add : Appropriation - Reserve for Uncollected Taxes

119,675.00

A-3

Amount for Support of Municipal Budget Appropriations

862,057.25

A-2

Receipts from Delinquent Taxes: Delinquent Taxes Taxes Receivable

87,188.70 1,134.96 88,323.66

A-6 A-7 A-2

TTL Receivable

Analysis of Non-budget Revenues

Miscellaneous Revenues Not Anticipated: Fire Inspection Fees Board of Health/Registrar of Vital Statistics

4,088.45 2,146.00

450.00

Planning, Zoning, & Land Use

5,775.00

Cable T.V. Franchise Fee

245.00

Senior Citizen And Veterans Administrative Fee

8,616.70

Miscellaneous

21,321.15

A-4

A-2

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

9

A-3

Unexpended Balance

Reserved Cancelled

Page 1 of 6

Municipal Land Use Law (N.J.S.A. 40:55 D-1 Et Seq.) Planning Board Salaries and Wages 5,000.00 5,000.00 4,999.87 0.13 Other Expenses 12,030.00 14,530.00 13,489.94 1,040.06

Salaries and Wages 13,091.00 13,091.00 13,091.00 Other Expenses 2,000.00 2,000.00 1,504.80 495.20

Financial Administration Salaries and Wages 5,000.00 5,000.00 4,615.36 384.64 Other Expenses 21,000.00 21,000.00 10,940.80 10,059.20

Assessment of Taxes Salaries and Wages 11,897.00 11,897.00 11,897.00 Other Expenses 2,100.00 2,100.00 1,863.78 236.22

Engineering Services and Costs Other Expenses 5,500.00 5,500.00 3,661.00 1,839.00

Public Buildings and Grounds Other Expenses 26,000.00 26,000.00 23,850.11 2,149.89

Administrative and Executive Salaries and Wages 69,000.00 74,564.00 73,046.59 1,517.41 Other Expenses 34,000.00 34,000.00 27,608.93 6,391.07

Legal Services and Costs: Other Expenses 50,000.00 47,500.00 26,614.60 20,885.40

Paid or

Charged

After

Budget

Modification

Year Ended December 31, 2017 General Appropriations Ref. Budget

Current Fund

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

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

Collection of Taxes

General Government:

A-3

Unexpended Balance

Reserved Cancelled

Page 2 of 6

First Aid Organization - Contribution 45,000.00 45,000.00 45,000.00 Emergency Management Services Salaries and Wages 1,549.00 1,549.00 1,549.00 Other Expenses 1,000.00 1,000.00 75.00 925.00 Streets and Roads

Fire Prevention Bureau Uniform Fire Safety Inspect. (P.L. 1983, Ch. 383) Salaries and Wages 5,668.00 5,668.00 5,668.00 Other Expenses 500.00 500.00 500.00 Police - Crossing Guards Salaries and Wages 14,700.00 14,700.00 13,315.12 1,384.88 Other Expenses 500.00 500.00 500.00

Road Repair and Maintenance Salaries and Wages 51,000.00 51,000.00 48,337.35 2,662.65 Other Expenses 60,000.00 49,000.00 32,347.98 16,652.02

Salaries and Wages 4,367.00 4,367.00 4,367.00

Fire Hydrant Service 13,860.00 13,860.00 13,860.00 Aid to Milford Volunteer Fire Company 44,500.00 44,500.00 44,500.00

Paid or

Charged

After

Budget

Modification

Year Ended December 31, 2017 General Appropriations Ref. Budget

Current Fund

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

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

Zoning Officer

Public Safety: Fire Other Expenses

A-3

Unexpended Balance

Reserved Cancelled

Page 3 of 6

Employee Group Health 104,797.00 115,797.00 97,198.14 18,598.86 Health Benefit Waiver 5,564.00 Electricity 5,000.00 5,000.00 4,010.12 989.88 Street Lighting 21,000.00 21,000.00 14,833.68 6,166.32

Recreation and Education Parks and Playgrounds Other Expenses 2,500.00 2,500.00 1,830.00 670.00 Insurance

General Liability 78,039.00 78,039.00 77,689.00 350.00

Garbage and Trash Removal Other Expenses 101,000.00 101,000.00 82,857.49 18,142.51 Dog Regulations Other Expenses 2,500.00 2,500.00 2,199.97 300.03

Total Operations Including Contingent- Within "Caps" 855,160.00 855,160.00 742,319.63 112,840.37 Detail: Salaries and Wages A-1 181,272.00 186,836.00 180,886.29 5,949.71 Other Expenses (Including Contingent) A-1 673,888.00 668,324.00 561,433.34 106,890.66

Workers Compensation 35,498.00 35,498.00 35,498.00

Paid or

Charged

After

Budget

Modification

Year Ended December 31, 2017 General Appropriations Ref. Budget

Current Fund

Borough of Milford, N.J.

Statement of Expenditures - Regulatory Basis

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

Sanitation

A-3

Unexpended Balance

General Appropriations Ref. Budget Modification Charged Reserved Cancelled Deferred Charges and Statutory Expenditures- Municipal - Excluded from "Caps" Statutory Expenditures Contribution to: Public Employees' Retirement System 43,046.00 43,046.00 43,046.00 Social Security System (O.A.S.I.) 18,500.00 18,500.00 16,399.13 2,100.87

Page 4 of 6

Total Other Operations - Excluded From Caps 110,000.00 110,000.00 56,077.84 53,922.16 Shared Service Agreements Municipal Court: Other Expenses 24,000.00 24,000.00 22,821.52 1,178.48 24,000.00 24,000.00 22,821.52 1,178.48

Other Operations Excluded from "CAPS" Council on Affordable Housing (COAH) 10,000.00 10,000.00 7,920.78 2,079.22 Maintenance of Free Public Library 50,000.00 50,000.00 48,157.06 1,842.94 Refund of Tax Appeals 50,000.00 50,000.00 50,000.00

Expenditures - Municipal within "CAPS" A-1 64,946.00 64,946.00 61,760.31 3,185.69 Total General Appropriations for Municipal Purposes- Within "CAPS" 920,106.00 920,106.00 804,079.94 116,026.06

Unemployment Compensation Insurance 3,400.00 3,400.00 2,315.18 1,084.82

After Paid or

Budget

Current Fund

Borough of Milford, N.J.

Year Ended December 31, 2017

Statement of Expenditures - Regulatory Basis

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

Total Deferred Charged and Statutory

Total Capital Improvements Excluded from "CAPS" A-1 171,000.00 171,000.00 171,000.00 Municipal Debt Services Payment of Bond Anticipation Notes 61,000.00 61,000.00 61,000.00 Interest on Notes 9,155.00 9,155.00 9,126.08 28.92

Total Municipal Debt Service Excluded from "caps" A-1 70,155.00 70,155.00 70,126.08 28.92 Total General Appropriations - Excluded From "Caps" 404,064.00 404,064.00 348,934.44 55,100.64 28.92 The accompanying "Notes to Financial Statements" are an integral part of these financial statements.

A-3

Unexpended Balance

General Appropriations Ref. Budget Modification Charged Reserved Cancelled Public and Private Programs Offset By Revenues A&L Site Remediation Other Expenses 24,695.00 24,695.00 24,695.00 Clean Communities Other Expenses 4,214.00 4,214.00 4,214.00

Page 5 of 6

Total Public and Private Programs Offset By Revenues 28,909.00 28,909.00 28,909.00 Total Operations - Excluded from "CAPS" A-1 162,909.00 162,909.00 107,808.36 55,100.64 Capital Improvements - Excluded From "Caps" Capital Improvement Fund 135,000.00 135,000.00 135,000.00 Purchase of Fire Apparatus 25,000.00 25,000.00 25,000.00 Purchase of Ambulance 11,000.00 11,000.00 11,000.00

After Paid or

Budget

Current Fund

Borough of Milford, N.J.

Year Ended December 31, 2017

Statement of Expenditures - Regulatory Basis

28.92

28.92

A-3

Unexpended Balance

Cancelled

Page 6 of 6

36,633.10

171,126.70

Reserved

134,493.60

171,126.70

171,126.70

28,909.00

Paid or

119,675.00

Charged

119,675.00

1,272,689.38

1,124,105.38

1,272,689.38

1,153,014.38

After

24,695.00

Budget

119,675.00

1,419,150.00

1,443,845.00

1,443,845.00

1,324,170.00

Modification

Budget

119,675.00

1,443,845.00

1,324,170.00

Current Fund

A

A

A-2

A-4

A-2

A-2

Ref.

Ref.

A-19

Borough of Milford, N.J.

Year Ended December 31, 2017

Statement of Expenditures - Regulatory Basis

General Appropriations

Analysis of Paid or Charged

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

Analysis of Modified Budget

Analysis of Appropriation Reserve

Reserve for Uncollected Taxes Unencumbered Encumbered

Added by N.J.S.A. 40A:4-87 Cash Disbursed

Original Budget

Reserve for Federal and State Grants

Total General Appropriations

Subtotal General Appropriations

Reserve for Uncollected Taxes

B

Borough of Milford, N.J.

Comparative Balance Sheet - Regulatory Basis

Trust Funds

December 31,

Ref.

2017

2016

Assets

Animal Control Trust Fund: Cash

B-1

1,989.43

2,236.90

Other Trust Funds: Cash

B-1 B-3

153,118.52 25,593.94 178,712.46

163,160.68 64,556.54 227,717.22

Interfund - Current Fund

180,701.89

229,954.12

Liabilities, Reserves & Fund Balance

Animal Control Fund: Reserve for Animal Control Trust Fund Expenditures

B-2 B-3 B-4

1,795.20

1,965.20

Interfund - Current Fund

174.83

245.70

Due to State Department of Health

19.40

26.00

1,989.43

2,236.90

Other Trust Fund: Reserve for:

Escrow Deposits Payroll Deductions Tax Sale Premiums

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

63,467.84 19,613.30 29,700.00

63,297.22 19,624.28 67,500.00

POAA

2.00

2.00

Public Defender Outside Liens

450.00

450.00

6,290.96 59,188.36 178,712.46

19,425.16 57,418.56 227,717.22

COAH

229,954.12

180,701.89

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.

2017

2016

Assets

551,618.12 643,021.05 1,194,639.17

584,725.86 704,021.05 1,288,746.91

C-2;C-3

Cash

C-5

Deferred Charges to Future Taxation - Unfunded

Liabilities, Reserves and Fund Balance

40,000.00

40,000.00 94,910.11

C-4 C-4 C-4 C-6

Interfund - Federal and State Grant Fund

82.23

Interfund - Current Fund

7,249.45

Interfund - Water Capital Fund Capital Improvement Fund Improvement Authorizations: Funded

135,000.00

41,081.23

171,314.52 32,511.19

137,648.02 36,900.19

C-7 C-7

Unfunded

Reserve for: Fire Apparatus and Equipment

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

190,661.60 12,301.00 40,000.00 549,000.00 16,519.18 1,194,639.17

165,661.60 77,000.00

Ambulance Debt Service

610,000.00 85,545.76 1,288,746.91

Bond Anticipation Notes Payable

Fund Balance

There were Bonds and Notes Authorized But Not Issued in the amount of $134,600.00 and $134,600.00 on December 31, 2017 and 2016 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,

2016

Ref.

2017

85,545.76

80,419.64

C

Balance - January 1,

Increased by: Improvement Authorizations Cancelled C-7

13,888.32 99,434.08

Decreased by: 2017 Improvement Authorizations

82,914.90

C-7

85,545.76

16,519.18

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,

2017

2016

Ref

Assets

Operating Fund: Cash-Treasurer

D-5 D-7

102,746.23

116,943.56

Cash-Change Fund

50.00

50.00

102,796.23

116,993.56

Receivables with Full Reserves: Consumers Account Receivable

37,129.64

33,966.56

D-9

Interfund Receivable: Water Capital Fund

3,576.68 3,472.76 44,179.08

D-10 D-10

Current Fund

33,966.56

Total Operating Fund

146,975.31

150,960.12

Capital Fund: Cash

D-5;D-8

346,206.79

374,824.90

Due from Water Operating Fund Due from General Capital Fund

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

3,517.85

7,249.45

3,605,268.94 310,000.00

2,052,745.24 2,210,000.00

Fixed Capital*

Fixed Capital Authorized and Uncompleted*

Grants Receivable

61,961.00

4,268,725.18

4,703,048.99

Total Capital Fund

4,854,009.11

Total Assets

4,415,700.49

* 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

2017

2016

Ref.

Operating Fund:

Appropriation Reserve: Unencumbered

22,104.82

17,491.31 7,409.17 19,479.79 1,093.99

D-4;D-15

D-4

Encumbered

D-16 D-11

19,433.21 1,561.39

Accrued Interest on Loans and Notes

Water Overpayments Interfund Payable: Water Capital

D-10

3,517.85 46,617.27 33,966.56 70,376.29 150,960.12

45,474.26

44,179.08 57,321.97 146,975.31

Contra

Reserve for Receivables

D-1

Fund Balance

Total Operating Fund

Capital Fund:

D-10

3,576.68

Due to Water Operating

Improvement Authorizations: Funded

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

265,138.92

717,591.98 1,298,333.79 1,999,595.45 68,098.78 482,000.00 132,816.00

Unfunded

1,270,285.47 1,846,087.47 80,127.65 737,000.00 61,896.00

Loans Payable

Reserve for Amortization Reserve for Capital Outlay

Reserve for Deferred Amortization Bond Anticipation Notes Payable

4,612.99

4,612.99

D-2

Fund Balance

4,703,048.99

4,268,725.18

Total Capital Fund

4,415,700.49

4,854,009.11

Footnote D: There were Bonds and Notes Authorized But Not Issued in the Amount of $0 and $350,000.00 on December 31, 2017 and 2016 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,

2016

2017

Ref.

Revenue and Other Income Realized: Operating Surplus Anticipated

44,351.00 373,468.22 17,760.00

35,710.00 367,787.47 16,100.00

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

Rents

Fire Hydrant Services

625.70

1,035.59

Miscellaneous

Other Credits to Income: Unexpended Balance of Appropriation Reserves

4,728.54

9,782.06

D-15

440,933.46

430,415.12

Total Income

Expenditures: Operating

210,229.00 15,000.00 140,797.00

216,600.00 20,000.00 149,210.00 14,900.00 7,049.44 407,759.44

D-4 D-4 D-4

Capital Improvements

Debt Service

Deferred Charges and Statutory Expenditures Interfunds Advanced

11,325.00

D-4

D-10

377,351.00

Total Expenditures

63,582.46

22,655.68

Excess in Revenue over Expenditures

51,144.83 114,727.29

70,376.29 93,031.97

D;D-1

Fund Balance - January 1,

Decreased by: Utilized as Anticipated Revenue

44,351.00

35,710.00

70,376.29

57,321.97

D

Fund Balance - December 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,

2017

2016

Ref.

4,612.99

4,612.99

D

Balance - January 1,

4,612.99

4,612.99

D

Balance - December 31,

D-3

Statement of Revenues - Regulatory Basis

Water Utility Operating Fund

Year Ended December 31, 2017

Excess

(Deficit)

Realized

Anticipated

Ref.

35,710.00 367,787.47 16,100.00

35,710.00 350,000.00 15,000.00

D-1

Operating Surplus Anticipated

17,787.47 1,100.00 1,035.59 19,923.06

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

Rents

Fire Hydrant Services

1,035.59

Miscellaneous Budget Totals

420,633.06

400,710.00

D-4

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

317.94

D-5

36.25

D-10

Water Capital Fund

681.40

D-6

Miscellaneous

1,035.59

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

22

Unemployment Compensation Insurance 700.00 700.00 415.97 284.03 Total Deferred Charges and Statutory Expenditures D-1 14,900.00 14,900.00 13,927.68 972.32 400,710.00 400,710.00 375,809.52 24,900.48 D-3 Ref. Analysis of Paid or Charged Cash Disbursed D-5 325,569.52 Accrued Interest D-16 50,240.00 375,809.52 Unencumbered D 17,491.31 Encumbered D 7,409.17 24,900.48

Deferred Charges and Statutory Expenditures Statutory Expenditures: Contribution to: Public Employees' Retirement System 6,000.00 6,000.00 6,000.00 Social Security System (O.A.S.I.) 8,200.00 8,200.00 7,511.71 688.29

D-4

Salaries and Wages 107,100.00 107,100.00 102,051.88 5,048.12 Other Expenses 109,500.00 109,500.00 90,619.96 18,880.04

Total Operating D-1 216,600.00 216,600.00 192,671.84 23,928.16

Charged Reserved

Expended

Payment of Bond Anticipation Notes and Capital Notes 70,920.00 70,920.00 70,920.00 Interest on Notes 2,195.00 2,195.00 2,195.00 USDA-Rural Development Loan Principal 28,050.00 28,050.00 28,050.00 USDA-Rural Development Loan Interest 48,045.00 48,045.00 48,045.00 Total Debt Service D-1 149,210.00 149,210.00 149,210.00

Total Capital Improvements D-1 20,000.00 20,000.00 20,000.00 Debt Service:

Capital Improvements Capital Outlay 20,000.00 20,000.00 20,000.00

Paid or

After

Budget

Modification

Ref. Budget

Borough of Milford, N.J.

Water Utility Operating Fund

Year Ended December 31, 2017

Statement of Expenditures - Regulatory Basis

Analysis of Appropriation Reserve

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

Operating:

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