Start your 7-day free trial — unlock full access instantly.
← Back to Search2 CLAUSES FOUND
Lead Closed
This opportunity is no longer accepting submissions.
Audit Report – Year Ended 2014
BID #: N/A
ISSUED: 7/22/2015
DUE: TBD
VALUE: TBD
85
Rating
Risk Rank
Yellow Risk
AI-Powered Lead Insights
Executive Summary
This document is an audit report for the Borough of North Arlington, Bergen County, New Jersey, for the year ended December 31, 2014. The report includes financial statements of the various funds and account groups of the Borough prepared on a regulatory basis of accounting. The regulatory basis differs from accounting principles generally accepted in the United States of America. The report provides an independent auditor's opinion on the financial statements. The financial statements for the Length of Service Awards Program (LOSAP) Trust Fund have not been audited.
Web Content
Automated discovery link found on North Arlington website.
Document Text
--- Document: Audit Report – Year Ended 2014 Document ---
BOROUGH OF NORTH ARLINGTON
BERGEN COUNTY, NEW JERSEY
REPORT OF AUDIT
YEAR ENDED DECEMBER 31, 2014
Exhibits
A
A-1
A-2
A-3
B
B-1
B-2
B-3
c
C-1
D
A-4
A-5
A-6
A-7
A-8
A-9
A-10
A-ll
A-12
A-13
A-14
A-15
A-16
A-17
A-18
A-19
A-20
BOROUGH OF NORTH ARLINGTON
TABLE OF CONTENTS
Independent Auditor's Report
Comparative Balance Sheets- Regulatory Basis - Current Fund
Comparative Statements of Operations and Changes in Fund Balance -
Regulatory Basis - Current Fund
Statement of Revenues- Regulatory Basis -Current Fund
Statement of Expenditures- Regulatory Basis- Current Fund
Comparative Balance Sheets- Regulatory Basis - Trust Funds
Comparative Statements of Changes in Fund Balances - Regulatory Basis-
Assessment Trust Fund
Statement of Revenues- Regulatory Basis- Assessment Trust Fund
Statement of Expenditures- Regulatory Basis- Assessment Trust Fund
Comparative Balance Sheets- Regulatory Basis - General Capital Fund
Comparative Statements of Changes in Fund Balances -Regulatory Basis -
General Capital Fund
Comparative Balance Sheets -Regulatory Basis - Water Utility Operating Fund
Notes to Financial Statements
Current Fund
Statement of Cash- Collector/Treasurer
Statement of Change Funds
Statement of Amount Due from State ofNew Jersey- Senior Citizens'
And Veterans' Deductions
Statement of Grants Receivable
Statement of Taxes Receivable and Analysis of Property Tax Levy
Statement of Tax Title Lie11s
Statement of Revenue Accounts Receivable
Statement of Deferred Charges N.J.S.A. 40A:4-53 -Special Emergency
Statement of Deferred Charges
Statement of2013 Appropriation Reserves
Statement of Encumbrances Payable
Statement of Accounts Payable
Statement of Fees Payable
Statement of Prepaid Taxes
Statement of Tax Overpayments
Statement of County Taxes Payable
Statement of Prepaid Local School District Taxes
1-3
4-5
6
7-8
9-15
16-17
18
18
18
19
20
21
22-55
56
57
57
58
59
60
61
62
62
63-64
65
65
65
66
66
67
67
Exhibits
A-21
A-22
A-23
A-24
A-25
A-26
B-4
B-5
B-6
B-7
B-8
B-9
B-10
B-11
B-12
B-13
B-14
B-15
B-16
B-17
B-18
C-2
C-3
C-4
C-5
C-6
C-7
C-8
C-9
C-10
C-11
C-12
C-13
C-14
BOROUGH OF NORTH ARLINGTON
Current Fund (Continued)
TABLE OF CONTENTS
(Continued)
Statement of Prepaid Payroll Expenditures
Statement of Appropriated Reserves
Statement of Reserve for Federal and State Grants- Unappropriated
Statement of Miscellaneous Reserves
Statement of Tax Anticipation Note Payable
Statement of Special Emergency Note Payable
Trust Funds
Statement of Cash and Investments- Collector/Treasurer
Analysis of Assessment Cash
Statement of Due To Current Fund- Animal Control Trust Fund
Statement of Amount Due To State ofNew Jersey- Animal Control Fund
Statement of Reserve for Animal Control Expenditures- Animal Control Fund
Statement of Assessment Receivable- Assessment Trust Fund
Statement of Assessment Serial Bonds- Assessment Trust Fund
Statement of Assessment Overpayments
Statement of Due To Current Fund- Assessment Trust Fund
Statement of Due to Current Fund- Other Trust Fund
Statement of Payroll and Payroll Deductions Payable- Other Trust Fund
Statement of Reserve for Library- Other Trust Fund
Statement of Miscellaneous Reserves- Other Trust Fund
Statement of Due to Current Fund- Unemployment Insurance Trust Fund
Schedule of Reserve for Unemployment Insurance Benefits-
Unemployment Insurance Trust Fund
General Capital Fnnd
Statement of Cash- Collector/Treasurer
Analysis of Cash
Statement of Grants/Other Receivable
Statement of Due From Current Fund
Statement of Deferred Charges to Future Taxation- Funded
Statement of Deferred Charges to Future Taxation-
Statement of General Serial Bonds
Statement of Wastewater Loans Payable
Statement of hnprovement Authorizations
Schedule of Contracts Payable
Statement of Capital hnprovement Fund
Statement of Reserve for Payment of Debt
Statement of Bonds and Notes Authorized But Not Issued
67
68
69
69
70
70
71
72
73
73
73
74
75
76
76
76
77
77
78
79
79
80
81
82
83
83
84
85-86
87
88
89
89
89
90
Exhibits
Part IT
BOROUGH OF NORTH ARLINGTON
TABLE OF CONTENTS
(Continued)
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
Schedule of Expenditures of Federal Awards, Schedule A
Schedule of Expenditures of State Financial Assistance, Schedule B
Notes to the Schedules of Expenditures of Federal Awards and
State Financial Assistance
Schedule of Findings and Questioned Costs
Part Ill
Comparative Statement of Operations and Change in Fund Balance -
Current Fund
Comparative Schedule of Tax Rate Information
Comparison of Levies and Collection Currently
Delinquent Taxes and Tax Title Liens
Comparative Schedule of Fund Balances
Officials in Office and Surety Bonds
General Comments
Recommendations
91-92
93
94
95
96-100
101
102
102
103
103
104
105-107
108-109
BOROUGH OF NORTH ARLINGTON
BERGEN COUNTY
PART I
REPORT ON AUDIT OF FINANCIAL STATEMENTS
AND SUPPLEMENTARY SCHEDULES
YEAR ENDED DECEMBER 31,2014
LERCH, VINCI & HIGGINS,LLP
CERTIFIED PUBLIC ACCOUNTANTS
REGISTERED MUNICIPAL ACCOUNTANTS
DIETER P. LERCH, CPA, RMA, PSA
GARY J. VINCI, CPA, RMA, PSA
GARY W. HIGGINS, CPA, RMA, PSA
JEFFREY C. BLISS, CPA, RMA, PSA
PAUL J. LERCH, CPA, RMA, PSA
DONNA L. JAPHET, CPA, PSA
JULIUS B. CONSONI, CPA, PSA
ELIZABETH A. SHICK, CPA, RMA, PSA
ANDREW PARENTE, CPA, RMA, PSA
ROBERT W. HAAG, CPA, PSA
DEBORAH K. LERCH, CPA, PSA
RALPH M. PICONE, CPA, RMA, PSA
Honorable Mayor and Members
of the Borough Council
Borough of North Arlington
North Arlington, New Jersey
Report on the Financial Statements
INDEPENDENT AUDITOR'S REPORT
DEBRA GOLLE, CPA
CINDY JANACEK, CPA, RMA
MARK SACO, CPA
KEVIN LOMSKI, CPA
SHERYL M. NICOLOSI, CPA
KATHLEEN WANG, CPA
We have audited the accompanying balance sheets - regulatory basis of the various funds and account group of the
Borough of North Arlington, as of December 31, 2014, and the related statements of operations and changes in fund
balance - regulatory basis, statement of revenues - regulatory basis and statement of expenditures - regulatory basis of the
various funds for the year then ended and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the
financial accounting and reporting principles and practices that demonstrate compliance with the regulatory basis of
accounting and budget laws 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 standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and
the audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs,
State of New Jersey. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
17-17 ROUTE 208 oFAIR LAWN. NJ 07410 • TELEPHONE C201l 791-7100 o FACSIMILE (201) 791-3035
WWW.IfHCPA.COM
We believe that the audit evidence we have obtained 1s sufficient and appropriate to provide a basis for our audit
opm10ns.
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 and presented by the Borough of
North Arlington on the basis of the financial accounting and reporting principles and practices that demonstrate
compliance with the regulatory basis of accounting and budget laws 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 the State of New Jersey for
municipal government entities.
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 requirement that the Borough of North Arlington prepare and present its
financial statements on the regulatory basis of accounting as discussed in the "Basis for Adverse Opinion on U.S.
Generally Accepted Accounting Principles" paragraph above, 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 North Arlington as of December 31, 2014, or changes in financial position for the year
then ended.
Basis for Qualified Opinion on Regulatory Basis of Accounting
As discussed in Note 19 of the financial statements, the financial statements - regulatory basis of the Length of Service
A wards Program (LOSAP) Trust Fund have not been audited, and we were not required by the Division of Local
Government Services, Department of Community Affairs, State of New Jersey, to audit nor were we engaged to audit the
LOSAP Trust Fund financial statements as part of our audit of the Borough's financial statements as of and for the year
ended December 31, 2014.
The LOSAP Trust Fund financial activities are included in the Borough's Trust Funds, and
represent 56 percent of the assets and liabilities, respectively, of the Borough's Trust Funds as of December 31,2014.
Qualified Opinion on Regulatory Basis of Accounting
In our opinion, except for the possible effects of such adjustments, if any, as might have been determined to be necessary
had the LOSAP Trust Fund financial statements been audited as described in the "Basis for Qualified Opinion on
Regulatory Basis of Accounting" paragraph above, the financial statements - regulatory basis referred to above present
fairly, in all material respects, the financial position - regulatory basis of the various funds and account group of the
Borough of North Arlington as of December 31, 2014, and the results of operations and changes in fund balance-
regulatory basis and the respective revenues - regulatory basis and expenditures - regulatory basis for the year then
ended in accordance with the financial accounting and reporting principles and practices prescribed by the Division of
Local Government Services, Department of Community Affairs, State of New Jersey as described in Note 1.
2
Other Matters
Prior Year's Financial Statements Audited by Other Auditors
The financial statements of the Borough of North Arlington as of and for the year ended December 31, 2013 were audited
by other auditors whose report dated October 16, 20 14 expressed an adverse opinion on the financial statements because
they were not prepared and presented in accordance with accounting principles generally accepted in the United States of
America but rather the regulatory basis of accounting, which is a basis of accounting other than accounting principles
generally accepted in the United States of America, to meet the requirements of the State of New Jersey for municipal
govemment entities. Their report also expressed a modified opinion on those financial statements - regulatory basis
prepared and presented in accordance with the regulatory basis of accounting, due to the unaudited LOSAP Trust Fund.
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements of the Borough of North
Arlington as a whole. The supplementary schedules listed in the table of contents, schedule of expenditures of federal
awards, schedule of expenditures of state financial assistance and the supplementary data and letter of comments and
recommendations section are presented for purposes of additional analysis and are not a required part of the financial
statements of the Borough of North Arlington.
The supplementary schedules listed in the table of contents, schedule of expenditure of federal awards and schedule of
expenditures of state financial assistance are the responsibility of management and were derived from and relate directly
to the underlying accounting and other records used to prepare the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other records used to
prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the supplementary schedules
listed in the table of contents, schedule of expenditures of federal awards and schedule of expenditures of state financial
assistance are fairly stated, in all material respects, in relation to the fmancial statements as a whole on the basis of
accounting described in Note 1.
The supplementary data and letter of comments and recommendations section has not been subject to the auditing
procedures applied in the audit of the financial statements, and accordingly, we do not express an opinion or provide any
assurance on it.
Other Reporting Reqnired by Government Auditing Standards
In accordance with Govemment Auditing Standards, we have also issued our report dated July 22, 2015 on our
consideration of the Borough of North Arlington's intemal 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 intemal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on intemal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Govemment Auditing Standards in considering the
Borough of North Arlington's intemal control over financial reporting and com liance.
.
Fair Lawn, New Jersey
July 22,2015
3
--- tYf-·,5f:7_y~. ~;.r
LERCH, VINCI & HiifcnNS, LLP
Certified Public Accountants
R~Municipal Accountants
;/ty.{~
Re 1stered Municipal Accountant
RMA Number CR00457
~
EXHIBIT A
Page 1
BOROUGH OF NORTH ARLINGTON
COMPARATIVE BALANCE SHEETS- REGULATORY BASIS
CURRENT FUND
AS OF DECEMBER 31, 2014 AND 2013
Reference
2014
2013
ASSETS
Cnrrent Fund
Cash and Cash Equivalents
A-4
$
8,099,901
$ 2,189,915
Cash- Change Funds
A-5
200
200
Due from State of New Jersey- Senior & Veterans Deductions
A-6
22,837
21,337
Grants Receivable
A-7
401,176
335,517
8,524,114
2,546,969
Receivables and Other Assets With Full Reserves
Taxes Receivable
A-8
1,364,732
692,948
Tax Title Liens Receivable
A-9
22,927
15,943
Interfunds Receivable
Due From Animal Control Fund
B-6
9,774
9,618
Due from Assessment Trust Fund
B-12
850
Due from Other Trust Fund
B-13
273,978
Due from Unemployment Trust Fund
B-17
3
7,843
Revenue Accounts Receivable
A-10
24,411
Prepaid School Taxes
A-20
2,290
Prepaid Payroll Expenditure
A-21
252,758
1,676,895
1,001,180
Deferred Charges:
Special Emergency Authorization (40A:4-55) Five Year
A-ll
474,441
750,000
Overexpenditure of Appropriation
A-12
64,984
Overexpenditure of Appropriation Reserve
A-12
7,084
10,182
Overexpenditure of Grant Appropriation
A-12
449
1,775
Operating Deficit
A-12
70,690
264,747
552,664
1,091,688
Total Assets
$
10,753,673
$ 4,639,837
See Accompanying Notes to Financial Statements
4
EXHIBIT A
Page2
BOROUGH OF NORTH ARLINGTON
COMPARATIVE BALANCE SHEETS- REGULATORY BASIS
CURRENT FUND
AS OF DECEMBER 31, 2014 AND 2013
Reference
2014
2013
LIABILITIES, RESERVES AND FUND BALANCE
Liabilities
Appropriation Reserves
A-3,A-13
$
1,226,596 $
206,028
Encumbrances Payable
A-14
419,596
359,282
Accounts Payable
A-15
23,593
12,944
Fees Payable
A-16
631
Prepaid Taxes
A-17
166,741
545,161
Tax Overpayments
A-18
243,913
242,462
County Added and Omitted Taxes Payable
A-19
3,172
873
Tax Anticipation Note Payable
A-25
4,750,000
Special Emergency Note Payable
A-26
510,000
750,000
Interfunds Payable
Due to Assessment Trust Fund
B-12
68,026
Due to Other Trust Fund
B-13
66,189
53,364
Due to General Capital Fund
C-5
504,987
290,681
Reserve for Federal and State Grants - Appropriated
A-22
410,340
381,822
Reserve for Federal and State Grants- Unappropriated
A-23
54,686
56,051
Miscellaneous Reserves
A-24
125,593
237,274
8,574,063
3,135,942
Reserve for Receivables
A
1,676,895
1,001,180
Fund Balance
A-1
502,715
502,715
Total Liabilities, Reserves and Fund Balance
$
10,753,673
$ 4,639,837
See Accompanying Notes to Financial Statements
5
EXHIBIT A-1
BOROUGH OF NORTH ARLINGTON
COMPARATIVE STATEMENTS OF OPERATIONS Al'<l> CHANGES IN FUND BALANCE
REGULATORY BASIS- CURRENT FUND
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Reference
2014
2013
REVENUE AND OTHER INCOME REALIZED
Miscellaneous Revenue Anticipated
A-2
$
4,706,852
$ 4,397,106
Receipts from Delinquent Taxes
A-2
683,700
247,570
Receipts from Current Taxes
A-2
41,447,400
40,708,241
Non-Budget Revenues
A-2
91,174
90,871
Other Credits to Income:
Interfunds Returned
A
292,289
6,342
Unexpended Balance of Appropriation Reserves
A-13
180,858
129,275
Cancellation of Tax Overpayments
A-1
23
Total Income
47,402,273
45,579,428
EXPENDITURES
Budget Appropriations
Operations
Salaries and Wages
A-3
6,803,051
6,497,137
Other Expenses
A-3
8,639,785
8,301,569
Capital Improvements
A-1
113,000
Municipal Debt Service
A-3
3,144,825
2,643,198
Deferred Charges, Statutory Expenditures and Judgments
A-3
2,051,153
1,938,343
Local District School Tax
A-20
23,058,397
22,980,691
County Taxes
A-19
3,410,281
3,395,522
Overexpenditure of Appropriation Reserves
A-12
7,084
10,182
Overexpenditure of Grant Appropriation
A-12
449
1,775
Refund of Prior Year Taxes and Revenue
A-4
99,896
Disallowed Senior Citizens and Veterans Deductions - Prior Year
A-6
750
17,471
Interfunds and Prepaid Expenditures Advanced
A
264,825
21,928
Total Expenditures
47,480,496
45,920,816
Deficit in Revenue
(78,223)
(341,388)
Adjustment to Income before Surplus:
Expenditures included above which are by Statute Deferred
Charges to Budgets of Succeeding Years
A-12
78,223
341,388
Statutory Excess to Surplus
A-1
Fund Balance, January 1
A
502,715
502,715
Fund Balance, December 31
A
$
502,715
$
502,715
See Accompanying Notes to Financial Statements
6
EXHIBIT A-2
Page I
BOROUGH OF NORTH ARLINGTON
STATEMENT OF REVENUES- REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER31, 2014
Added by
2014
N..I.S.
2014
Excess or
Reference
Budget
40A:4-87
Realized
CDefici1)
MISCELLANEOUS REVENUES
Licenses
Alcoholic Beverages
A-10
$
59,300
$
53,584
$
(5,716)
Other
A-2
16,150
21,905
5,755
Pees and Permits
A-2
40,025
40,427
402
Fines and Costs
Municipal Court
A-10
322,800
336,132
13,332
Interest and Costs on Taxes
A-10
91,500
113,678
22,178
Parking Meters
A-10
41,800
44,137
2,337
Interest on Investments and Deposits
A-2
9,500
9,139
(361)
Cable Television Franchise Fees
A-10
88,297
85,887
(2,41 0)
Yerizon Franchise Fees
A-10
107,148
120,758
13,610
New Jersey Meadowlands Commission
TaxSharingNJSA 13:17-74
A-10
996,462
996,462
Energy Receipts Tax
A-10
1,069,861
1,069,861
UnifOrm Construction Code Fees
A-10
210,000
225,854
15,854
State and Federal Revenues Offset with Appropriations
Municipal Alliance on Alcoholism and Drug Abuse
A-7
11,677
11,677
Drunk Driving Enforcement Fund
A-7
3,943
3,943
Bullet Proof Vest Partnership
A-7
9,847
9,847
Emergency Management Agency Assistance Subgrant
A-7
5,000
5,000
Body Armor Replacement Program - Reserve
A-23
I ,858
I ,858
Clean Communilies- Reserve
A-23
48,628
48,628
Drunk Driving Enforcement Fund- Reserve
A-23
5,407
5,407
Alcohol Education and Rehabilitalion- Reserve
A-23
158
158
Bergen County Prosecutor- Police Radios
A-7
$
44,099
44,099
Other Special Items of Revenue
Uniform Fire Safety Act
A-10
17,400
19,209
1,809
NJMC Host Community Fees
A-10
313,000
330,380
17,380
Third Party Billing- Emergency Medical Services
A-10
320,000
303,454
( 16,546)
Trust Assessment Surplus
B-12
32,000
32,000
Library Insurance Reimbursement
A-10
40,000
40,000
FEMA Reimbursement- Sandy
A-24
125,559
125,559
Reserve for Tax Maps
A-24
97,809
97,809
Passaic Valley Water Settlement
A-10
275,000
325,000
50,000
Capital Surplus to Pay Debt Service
C-1
185,000
185,000
A-I
4,545,129
44,099
4,706,852
117,624
RECEIPTS FROM DELINQUENT TAXES
A-I, A-2
650,000
683,700
33,700
AMOUNT TO BE RAISED FOR SUPPORT OF
MUNICIPAL BUDGET
Local Tax for Municipal Purposes
A-2
15,875,961
15,427,768
(448,193)
Minimum Library Tax
A-2
485,954
485,954
Total Amount to be Raised for Support of Municipal Budget
16,361,915
15,913,722
(448,193)
Total General Revenues
$ 21,557,044
$
44,099
21,304,274
$
(296,869)
Non-Budget Revenue
A-I, A-2
91,174
$21,395,448
See Accompanying Notes to Financial Statements
7
BOROUGH OF NORTH ARLINGTON
STATEMENT OF REVENUES- REGULATORY BASIS
CURRENT FUND
FOR HIE YEAR ENDED DECEMBER 31,2014
(Continued)
ANALYSIS OF REALIZED REVENUES
Allocation of Current Tax Collection
Revenue from Collections
Less: Allocated to School,County and Open Space Taxes
Balance for Support of Municipal Budget Appropriations
Add: Appropriation "Reserve for Uncollected Taxes"
Amount for Support of Municipal Budget Appropriations
Licenses- Other
Borough Clerk
Board of Health
Fees and Permits
Borough Clerk
Board of Health
Police
Tax
Recreation
Interest on Investments and Deposits
Revenue Accounts Receivable
Due from Animal Control Fund
Due from Assessment Trust Fund
Due from Unemployment Trust Fund
Due from Other Trust Fund
Due from General Capital Fund
Non Budget Revenues
Premium on Tax Anticipation Note
Miscellaneous
See Accompanying Notes to Financial Statements
8
Reference
A-l,A-7
A-19, A-20
A-3
A-3
A-2
A-10
A-10
A-2
A-10
A-10
A-10
A-10
A-10
A-2
A-10
B-6
8-12
B-17
B-13
C-5
A-2
A-1, A-2, A-4
EXHIBIT A-2
Page 2
$41,447,400
26,468,678
14,978,722
935,000
$ 15,913,722
$
$
$
$
$
$
$
10,801
11,104
21,905
5,957
13,582
7,472
40
13,376
40,427
5,824
34
681
37
588
1,975
9,139
2,850
88,324
91,174
EXHIBIT A-3
Page 1
BOROUGH OF NORTH ARLINGTON
STATEMENT OF EXPENDITURES- REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31,2014
Approoriated
Ex:Qended
Unexpended
Budget After
Paid or
Balances
GENERAL APPROPRJATIONS
Budget
Modification
Charged
Reserved
Cancelled
OPERATIONS- WITHIN "CAPS"
GENERAL GOVERNMENT FUNCTIONS
Administrative and Executive
Salaries and Wages
$
194,000
$
I89,000
$
179,086
$
9,914
Other Expenses
165,140
185,140
156,911
28,229
Borough Council
Salaries and Wages
51,600
51,600
51,549
51
Elections
Salaries and Wages
3,800
3,800
3,800
Other Expenses
I7,100
17,100
12,547
4,553
Financial Administration
Salaries and Wages
25,000
25,000
24,602
398
Other Expenses
268,000
291,000
257,165
33,835
Collection of Taxes
Salaries and Wages
13,000
13,000
12,860
140
Other Expenses
84,800
99,800
89,793
10,007
Assessment of Taxes
Salaries and Wages
24,200
24,200
24,164
36
Other Expenses
1,500
5,500
577
4,923
Legal Services and Costs
Salaries and Wages
70,000
70,000
70,000
Other Expenses
175,000
160,000
110,817
49,183
Engineering Services and Costs
Other Expenses
60,000
85,000
59,802
25,198
LAND USE ADMINISTRATION
Municipal Land Use Law N.J.S.A. 40:55wDI
Planning Board
Salaries and Wages
4,100
1,100
1,100
Other Expenses
2,150
6,150
812
5,338
Zoning Commission
Salaries and Wages
7,600
5,600
4,100
1,500
Other Expenses
1,000
5,000
34
4,966
CODE ENFORCEMENT ADMINISTRATION
Rent Leveling Board
Salaries and Wages
2,600
2,600
2,500
100
INSURANCE
Unemployment
20,000
20,000
20,000
Liability Insurance
370,000
370,000
343,736
26,264
Workers Compensation
372,500
372,500
317,366
55,!34
Employee Group Insurance
2,217,700
2,217,700
2,037,994
179,706
PUBLIC SAFETY FUNCTIONS
Police Department
Salaries and Wages
3,886,200
3,850,600
3,688,675
161,925
Other Expenses
214,200
204,200
136,876
67,324
See Accompanying Notes to Financial Statements
9
BOROUGH OF NORTH ARLINGTON
STATEMENT OF EXPENDITURES- REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31,2014
Annronriated
Exnended
GENERAL APPROPRIATIONS
OPERATIONS WITHIN "CAPS" (Cont'd.)
Emergency Medical Transportation
Salaries and Wages
Police Dispatch/911
Salaries and Wages
Crossing Guards
Salaries and Wages
Office of Emergency Management
Other Expenses
Fire Department
Other Expenses
Volunteer Emergency Squad (First Aid Organization)
Other Expenses
Uniform Fire Safety (Ch. 383, P.L. 1983)
Fire Official
Salaries and Wages
Other Expenses
Municipal Prosecutor
Salaries and Wages
PUBLIC WORKS FUNCTION
Streets and Roads
Road Repair and Maintenance
Salaries and Wages
Other Expenses
Snow Removal
Salaries and Wages
Other Expenses
Shade Tree
Other Expenses
Sanitation
Garbage and Trash Removal Contract
Public Building and Grounds
Other Expenses
Recycling Program
Other Expenses ~ Contractual
HEALTH AND HUMAN SERVICES
FUNCTIONS
Board of Health
Salaries and Wages
Other Expenses
Dog Warden
Other Expenses
See Accompanying Notes to Financial Statements
$
Budget
406,000
300,000
24I,OOO
4,000
I62,990
72,420
6,000
6,500
I5,000
8I8,000
242,320
30,000
4I,Il4
50,000
420,000
258,570
I65,000
I58,000
6I,OOO
I4,000
IO
Budget After
Modification
$
406,000
290,000
236,000
4,000
162,990
72,420
6,000
6,500
15,000
783,000
277,320
30,000
79,II4
35,000
420,000
258,570
I65,000
148,000
63,000
I4,000
$
Paid or
Charged
386,996
267,602
226,806
2,736
I54,507
65,636
5,595
5,882
I5,000
782,996
223,947
29,999
4I,3I5
21,375
381,333
234,719
150,220
119,606
53,253
8,773
$
Reserved
I9,004
22,398
9,I94
1,264
8,483
6,784
405
6I8
4
53,373
37,799
13,625
38,667
23,851
I4,780
28,394
9,747
5,227
EXHIBIT A-3
Page2
Unexpended
Balances
Cancelled
BOROUGH OF NORTH ARLINGTON
STATEMENT OF EXPENDITURES- REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2014
Appropriated
Expended
GENERAL APPROPRIATIONS (Con!' d.)
OPERATIONS WITHrN "CAPS" (Cont'd.)
PARKS AND RECREATION FUNCTIONS
Recreation
Salaries and Wages
Other Expenses
Celebration of Public Events
Other Expenses
Youth Center
Salaries and Wages
Other Expenses
Senior Citizen Services
Salaries and Wages
Other Expenses
OTHER COMMON OPERATfNG
FUNCTIONS
Municipal Court
Salaries and Wages
Other Expenses
Public Defenders (P.L. 1997, C.256)
Salaries and Wages
Accumulated Leave
CODE ENFORCEMENT AND
ADMrNISTRA TION
Uniform Construction Code Enforcement Functions
Construction Code Official
Salaries and Wages
Other Expenses
UTILITY EXPENSES AND BULK PURCHASES
Gasoline
Electricity
Telephone
Street Lighting
Water
Total Operations Within "CAPS"
Total Operations including Contingent-Within "CAPS"
Detail:
Salaries and Wages
Other Expenses
See Accompanying Notes to Financial Statements
$
7,500
85,000
4,700
75,000
8,000
28,500
3,700
169,300
11,435
10,000
233,000
7,140
132,400
243,000
110,000
275,000
13,000
13,139,780
13,139,780
6,779,401
6,360,379
11
Budget After
Modification
$
9,900
79,000
4,700
63,000
8,000
28,500
3,700
159,900
11,435
10,000
1
233,000
7,140
132,400
243,000
110,000
275,000
13,000
13,139,180
13,139,180
6,654,801
6,484,379
$
Paid or
Charged
9,761
57,945
2,950
57,663
4,444
24,539
195
148,499
11,127
10,000
1
228,274
5,965
132,093
195,713
90,474
244,814
11,245
12,015,964
12,015,964
6,370,873
5,645,091
$
139
21,055
1,750
5,337
3,556
3,961
3,505
11,401
308
4,726
1,175
307
47,287
19,526
30,186
1,755
1,123,216
1,123,216
283,928
839,288
EXHIBIT A-3
Page 3
Unexpended
Balances
Cancelled
BOROUGH OF NORTH ARLINGTON
STATEMENT OF EXPENDITURES- REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2014
Approoriated
Expended
GENERAL APPROPRIATIONS (Cont'd.)
DEFERRED CHARGES AND
STATUTORY EXPENDITURES-
MUNICIPAL WITHIN "CAPS"
Deferred Charges
Overexpenditure of Appropriations
Overexpcnditure of Appropriation Reserves
Operating Deficit
Expenditure Without Appropriation-Grant Fund
Statutory Charges
PERS
Social Security System (O.A.S.I.)
Police and Firemen's Retirement System
Defined Contribution Retirement Program
Total Deferred Charges & Statutory
Expenditures~ Municipal within "CAPS"
Total General Appropriation for Municipal
Purposes within "CAPS"
OPERATIONS EXCLUDED FROM "CAPS"
Lyndhurst-North Arlington Joint Meeting
Share of Costs
Maintenance of Free Public Library
Passaic VaHey Sewerage Commission
Share of Costs
Snow Emergencies
Salaries and Wages
Other Expenses
Length of Service Award Program: (NJSA 40AM45.3)
Contribution
Total Other Operations Excluded
from "CAPS"
See Accompanying Notes to Financial Statements
$
64,984
10,182
271,553
1,776
283,932
315,000
787,374
2,000
1,736,801
14,876,581
176,000
485,954
1,102,800
148,250
158,885
93,150
2,165,039
12
Budget After
Modification
$
64,984
10,182
271,553
1,776
283,932
315,000
787,374
2,600
1,737,401
14,876,581
176,000
485,954
1,102,800
148,250
158,885
93,150
2,165,039
$
Paid or
Charged
64,984
10,182
264,747
1,775
283,932
297,960
787,374
2,349
1,713,303
13,729,267
175,986
473,366
1,102,738
148,250
157,425
66,185
2,123,950
$
17,040
251
17,291
1,140,507
14
12,588
62
1,460
26,965
41,089
$
EXHIBIT A-3
Page4
Unexpended
Balances
Cancelled
6,806
6,807
6,807
BOROUGH OF NORTH ARLINGTON
STATEMENT OF EXPENDITURES- REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31,2014
Appropriated
Expended
GENERAL APPROPRIATIONS (Cont'd.)
OPERATIONS - EXCLUDED FROM
''CAPS" (Cont'd.)
PUBLIC AND PRIVATE PROGRAMS
OFFSET BY REVENUES
Municipal Alliance Against Alcohol and Drug Abuse
Other Expenses
Local Match
Drunk Driving EnfOrcement Fund
Other Expenses
State of New Jersey- Body Armor Fund
Other Expenses
Bullet Proof Vest Partnership
Drunk Driving Enforcement Fund
NJ Alcohol Rehabilitation
Emergency Management Agency Assistance Subgrant
Emergency Management Agency Assistance Subgrant Match
NJ Clean Communities- Unappropriated Reserve
Bergen County Prosecutor
Total Public and Private Programs Offset by Revenues
Total Operations Excluded from "CAPS"
Detail:
Salaries and Wages
Other Expenses
MUNICIPAL DEBT SERVICE-
EXCLUDED FROM "CAPS"
Payment of Bond Principal
Payment of Bond Anticipation Notes and Capital Notes
Interest on Bonds
lnterest on Special Emergency Note
N.J. Wastewater Treatment Trust Loan
Principal and Interest
Total Municipal Debt Service-
Excluded fl·om "CAPS"
See Accompanying Notes to Financial Statements
$
Budget After
Budget
Moditication
11,677
$
11,677
3,000
3,000
5,407
5,407
I ,858
1,858
9,847
9,847
3,943
3,943
158
158
5,000
5,000
5,000
5,000
48,628
48,628
44,099
94,518
138,617
2,259,557
2,303,656
148,250
148,250
2,111,307
2,155,406
2,370,000
2,370,000
10,000
10,000
740,000
740,000
7,500
7,500
37,847
37,847
3,165,347
3,165,347
13
$
Paid or
Charged
11,677
3,000
5,407
1,858
9,847
3,943
158
5,000
5,000
48,628
44,099
138,617
2,262,567
148,250
2,114,317
2,370,000
736,786
7,479
30,560
3,144,825
$
41,089
41,089
$
EXHIBIT A-3
Page 5
Unexpended
Balances
Cancelled
10,000
3,214
21
7,287
20,522
BOROUGH OF NORTH ARLINGTON
STATEMENT OF EXPENDITURES- REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31,2014
Appropriated
Expended
Budget After
Paid or
GENERAL APPROPRIATIONS (Cont'd.}
Budget
Modification
Charged
Reserved
MUNICIPAL DEBT SERVICE-
EXCLUDED FROM "CAPS" (Continued)
DEFERRED CHARGES MUNICIPAL-
EXCLUDED FROM "CAPS"
Special Emergency Authorizations-5 Years
$
I 50,000
$
150,000
$
150,000
Sandy Superslorm 2012 Special Emergency Auth-3 Years
I 25,559
125,559
I 25,559
Total Deterred Charges Municipal -
Excluded from "CAPS"
275 559
275 559
275 559
Judgements
45,000
45,000
$
45,000
Total General Appropriations for Municipal
Purposes Excluded tl·om "CAPS"
5,745,463
5,789,562
5,682,95 I
86,089
Subtotal General Appropriations
20,622,044
20,666,143
19,412,218
I ,226,596
Reserve for Uncollected Taxes
935,000
935,000
935,000
Total General Appropriations
$
21,557,044
$
21,601,143
$
20,347,218
$
1,226,596
Reference
A-2
A-2
A-1
A,A-1
See Accompanying Notes to Financial Statements
14
$
$
EXHIBIT A-3
Page 6
Unexpended
Balances
Cancelled
20,522
27,329
27,329
A-I
BOROUGH OF NORTH ARLINGTON
STATEMENT OF EXPENDITURES- REGULATORY BASIS
CURRENT FUND
FOR THE YEAR ENDED DECEMBER31, 2014
(Continued)
Budget
After
Reference
Modification
Budget as Adopted
A-2
$
21,557,044
Added N.J.S.A. 40A:4-87
A-2
44,099
$
21,601,143
Cash Disbursements
A-4
Reserve for Uncollected Taxes
A-2
Deferred Charges
A-11, A-12
Encumbrances Payable
A-14
Appropriated Grant Reserves
A-22
See Accompanying Notes to Financial Statements
15
$
$
EXHIBIT A-3
Page 7
Exgended
Paid or
Charged
18,282,681
935,000
617,247
373,673
138,617
20,347,218
EXHIBIT B
BOROUGH OF NORTH ARLINGTON
COMPARATIVE BALANCE SHEETS- REGULATORY BASIS- TRUST FUNDS
AS OF DECEMBER 31,2014 AND 2013
Reference
2014
2013
ASSETS
ANIMAL CONTROL FUND
Cash
B-4
$
14,625
$
16,608
14,625
16,608
ASSESSMENT TRUST FUND
Cash
B-4,5
315,865
498,969
Assessments Receivable
B-9
23
23
Due from Current Fund
B-12
68,026
383,914
498,992
OTHER TRUST FUND
Cash
B-4
707,314
752,841
Due from Current Fund
B-13
66,189
773,503
752,841
UNEMPLOYMENT INSURANCE TRUST FUND
Cash
B-4
981
19,028
981
19,028
LENGTH OF SERVICE AWARD PROGRAM (UNAUDITED)
Investments
B
1,382,420
1,242,350
Contributions Receivable
B
97,750
93,150
1 ,480,170
1,335,500
Total Assets
$
2,653,193
$
2,622,969
See Accompanying Notes to Financial Statements
16
EXHIBITB
BOROUGH OF NORTH ARLINGTON
COMPARATIVE BALANCE SHEETS- REGULATORY BASIS- TRUST FUNDS
AS OF DECEMBER 31, 2014 AND 2013
Reference
2014
2013
LIABILITIES, RESERVES AND FUND BALANCE
ANIMAL CONTROL FUND
Due to Current Fund
B-6
$
9,774
$
9,618
Due to State of New Jersey
B-7
1
4
Reserve for Animal Control Expenditures
B-8
4,850
6,986
14,625
16,608
ASSESSMENT TRUST FUND
Assessment Bonds Payable
B-10
383,745
465,973
Assessment Overpayment
B-11
30
30
Due to Current Fund
B-12
850
Reserve for Assessment Receivables
B-9
23
23
Fund Balance
B-1
116
32,116
383,914
498,992
OTHER TRUST FUND
Due to Current Fund
B-13
220,614
Payroll and Payroll Deductions Payable
B-14
3,435
3,435
Reserve for Library
B-15
47,806
51,979
Miscellaneous Reserves
B-16
722,262
476,813
773,503
752,841
UNEMPLOYMENT INSURANCE TRUST FUND
Due to Current Fund
B-17
3
7,843
Reserve for Unemployment Insurance Benefits
B-18
978
II, 185
981
19,028
LENGTH OF SERVICE AWARD PROGRAM (UNAUDITED)
Net Assets Available for Benefits
B
I ,480,170
1,335,500
1,480,170
I ,335,500
LIABILITIES, RESERVES AND FUND BALANCE
$
2,653,193
$
2,622,969
See Accompanying Notes to Financial Statements
17
EXHIBIT B-1
BOROUGH OF NORTH ARLINGTON
COMPARATIVE STATEMENTS OF CHANGES IN FUND BALANCES- REGULATORY BASIS
ASSESSMENT TRUST FUND
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Reference
Balance, January l
B
$
32,1l6 $
32,698
Increased by:
Collection of Unpledged Assessments
B
31,418
32,116
64,116
Decreased by:
Anticipated as Revenue in the Current Fund Budget
A-2, B-12
32,000
32,000
Balance, December 31
Assessment Cash
B
$
116
;:;.$ ~=3
2;;;., 1;,:1,;;6
STATEMENT OF REVENUES- REGULATORY BASIS
ASSESSMENT TRUST FUND
FOR THE YEAR ENDED DECEMBER 31, 2014
Reference
Budget
Revenues
EXHIBITB-2
Realized
B-3
$
82,228
;:;.$ ~=82;;~,;,2;;;;;2,;;,8
STATEMENT OF EXPENDITURES- REGULATORY BASIS
ASSESSMENT TRUST FUND
FOR THE YEAR ENDED DECEMBER 31, 2014
Budget
EXHIBIT B-3
Reference
Appropriations
Expenditures
Payment of Bond Principal
B-2, B-10 $
82,228
;;.$ ~,.,;;,;82;;,;;,2;;;;;2,;,8
See Accompanying Notes to Financial Statements
18
BOROUGH OF NORTH ARLINGTON
COMPARATIVE BALANCE SHEETS- REGULATORY BASIS
GENERAL CAPITAL FUND
AS OF DECEMBER 31, 2014 AND 2013
Reference
2014
ASSETS
Cash
C-2,3
$ 1,099,162
Grants Receivable
C-4
535,763
Due from Current Fund
C-5
504,987
Deferred Charges to Future Taxation
Funded
C-6
17,115,256
Unfunded
C-7
1,011,743
Total Assets
$ 20,266,911
LIABILITIES, RESERVES AND FUND BALANCE
General Serial Bonds
C-8
$ 17,115,256
Loans Payable
C-9
Improvement Authorizations:
Funded
C-10
1,725,512
Unfunded
C-10
527,776
Contracts Payable
C-11
706,099
Capital Improvement Fund
C-12
33,972
Reserve for Payment of Debt
C-13
72,200
Reserve for Grants Receivable
C-4
51,097
Fund Balance
C-1
34,999
Total Liabilities, Reserves and Fund Balance
$ 20,266,911
EXHIBITC
2013
$ 2,036,795
581,0!3
290,681
19,440,077
375,243
$ 22,723,809
$ 19,403,028
37,049
32,924
2,376,135
460,865
70,712
123,097
219,999
$ 22,723,809
There were bonds and notes authorized but not issued of$1,011,743 and $375,243 at December 31,2014
and 2013, respectively (Exhibit C-14).
See Accompanying Notes to Financial Statements
19
EXHIBIT C-1
BOROUGH OF NORTH ARLINGTON
COMPARATIVE STATEMENTS OF CHANGES IN FUND BALANCES- REGULATORY BASIS
GENERAL CAPITAL FUND
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
Reference
2014
2013
Balance, January I
c
$
219,999
$
38,212
Increased by:
Premium on Sale of Notes
c
181,787
219,999
219,999
Decreased by:
Anticipated as Revenue in tbe Current Fund Budget
A-2, C-5
185,000
Balance, December 31
c
$
34,999 $
219,999
See Accompanying Notes to Financial Statements
20
EXHIBITD
BOROUGH OF NORTH ARLINGTON
COMPARATIVE BALANCE SHEETS- GENERAL FIXED ASSETS ACCOUNT GROUP
REGULATORY BASIS
AS OF DECEMBER 31, 2014 AND 2013
2014
2013
ASSETS
Land
$
7,418,400
$
7,418,400
Buildings and Improvements
5,565,488
5,492,089
Vehicles and Equipment
7,423,349
7,285,580
$
20,407,237
$
20,196,069
LIABILITIES
Investment in General Fixed Assets
$
20,407,237
$
20,196,069
See Accompanying Notes to Financial Statements
21
NOTES TO FINANCIAL STATEMENTS
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A.
Reporting Entity
The Borough of North Arlington (the "Borough") was incorporated in 1840 and operates under an elected Mayor and
Council form of government. The Borough's major operations include public safety, road repair and maintenance,
sanitation, fire protection, recreation and parks, health services, and general administrative services.
GASB requires the fmancial reporting entity to include both the primary government and component units. Component
units are legally separate organizations for which the Borough is fmancially accountable. The Borough is financially
accountable for an organization if the Borough appoints a voting majority of the organization's governing board and (1)
the Borough is able to significantly influence the programs or services performed or provided by the organization; or (2)
the Borough is legally entitled to or can otherwise access the organization's resources; the Borough is legally obligated
or has otherwise assumed the responsibility to fmance the deficits of, or provide financial support to, the organization;
or the Borough is obligated for the debt of the organization. Component units may also include organizations that are
fiscally dependent on the Borough in that the Borough approves the budget, the issuance of debt or the levying of taxes.
The Borough is not includable in any other reporting entity as a component unit.
The financial statements contained herein include only those boards, bodies, officers or commissions as required by
NJS 40A:5-5. Accordingly, the financial statements of the Borough do not include the municipal library, volunteer fire
department or volunteer ambulance squad, which are considered component units under GAAP. Complete fmancial
statements of the above component units can be obtained by contacting the Treasurer of the respective entity.
B.
Description of Regulatory Basis of Accounting
The financial statements of the Borough of North Arlington have been prepared on a basis of accounting in conformity
with accounting principles and practices prescribed or permitted by the Division of Local Government Services,
Department of Community Affairs, State of New Jersey (the "Division") which is a regulatory basis of accounting other
than accounting principles generally accepted in the United States of America (GAAP). Such principles and practices
are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of
reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the
Borough accounts for its financial transactions through separate funds, which differ from the fund structure required by
GAAP.
The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing
governmental accounting and fmancial reporting principles. GASB has adopted accounting statements to be used by
governmental units when reporting financial position and results of operations in accordance with accounting principles
generally accepted in the United States of America. (GAAP). The municipalities in the State of New Jersey do not
prepare fmancial statements in accordance with GAAP and thus do not comply with all of the GASB pronouncements.
C.
Basis of Presentation- Financial Statements
The Borough uses funds, as required by the Division, to report on its financial position and the results of its operations.
Fund accounting is designed to demonstrate legal compliance and to aid fmancial administration by segregating
transactions related to certain Borough functions or activities. The Borough also uses an account group, which is
designed to provide accountability for certain assets that are not recorded in those Funds.
22
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C.
Basis of Presentation- Financial Statements (Continued)
The Borough has the following funds and account group:
Current Fund - This fund is used to account for the revenues and expenditures for governmental operations of a
general nature and the assets and liabilities related to such activities, including Federal and State grants not
accounted for in another fund.
Trust Funds- These funds are used to account for assets held by the government in a trustee capacity. Funds held by
the Borough as an agent for individuals, private organizations, or other governments are recorded in the Trust Funds.
Animal Control Fund - This fund is used to account for fees collected from dog and cat licenses and
expenditures which are regulated by NJS 4:19-15.11.
Assessment Trust Fund - This fund is used to account for special benefit assessments levied against
properties for specific purposes.
Other Trust Fund - This fund is established to account for the assets and resources, which are held by the
Borough as a trustee or agent for individuals, private organizations, other governments and/or other funds.
These funds include dedicated fees/proceeds collected, developer deposits, payroll related deposits and
funds deposited with the Borough as collateral.
Unemployment Insurance Fund- This fund is used to account for employee and employer contributions for
the purpose of providing unemployment benefits to former eligible employees.
Length of Service Awards Program Fund (LOSAP)- This fund is established to account for the tax-deferred
income benefits to active volunteer members of emergency service organizations of the Borough.
General Capital Fund - This fund is used to account for the receipt and disbursement of funds used and related
financial transactions related to the acquisition or improvement of general capital facilities and other capital assets,
other than those acquired in the Current Fund.
General Fixed Assets Account Group - This account group is used to account for all general fixed assets of the
Borough. The Borough's infrastructure is not reported in the account group.
Comparative Data- Comparative data for the prior year has been presented in the accompanying financial statements
in order to provide an understanding of changes in the Borough's financial position and operations.
However,
comparative data have not been presented in all statements because their inclusion would make certain statements
unduly complex and difficult to understand.
23
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C.
Basis of Presentation- Financial Statements (Continued)
Reclassifications - Certain reclassifications have been made to the December 31, 2013 balances to conform to the
December 31, 2014 presentation.
Financial Statements -Regulatory Basis
The GASB Codification also requires the financial statements of a governmental unit to be presented in the basic
financial statements in accordance with GAAP. The Borough presents the regulatory basis fmancial statements listed
in the table of contents which are required by the Division and which differ from the basic fmancial statements required
by GAAP. In addition, the Division requires the regulatory basis fmancial statements listed in the table of contents to
be referenced to the supplementary schedules. This practice differs from reporting requirements under GAAP.
D.
Measurement Focus and Basis of Accounting
The accounting and financial reporting treatment is determined by the accounting principles and practices prescribed by
the Division in accordance with tbe regulatory basis of accountiog. Measurement focus indicates the type of resources
being measured. The basis of accountiog iodicates the timing of transactions or events for recognition io tbe financial
statements.
The Borough of North Arliogton follows a modified accrual basis of accountiog. Under this method of accountiog,
revenues, except State/Federal Aid, are recognized when received and expenditures are recorded when iocurred. The
accountiog priociples and practices prescribed or permitted for municipalities by the Division ("regulatory basis of
accounting") differ io certaio respects from accounting priociples generally accepted in the United States of America
(GAAP) applicable to local government units. The more significant differences are as follows:
Cash and Investments - Cash includes amounts io demand deposits as well as short-term investments with a maturity
date within three months of the date acquired by the government. Investments are reported at cost and are limited by
N.J.S.A. 40A:5-15.1 et seq. with the exception ofLOSAP Trust Fund iovestments which are reported at fair value and
are limited by N.J.A.C. 5:30-14.19. GAAP requires that all investments be reported at fair value.
Inventories - The costs of inventories of supplies for all firnds are recorded as expenditures at the time iodividual items
are purchased. The costs of inventories are not iocluded on the various balance sheets. GAAP requires inventories to
be recorded as assets in proprietary-type funds.
24
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D.
Measurement Focus and Basis of Accounting (Continued)
Property Tax Revenues/Receivables - Real property taxes are assessed locally, based upon the assessed value of the
property. The tax bill includes a levy for Municipal, County, and School purposes. The bills are mailed annually in
June for that calendar year's levy. Taxes are payable in four quarterly installments on February 1, May I, August I, and
November I. The amounts of the first and second installments are determined as one-quarter of the total tax levied
against the property for the preceding year. The installment due the third and fourth quarters is determined by taking
the current year levy less the amount previously charged for the first and second installments, with the remainder being
divided equally. If unpaid on these dates, the amount due becomes delinquent and subject to interest at 8% per annum,
or 18% on any delinquency amount in excess of$1,500. A penalty of up to 6% of the delinquency may be imposed on
a taxpayer with a delinquency in excess of $10,000 who fails to pay that delinquency prior to the end of the fiscal year
in which the charges become delinquent. The school levy is turned over to the Board of Education as expenditures are
incurred, and the balance, if any, must be transferred as of June 30, of each fiscal year. County taxes are paid quarterly
on February 15, May 15, August 15 and November 15, to the County by the Borough. When unpaid taxes or any
municipal lien, or part thereof, on real property, remains in arrears on April first in the year following the calendar year
levy when the same became in arrears, the collector in the municipality shall, subject to the provisions of the New
Jersey Statutes, enforce the lien by placing the property on a standard tax sale. The Borough also has the option when
unpaid taxes or any municipal lien, or part thereof, on real property remains in arrears on the 11th day of the eleventh
month in the fiscal year when the taxes or lien became in arrears, the collector in the municipality shall, subject to the
provisions of the New Jersey Statutes, enforce the lien by placing property on an accelerated tax sale, provided that the
sale is conducted and completed no earlier than in the last month of the fiscal year.
The Borough may institute annual
in rem tax foreclosure proceedings to enforce the tax collection or acquisition of title to the property. In accordance
with the accounting principles prescribed by the State of New Jersey, current and delinquent taxes are realized as
revenue when collected. Since delinquent taxes and liens are fully reserved, no provision has been made to estimate
that portion of the tax receivable and tax title liens that are uncollectible. GAAP requires property tax revenues to be
recognized in the accounting period when they become susceptible to accrual (i.e., when they are both levied and
available), reduced by an allowance for doubtful accounts.
Miscellaneous Revenues/Receivables - Miscellaneous revenues are recognized on a cash basis. Receivables for the
miscellaneous items that are susceptible to accrual are recorded with offsetting reserves on the balance sheet of the
Borough's Current Fund. GAAP requires such revenues to be recognized in the accounting period when they become
susceptible to accrual (i.e., when they are both measurable and available).
Grant and Similar Award Revenues/Receivables- Federal and State grants, entitlements or shared revenues received
for purposes normally fmanced through the Current Fund are recognized when anticipated in the Borough's budget.
GAAP requires such revenues to be recognized as soon as all eligibility requirements imposed by the grantor or
provider have been met.
Interfunds - Interfund receivables in the Current Fund are recorded with offsetting reserves, which are created by
charges to operations. Income is recognized in the year the receivables are liquidated. Interfund receivables in the
other funds are not offset by reserves. GAAP does not require the establislnnent of an offsetting reserve for interfunds
and, therefore, does not recognize income in the year liquidated.
Prepaid Items - Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items. Prepaid items in the current fund, except for prepaid debt service, are offset by a reserve, created by a
charge to operations. GAAP does not require the establislnnent of a reserve for prepaid items.
25
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D.
Measurement Focus and Basis of Accounting (Continued)
Deferred Charges - Certain expenditures, operating deficits and other items are required to be deferred to budgets of
succeeding years. GAAP requires expenditures, operating deficits and certain other items generally to be recognized
when incurred, if measurable.
Appropriation Reserves - Appropriation reserves are recorded as liabilities and are available, until lapsed at the close
of the succeeding year, to meet specific claims, commitments or contracts incurred during the preceding year. Lapsed
appropriation reserves are recorded as additions to income. Appropriation reserves do not exist under GAAP.
Expenditures - Expenditures are recorded on the "budgetary" basis of accounting.
Generally, expenditures are
recorded when an amount is encumbered for goods or services through the issuance of a purchase order in conjunction
with an encumbrance accounting system. Outstanding encumbrances at December 31, are reported as a cash liability in
the financial statements. Unexpended or uncommitted appropriations, at December 31, are reported as expenditures
through the establishment of appropriation reserves unless cancelled by the governing body.
GAAP requires
expenditures to be recognized in the accounting period in which the fund liability is incurred, if measurable, except for
unmatured interest on general long-term debt, as well as expenditures related to compensated absences and claims and
judgements, which are recognized when due.
Encumbrances - Contractual orders outstanding at December 31, are reported as expenditures and liabilities through
the establishment of an encumbrance payable. Encumbrances do not constitute expenditures or liabilities under GAAP.
Compensated Absences - Expenditures relating to obligations for unused vested accumulated vacation and sick leave
are not recorded until paid; however, municipalities may establish and budget reserve funds subject to NJSA 40A:4-39
for the future payment of compensated absences. GAAP requires that the amount that would normally be liquidated
with expendable available fmancial resources be recorded as an expenditure in the operating funds and the remaining
obligations are recorded as a long-term obligation in the government-wide financial statements.
Tax Appeals and Other Contingent Losses - Losses arising from tax appeals and other contingent losses are
recognized at the time a decision is rendered by an administrative or judicial body; however, municipalities may
establish reserves transferred from tax collections or by budget appropriation for future payments of tax appeal losses.
GAAP requires such amounts to be recorded when it is probable that a loss has been incurred and the amount of such
loss can be reasonably estimated.
Operating Deficits - Deficits resulting from expenditures and other debits which exceed cash revenues, other realized
revenues and credits to income in such fiscal year are recorded as deferred charges on the balance sheet of the
respective operating fund at year end and are required to be funded in the succeeding year's budget. GAAP does not
permit the deferral of operating deficits at year end.
26
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER31, 2014 AND 2013
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Measurement Focus and Basis of Accounting (Continued)
General Fixed Assets- In accordance with NJAC 5:30-5.6, Accounting for Governmental Fixed Assets, the Borough
of North Arlington has developed a fixed assets accounting and reporting system. Fixed assets are defined by the
Borough as assets with an initial, individual cost of $1,000 and an estimated useful life in excess of two years.
Fixed assets used in governmental operations (general fixed assets) are accounted for in the General Fixed Assets
Account Group. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than
buildings, such as roads, bridges, curbs and gutters, streets and sidewalks and sewerage and drainage systems are not
capitalized.
Fixed Assets purchased after December 31, 1986 are stated as cost. Donated fixed assets are recorded at estimated fair
market value at the date of donation.
Fixed Assets purchased prior to December 31, 1986 are stated as follows:
Land and Buildings
Machinery and Equipment
No depreciation has been provided for in the financial statements.
Assessed Value
Replacement Cost
Expenditures for construction in progress are recorded in the General Capital Fund until such time as the construction is
completed and put into operation for general fixed assets.
GAAP requires that capital assets be recorded in proprietary-type funds as well as the government-wide fmancial
statement at historical or estimated historical cost if actual historical cost is not available. In addition, GAAP requires
depreciation on capital assets to be recorded in proprietary-type funds as well as in the government-wide financial
statements.
Use of Estimates - The preparation of financial statements requires management of the Borough to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the fmancial statements and the reported amounts of accrued revenues and expenditures
during the reporting period. Accordingly, actual results could differ from those estimates.
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A.
Budgets and Budgetary Accounting - An annual budget is required to be adopted and integrated into the accounting
system to provide budgetary control over revenues and expenditures. Budget amounts presented in the accompanying
financial statements represent amounts adopted by the Borough and approved by the State Division of Local
Government Services as per N.J.S.A. 40A:4 et seq.
The Borough is not required to adopt budgets for the following funds:
Trust Funds (except Assessment Trust)
General Capital Fund
27
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued)
A.
Budgets and Budgetary Accounting (Continued)
The governing body is required to introduce and approve the annual budget no later than February 10, of the fiscal year.
The budget is required to be adopted no later than March 20, and prior to adoption must be certified by the Division of
Local Government Services, Department of Community Affairs, State of New Jersey. The Director of the Division of
Local Government Services, with the approval of the Local Finance Board may extend the introduction and approval
and adoption dates of the municipal budget. The budget is prepared by fund, function, activity and line item (salary or
other expense) and includes information on the previous year. The legal level of control for appropriations is exercised
at the individual line item level for all operating budgets adopted. The governing body of the municipality may
authorize emergency appropriations and the inclusion of certain special items of revenue to the budget after its adoption
and determination of the tax rate. During the last two months of the fiscal year, the governing body may, by a 2/3 vote;
amend the budget through line item transfers. Management has no authority to amend the budget without the approval
of the governing body. Expenditures may not legally exceed budgeted appropriations at the line item level. During
2014 the Borough Council increased the original budget by $44,099. The increase was funded by additional aid
allotted to the Borough. The Borough Council did not increase the original budget in 2013. In addition, the governing
body approved several budget transfers during 2014 and 2013.
B.
Excess Expenditures Over Appropriations
The following is a summary of expenditures in excess of available appropriations. The overexpended appropriations
resulted in unfavorable variances.
Modified
Unfavorable
2014
Budget
Actual
Variance
Current Fund
2013 Appropriation Reserves
Streets and Roads - Repair and Maintenance
Salaries and Wages
$
82
$
1,130
$
1,048
Other Expenses
1,232
1,232
Streets and Roads - Snow Removal
Salaries and Wages
I
813
812
Fire Official
Other Expenses
34
2,999
2,965
Public Buildings and Grounds
Other Expenses
398
398
Board of Health
Other Expenses
3,071
3,700
629
Appropriated Grant Reserves
Alcohol Education and Rehabilitation
3,355
3,804
449
28
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 2 STEWARDSHIP, COMPLiANCE AND ACCOUNTABILITY (Continued)
B.
Excess Expenditures Over Appropriations (Continued)
Modified
2013
Budget
Actual
Current Fund
2013 Appropriations
Legal Services and Costs
Other Expenses
$
228,775
$
235,197
Engineering Services and Costs
Other Expenses
60,170
70,606
Road Repair and Maintenance
Other Expenses
231,500
246,361
Public Buildings and Grounds
Other Expenses
263,780
269,830
Recreation
Other Expenses
62,050
65,792
Construction Code Official
Other Expenses
7,000
7,080
Insurance
Employee Group Insurance
2,024,954
2,047,105
Utilities
Water
12,400
13,130
Statutory Charges
Defined Contribution Retirement Plan (DCRP)
1,000
1,512
2012 Appropriation Reserves
Financial Administration
Other Expenses
663
3,902
Maintenance of Free Public Library
Other Expenses
25,833
32,776
Unfavorable
Variance
$
6,422
10,436
14,861
6,050
3,742
80
22,151
730
512
3,239
6,943
In accordance with the regulatory basis of accounting, the above variances or overexpenditnres were recorded as
deferred charges on the balance sheet of the respective fund at year end and are required to be funded in the succeeding
year's budget. GAAP does not permit the deferral of overexpenditnres at year end.
29
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 3 DEPOSITS AND INVESTMENTS
The Borough considers petty cash, change funds, cash in banks, certificates of deposit and deposits with the New Jersey
Cash Management Fund as cash and cash equivalents.
A.
Deposits
The Borough's deposits are insured through either the Federal Deposit Insurance Corporation (FDIC), Securities
Investor Protection Corporation (SIPC) or New Jersey's Governmental Unit Deposit Protection Act (GUDPA). The
Borough is required to deposit their funds in a depository which is protecting such funds pursuant to GUDP A. The
New Jersey Governmental Unit Deposit Protection Act requires all banks doing business in the State of New Jersey to
pledge collateral equal to at least 5% of the average amount of its public deposits and I 00% of the average amount of
its public funds in excess of the lesser of 75% of its capital funds or $200 million for all deposits not covered by the
FDIC.
Bank balances are insured up to $250,000 in the aggregate by the FDIC for each banlc SIPC replaces cash claims up to
a maximum of $250,000 for each failed brokerage fmn. At December 31, 2014 and 2013, the book value of the
Borough's deposits were $10,238,048 and $5,514,356 and bank and brokerage firm balances of the Borough's deposits
amounted to $9,640,201 and $5,914,472, respectively.
The Borough's deposits which are displayed on the various
fund balance sheets as "cash" or "cash and cash equivalents" are categorized as:
Bank Balance
Depository Account
2014
2013
Insured
$
9,640,201
,;;;.$ ~~5,"=9"=14"'",4'"'7;;;c2
Custodial Credit Risk - Deposits - Custodial credit risk is the risk that in the event of a bank failure, the
government's deposits may not be returned to it. The Borough does not have a formal policy for custodial credit
risk. As of December 31, 2014 and 2013, the Borough's bank balances were not exposed to custodial credit risk.
B.
Investments
The Borough is permitted to invest public funds in accordance with the types of securities authorized by N.J.S.A.
40A:5-15.1. Investments include bonds or other obligations of the United States or obligations guaranteed by the
United States of America, Government Money Market Mutual Funds, bonds or other obligations of the Borough or
bonds or other obligations of the school districts which are a part of the Borough or school districts located within the
Borough, Local Government investment pools, and agreements for the repurchase of fully collateralized securities, if
transacted in accordance with NJSA 40A:5-15 .I (8a-8e ). In addition, the Borough is permitted to invest LOSAP Funds
with the types of eligible investments authorized in NJAC 5:30-14.19. LOSAP investments include interest bearing
accounts or securities, in which savings banks of New Jersey are authorized to invest their funds, New Jersey Cash
Management Fund, fixed and variable individual or group annuity contracts, mutual fund shares or fixed and variable
life insurance contracts.
30
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 3 DEPOSITS AND INVESTMENTS (Continued)
B.
Investments (Continued)
As of December 31, 2014 and 2013, the Borough had the following investments:
Fair
Book
Value
Value
Lincoln Financial Group (LOSAP)
$
1,382,420
$
1,382,420
Fair
Book
Value
Value
Lincoln Financial Group (LOSAP)
$
1,242,350
$
1,242,350
Custodial Credit Risk - Investments - For an investment, this is the risk, that in the event of the failure of the
counterparty, the Borough will not be able to recover the value of its investments or collateral securities that are held
by an outside party. The Borough does not have a policy for custodial risk. As of December 31, 2014 and 2013,
$1,382,420 and $1,142,350 of the Borough's investments was exposed to custodial credit risk as follows:
Uninsured and Collateralized:
Collateral held by pledging financial institution's trust department but not in
the Borough's name (unaudited)
Uninsured and Collateralized:
Collateral held by pledging financial institution's trust department but not in
the Borough's name (unaudited)
31
Fair
Value
(LOSAP)
Book
Value
$ 1,382,420
$ 1,382,420
Fair
Book
Value
Value
(LOSAP)
$ 1,142,350
$ 1,142,350
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 3 DEPOSITS AND INVESTMENTS (Continued)
B.
Investments (Continued)
Interest Rate Risk- The Borough does not have a formal investment policy that limits investment maturities as a
means of managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk- State law limits investments as noted above (N.J.S.A. 40A:5-15.1). The Borough does not have an
investment policy that would further limit its investment choices. As of December 31, 2014 and 2013, the
Borough's investment in Lincoln Financial Group was rated Baa2 by Moody's Investor Services.
Concentration of Credit Risk - The Borough places no limit in the amount tbe Borough may invest in any one
issuer.
More tban five (5) percent of the Borough's investments are in Lincoln Financial Group.
These
investments are I 00% of the Borough's total investments.
The fair value of the above-listed investments were based on quoted market prices.
Interest earned in tbe General Capital Fund, Assessment Trust Fund, Animal Control Fund and certain Otber Trust
Funds are assigned to tbe Current Fund in accordance with tbe regulatory basis of accounting.
NOTE 4 TAXES RECEIVABLE
Receivables at December 31, 2014 and 2013 consisted oftbe following:
2014
2013
Current Fund
Property Taxes
$
1,364,732
$
692,948
Tax Title Liens
22,927
15,943
$
1,387,659 $
708,891
In 2014 and 2013, the Borough collected $683,700 and $247,570 from delinquent taxes, which represented 96.4% and
97.8%, respectively of the prior year delinquent taxes receivable balance.
32
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 5 DUE TO/FROM OTHER FUNDS
As of December 31, interfund receivables and payables that resulted from various interfund transactions were as
follows:
2014
2013
Due from
Due to
Due from
Due to
Other Funds
Other Funds
Other Funds
Other Funds
Current Fund
$
9,777 $
639,202
$
292,289 $
344,045
Trust Fund
Animal Control
9,774
9,618
Other Trust
66,189
220,614
Unemployment
3
7,843
Assessment
68,026
850
General Capital Fund
504,987
290,681
Total
$
648,979
$
648,979
$
582,970
$
582,970
The above balances are the result of expenditures being paid by one fund on behalf of another.
The Borough expects all interfund balances to be liquidated within one year.
33
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 6 DEFERRED CHARGES TO BE RAISED IN SUCCEEDING BUDGETS
Under the regulatory basis of accounting, certain expenditures are required to be deferred to budgets of succeeding
years. At December 31, the following deferred charges are reported on the balance sheets of the following funds:
2014
Current Fund
Special Emergency Authorizations ( 40A:4-55)
Overexpenditure of Grant Appropriation
Overexpenditure of Appropriation Reserves
Operating Deficit
2013
Current Fund
Subsequent Year
Balance
Budget
December 31,
Appropriation
$
474,441
$
261,688
$
449
449
7,084
7,084
70,690
70,690
Subsequent Year
Balance
Budget
December 31,
Appropriation
Special Emergency Authorizations (40A:4-55)
$
750,000
$
64,984
10,182
1,775
264,747
275,559
$
64,984
10,182
1,775
264,747
Overexpenditure of Appropriations
Overexpenditure of an Appropriation Reserves
Overexpenditure of a Grant Appropriation
Operating Deficit
34
Balance to
Succeeding
Budgets
212,753
Balance to
Succeeding
Budgets
474,441
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 7 FUND BALANCES APPROPRIATED
Under the regulatory basis of accounting, fund balance in the Current Fund is comprised of cash surplus (fund balance)
and non-cash surplus (fund balance). All or part of cash surplus as of December 31 may be anticipated in the
subsequent year's budget. The non-cash surplus portion of fund balance may be utilized in the subsequent year's
budget with the prior written consent of the Director of the Division of Local Government Services if certain guidelines
are met as to its availability. Fund balances at December 31, which were appropriated and included as anticipated
revenue in the budget for the succeeding year were as follows:
Current Fund
Non-Cash Surplus
NOTE 8 FIXED ASSETS
A. General Fixed Assets
Fund
Balance
December 3 I ,
$
502,715
$
502,715
2014
Utilized
in Subsequent
Year's Budget
$
$
Fund
Balance
December 31,
$
502,715
$
502,715
2013
Utilized
in Subsequent
Year's Budget
$
$
The following is a summary of changes in the general fixed assets account group for the years ended December 31,
2014 and 2013.
2014
Land
Buildings and Building Improvements
Machinery and Equipment
2013
Land
Buildings and Building Improvements
Machinery and Equipment
35
Balance
January 1,
2014
$ 7,418,400
5,492,089
7,285,580
$ 20,196,069
Balance
January 1,
2013
$ 7,418,400
5,201,823
6,395,728
$ 19,015,951
Increases
$
73,399
137,769
$
211,168
Increases
$
290,266
957,502
$ 1,247,768
Balance,
December 31,
Decreases
2014
$ 7,418,400
5,565,488
7,423,349
$
$ 20,407,237
Balance,
December 31,
Decreases
2013
$ 7,418,400
5,492,089
$
67,650
7,285,580
$
67,650
$ 20,196,069
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE9 MUNICIPALDEBT
The Local Bond Law governs the issuance of bonds and notes used to fmance capital expenditures. General obligation
bonds have been issued for general capital fund projects.
All bonds are retired in serial installments within the
statutory period of usefulness. Bonds issued by the Borough are general obligation bonds, backed by the full faith and
credit of the Borough.
The Borough's debt is summarized as follows:
Issued
General
Bonds and Loans
Assessment
Bonds
Less Funds Temporarily Held to Pay Bonds
and Notes
Net Debt Issued
Authorized But Not Issued
General
Bonds and Notes
Net Bonds and Notes Issued and Authorized
But Not Issued
36
$
17,115,256
$
19,440,077
383,745
465,973
17,499,001
19,906,050
455,945
465,973
17,043,056
19,440,077
1,011,743
375,243
$
18,054,799
$ .
19,815,320
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 9 MUNICIPAL DEBT (Continued)
Statutory Net Debt
The statement of debt condition that follows is extracted from the Borough's Annual Debt Statement and indicates a
statutory net debt of 1.229% and 1.312% at December 31, 2014 and 2013, respectively.
Gross Debt
Deductions
Net Debt
2014
General Debt
$
18,510,744 $
455,945
$
18,054,799
School Debt
4,902,000
4,902,000
Total
$
23,412,744 $
5,357,945
$
18,054,799
Gross Debt
Deductions
Net Debt
2013
General Debt
$
20,281,293
$
465,973
$
19,815,320
School Debt
3,632,000
3,632,000
Total
$
23,913,293
$
4,097,973
$
19,815,320
Statutory Borrowing Power
The Borough's remaining borrowing power under N.J.S. 40A:2-6, as amended, at December 31, was as follows:
3-1/2% of Equalized Valuation Basis (Municipal)
Net Debt
Remaining Borrowing Power
$
$
37
51,628,575
$
18,054,799
52,847,719
19,815,320
3 3,5 73,77 6
;:;.$ ~.,;;:3,;::;3 ,c;;.0;;,;3 2::.:;,3;.;;9,;;.9
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 9 MUNICIPAL DEBT (Continued)
A.
Long-Term Debt
The Borough's long-term debt consisted of the following at December 31:
General Obligation Bonds
The Borough levies ad valorem taxes to pay debt service on general obligation bonds. General obligation bonds
outstanding at December 31 are as follows:
$11,765,000,2005 B.C.LA. Refunding Bond, due in
annual installments of$475,000 to $520,000 through
September 20,2018, interest at 3.50% to 4.00%
$8,720,000, 2005 B.C.LA. General Improvement Bonds, due in
annual installments of$1,270,000 to $1,535,000 through
September 20,2018, interest at 3.50% to 3.75%
$390,889, 2005 B. C.I.A. Assessment Bonds, due in
annual installments of$56,681 to $68,396 through
September 20,2018, interest at 3.50% to 3.75%
$2,800,000,2010 General Improvement Encap Bonds, due in
annual installments of$200,000 through
September 20,2018, interest at 3.75% to 4.25%
$7,634,000, 2013 General Improvement Bonds, due in annual
instalhnents of $350,000 to $700,000 through
August 15, 2027, interest at 3.00% to 3.375%
Assessment Bonds
$
$
2,015,000
$
2,535,000
5,570,000
6,735,000
246,256
299,028
2,000,000
2,200,000
7,284,000
7,634,000
17,115,256
"=$ ~_;;1,;;,;9,c.;,40,;,;3b,0;.;;2.;;.8
The Borough pledges revenue from special benefit assessments to pay debt service on assessment bonds issued. The
assessment bonds outstanding at December 31 are as follows:
$609,111, 2005 B.C.LA. Assessment Bonds, due in
annual installments of$88,319 to $106,605 through
September 20, 2018, interest at 3.50% to 3.75%
38
$
3 83 '7 45
;:;.$ ~~_;;4,;;,;65o:;,9;,;7..:;.3
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 9 MUNICIPAL DEBT (Continued)
A.
Long-Term Debt (Continued)
General Intergovernmental Loans Payable
The Borough has entered into loan agreements with the New Jersey Department of Enviromnental Protection for the
financing relating to the wastewater treatment program of the Borough's sanitary sewer system.. The Borough levies ad
valorem taxes to pay debt service on general intergovernmental loans issued.
General intergovernmental loans
outstanding at December 31 are as follows:
$227,322, 1994 Loan Payable, due to an annual installment of
$12,049 on March 1, 2014. This loan is fully matured
$228,952, 1998 Refunding Loan, due in an
annual installment of$25,000 on March 1, 2014.
This loan is fully matured
$
$
12,049
25,000
$
37,049
The Borough's principal and interest for long-term debt issued and outstanding as of December 31, 2014 is as follows:
Calendar
General Bonds
Assessment
Total
Year
Principal
lnterest
Principal
2015
$ 2,396,681
$ 651,067
$
88,319
$ 3,136,067
2016
2,463,635
551,192
91,365
3,106,192
2017
2,542,544
446,587
97,456
3,086,587
2018
2,628,396
339,301
106,605
3,074,302
2019
900,000
229,126
1,129,126
2020-2024
4,325,000
717,120
5,042,120
2025-2027
1,859,000
121,036
1,980,036
Total
$17,115,256
$3,055,429
$
383,745
$ 20,554,430
39
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER31, 2014 AND 2013
NOTE 9 MUNICIPAL DEBT (Continued)
A.
Long-Term Debt (Continued)
Changes in Long-Term Municipal Debt
The Borough's long-term capital debt activity for the years ended December 31, 2014 and 2013 were as follows:
2014
General Capital Fund
Bonds Payable
Intergovernmental Loans Payable
General Capital Fund Long-Term
Liabilities
Trust Assessment Fund
Balance,
December 31,
2013
Additions
$ 19,403,028
37,049
$ 19,440,077
""$~~~
Balance,
Due
December 31,
Within
Reductions
2014
One Year
$ 2,287,772
$ 17,115,256
$ 2,396,681
37,049
$ 2,324,821
$17,115,256
$ 2,396,681
Bonds Payable
$
465,973 ____
-
$
82,228
$
3 83 '7 4 5
"-$ ---'80.:82.:,3..01'-9
Trust Assessment Fund Long-Term
Liabilities
$
465,973
~$~~~~ $
82,228
$
383,745
""$-~8;;;:8;o;;,3:.;.1;;;.9
40
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 9 MUNICIPAL DEBT (Continued)
A.
Long-Term Debt (Continued)
Changes in Long-Term Municipal Debt (Continued)
2013
General Capital Fund
Balance,
December 31,
2012
Additions
Balance,
Due
December 31,
Within
Reductions
2013
One Year
Bonds Payable
Intergovernmental Loans Payable
$ 13,655,300
$ 7,634,000
$ 1,886,272
$ 19,403,028
$ 2,287,772
B.
General Capital Fund Long-Term
Liabilities
Trust Assessment Fund
Bonds Payable
Trust Assessment Fund Long-Term
Liabilities
Short-Term Debt
67,433
30,384
37,049
37,049
$ 13,722,733
$ 7,634,000
$ 1,916,656
$ 19,440,077
$ 2,324,821
$
514,701
-
$
48,728
$
465,973
$
82,228
$
514,701
$
$
48,728
$
465,973
$
82,228
The Borough's short-term debt activity for the years ended December 31, 2014 and 2013 was as follows:
Bond Anticipation Notes
There are none.
41
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 9 MUNICIPAL DEBT (Continued)
B.
Short-Term Debt (Continued)
Bond Antici[!ation Notes (Continued)
Balance
Balance,
Rate
Maturity
December 31,
Renewed/
Retired/
December 31,
Puroose
~
Date
2012
Issued
Redeemed
2013
2013
General Capital Fund
Reconstruction ofRutherford Place
1.50%
5/24/2013
$
35,590
$
35,590
1.00%
8/23/2013
$
35,590
35,590
Construction ofBikeway
1.50%
5/24/2013
29,470
29,470
1.00%
8/23/2013
29,470
29,470
Various Equipment
1.50%
5/24/2013
171,850
171,850
1.00%
8/23/2013
171,850
171,850
Reconstruction of Rutherford Place
1.50%
5/24/2013
229,050
229,050
1.00%
8/23/2013
229,050
229,050
DPW Storage Tanks
1.50%
5/24/2013
203,424
203,424
1.00%
8/23/2013
203,424
203,424
Resurfacing Hedden Terrace
1.50%
5/24/2013
170,356
170,356
1.00%
8/23/2013
170,356
170,356
Improvements to Various Public Buildings
1.50%
5/24/2013
199,240
199,240
1.00%
8/23/2013
199,240
199,240
Stover Street & Ridge Park Drive Improvements
1.50%
5/24/2013
61,288
61,288
1.00%
8/23/2013
61,288
61,288
Various General Improvements
1.50%
5/24/2013
933,000
933,000
1.00%
8/23/2013
933,000
933,000
Ridge Road Streetscape III
1.50%
5/24/2013
638,000
638,000
1.00%
8/23/2013
638,000
638,000
Acquisition of Fire Rescue Truck
1.50%
5/24/2013
467,500
467,500
1.00%
8/23/2013
467,500
467,500
Various Park Improvements
1.50%
5/24/2013
193,809
193,809
1.00%
8/23/2013
193,809
193,809
Various General Improvements
1.50%
5/24/2013
190,000
190,000
1.00%
8/23/2013
190,000
190,000
Wilson Place Improvements
1.50%
5/24/2013
17,400
17,400
1.00%
8/23/2013
17,400
17,400
Resurfacing of Sunset A venue
1.50%
5/24/2013
25,000
25,000
1.00%
8/23/2013
25,000
25,000
Various Sewer Improvements
1.50%
5/24/2013
237,500
237,500
1.00%
8/23/2013
237,500
237,500
Various Improvements
1.50%
5/24/2013
664,393
664,393
1.00%
8/23/2013
664,393
664,393
Various Improvements
1.50%
5/24/2013
807,500
807,500
1.00%
8/23/2013
807,500
807,500
Acquisition of Equipment
1.50%
5/24/2013
130
130
1.00%
8/23/2013
130
130
Various Capital Improvements
1.50%
5/24/2013
332,500
332,500
1.00%
8/23/2013
332,500
332,500
$
5,607,000
$ 5,607,000
$
11,214,000
$
42
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 9 MUNICIPAL DEBT (Continued)
B.
Short-Term Debt (Continued)
Bond Anticipation Notes (Continued)
The purpose of these short-term borrowings was to provide resources for capital construction, acquisitions or
improvement projects and other purposes permitted by State Local Bond Law NJSA 40A:2 et. seq. The amounts issued
for governmental activities are accounted for in the General Capital Fund.
State law requires that notes are to be issued for a period not exceeding one year and may be renewed from time to time
for additional periods, none of which shall exceed one year. All bond anticipation notes, including renewals, shall
mature and be paid not later than the first day of the fifth month following the close of the tenth fiscal year following
the date of the original notes. In addition any note renewed beyond the third anniversary date of the original note,
requires one legally payable installment to be paid.
In addition to the debt shown in the above schedule, municipalities may issue debt to finance emergency or special
emergency appropriations or to meet cash flow needs (Tax Anticipation Notes) to temporarily finance operating
expenditures. This debt which is not included in the Borough's statutory debt limit calculation is reported in the
Current Fund for the years 2014 and 2013 as follows:
Special Emergency Notes
Following the adoption of an ordinance or resolution for special emergency appropriations, the Borough may borrow
money and issue special emergency notes which may be renewed from time to time, but at least 1/5 of all such notes
and the renewal thereof, shall mature and be paid in each year so that all notes have been paid by the end of the fifth
year following the date of the special emergency resolution.
Balance,
Balance,
Rate
Maturity
December 31,
December 31,
(%)
Date
2013
Additions
Reductions
2014
2014
Special Emergency Notes
5/22/2015
$
750,000
$
510,000
$
750,000
$
510,000
Balance,
Balance,
December 31,
December 31,
2012
Additions
Reductions
2013
2013
Special Emergency Notes
1.50% 5/23/2014
$
990,000
$
750,000
$
990,000
$
750,000
43
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER31, 2014 AND 2013
NOTE 9 MUNICIPAL DEBT (Continued)
B.
Short-Term Debt (Continued)
Tax Anticipation Notes
1n any fiscal year in anticipation of the collection of taxes for such year, whether levied or to be levied in such year, or
in anticipation of other revenues for such year, the Borough may borrow money in the form of tax anticipation notes.
The amount of tax anticipation notes of any fiscal year outstanding at any one time shall not exceed an amount certified
as the gross borrowing power. Tax anticipation notes may be renewed from time to time, but all such notes and any
renewals shall mature within 120 days after the beginning of the succeeding fiscal year.
2014
Tax Anticipation Note
2013
None
Rate
(%)
0.50%
Maturity
Date
3/23/2015
Balance,
December 3 1,
2013
Additions
$
$
4,750,000
NOTE 10 CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS
Balance,
December 3 1,
Reductions
2014
$
$
4,750,000
As of December 31, the Borough had the following commitments with respect to unfinished capital projects:
Capital Project
2013 Road Improvement Program
Not Available.
44
Construction
Commitment
$281,796
Estimated
Date of
Completion
2015
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 11 OTHER LONG-TERM LIABILITIES
A.
Compensated Absences
Under the existing policies and labor agreements of the Borough, employees are allowed to accumulate (with certain
restrictions) unused sick leave over the life of their working careers and to redeem such unused leave time in cash (with
certain limitations) upon death, retirement or by extended absence immediately preceding retirement.
It is estimated that the current cost of such unpaid compensation and salary related payments would approximate
$1,427,042 and $1,249,583 at December 31, 2014 and 2013, respectively. These amounts which is are considered
material to the financial statements, are not reported either as an expenditure or liability.
As of both December 31, 2014 and 2013, the Borough has reserved in the Other Trust Fund $75,012 to fund
compensated absences in accordance with NJSA 40A:4-39.
B.
Deferred Pension Obligation
During the year ended December 31, 2009 the Borough elected to contribute 50% of its normal and accrued liability
components of the PFRS and PERS obligations and deferred the remaining 50% in accordance with P.L. 2009, c.l9.
The deferred amount totaled $474,676 and will be paid back with interest over 15 years beginning in the 2012 year.
The Borough is permitted to payoff the deferred PFRS and PERS pension obligations at any time. It is estimated that
the total deferred liability including accrued interest (at 7.90% effective July 1, 2012 and 8.25% prior to July I, 2012) at
December 31, 2014 and 2013 is $569,820 and $609,993, respectively.
Changes in Other Long-Term Liabilities
The Borough's changes in other long-term liabilities for the years ended December 31, 2014 and 2013 were as follows:
Balance,
Balance,
Due
December 31,
December 31,
Within
2013
Additions
Reductions
2014
One Year
2014
Compensated Absences
$ 1,249,583
$
177,459
$ 1,427,042
Deferred Pension Obligation
430,720
$
70,049
360,671
$
28,706
Other Long-Term Liabilities
$ 1,680,303
$
177,459
$
70,049
$ 1,787,713
$
28,706
Balance,
Balance,
Due
December 31,
December 31,
Within
2012
Additions
Reductions
2013
One Year
2013
Compensated Absences
$ 1,303,224
$
53,641
$ 1,249,583
Deferred Pension Obligation
454,086
23,366
430,720
$
70,049
Other Long-Term Liabilities
$ 1,757,310
$
$
77,007
$ 1,680,303
$
70,049
45
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 12 EMPLOYEE RETIREMENT SYSTEMS
The State of New Jersey sponsors and administers the following contributory defined benefit public employee
retirement systems (retirement systems) covering substantially all state and local government employees which
includes those Borough employees who are eligible for pension coverage.
Police and Firemen's Retirement System (PFRS)- established in July 1944, under the provisions of N.J.S.A.
43: 16A to provide coverage to substantially all full time county and municipal police or firemen and State firemen
appointed after June 30, 1944. Membership is mandatory for such employees with vesting occurring after 10 years
of membership. PFRS is a cost-sharing multi-employer defined benefit pension plan.
Public Employees' Retirement System (PERS)- established in January 1955, under the provisions of N.J.S.A.
43: 15A to provide coverage, including post-retirement healthcare for those eligible employees whose local
employers elected to do so, to substantially all full-time employees of the State or any county, municipality, school
district, or public agency provided the employee is not a member of another State-administered retirement system.
Membership is mandatory for such employees and vesting occurs after I 0 years of service for pension benefits and,
if applicable, 25 years for post-retirement healthcare coverage. PERS is a cost-sharing multi-employer defined
benefit pension plan.
The State of New Jersey sponsors and administers the following defined contribution public employee retirement
program covering certain state and local government employees which include those Borough employees who are
eligible for pension coverage.
Defined Contribution Retirement Program (DCRP) - established under the provisions of Chapter 92, P.L. 2007
and Chapter 103, P.L. 2008 to provide coverage to elected and certain appointed officials, effective July I, 2007.
Membership is mandatory for such individuals with vesting occurring after one (I) year of membership. This
provision was extended by Chapter I, P.L. 2010, effective May 21, 2010, to new employees (Tier 2) of the PFRS
and new employees who would otherwise be eligible to participate in PERS and do not work the minimum required
hours but earn a base salary of at least $5,000 are eligible for participation in the DCRP.
Other Pension Funds
The state established and administers a Supplemental Annuity Collective Trust Fund (SACT) which is available to
active members of the State-administered retirement systems to purchase annuities to supplement the guaranteed
benefits provided by their retirement system. The state or local governmental employers do not appropriate funds to
SACT.
The cost of living increase for PFRS and PERS are funded directly by each of the respective systems, but are
currently suspended as a result of reform legislation.
According to state law, all obligations of each retirement system will be assumed by the State of New Jersey should
any retirement system be terminated.
The State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, issues publicly available
financial reports that include the financial statements and required supplementary information of each of the above
systems, funds, and trust. The financial reports may be accessed via the New Jersey, Division of Pensions and
Benefits website at www.state.nj .us/treasury/pensions.
46
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 12 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Basis of Accounting
The financial statements of the retirement systems are prepared on the accrual basis of accounting. Employer
contributions are recognized when payable to the retirement systems. Benefits and refunds are recognized when due
and payable in accordance with the terms of the retirement systems.
Significant Legislation
P.L. 2011, c.78, effective June 28, 2011, made various changes to the manner in which PERS and PFRS operate and
to the benefit provisions of those systems.
This new legislation's provisions impacting employee pension and health benefits include:
• For new members of PERS hired on or after June 28, 2011 (Tier 5 members), the years of creditable service
needed for early retirement benefits increased from 25 to 30 years and the early retirement age increased from
55 to 65. The eligibility age to qualifY for a service retirement in the PERS increased from age 62 to 65 for Tier
5 members.
• The annual benefit under special retirement for new PFRS members enrolled after June 28, 2011 (Tier 3
members), decreased from 65 percent of fmal compensation to 60 percent of final compensation after 25 years
of service and from 70 percent of final compensation to 65 percent of final compensation after 30 or more years
of service.
• It increased the active member contribution rates as follows: PERS active member rates increase from 5.5
percent of annual compensation to 6.5 percent plus an additional 1 percent phased-in over 7 years for members
hired or reappointed on or after June 28, 2011; PFRS active member rates increase from 8.5 percent to 10
percent. For Fiscal Year 2014, the PERS member contribution rate was 6.78%. The rate increased to 6.92%
effective July 2014. The phase-in of the additional incremental member contributions for PERS members will
take place in July of each subsequent fiscal year.
• The payment of automatic cost-of-living adjustment (COLA) additional increases to current and future retirees
and beneficiaries was suspended. COLA increases may be reactivated at a future date as permitted by this law.
• It changed the method for amortizing the pension systems' unfunded accrued liability (from a level percent of pay
method to a level dollar of pay method).
Investment Valuation
Investments are reported at fair value. Securities traded on a national or international exchange are valued at the last
reported sales price at current exchange rates. Mortgages are valued on the basis of future principal and interest
payments, and are discounted at prevailing interest rates for similar instruments. The fair value of real estate
investments is based on independent appraisals. Investments that do not have an established market are reported at
estimated fair values.
The State of New Jersey, Department of the Treasury, Division of Investment, issues publicly available financial
reports that include the financial statements of the State of New Jersey Cash Management Fund. The financial
report may be obtained by writing to the State of New Jersey, Department of the Treasury, Division of Investment,
P.O. Box 290, Trenton, New Jersey 08625-0290, or at www.state.nj/treasury/doinvest.
47
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 12 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Funded Status and Funding Progress
As of July 1, 2012, the most recent actuarial valuation date, the aggregate funded ratio for all the State administered
retirement systems, including PERS and PFRS, is 64.5 percent with an unfunded actuarial accrued liability of $47.2
billion. The aggregate funded ratio and unfunded accrued liability for the State-funded systems is 56.7 percent and
$34.4 billion, respectively and the aggregate funded ratio and unfunded accrued liability for local PERS and PFRS is
76.1 percent and $12.8 billion, respectively.
The funded status and funding progress of the retirement systems includes actuarial valuations which involve
estimates of the value of reported amounts and assumptions about the probability of events far into the future.
These amounts are subject to continual revision as actual results are compared to past expectations and new
estimates are made about the probability of future events.
Actuarial calculations reflect a long-term perspective and are based on the benefits provided under the terms of the
retirement systems in effect at the time of each valuation and also consider the pattern of the sharing of costs
between the employer and members at that point in time. The projection of benefits for financial reporting purposes
does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost
sharing between the employer and members in the future.
Actuarial Methods and Assumptions
In the July 1, 2012 actuarial valuations, the date of the most recent actuarial valuations, the projected unit credit was
used as actuarial cost method, and the five year average of market value was used as asset valuation method for
pension trust funds. The actuarial assumptions included (a) 7.90% for investment rate of return for all the retirement
systems except CPFPF (2.00%) and (b) changes to projected salary increases of 4.22 percent for PERS and 6.01
percent for PFRS.
'
Employer and Employee Pension Contributions
The contribution policy is set by laws of the State of New Jersey and contributions are required by active members
and participating employers. Plan members and employer contributions may be amended by State of New Jersey
legislation, with the amount of contributions by the State of New Jersey contingent upon the annual Appropriations
Act. As defined, the various retirement systems require employee contributions based on 6.50% plus an additional
1% phased-in over 7 years beginning in July 2013 for PERS, 10.0% for PFRS and 5.50% for DCRP of employees'
annual compensation. The member contribution for PERS was 6.78% in fiscal year 2014 and 6.92% for fiscal year
2015 effective July 2014.
Annual Pension Cost (APC)
Per the requirements of GASB Statement No. 27, Accounting for Pensions by State and Local Government
Employees, for the year ended June 30, 2014 for PFRS and PERS, which are cost sharing multi-employer defined
benefit pension plans, annual pension cost equals contributions made. In the DCRP, which is a defined contribution
plan, member contributions are matched by a 3% employer contribution.
48
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 12 EMPLOYEE RETIREMENT SYSTEMS (Continued)
Annual Pension Cost (APC) (Continued)
During the years ended December 31, 2014, 2013 and 2012, the Borough, was required to contribute for normal cost
pension contributions, accrued liability pension contributions, early retirement incentive program contributions,
deferred pension obligation contributions, and non-contributory life insurance premiums the following amounts
which equaled the required contributions for each respective year:
Year Ended
December 31
PFRS
PERS
DCRP
2014
$
787,374
$
283,932
$
2,349
2013
786,590
287,645
1,512
2012
917,278
311,846
1,338
NOTE 13 POST-RETIREMENT MEDICAL BENEFITS
The State of New Jersey sponsors and administers the post-retirement health benefit program plans for participating
municipalities including the Borough. The plans are classified as either single employer plans or cost sharing multiple
employer defined benefit plans depending on the plan the eligible employee is covered under.
As a result of implementing Governmental Accounting Standards Board (GASB) Statement No. 43, Financial
Reporting for Post-employment Benefit Plans Other than Pension Plans (OPEB), effective for Fiscal Year 2007, the
State Health Benefits Program (SHBP), and the Prescription Drug Program (PDP), and Post-Retirement Medical (PRM)
of the PERS and the Teacher's Pension and Annuity (TPAF) are combined and reported as Pension and Other
Employee Benefit Trust Funds in the State's Comprehensive Aunual Financial Report (CAFR). Specifically, SHBP-
State, PDP-State, and the PRM of the PERS are combined and reported as Health Benefits Program Fund - State
classified as a single employer plan. The SHBP-Local, PDP-Local, and the PRM of the TPAF-Local are combined and
reported as Health Benefits Program Fund -Local Government classified as a cost sharing multiple-employer plan. The
post-retirement benefit programs had a total of 585 state and local participating employers and contributing entities for
Fiscal Year 2013.
The State of New Jersey sponsors and administers the following health benefit program covering substantially all local
government employees from local participating employers.
49
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 13 POST-RETIREMENT MEDICAL BENEFITS (Continued)
State Health Benefits Program Funds (HBPF)- Local Government (including Prescription Drug Program Fund)-
Certain local employers who participate in the State Health Benefits Program provide health insurance coverage to their
employees at retirement. Under provisions of P.L. 1997, c.330, the State of New Jersey provides partially funded
benefits to local police officers and firefighters who retire with 25 years of service (or on disability) from an employer
who does not provide coverage. Retirees who are not eligible for employer paid health coverage at retirement can
continue in the program by paying the cost of the insurance for themselves and their covered dependents. Also, local
employees are eligible for the PDP coverage after 60 days of employment.
The State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, issues publicly available
financial reports that include the fmancial statements and required supplementary information of the above Fund. The
financial reports may be assessed via, the New Jersey, Division of Pensions and Benefits website at
www.state.nj. us/treasurv/pensions.
Basis of Accounting
The financial statements of the health benefit programs are prepared on the accrual basis of accounting. Employer
contributions are recognized when payable to the health benefit programs. Benefits or refunds are recognized when due
and payable in accordance with the terms of the health benefit programs.
Significant Legislation
P .L. 2011, c. 78, effective October 20 ll, sets new employee contribution requirements towards the cost of employer-
provided health benefit coverage. Employees are required to contribute a certain percentage of the cost of coverage.
The rate of contribution is determined based on the employee's annual salary and the selected level of coverage. The
increased employee contributions will be phased in over a 4-year period for those employed prior to this new
legislation's effective date with a minimum contribution required to be at least 1.5% of salary., For those employed on
or after June 28, 2011 the 4-year phase in does not apply, and contributions based on the full percentage rate of
contribution are required.
Investment Valuation
Investments are reported at fair value. Investments that do not have an established market are reported at estimated fair
values.
Funded Status and Funding Progress
As of July I, 2013, the most recent actuarial valuation date, the State had a $51.5 billion unfunded actuarial liability for
other postemployment benefits (OPEB) which is made up of $19.3 billion for state active and retired members and
$32.2 billion for education employees and retirees that become the obligation of the State of New Jersey upon
retirement.
The funded status and funding progress of the OPEB includes actuarial valuations which involve estimates of the value
of reported amounts and assumptions about the probability of events far into the future. These amounts are subject to
continual revision as actual results are compared to past expectations and new estimates are made about the probability
of future events.
50
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 13 POST-RETIREMENT MEDICAL BENEFITS (Continued)
Funded Status and Funding Progress (Continued)
Actuarial calculations reflect a long-term perspective and are based on the benefits provided under the terms of the
OPEB in effect at the time of each valuation and also consider the pattern of the sharing of costs between the employer
and members at the point in time. The projection of benefits for financial reporting purposes does not explicitly
incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the
employer and members in the future.
Actuarial Methods and Assumptions
In the July 1, 2012 OPEB actuarial valuation, the projected unit credit was used as the actuarial cost method, and the
market value was used as asset valuation method for the OPEB. The actuarial assumptions included an assumed
investment rate of return of 4.50 percent.
Post-Retirement Medical Benefits Contribution
P.L. 1987, c. 384 and P.L. 1990, c.6 required the Public Employees' Retirement System to fund post-retirement medical
benefits for those State and participating local government employees who retire after accumulating 25 years of credited
service or on a disability retirement. As of June 30, 2013, there were 100,!34 retirees receiving post-retirement medical
benefits, and the State contributed $!.07 billion on their behalf.
The cost of these benefits is funded through
contributions by the State and participating local governments in accordance with P.L. 1994, c.62. Funding of post-
retirement medical benefits changed from a pre-funding basis to a pay-as-you-go basis beginning in Fiscal Year 1994.
P.L. 1977, c. 136 provides for the State and participating local governments to pay health benefits on a pay-as-you-go
basis for all enrolled retired employees, regardless of retirement date, under two provisions. The first is for employees
whose pensions are based on 25 years or more of credited service (except those who elect a deferred retirement). The
second is for retired employees who are eligible for a disability retirement regardless of years of service. The State and
participating local governments contributed $139.8 million for 9,404 eligible retired members for Fiscal Year 20!3.
This benefit covers the Police and Firemen's Retirement System.
P.L. 1997, c. 330 provides paid post-retirement health benefits to qualified retirees of the Police and Firemen's
Retirement System and to dependents of qualified retirees.
The State and participating local governments are
responsible for 80 percent of the premium for the category of coverage elected by the retiree under the State managed
care plan or a health maintenance organization participating in the program, whichever provides the lower charge. The
State and participating local governments contributed $38.0 million in Fiscal Year 20!3 to provide benefits under
Chapter 330 to qualified retirees.
51
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 13 POST-RETIREMENT MEDICAL BENEFITS (Continued)
Post-Retirement Medical Benefits Contribution (Continued)
The State sets the employer contribution rate based on a pay-as-you-go basis rather than the annual required
contribution of the employers (ARC), an amount actuarially determined in accordance with the parameters of GASB
Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost
each year and amortize any unfunded actuarial liabilities (or funding excess) of the plan over a period not to exceed
thirty years. The Borough's contributions to the State Health Benefits Program Fund-Local Government for post-
retirement benefits for the years ended December 31, 2014, 2013 and 2012 were $991,814, $930,345 and $834,053,
respectively, which equaled the required contributions for each year (or were not available). In addition, the Borough's
reimbursements to eligible retired employees for Medicare Part B insurance coverage for the years ended December 31,
2014 and 2013 were $19,612 and $42,977, respectively.
NOTE 14 RlSK MANAGEMENT
The Borough is exposed to various risks ofloss related to general liability, automobile coverage, theft of, damage to and
destruction of assets; errors and omissions; injuries to employees; termination of employees and natural disasters. The
Borough has obtained commercial insurance coverage to guard against these events to minimize the exposure to the
Borough should they occur.
The Borough of North Arlington is a member of the South Bergen Municipal Joint Insurance Fund (SBJIF) and
Municipal Excess Liability Joint Insurance Fund (MEL). The joint insurance funds are both an insured and self-
administered group of municipalities established for the purpose of insuring against property damage, general liability,
motor vehicles and equipment liability and worker's compensation. The Funds are risk-sharing public entity pools. The
SBJIF and MEL coverage amounts are on file with the Borough.
The relationship between the Borough and respective insurance funds is governed by a contract and by-laws that have
been adopted by resolution of each unit's governing body. The Borough is contractually obligated to make all annual
and supplementary contributions to the insurance funds, to report claims on a timely basis, to cooperate with the
management of the funds, its claims administrator and attorneys in claims investigation and settlement, and to follow
risk management procedures as outlined by the funds. Members have a contractual obligation to fund any deficit of the
funds attributable to a membership year during which the municipality was a member.
The funds provide its members with risk management services, including the defense of and settlement of claims, and
established reasonable and necessary loss reduction and prevention procedures to be followed by the members.
Complete financial statements of the funds can be obtained by contacting the respective fund's Treasurer.
There has been no significant reduction in insurance coverage from the previous year nor have there been any
settlements in excess of insurance coverage in any of the prior three years.
52
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 14 RISK MANAGEMENT (Continued)
The Borough has elected to fund its New Jersey Unemployment Compensation Insurance under the "Benefit
Reimbursement Method". Under this plan the Borough is required to reimburse the New Jersey Unemployment Trust
Fund for benefits paid to its former employees and charged to its account with the State. The Borough is billed
quarterly for amounts due to the State. The following is a summary of Borough contributions, employee contributions,
reimbursements to the State for benefits paid and the ending balance of the Borough's unemployment compensation
trust fund for the current and previous two years:
Ending
Year Ended
Borough
Employee
Amount
Balance
December 31
Contributions
Contributions
Reimbursed
(Deficit)
2014
$
20,000
$
8,944
$
39,151
$
978
2013
8,801
28,320
11,185
2012
28,544
16,600
28,554
30,704
NOTE 15 CONTINGENT LIABILITIES
The Borough is a party defendant in some lawsuits, none of a kind unusual for a municipality of its size and scope of
operation. In the opinion of the Borough's Attorney, the potential claims against the Borough not covered by insurance
policies would not materially affect the fmancial condition of the Borough.
Pending Tax Appeals - Various tax appeal cases were pending in the New Jersey Tax Comt at December 31, 2014 and
2013. Amounts claimed have not yet been determined. The Borough is vigorously defending its assessments in each
case. Under the accounting principles prescribed by the Division of Local Government Services, Department of
community Affairs, State of New Jersey, the Borough does not recognize a liability, if any, until these cases have been
adjudicated. The Borough expects such amounts, if any, could be material.
Funding of any ultimate liability would be
provided for in succeeding years' budget or from fund balance.
Federal and State Awards - The Borough participates in a nmnber of federal and state programs that are fully or
partially funded by grants received from other governmental units. Expenditures fmanced by grants are subject to audit
by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grant program
regulations, the Borough may be required to reimburse the grantor government. As of December 31, 2014 and 2013,
significant amounts of grant expenditure have not been audited by the various grantor agencies but the Borough
believes that disallowed expenditures, if any, based on subsequent audits will not have a material effect on the overall
financial position of the Borough.
53
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31,2014 AND 2013
NOTE 16 FEDERAL ARBITRAGE REGULATIONS
The Borough is subject to Section 148 of the Internal Revenue Code as it pertains to the arbitrage rebate on all tax-
exempt obligations, both long and short-term debt. Under the 1986 Tax Reform Act, the Internal Revenue Service
(IRS) required that all excess earnings from investment proceeds be rebated to the IRS. Arbitrage, for purposes of these
regulations, is defined as the difference between the yield on the investment and the yield on the obligations issued. If
there are excess earnings, this amount may be required to be rebated to the IRS. At December 31, 2014 and 2013, the
Borough has not estimated its estimated arbitrage earnings due to the IRS, if any.
NOTE 17 LENGTH OF SERVICE AWARD PROGRAM (LOSAP)-UNAUDITED
The Borough of North Arlington Length of Service Award Program (the Plan) was created by a Borough ordinance
adopted on July 10, 2000 pursuant to 457 (e)(l1)(13) of the Internal Service Code of 1986, as amended, except for
provisions added by reason of the Length of Service Award Program as enacted into federal law in 1997. The voters
of the Borough of North Arlington approved the adoption of the Plan at the general election held on November 17,
2000.
The first year of eligibility for entrance into the Plan was calendar year 200 I. The tax deferred income benefits for
emergency services volunteers, consisting of the Volunteer Fire Department and the First Aid Organization, come
from contributions made solely by the Borough on behalf of those volunteers who meet the criteria of a plan created
by the governing body.
If an active member meets the year of active service requirement, a LOSAP must provide a benefit between the
minimum contribution of $100 and a maximum contribution of $1,150 per year. While the maximum amount is
established by statute, it is subject to periodic increases that are related to the consumer price index (N.J.S.A.
40A:l4-185(f). The Division of Local Government Services issues the permitted maximum increase annually.
The Borough of North Arlington has contributed $1,150 for both 2014 and 2013, for each eligible volunteer fire
department member into the Plan. The Borough also contributed $1,150 for both 2014 and 2013, for each eligible
volunteer first aid squad members into the Plan. The total Borough contributions were $79,350 and $93,150 for
2014 and 2013, respectively.
In accordance with the amendments to Section 457 of the Internal Revenue Code and the State Deferred Revenue
Regulations, the Borough has placed the amounts deferred, including earnings, in a trust for the exclusive benefit of
the plan participants and their beneficiaries.
Lincoln Financial Group is the administrator of the plan. The Borough's practical involvement in administering the
plan is essentially limited to verifYing the eligibility of each participant and remitting the funds to the plan
administrator.
54
BOROUGH OF NORTH ARLINGTON
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2014 AND 2013
NOTE 17 LENGTH OF SERVICE AWARD PROGRAM (LOSAP)-UNAUDITED (Continued)
Vesting and Benefits
A volunteer is eligible to receive a distribution of funds upon completing 5 (five) cumulative years as an active
member of the volunteer organization.
Certain restrictions and tax implications may result in the event of a
withdrawal of funds from the Plan.
If a volunteer member does not vest and terminates their association with the emergency service organization, the
funds are returned to the sponsoring agency's surplus.
Reporting Requirements
The New Jersey Administrative Code NJAC 5:30-14.49 requires that the Borough perform a separate review report of
the plan in accordance with the American Institute of Certified Public Accountants (AICPA) Statements on Standards
for Accounting and Auditing Review Services. Since a review does not constitute an audit, the financial statements
pertaining to the Plan are presented as unaudited in this report as part of the Borough's Trust Fund.
NOTE18HURRICANESANDY
On October 29, 2012 Hurricane Sandy, the largest Atlantic hurricane on record made landfall in New Jersey and
resulted in severe damage in numerous communities and a federal disaster was declared throughout the State. The
Borough has incurred significant costs in the clean up and recovery from this federal disaster.
The Federal
Emergency Management Agency ("FEMA") provides emergency grant assistance (voluntary nonexchange
transaction) to help government's cope with losses. Although the Borough has applied for reimbursement from
FEMA, the total amount to be received in conjunction with this event is not considered to be measurable with
sufficient reliability and therefore has not been recognized in the financial statements as of December 31,2014. As
of December 31, 2014, the Borough has received $342,233 in FEMA reimbursements relating to Hurricane Sandy
which have been reflected in the financial statements.
55
CURRENT FUND
BOROUGH OF NORTH ARLINGTON
STATEMENT OF CASH - COLLECTOR/TREASURER
Balance, December 31, 2013
Increased by Receipts:
Revenue Accounts Receivable
Miscellaneous Revenue Not Anticipated
Due from State ofNJ Senior Citizens' and Veterans Deductions
Grants Receivable
Taxes Receivable
Fees Payable
Prepaid Taxes
Tax Overpayments
Reserve for Federal and State Grants - Unappropriated
Miscellaneous Reserves
Tax Anticipation Note
Special Emergency Notes
Receipts From Animal Control Fund
Receipts From General Capital Fund
Receipts From Other Trust Fund
Receipts From Assessment Trust Fund
Receipts From Unemployment Trust Fund
Decreased by Disbursements:
2014 Budget Appropriations
2013 Appropriation Reserves
Encumbrances Payable
Fees Payable
Tax Overpayments
County Taxes Payable
Local District School Taxes
Prepaid Payroll Expenditure
Reserve for Federal and State Grants -Appropriated
Special Emergency Notes
Animal Control Trust Fund Expenditures Paid by Current Fund
Other Trust Fund Expenditures Paid by Current Fund
Refund of Prior Year Taxes and Revenue
Balance, December 31,2014
See Accompanying Notes to Financial Statements
56
$
4,132,552
91,174
120,250
8,907
41,463,439
12,515
166,741
243,913
54,686
111,687
4,750,000
510,000
67
401,281
329,953
101,557
7,877
18,282,681
86,646
303,981
11,884
242,462
3,407,982
23,060,687
252,758
64,625
750,000
189
42,562
90,156
EXHIBIT A-4
$
2,189,915
52,506,599
54,696,514
46,596,613
$
8,099,901
Tax Collector
BOROUGH OF NORTH ARLINGTON
STATEMENT OF CHANGE FUNDS
$
$
Balance,
December 3 I,
20I3
EXHIBIT A-5
Balance,
December 31,
2014
200
"'-$ ---""-20""0
200
~$ ---~20:;;;,0
EXHIBIT A-6
STATEMENT OF AMOUNT DUE FROM STATE OF NEW JERSEY-
SENIOR CITIZENS' AND VETERANS' DEDUCTIONS
Balance, December 31, 2013
$
21,337
Increased by:
Senior Citizen and Veterans Deductions per Tax Billing
$
122,750
Senior Citizen Deductions Allowed by Tax Collector
250
123,000
144,337
Decreased by:
Senior Citizen Deductions Disallowed by Tax Collector
500
Senior Citizen Deductions Disallowed by Tax Collector- Prior Year
750
Received in Cash from State
120,250
121,500
Balance, December 31,2014
$
22,837
See Accompanying Notes to Financial Statements
57
EXHIBIT A-7
BOROUGH OF NORTH ARLINGTON
STATEMENT OF GRANTS RECEIVABLE
Balance,
Balance,
January I,
Cash
December 31,
2014
Accrued
Receipts
2014
NJ Meadowlands Municipal Assistance Grant
$
8,300
$
8,300
NJ Handicapped Recreational Opportunities
18,727
$
4,964
13,763
NJ Department of Transportation- Canterbury PH ll
4
4
Hackensack Meadowland Development Commission
Discretionary Grant
46,425
46,425
Municipal Alliance
39,024 $
11,677
50,701
County of Bergen- Road Repair River Road
113,886
113,886
Bergen County Open Space
T-Ball Field- High School
1,308
1,308
Bullet Proof Vest Partnership
9,847
9,847
Drunk Driving Enforcement Fund
3,943
3,943
Emergency Management
5,000
5,000
Fire Department Saver Grant
74,437
74,437
County of Bergen - ADA Ramps
11,488
11,488
Smart Growth
11,598
11,598
Bergen County Prosecutor - Police Radios
44,099
44,099
NJ Dept. of Transportation- Mobility Grant
10,320
10,320
$
335,517 $
74,566 $
8,907 $
401,176
See Accompanying Notes to Financial Statements
58
EXHIBIT A-8
BOROUGH OF NORTH ARLINGTON
STATEMENT OF TAXES RECEIVABLE AND ANALYSIS OF PROPERTY TAX LEVY
Senior
Senior
Citizens' and
Citizens' and
Transferred
Balance,
Added/
Veterans'
Veterans'
to Tax
Balance,
January l,
2014
Omitted
Deductions
Collected In
Deductions
Title
December 31,
Year
2014
Levy
Taxes
Disallowed
2013
2014
Allowed
Cancelled
Liens
2014
2012
$
250
$
250
2013
692,698
$
750
683,450
$
9,358
$
640
692,948
750
683,700
9,358
640
2014
$ 42,832,630
$
28,540
500
$
545,161
40,779,739
$
123,000
42,694
$
6,984
1,364,092
$
692,948
$ 42,832,630
$
28,540
$
1,250
$
545,161
$
41,463,439
$
123,000
$
52~052 $
6,984
$
1,364,732
Analysis of20l4 Tax Levy
Tax Yield
General Purpose Tax
$
42,832,630
Added Taxes (54:4-63.1 et seq.)
28,540
$
42,861,170
Tax Levy
Local District School Tax (Abstract)
$
23,058,397
County Taxes (Abstract)
3,371,264
County Open Space
36,688
Due County for Added Taxes(54:4-63.1 et seq.)
2,329
$
26,468,678
Local Tax for Municipal Purposes (Abstract)
15,875,961
Minimum Library Tax
485,954
Additional Tax Levied
30 577
16,392,492
$
42,861,170
See Accompanying Notes to Financial Statements
59
Balance, January I, 2014
Increased by:
Transfers from Taxes Receivable
Balance, December 3 I, 20 14
BOROUGH OF NORTH ARLINGTON
STA TEIVIENT OF TAX TITLE LIENS
See Accompanying Notes to Financial Statements
60
EXHIBIT A-9
$
15,943
6,984
$
22,927
BOROUGH OF NORTH ARLINGTON
STATEMENT OF REVENUE ACCOUNTS RECEIVABLE
Balance,
December 3 1 ,
Accrued
2013
in 2014
Collected
Borough Clerk
Alcoholic Beverage Licenses
$
53,584
$
53,584
Licenses - Other
I0,801
10,801
Fees and Permits
5,957
5,957
Board of Health
Licenses - Other
I I,l04
1 I,I04
Fees and Permits
I3,582
13,582
Police
Fees and Permits
7,472
7,472
Tax
Fees and Permits
40
40
Recreation
Fees and Permits
I3,376
13,376
Parking Meters
44,137
44,137
Construction Code Official
Fees and Pennits
225,854
225,854
Interest on Investments and Deposits
5,824
5,824
Interest and Costs on Taxes
113,678
113,678
Municipal Court
Fines and Costs
360,543
336,132
Cable TV Franchise Fees
85,887
85,887
Verizon Franchise Fees
120,758
120,758
New Jersey Meadowlands Commission
Tax SharingN.J.S.A. 13:17-74
996,462
996,462
Energy Receipts Tax
1,069,861
1,069,861
N.J.M.C. Host Community Fees
330,380
330,380
Uniform Fire Safety Act
19,209
19,209
Library- Pension/Insurance Reimbursement
40,000
40,000
Third Party Billing-Emergency Medical Services
303,454
303,454
Passaic Valley Water Settlement
325,000
325,000
$
$
4,156,963
$
4,132,552
See Accompanying Notes to Financial Statements
61
EXHIBIT A-10
Balance,
December 3 1,
2014
$
24,411
$
24,411
EXHIBIT A-ll
BOROUGH OF NORTH ARLINGTON
STATEMENT OF DEFERRED CHARGES N.J.S.A. 40A:4-53 -SPECIAL EMERGENCY
Date
Authorized
Purpose
2010
Terminal Leave
2011
Terminal Leave
2012
Superstorm Sandy
Operating Deficit
Overexpenditure of Grant Appropriation
Overexpenditure of Appropriation
Overexpenditure of Appropriation Reserve
See Accompanying Notes to Financial Statements
$
115 ofNet
Balance.
Amount
Amount
December 31,
Increased in
Authorized
Authorized
2013
2014
300,000
$
60,000
$
120,000
$
450,000
90,000
270,000
450,000
90,000
360,000
$
750,000
$
$
STATEMENT OF DEFERRED CHARGES
Balance,
December 31,
2013
Amount in
2014 Budget
$
264,747
$
1,775
64,984
10,182
264,747
$
1,775
64,984
10,182
Reduced in
2014
60,000
90,000
125,559
275,559
Amount
Resulting
from 2014
Balance,
December 3 I ,
2014
$
60,000
180,000
234,441
$
474,441
EXHIBIT A-12
Balance,
December 31,
2014
70,690
$
449
70,690
449
7,084
7,084
$
341,688
$
341,688
$
78,223
$
78,223
62
EXHIBIT A- I3
Page I
BOROUGH OF NORTH ARLINGTON
STATEMENT OF 2013 APPROPRIATION RESERVES
Balance,
Encumbrances
Budget
December 31,
Payable
After
Balance
20!3
Cancelled
Modification
Exgended
Lag sed
Overexgended
Salaries and Wages
Administration & Executive
$
IO
$
IO
$
IO
Borough Council
272
272
272
Elections
1,300
1,300
1,300
Financial Administration
29
29
29
Collection of Taxes
40
40
40
Assessment of Taxes
35
35
35
Legal Services and Costs
9
9
9
Zoning Commission
782
782
$
699
83
Police Department
14,147
14,147
14,098
49
Emergency Medical Transportation
49
49
49
Police~ Dispatch 911
5,999
5,999
5,500
499
Crossing Guards
3,236
3,236
3,000
236
Fire Official
$
3,177
3,177
3,177
Streets & Roads- Repair & Maintenance
82
82
1,!30
$
1,048
Streets & Roads- Snow Removal
I
I
813
812
Board of Health
823
823
823
Youth Center
8
8
8
Senior Citizens Services
635
635
635
Municipal Court
65
65
65
Construction Code Officials
301
301
301
Other Expenses
Administration & Executive
49
670
719
719
Elections
61
61
61
Financial Administration
3,943
3,943
3,899
44
Collection of Taxes
423
423
423
Assessment of Taxes
3
3
3
Planning Board
466
466
290
176
Rent Leveling Board
!00
100
100
Police Department
26,804
26,804
18,643
8,161
Office of Emergency Management
1,!01
I, 101
343
758
Fire Department
2,825
2,825
1,192
1,633
Volunteer Emergency Squad
60
1,357
1,417
1,417
Fire Official
34
34
2,999
2,965
Streets & Roads- Repair & Maintenance
1,232
1,232
Streets & Roads- Snow Removal
24,969
24,969
18,999
5,970
Shade Tree
93
375
468
468
Sanitation
3,998
3,998
3,498
500
Public Building & Grounds
398
398
Recycling
3,999
3,999
3,499
500
Board of Health
3,071
3,071
3,700
629
Celebration of Public Events
800
800
800
Youth Center
310
310
310
Senior Citizens
861
861
861
Municipal Court
649
649
200
449
See Accompanying Notes to Financial Statements
63
EXHIBIT A-13
Page 2
BOROUGH OF NORTH ARLINGTON
STATEMENT OF 2013 APPROPRIATION RESERVES
Balance,
Encumbrances
Budget
December 31,
Payable
After
Balance
2013
Cancelled
Modification
Expended
Lapsed
Overexpended
UNCLASSIFIED
Insurance
Unemployment
$
20,000
$
20,000
$
20,000
General Liability Insurance
998
$
20,740
21,738
21,738
Worker's Compensation Insurance
911
9,758
10,669
10,669
Utility Expenses
Electricity
13
13
13
Street Lighting
3,480
3,480
$
3,423
57
Gasoline
30
7
37
37
~elephone
521
12,000
12,521
12,521
Social Security System (O.A.S.I.)
25,840
25,840
25,840
Public Employees Retirement System
31,075
31,075
31,075
Lyndhurst R North Arlington Joint Meeting
14
14
14
Maintenance of Free Public Library
21,501
6,417
27,918
27,918
Passaic Valley Sewerage Commission
3
3
3
$
206,028
$
55,301
$
261,329
$
87,555
$
180,858
$
7,084
Cash Disbursements
$
86,646
Transferred to Accounts Payable
909
$
87,555
See Accompanying Notes to Financial Statements
64
BOROUGH OF NORTH ARLINGTON
SCHEDULEOFENCUMBRANCESPAYABLE
Balance, December 3 I, 2013
Increased by:
Charged to 2014 Budget Appropriations
Charged to Appropriated Grant Reserves
Decreased by:
Cash Disbursements
Cancellations
Balance, December 3 1, 20 I 4
STATEMENT OF ACCOUNTS PAYABLE
Balance, December 31, 2013
Increased by:
Transferred from 20 13 Appropriation Reserves
Revenue Refunds Payable
Balance, December 3 I, 2014
STATEMENT OF FEES PAYABLE
Increased by:
Cash Receipts
Decreased by:
Payments to State of New Jersey
Balance, December 31, 2014
See Accompanying Notes to Financial Statements
65
$
373,673
45,923
$
303,981
55,301
909
9,740
EXHIBIT A-14
$
359,282
419,596
778,878
359,282
$
419,596
EXHIBIT A-15
$
12,944
10,649
$
23,593
EXHIBIT A-16
$
12,515
II ,884
$
631
Balance, December 31, 2013
Increased by:
Payment of 2015 Taxes
Decreased by:
Applied to 2014 Taxes
Balance, December 31, 2014
Balance, December 31, 2013
Increased by:
Overpayments Received
Decreased by:
Cash Disbursements
Balance, December 31,2014
BOROUGH OF NORTH ARLINGTON
STATEMENT OF PREPAID TAXES
ST A TEIVIENT OF TAX OVERPA YIVIENTS
See Accompanying Notes to Financial Statements
66
EXHIBIT A-17
$
545,161
166,741
711,902
545,161
$
166,741
EXHIBIT A-18
$
242,462
243,913
486,375
242,462
$
243,913
Balance, December 31, 2013
Increased by:
General County Levy - 2014
BOROUGH OF NORTH ARLINGTON
STATEMENT OF COUNTY TAXES PAY ABLE
County Open Space Preservation Levy -2014
Due County for Added and Omitted Taxes
Decreased by:
Payments
Balance, December 31, 2014
$ 3,371,264
36,688
2,329
STATEMENT OF PREPAID LOCAL SCHOOL DISTRICT TAXES
Increased by:
Cash Disbursements
Decreased by:
Levy - Calendar Year 20 14
Balance, December 31, 2014
STATEMENT OF PREPAID PAYROLL EXPENDITURES
Increased by:
Prepayment of 20 15 Salaries and Wages
Balance, December 31, 2014
See Accompanying Notes to Financial Statements
67
EXHIBIT A-19
$
873
3,410,281
3,411,154
3,407,982
$
3,172
EXHIBIT A-20
$ 23,060,687
23,058,397
$
2,290
EXHIBIT A-21
$
252,758
$
252,758
EXHIBIT A-22
BOROUGH OF NORTH ARLINGTON
STATEMENT OF APPROPRIATED GRANT RESERVES
Balance,
Transfer from
Balance,
January I,
Current Year
Paid or
December 31, 2014
2014
Appropriations
Charged
Reserved
Overexpended
Body Armor Fund
$
4,932
$
11,705
$
11,156
$
5,481
Drunk Driving Enforcement Fund
9,350
3,855
5,495
Alcohol Education and Rehabilitation Fund
3,197
158
3,804
$
449
Clean Communities
64,553
48,628
113,181
Recycling Tonnage Grant
54,470
3,363
51,107
NJ DEP Stormwater
34
34
Community Development Block Grant- Generator
2
2
Highway Safety Seat Belts
4,000
4,000
Strengthening Families
3,516
3,516
NJ Environmental Protection- Road Mileage
45,082
45,082
NJ Meadowlands Municipal Assistance Grant
67,567
67,567
Municipal Alliance
State Share
28,568
14,677
7,240
36,005
Local Match
10,433
10,433
Fire Department Saver Grant
73,631
34,089
39,542
Bill Gates Library Grant
1,300
1,300
County of Bergen ADA Ramps Project
11,488
11,488
Emergency Management
10,000
10,000
Bergen County Prosecutor - Police Radios
44,099
43,199
900
BCUA Recycling Assistance
9,049
3,842
5,207
$
381,822
$
138,617
$
110,548
$
410,340
$
449
Cash Disbursed $
64,625
Encumbrances Payable
45,923
$
110,548
See Accompanying Notes to Financial Statements
68
EXHIBIT A-23
BOROUGH OF NORTH ARLINGTON
STATEMENT OF RESERVE FOR FEDERAL AND STATE GRANTS- UNAPPROPRIATED
Anticipated
Balance,
as 2014
January 1,
Cash
Budget
2014
Receipts
Revenue
Body Armor
$
1,858
$
2,862
$
1,858
Drunk Driving Enforcement Fund
5,407
5,407
NJ Alcohol Rehab. Education
!58
1,477
!58
Clean Communities
48,628
22,678
48,628
Recycling tonnage
27,669
$
56,051
$
54,686
$
56,051
STATEMENT OF MISCELLANEOUS RESERVES
Reserve for:
Revaluation
$
FEMA
State Library Aid
$
Balance,
January I,
2014
97,809
125,560
13,905
237,274
See Accompanying Notes to Financial Statements
$
$
69
Cash
Receipts
111,687
111,687
$
$
Anticipated
as 2014
Budget
Revenue
97,809
125,559
223,368
$
$
$
$
Balance,
December 31,
2014
2,862
1,477
22,678
27,669
54,686
EXHIBIT A-24
Balance,
December 31,
2014
111,688
I 3,905
125,593
Original
Date of
Original
Issue
Issue
10/23/2014 $
4,750,000
Date of
Original
Issue
Issue
5/23/2014 $
510,000
5/24/2013
750,000
BOROUGH OF NORTH ARLINGTON
STATEMENT OF TAX ANTICIPATION NOTE PAYABLE
Balance,
Date of
Ioterest
December 31,
Maturity
Rate
2013
Iocreased
3/23/2015
0.50%
-
$
4)50,000
$
$
4,750,000
STATEMENT OF SPECIAL EMERGENCY NOTE PAYABLE
Balance,
Date of
Ioterest
December 31,
Maturity
Rate
2013
Iocreased
5/22/2015
$
510,000
5/23/2014
1.50% $
750,000
$
750,000
$
510,000
See Accompanying Notes to Financial Statements
70
EXHIBIT A-25
Balance,
December 31,
Decreased
2014
$
4,750,000
$
$
4,750,000
EXHIBIT A-26
Balance,
December 31,
Decreased
2014
$
510,000
$
7502000
$
750,000
$
510,000
TRUST FUNDS
EXHIBIT B-4
BOROUGH OF NORTH ARLINGTON
STATEMENT OF CASH AND INVESTMENTS- COLLECTOR!TREASURER
Animal Control Fund
Assessment Trust
Other Trust Funds
Unemplovment Insurance
Balance, December 31, 2013
$
16,608
$
498,969
$
752,841
$
19,028
Increased by Receipts:
Animal License Fees
$
7,671
State Dog License Fees
1,180
Current Fund Budget Appropriation
Unemployment Insurance
$
20,000
Employee Contributions
8,944
Interest on Deposits
34
$
681
$
588
37
Payroll Deposits
6,148,137
Library Deposits
9,701
Miscellaneous Reserves
746,623
8,885
681
6,905,049
~981
25,493
499,650
7,657,890
48,009
Decreased by Disbursements:
Reserve for Animal Control Expenditures
9,618
State Dog License Fees
1,183
Reserve for Library
13,874
Payroll Disbursements
6,148,137
Assessment Bonds Payable
82,228
Miscellaneous Reserves
458,612
Payments to Current Fund
67
101,557
329,953
7,877
Payments to State ofNJ ~Unemployment Claims
___12,151
10,868
183,785
6,950,576
~028
Balance, December 31, 2014
$
14,625
$
315,865
$
707,314
$
981
See Accompanying Notes to Financial Statements
71
Fund Balance
Due from Current Fund
Assessment Overpayments
Assessment Serial Bonds
BOROUGH OF NORTH ARLINGTON
ANALYSIS OF ASSESSMENT CASH
Ord. #1681 Porete Avenue
See Accompanying Notes to Financial Statements
72
EXHIBIT B-5
Balance,
December 31,
2014
$
116
(68,026)
30
383,745
$
315,865
Balance, December 3I, 20 I3
Increased by:
Interest Earnings
BOROUGH OF NORTH ARLINGTON
STATEMENT OF DUE TO CURRENT FUND
ANIMAL CONTROL TRUST FUND
Animal Control Expenditures Paid by Current Fund
Decreased by:
Payments to Current Fund
Balance, December 3 I, 20 \4
$
34
189
STATEMENT OF AMOUNT DUE TO STATE OF NEW JERSEY
ANIMAL CONTROL FUND
Balance, December 31, 2013
Increased by:
20I4 State Fees Collected
Decreased by:
Payments to State of New Jersey
Balance, December 3I, 2014
STATEMENT OF RESERVE FOR ANIMAL CONTROL EXPENDITURES
ANIMAL CONTROL FUND
Balance, December 3 I, 20 I3
Increased by:
Dog License Fees
Cat License Fees
Late Fees
Decreased by:
Animal Control Expenditures Paid by Current Fund
Cash Disbursements
Balance, December 3 I, 2014
See Accompanying Notes to Financial Statements
$
6,406
290
975
189
9,6I8
73
EXHIBIT B-6
$
9,618
223
9,841
67
$
9,774
EXHIBIT B-7
$
4
I ,I80
1,184
I, I83
$
EXHIBIT B-8
$
6,986
7,671
14,657
9,807
$
4,850
Or d.
Improvement
Date of
BOROUGH OF NORTH ARLINGTON
STATEMENT OF ASSESSMENTS RECEIVABLE
ASSESSMENT TRUST FUND
Balance,
Annual
Due
December 31,
No.
Description
Confirmation Installments
Dates
2013
Collected
1681
Porete Avenue
4/1/2003
I/10/1900
11/1
$
23
$
See Accompanying Notes to Financial Statements
74
EXHIBIT B-9
~~~
Analysis of Balance
Balance,
December 31,
Assessment
2014
Bonds
Reserve
$
23
$
$
23
Date of
Puroose
Issue
Porete Avenue
9/20/2005
BOROUGH OF NORTH ARLINGTON
STATEMENT OF ASSESSMENT SERIAL BONDS
ASSESSMENT TRUST FUND
Maturities of Bonds
Outstanding
Original
December 31,2014
Interest
Balance,
December 31,
2013
Issue
Date
Amount
Rate
$ 609,111
2015
$ 88,319
3.500%
2016
91,365
3.750%
2017
97,456
3.750%
2018
106,605
3.750%
$
465,973
$
$
465,973
$
Budget Appropriation
$
See Accompanying Notes to Financial Statements
75
EXHIBIT B-10
Balance,
December 31,
Decreased
2014
82,228
$
383,745
82,228
$
383,745
82,228
BOROUGH OF NORTH ARLINGTON
STATEMENT OF ASSESSMENT OVERPAYMENTS
Balance, December 31, 2013
Balance, December 31, 2014
STATEMENT OF DUE FROM/TO CURRENT FUND
ASSESSMENT TRUST FUND
Balance, December 31, 2013 (Due to)
Increased by:
Anticipated as Current Fund Revenue
Interest on Deposits
Decreased by:
Payments to Current Fund
Balance, December 31, 2014 (Due from)
$
32,000
681
STATEMENT OF DUE FROM/TO CURRENT FUND
OTHER TRUST FUND
Balance, December 31, 2013 (Due to)
Increased by:
Interest Earnings
Other Trust Fund Expenditures Paid by Current Fund
Decreased by:
Payments to Current Fund
Balance, December 31, 2014 (Due from)
$
76
588
42,562
EXHIBIT B-11
$
30
$
30
EXHIBIT B-12
$
850
32,681
33,531
101,557
$
68,026
EXHIBIT B-13
$
220,614
43,150
263,764
329,953
$
66,189
BOROUGH OF NORTH ARLINGTON
STATEMENT OF PAYROLL AND PAYROLL DEDUCTIONS PAYABLE
OTHER TRUST FUND
Balance, December 31,2013
Increased by:
Cash Receipts
Decreased by:
Cash Disbursements
Balance, December 31, 2014
Balance, December 31,2013
Increased by:
Cash Receipts
Decreased by:
Cash Disbursements
Balance, December 31, 2014
STATEMENT OF RESERVE FOR LIBRARY
OTHER TRUST FUND
77
EXHIBIT B-14
$
3,435
6,148,137
6,151,572
6, 148,137
$
3,435
EXHIBIT B-15
$
51,979
9,701
61,680
13,874
$
47,806
EXHIBIT B-16
BOROUGH OF NORTH ARLINGTON
SCHEDULE OF MISCELLANEOUS RESERVES
OTHER TRUST FUND
Balance,
Balance,
December 31,
December 31,
2013
Increase
Decrease
2014
Escrow Deposits
$
77,288
$
85,222
$
43,674
$
118,836
Premium on Tax Sale
242,093
390,700
251,800
380,993
William Swellick Memorial Fund
6,099
6,099
Domestic Partners
25
25
Lien Redemptions
8,912
259,068
205,142
62,838
P.O.A.A.
25,565
1,670
27,235
Municipal Alliance Donations
33,106
7,120
40,226
Fire Prevention - Fines and Penalties
8,087
8,087
Recreation
625
625
Accumulated Leave
75,012
75,012
Police -Fund Drive
2,843
558
2,285
Community Development
1
1
$
476,813
$
746,623
$
501,174 $
722,262
Cash Receipts $
746,623
Cash Disbursements
$
458,612
Due to Current Fund
42,562
$
501,174
See Accompanying Notes to Financial Statements
78
BOROUGH OF NORTH ARLINGTON
STATEMENT OF DUE TO CURRENT FUND
UNEMPLOYMENTINSURANCETRUSTFUND
Balance, December 31, 20 13
Increased by:
Interest on Deposits
Decreased by:
Payments to Current Fund
Balance, December 31, 20 14
EXHIBIT B-17
$
7,843
37
7,880
7,877
$
3
EXHIBITB-18
STATEMENT OF RESERVE FOR UNEMPLOYMENT INSURANCE BENEFITS
UNEMPLOYMENT INSURANCE TRUST FUND
Balance, December 31, 20 13
Increased by:
Current Fund Budget Appropriation
Employee Contributions
Decreased by:
Unemployment Claims Paid
Balance, December 31, 2014
$
79
20,000
8,944
$
$
II, 185
28,944
40,129
39,151
978
GENERAL CAPITAL FUND
BOROUGH OF NORTH ARLINGTON
STATEMENT OF CASH- COLLECTOR!fREASURER
Balance, December 31, 2013
Increased by:
Interest Earnings
$
Grant Receipts
Reserve for Payment of Debt
Decreased by:
Improvement Authorizations
Contracts Payable
Payments to Current Fund
Balance, December 31, 2014
See Accompanying Notes to Financial Statements
80
EXHIBITC-2
$
2,036,795
1,975
72,200
74,175
2,110,970
162,127
448,400
401,281
1,011,808
$
1,099,162
Fund Balance
BOROUGH OF NORTH ARLINGTON
ANALYSIS OF CASH
Capital Improvement Fund
Grants Receivable
Due from Current Fund
Contracts Payable
Reserve for Payment of Debt
Or d.
No.
1524
1725
1751/1753
1889
1928
1960
1961/1927
1963
1977
1979/1982
2013
2018
2019
2020
2021
2024
2057
2058
2067
2068
2074
2080
2083
2101
2102
2110
2111
2114
2116
2142
2145
Curbs and Sidewalks
Plans and Specifications-Construction of Intersection
Varia us Improvements
Paving - Various Roads
Construction of Bikeway
Resurface Hedden Terrace
Reconstruction of Rutherford Place
Ridge Road Streetscape
Various Capital Improvements - Library
Improvements to Stover and Ridge Park
Acquisition of Fire Rescue Truck
Various Park Improvements
Various General Improvements
Wilson Place Phase I Improvements
Resurfacing of Sunset Avenue
Providing for the Payment of Obligations (Cherokee)
Various General Improvements
Ridge Road S treetscape Phase III
Sanitary Sewer Improvements
Acquisition of Senior Bus
Various Capital Improvements
Various Capital Improvements
Various Road Improvements
Various Capital Improvements
Various Capital Improvements
Various Capital Improvements
Various Capital Improvements
Various Capital Improvements
Fire Equipment
Various 2014 Capital Improvements
Additional 2014 Capital Improvements
See Accompanying Notes to Financial Statements
81
EXHIBITC-3
Balance,
December 3 1,
2014
$
$
34,999
33,972
(484,666)
(504,987)
706,099
72,200
(8,000)
(21,190)
(37,957)
1,100
35,627
97,266
131,595
(60,731)
(175,261)
22,867
103
988
444
20,779
24,080
(39,180)
153,148
74,346
1,025
4
3,017
146,862
12,633
117,799
7,388
473,401
38,266
320,817
41,957
(56,210)
(85,438)
1,099,162
EXHIBIT C-4
BOROUGH OF NORTH ARLINGTON
STATEMENT OF GRANTS RECEIVABLE
Balance,
Increased by:
Decreased by:
Balance,
December 31,
Grants
Cash
December 31,
2013
Awarded
Receipts
2014
New Jersey Department of Transportation
Ordinance 1928- Bikeway Phase I
$
25,820
$
25,820
Ordinance 1988 - Caterbury
53,520
53,520
Ordinance 2021- Sunset Avenue
63,029
63,029
Community Development Block Grants
Ordinance 1979/1982/1998
77,775
77,775
Ordinance 2020
12,005
12,005
Ordinance 2083
72,000
$
72,000
Bergen County Open Space
Ordinance 2018
26,330
26,330
Ordinance 2142
$
26,750
26,750
FEMA- Fire Department Equipment- Ordinance 2116
14,452
14,452
ARRA - Streetscape Ordinance 2058
51,097
51,097
Rothman Senior Bus- Ordinance 2068
84,985
84,985
Due from Developer- North Arlington Associates
100,000
100,000
$
581,013
$
26,750
$
72,000
$
535,763
Analysis of Balance
Pledged to Ordinance
$
457,916
$
26,750
$
484,666
Pledged to Reserve
123,097
$
72,000
51,097
$
581,013
$
26,750
$
72,000
$
535,763
See Accompanying Notes to Financial Statements
82
Balance, December 31, 2013
Increased by:
Payments to Current Fund
Decreased by:
Interest Earnings
BOROUGH OF NORTH ARLINGTON
STATEMENT OF DUE FROM CURRENT FUND
$
Current Fund Anticipated Revenue
Fund Balance
Balance, December 31, 20 14
EXHIBITC-5
$
290,681
401,281
691,962
1,975
185,000
186,975
$
504,987
EXHIBITC-6
STATEMENT OF DEFERRED CHARGES TO FUTURE TAXATION- FUNDED
Balance, December 31, 20 13
Decreased by:
Current Fund Budget Appropriation:
Serial Bond Principal
Wastewater Loan Principal
Balance, December 31, 2014
See Accompanying Notes to Financial Statements
$
83
2,287,772
37,049
$
19,440,077
2,324,821
$
17,115,256
BOROUGH OF NORTH ARLINGTON
STATEMENT OF DEFERRED CHARGES TO FUTURE TAXATION- UNFUNDED
Ord. No.
Improvement Description
1524
Curbs and Sidewalks
1725
Plans and Specifications - Construction of Intersection
1751/1753
Acquisition of Equipment and Various Improvements
1963
Ridge Road Streetscape
1977
Various Capital Improvements- Library
2024
Payment of Obligations - Cherokee
2116
Fire Equipment
2142
Various 2014 Capital Improvements
2145
Additional 2014 Capital Improvements
See Accompanying Notes to Financial Statements
Balance,
December31,
2014
2013
Authorizations
$
8,000
21,060
38,087
67,674
190,000
50,000
422
$
228,500
408,000
$
375,243
$
636,500
84
Balance,
December 3 I,
2014
$
8,000
21,060
38,087
67,674
190,000
50,000
422
228,500
408,000
$
1,011,743
$
$
EXHIBIT C-7
Analysis of Balance
Unexpended
Improvement
Expenditures
Authorizations
8,000
21,060
38,087
60,731
$
6,943
175,261
14,739
39,180
10,820
422
172,290
322,562
342,319
$
527,776
Date of
Puroose
Issue
BCIA Refunding Issue
9/20/2005
General Improvements - BCIA
9/20/2005
General Improvements - BCIA
9/20/2005
General Improvement - Encap Bonds
12/15/2010
See Accompanying Notes to Financial Statements
BOROUGH OF NORTH ARLINGTON
STATEMENT OF GENERAL SERIAL BONDS
Amount of
Original
Issue
$ 11,765,000
8,720,000
390,889
Maturities of Bonds
Outstanding
December 31, 2014
Date
9/20/2015
9/20/2016
9/20/2017
9/20/2018
9/20/2015
9/20/2016
9/20/2017
9/20/2018
9/20/2015
9/20/2016
9/20/2017
9/20/2018
$
Amount
520,000
515,000
505,000
475,000
1,270,000
1,340,000
1,425,000
1,535,000
56,681
58,635
62,544
68,396
2,800,000
12/15/2015
200,000
200,000
200,000
200,000
12/15/2016-2022
12/15/2023
12115/2024
85
Interest
Rate
3.50%
3.70%
3.85%
4.00%
3.50%
3.75%
3.75%
3.75%
3.50%
3.75%
3.75%
3.75%
3.75%
4.00%
4.13%
4.25%
Balance,
December 31,
2013
Decreased
EXHIBITC-8
Page I
Balance,
December 31,
2014
$
2,535,000
$
520,000
$
2,015,000
6,735,000
1,165,000
5,570,000
299,028
52,772
246,256
2,200,000
200,000
2,000,000
Date of
Puroose
Issue
General Obligation Bonds- 2013
8/15/2013 $
See Accompanying Notes to Financial Statements
BOROUGH OF NORTH ARLINGTON
STATEMENT OF GENERAL SERIAL BONDS
Maturities of Bonds
Amount of
Outstanding
Original
December 31, 2014
Issue
Date
Amount
7,634,000
8/15/2015-2018
$
350,000
8/15/2019-2020
700,000
8/15/2021
675,000
8/15/2022-2024
650,000
8/15/2025
625,000
8/15/2026
625,000
8115/2027
609,000
Interest
Rate
3.000%
3.000%
3.000%
3.000%
3.000%
3.250%
3.375%
Paid by Budget Appropriation
86
Balance,
December 31,
2013
Decreased
EXHIBIT C-8
Page2
Balance,
December 31,
2014
$
7,634,000
$
350,000
$
7,284,000
$ 19,403,028
$
2,287,772
$
17,115,256
$
2,287,772
Purpose
Sanitary Sewer System
Refunding Bonds 19980
Wastewater Treatment
(Original Issue- 1994)
BOROUGH OF NORTH ARLINGTON
STATEMENT OF WASTEWATER LOANS PAYABLE
Balance,
Original
Maturities
Interest December 31,
Date oflssue
Issue
Date
Amount
Rate
2013
1111/1994
$
227,322
$
12,049
3/10/1998
228,952
25,000
$
$
37,049
$
EXHIBITC-9
Balance,
December 31,
Decreased
2014
12,049
25,000
37,049
.;:;.$ ~~~
Paid by Budget Appropriation $
37,049
See Accompanying Notes to Financial Statements
87
EXHIBIT C-1 0
BOROUGH OF NORTH ARLINGTON
STATEMENT OF IMPROVEMENT AUTHORIZATIONS
Balance,
2014
Balance,
December 31 2013
Improvement
Paid or
Contracts
December 31 2014
Ord. No.
Imorovements
Funded
Unfunded
Authorizations
Charged
Cancelled
Funded
Unfunded
1889
Paving- Various Roads
$
1,100
$
1,100
1928
Construction of Bikeway
35,627
35,627
1960
Resurface Hedden Terrace
97,266
97,266
1961
Reconstruction of Rutherford Place
131,595
131,595
1963
Ridge Road Streetscape
$
6,943
$
6,943
1977
Various Capital Improvements- Library
14,739
14,739
1979/1982
Improvements to Stover and Ridge Park
22,867
22,867
2013
Acquisition of Fire Rescue Truck
103
103
2018
Various Park Improvements
988
988
2019
Various General Improvements
444
444
2020
Wilson Place Phase I Improvements
20,779
20,779
2021
Resurfacing of Sunset Avenue
24,080
24,080
2024
Providing for the Payment of Obligations - Cherokee
10,820
10,820
2057
Various General Improvements
155,293
$
2,145
153,148
2058
Ridge Road Streetscape - Phase III
74,346
74,346
2067
Sanitary Sewer Improvements
1,025
1,025
2068
Acquisition of a Senior Bus
4
4
2074
Various Capital Improvements
3,017
3,017
2080
Various Capital Improvements
180,969
34,107
146,862
2083
Various Road Improvements
12,633
12,633
2101
Various Capital Improvements
117,799
117,799
2102
Various Capital Improvements
7,388
7,388
2110
Various Capital Improvements
473,401
473,401
2111
Various Capital Improvements
67,568
29,302
38,266
2114
Various Capital Improvements
918,351
597,534
320,817
2116
Fire Department Equipment
29,492
422
$
12,465
41,957
422
2142
Various 2014 Capital Improvements
$
269,790
97,500
172,290
2145
Additional 2014 Capital Improvements
430 200
107,638
322,562
$
2,376,135
$
32 924 $
699,990
$
868,226
$
12 465
$
1,725,512
$
527,776
Debt Authorized
$
636,500
Grant Receivable
26,750
'Capital Improvement Fund
36,740
$
699,990
Cash Disbursements
$
162,127
Contracts Payable
706 099
$
868,226
See Accompanying Notes to Financial Statements
88
Balance, December 31,2013
Increased by:
BOROUGH OF NORTH ARLINGTON
SCHEDULE OF CONTRACTS PAYABLE
Charged to Improvement Authorizations
Decreased by:
Cash Disbursements
Contracts Cancelled
Balance, December 31, 2014
$
448,400
12,465
STATEMENT OF CAPITAL IMPROVEMENT FUND
Balance, December 31, 2013
Decreased by:
Appropriated to Finance Improvement Authorizations
Balance, December 31,2014
STATEMENT OF RESERVE FOR PAYMENT OF DEBT
Increased by:
Grant Receipts
Balance, December 31, 2014
See Accompanying Notes to Financial Statements
89
EXHIBIT C-11
$
460,865
706,099
1,166,964
460,865
$
706,099
EXHIBIT C-12
$
70,712
36,740
$
33,972
EXHIBIT C-13
$
72,200
$
72,200
EXHIBIT C-14
BOROUGH OF NORTH ARLINGTON
STATEMENT OF BONDS AND NOTES AUTHORIZED BUT NOT ISSUED
Balance,
Balance,
Or d.
December 3 1,
2014
December 31,
No.
Improvement Description
2013
Authorizations
2014
1524
Curbs and Sidewalks
$
8,000
$
8,000
1725
Plans and Specifications - Construction oflntersection
21,190
21,190
175111753
Acquisition of Equipment and Various Improvements
37,957
37,957
1963
Ridge Road Streetscape
67,674
67,674
1977
Various Capital Improvements - Library
190,000
190,000
2024
Payment of Obligations - Cherokee
50,000
50,000
2116
Fire Equipment
422
422
2142
Various 2014 Capital Improvements
$
228,500
228,500
2145
Additional 2014 Capital Improvements
408,000
408,000
$
375,243
$
636,500
$
1,011,743
See Accompanying Notes to Financial Statements
90
BOROUGH OF NORTH ARLINGTON
BERGEN COUNTY, NEW JERSEY
PART II
GOVERNMENT AUDITING STANDARDS
LERCH, VINCI & HIGGINS,LLP
DIETER P. LERCH, CPA, RMA, PSA
GARY J. VINCI, CPA, RMA, PSA
GARY W. HIGGINS, CPA, RMA, PSA
JEFFREY C. BLISS, CPA, RMA, PSA
PAUL J. LERCH, CPA, RMA, PSA
DONNA L JAPHET, CPA, PSA
JULIUS B. CONSONI, CPA, PSA
ELIZABETH A. SHICK, CPA, RMA, PSA
ANDREW PARENTE, CPA, RMA, PSA
ROBERT W. HAAG, CPA, PSA
DEBORAH K. LERCH, CPA, PSA
RALPH M. PICONE, CPA, RMA, PSA
CERTIFIED PUBLIC ACCOUNTANTS
REGISTERED MUNICIPAL ACCOUNTANTS
DEBRA GOLLE, CPA
CINDY JANACEK, CPA, RMA
MARK SACO, CPA
KEVIN LOMSK.I, CPA
SHERYL M. NICOLOSI, CPA
KATHLEEN WANG, CPA
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
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members
of the Borough Council
Borough ofNorth Arlington
Nortb Arlington, New Jersey
We have audited, in accordance with the auditing standards generally accepted in the United States of America; the
standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General
of the United States, and audit requirements prescribed by the Division of Local Government Services, Department of
Community Affairs, State of New Jersey, the financial statements- regulatory basis of the Borough of North Arlington,
as of and for the year ended December 31, 2014, and the related notes to the financial statements, and have issued our
report thereon dated July 22, 20 15. Our report on the financial statements - regulatory basis was modified to indicate that
the financial statements were not prepared and presented in accordance with accounting principles generally accepted in the
United States of America but rather prepared and presented in accordance with the regulatory basis of accounting 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, to meet the requirements of the State of
New Jersey for municipal government entities as described in Note 1. In addition, our report on the financial statements-
regulatory basis was modified on the regulatory basis of accounting because of the presentation of the unaudited LOSAP
Trust Fund or unaudited General Fixed Assets Account Group financial statements.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Borough of North Arlington's
internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the financial statements but not for the purpose of expressing
an opinion on the effectiveness of the Borough ofNortb Arlington's internal control. Accordingly, we do not express an
opinion on the effectiveness of the Borough ofNortb Arlington's internal control.
17-17 ROUTE 208 •FAIRLAWN, NJ 07410• TELEPHONE (201) 791-7100 • FACSIMILE (201) 791-3035
WWW.LVHCPA.COM
91
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements
on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that
there is a reasonable possibility that a material misstatement of the Borough's financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in
internal control that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was
not designed to identity all deficiencies in internal control that might be material weaknesses or significant deficiencies
and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations,
during our audit we did not identity any differences in internal control that we consider to be material weaknesses. We
did identity certain deficiencies in internal control described in the accompanying schedule of findings and responses as
items 20 14-00 I and 2014-002 that we consider to be significant deficiencies in internal control over financial reporting.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Borough of North Arlington's financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of
noncompliance or other matter that is required to be reported under Government Auditing Standards and audit
requirements as prescribed by the Division of Local Government Services, Department of Community Affairs, State of
New Jersey and which is described in the accompanying schedule of findings and responses as item 2014-001.
We also noted certain matters that are not required to be reported under Government Auditing Standards that we reported
to management of the Borough of North Arlington in Part III of this report of audit entitled; "Letter of Comments and
Recommendations".
Borough of North Arlington's Responses to Findings
The Borough of North Arlington's responses to the findings identified in our audit are described in the accompanying
schedule of findings and responses. The Borough of North Arlington's responses were not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the responses.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results
of that testing, and not to provide an opinion on the effectiveness of the Borough of North Arlington's internal control or
on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards
in considering the Borough of North Arlington's internal control and complia
. Accordingly, this communication is not
suitable for any other purpose.
, /
·
.. ; /.1.
·
1 J ,D
_,.._- , //-"""" ' /1'~1110 AI.. f
ERCH, VINCI & HIGefJNS, LLP
Fair Lawn, New Jersey
July 22,2015
92
ed Municipal Accountants
-;- -?/
Pau .iJr'ch
R iste'red Municipal Accountant
RMA Number CR00457
Law and Public Safety
State and Highway Community Safety
Click !tor Ticket
U.S. Department of Environmental Protection
Municipal Stonnwater Regulation Program
U.S. Department of Homeland Security
Public Assistance Grant - Hurricane Sandy
Assistance to Firefighters Grant Program - SAFER
BOROUGH OF NORTH ARLINGTON
SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS
FOR THE YEAR ENDED DECEMBER3l, 2014
Federal
CFDA
Number
20.600
66.605
97.036
97.044
Grant
Year
2009
2004
2014
2008
$
Grant
Award
4,000
12,029
51,685
$
104,000
2014
Receipts
51,685
Balance,
December 31,
2013
$
4,000
34
73,632
$
$
77,666
$
Note: This Schedule is not subject to a single Audit in accordance with U.S. OMB Circular A-133.
See Accompanying Notes to Financial Statements
93
Revenues
Realized
51,685
$
51,685
$
Balance
December 31,
Expended
Adjustment
20 14
51,685
34,089
85,774
"$~~~
$
$
4,000
34
39,543
43,577
•
•
' ' •
' •
•
Schedule A
Cumulative
Expenditures
$
1!,995
51,685
64,457
Schedule B
BOROUGH OF NORTH ARLINGTON
SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE
FOR THE YEAR ENDED DECEMBER 31, 2014
Grant
Balance,
Balance,
Grant
Grant
Award
Grant
December 31,
Revenue/
December 3 I, '
Cumulative
State Grant Pro!.':ram
Number
Year
Received
Receipts
2013
Receipts
Expended
Adjustment
2014
'
Expenditures
N.J. Department ofCommunitv Affairs
NJ Meadowlands Commission Municipal Aid
8030-495-009-041870
2009
'
100,000
'
67,567
'
67,567 ' '
32,433
Department of Human Services
Strengthening Families
I 00-054-4213
2010
3,516
3,516
3,516
Department of Environmental Protection
Clean Communities Program
4900-765-004-178910
2010
20,929
16,386
16.386 '
4,543
Clean Communities Program
4900-765-004-178910
2011
27,566
27,566
27.566
Clean Communities Program
4900-765-004-178910
2012
20,599
20,599
20,599
Clean Communities Program
4900-765-004-178910
2014
48,628
'
48,628
48,628
Recycling Tonnage Grant
4900-752-004-178910
2010
27,657
11,367
'
3,363
8,004 '
19,653
Recycling Tonnage Grant
4900-752-004-178910
2011
9,049
9,049
3.842
5,207 '
3,842
Recycling Tonnage Grant
4900-752-004-178910
2012
17,035
I 7,035
t 7,035
Recycling Tonnage Grant
4900-752-004-178910
2013
26,068
26,068
26,068
DeRaltment of Law and Public Safety
Police Body Annor Replacement
718-066-1021-001
2011
6,920
1,961
1,961
'
6,920
Police Body Annor Replacement
718-066-1 02!-00 l
2012
2,971
2,971
2,971
•
2,971
Police Body Armor Replacement
718-066-1021-001
2014
I 1,705
11,705
6,224
5,481
'
6,224
Drunk Driving Enforcement Fund
1110-10!-030000
2014
9,350 '
3,943
9,]50
3,855
5.495 '
3,855
Emergency Management Program
N/A
2014
10,000
10,000
10.000
NJ De12anment ofTransnortation
(Passed through the College of New Jersey)
NJ Mobility and Community Fmm Initiative
S8040
2009
71,500
45,082
45.082 '
26,418
NJ Depanment of Treasury
(Passed through the County of Bergen)
Municipal Alliance on Alcoholism & Drug Abuse
N/A
2011
12,157
8,968
7,240
1.728 '
!0,429
Municipal Alliance on Alcoholism & Drug Abuse
NIA
2012
15,357
15,357
15,357
Municipal Alliance on Alcoholism & Drug Abuse
NIA
2013
14,677
14,677
14,677
2014
!4,677
14,677
14.677
NJ Administrative Office of the Courts
Alcohol Education and Rehabilitation
760-046-4240-001
2012
!58
3,197
3,197
'
158
Alcohol Education and Rehabilitation
760-046-4240-00 I
2014
!58
!58
!58
'
!58
'
291,366 s
94,518
L.-_8811 '
'
353,073
Note: This Schedule is not subject to a single Audit in accordance with NJ OMB Circular 15-08.
See Accompanying Notes to Financial Statements
94
NOTES TO THE SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE
BOROUGH OF NORTH ARLINGTON
NOTES TO THE SCHEDULES OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE
YEAR ENDED DECEMBER 31,2014
NOTE 1 GENERAL
The accompanying schedules present the activity of all federal awards and state financial assistance programs of the
Borough of North Arlington. The Borough is defined in Note !(A) to the Borough's financial statements. All federal
financial assistance received directly from federal agencies, as well as federal awards and state financial assistance
passed through other government agencies is included on the schedules of expenditures of federal awards and state
financial assistance.
NOTE 2 BASIS OF ACCOUNTING
The accompanying schedules are prepared and presented using the regulatory basis of accounting as prescribed for
municipalities by the Division of Local Govermnent Services, Department of Community Affairs, State of New Jersey
which differ in certain respects from accounting principles generally accepted in the United States of America (GAAP)
applicable to local government units. This basis of accounting is described in Note I to the Borough's financial
statements.
NOTE 3 RELATIONSHIP TO FINANCIAL STATEMENTS
Amounts reported in the accompanying schedules agree with amounts reported in the Borough's financial statements.
Financial assistance revenues are reported in the Borough's financial statements on a basis of accounting described
above as follows:
Federal
Current Fund
$
51,685
$
94,518
:::_$ -~~4CC6I,2o.=0-=-3
Total Financial Awards
$
51,685
$
94,5 18
;::,$ ~.:.l4.:,;6;J,;,2~0:;;.3
NOTE 4 RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS
Amounts reported in the accompanying schedules may not necessarily agree with the amounts reported in the related
federal and state financial reports due to timing differences between the Borough's fiscal year and grant program year.
95
Financial Statements
BOROUGH OF NORTH ARLINGTON
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED DECEMBER 31, 2014
Part I- Summary of Auditor's Results
Type of auditor's report issued on financial statements
Unmodified (Regulatory Basis)
Internal control over financial reporting:
l) Material weakness( es) identified
~----yes _ __::X.:c__no
2) Significant deficiency(ies) that are not
considered to be material weakness( es )?
Noncompliance material to the fmancial
statements noted?
See Accompanying Notes to Financial Statements
__
_ox.:c_ __ yes
no
---
_ ___:X.:;___ yes ____ no
96
BOROUGH OF NORTH ARLINGTON
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED DECEMBER 31, 2014
Part 2- Schedule of Financial Statement Findings
This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of
contracts and grant agreements and abuse related to the financial statements in accordance with Government Auditing
Standards.
Finding 2014-001
Our audit revealed that the Current Fund incurred an operating deficit in 2014.
Criteria or specific requirement
Requirements of Audit, issued by the Division ofLoca1 Government Services, Department of Community Affairs State of
New Jersey.
Condition
Current Fund revenues and other income were not sufficient to support expenditures incurred during 2014.
Questioned Costs
None
Context
Current Fund expenditures exceeded revenues and other income by $78,223 during 2014.
The Borough's operating deficit is required to be raised in the subsequent year's budget.
Unknown.
Recommendation
A course of action be developed and implemented to eliminate the Borough's operating deficit.
View of Responsible Officials and Planned Corrective Action
Management has reviewed this finding and has indicated appropriate corrective action will be implemented.
97
BOROUGH OF NORTH ARLINGTON
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED DECEMBER 31,2014
Part 2 -Schedule of Financial Statement Findings
This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of
contracts and grant agreements and abuse related to the financial statements in accordance with Government Auditing
Standards.
Finding 2014-002
Our audit of the General Capital Fund revealed certain contracts were not encumbered upon award.
Criteria or specific requirement
N.J.A.C. 5:30-5.2 through 5.5.
Condition
Certain contracts were approved by the governing body but were not promptly encumbered in the financial reporting
system.
Questioned Costs
None
Context
The following contract balances were not reported as a liability by the Borough:
$97,500
$37,500
$74,781
$32,857
Bathroom Upgrades
Inlet Repair- Phase II
Ford F450
Ford F250
Improvement authorization balances in the General Capital Fund were overstated and contracts payable were understated
in the amount of$242,638. The financial statements in the General Capital Fund have been adjusted.
Unknown
Recommendation
Internal controls be enhanced to ensure all contracts be encumbered when awarded or incurred in the General Capital
Fund.
View of Responsible Officials and Planned Corrective Action
Management has reviewed this finding and has indicated appropriate corrective action will be implemented.
98
BOROUGH OF NORTH ARLINGTON
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED DECEMBER 31, 2014
This section identifies the status of prior-year findings related to the financial statements and federal and state awards that
are required to be reported in accordance with Chapter 6.12 of Government Auditing Standards, U.S. OMB Circular A-
133 (Section .315(a)(b)) and New Jersey OMB's Circular 04-04.
STATUS OF PRIOR YEAR FINDINGS
FINDING 2013-001
Our audit of the General Capital Fund revealed that there are numerous improvement authorizations over five years old that
have deficit cash balances at year end.
See General Comments.
FINDING 2013-002
Grant receivables and appropriation reserves in the Federal and State Grant Fund should be monitored periodically during
the year to ensure that all revenues have been billed and appropriate expenditures have been charged to the grant
expenditures and all grants expended have been appropriated. Utilizing grant resources first allows the entity to free up
funds in the current budget.
See General Comments.
FINDING 2013-003
The Borough of North Arlington incurred $64,984.54 of overexpenditures in the 2013 budget appropriations, $10, 182.00 in
the 2012 Appropriation Reserves and $1,775.67 in the Grant Reserve.
In addition, certain Current Fund operating costs were not encumbered at December 31, 2013.
See General Comments
FINDING 2013-004
Procurement requirements for municipalities require compliance with the administrative codes for contracts and
procurement, Pay to Play Laws and Local Public Contract Law. A process to ensure the execution and maintenance of
contracts, resolutions to authorize state contracts, protocol for emergency procurement, proper certification of funds and
compliance with pay to play laws. We noted that the Borough did not have process in place to ensure compliance in the
procurement area.
Corrective action has been taken.
99
BOROUGH OF NORTH ARLINGTON
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED DECEMBER 31, 2014
This section identifies the status of prior-year findings related to the financial statements and federal and state awards that
are required to be reported in accordance with Chapter 6.12 of Government Auditing Standards, U.S. OMB Circular A-
133 (Section .315(a)(b)) and New Jersey OMB's Circular 04-04.
STATUS OF PRIOR YEAR FINDINGS
FINDING 2013-005
Resolutions for the approval of legal services were not in all cases presented to the governing body for approval.
Documentation supporting the approval of such contracts, by project, was not maintained.
Corrective action has been taken.
100
BOROUGH OF NORTH ARLINGTON
BERGEN COUNTY
PART III
SUPPORTING DATA
LETTER OF COMMENTS AND RECOMMENDATIONS
YEAR ENDED DECEMBER 31, 2014
BOROUGH OF NORTH ARLINGTON
SUPPLEMENTARY DATA
COMPARATIVE STATEMENT OF OPERATIONS AND CHANGE IN FUND BALANCE-
CURRENT FUND
Year 2014
Year 2013
Amount
Percent
Amount
Percent
REVENUE AND OTHER INCOME REALIZED
Miscellaneous - From Other Than Local
Property Tax Levies
4,798,026
10.12
%
4,487,977
9.85
Collection of Delinquent Taxes and Tax Title Liens
683,700
1.44
247,570
0.54
Collection of Current Tax Levy
41,447,400
87.44
40,708,241
89.31
Other Credits
473,147
1.00
135,640
0.30
Total Income
47,402,273
100.00 %
45 579 428
100.00
EXPENDITURES
Budget Expenditures
Municipal Purposes
20,638,814
43.47
19,493,247
42.45
County Taxes
3,410,281
7.18
3,395,522
7.39
Local School Taxes
23,058,397
48.56
22,980,691
50.04
Other Expenditures
373,004
0.79
51,356
0.11
Total Expenditures
47,480,496
100.00 %
45,920,816
100.00
Excess in Revenue/(Deficit) in Revenue
(78,223)
(341 ,388)
Adjustments to Income before Surplus:
Expenditures Included above which by Statute are
Deferred Charges to Budget of Succeeding Year
78,223
341,388
Statutory Excess to Surplus
Fund Balance, January I
502,715
502,715
502,715
502,715
Less Utilization as Anticipated Revenue
Fund Balance, December 31
$
502,715
$
502,715
101
%
%
%
%
BOROUGH OF NORTH ARLINGTON
SUPPLEMENTARY DATA
COMPARATIVE SCHEDULE OF TAX RATE INFORMATION
Tax Rate
Apportionment of Tax Rate
Municipal
County
Local School
Library
Assessed Valuation
2014
2013
2012
$1.070
.231
1.554
.032
$] 483 637.956
COMPARATIVE OF LEVIES AND COLLECTION CURRENTLY
$.990
.229
1.554
.033
$] 479.26!.575
$.987
0.233
1.450
.035
$].586 564 192
A study of this tabulation could indicate a possible trend in future tax levies. A decrease in the percentage of current
collection could be an indication of a probable increase in future tax levies.
Percentage
of
Year
TaxLevv
Cash Collections
Collection
2014
$
42,861,170
$
41,447,400
96.70%
2013
41,783,927
40,708,241
97.43%
2012
40,661,795
39,193,071
96.39%
102
BOROUGH OF NORTH ARLINGTON
SUPPLEMENTARY DATA
DELINQUENT TAXES AND TAX TITLE LIENS
This tabulation includes a comparison, expressed in percentage, of the total of delinquent taxes and tax title liens, in
relation to the tax levies of the last three years.
Amount of
Amount of
December 31
Tax Title
Delinquent
Total
Year
Liens
Taxes
Delinquent
2014
$
22,927
$ 1,364,732
$ 1,387,659
2013
15,943
692,948
708,891
2012
2,993
466,622
469,615
COMPARATnffiSCHEDULEOFFUNDBALANCES
Current Fund
2014
2013
2012
103
Balance,
December 31,
$502,715
502,715
502,715
Percentage
of
TaxLeyy
3.23%
1,70%
1.12%
Utilized
in Budget of
Succeeding Year
BOROUGH OF NORTH ARLINGTON
SUPPLEMENTARY DATA
OFFICIALS IN OFFICE AND SURETY BONDS AS OF DECEMBER 31, 2014
Name
Title
Term Expires
Peter Massa
Mayor
12/31/2014
Dan Pronti
Councilman
12/31/2014
Mark Y ampaglia
Councilman
12/31/2014
Joseph Bianchi
Councilman
12/31/2016
Richard Hughes
Councilman
12/31/2016
Albert Grauel!
Councilman
12/31/2015
Thomas Zammatore
Councilman
12/31/2015
Stephen Loiacono
Borough Administrator
Kathleen Moore
Borough Clerk
Stephen Sanzari
Chief Financial Officer
Joseph Iannaconi, Jr.
Tax Collector
Douglas Bern
Municipal Attorney
George Savino
Judge
There is a statutory bond limit in the Municipal Joint Insurance Fund that covers the Treasurer, Tax Collector,
Magistrates, Court Administrators and Court Clerk up to $1,000,000 with a member deductible of $2,500.
104
BOROUGH OF NORTH ARLINGTON
LETTER OF COMMENTS AND RECOMMENDATIONS
GENERAL COMMENTS
Our audit indicated several capital improvement authorizations over 5 years old reflect a cash deficit. It is
recommended that cash deficits of capital improvement authorizations over 5 years old be funded.
Our audit indicated several reconciling items are reported on the operating bank account reconciliation. It is
recommended that reconciling items reported on the monthly operating bank account reconciliation be reviewed
and be appropriately cleared.
Our audit indicated that the Borough does not have a formal policy for the use of store credit cards. It is
recommended that the Borough adopt formal policies for procedures related to the utilization of store credit
cards.
Our audit of the Borough's tax billings indicated a certain property which is tax exempt under a Payment in Lieu
of Tax (PILOT) agreement was billed during 2014 and reported as a delinquent balance at year end. It is
recommended that, in all instances, tax exempt properties be properly classified in the tax duplicate to ensure that
the affected property is not included in the quarterly tax billings.
Our audit indicated that 2014 taxes for properties held in lien by the Borough were not transferred and included
in the year end lien balance. It is recommended that subsequent taxes on properties held in municipal tax title
liens be added to the lien balance at year end.
Our audit indicated that significant prior year tax overpayment balances remain on the financial records of the
Borough. It is recommended that aging tax overpayment balances be reviewed for validity and either be refunded
or otherwise cleared of record.
Our audit indicated that several grant receivable and unexpended grant reserve appropriations remain on the
financial records of the Borough. It is recommended that efforts be made to collect outstanding grant receivable
balances and to utilize unexpended grant reserve balances, or otherwise be cleared of record.
Our audit indicated that the Borough's financial reporting software system does not provide for the maintenance
of a general ledger. It is recommended that the Borough maintain a financial reporting software system that
provides for the maintenance of a general ledger.
Our audit indicated the dog licenses do not appear to have been issued in sequential order. It is recommended that
dog licenses be issued in sequential order to ensure an accurate accounting of licenses issued.
Our audit indicated that a detail escrow account and activity ledger by developer is not currently being
maintained by the Borough. It is recommended that a detail escrow account and activity ledger, by developer, be
developed and maintained.
Our audit indicated that the Borough's fixed assets appraisal report was not updated for 2014. It is recommended
that the fixed assets appraisal report by updated on an annual basis.
105
BOROUGH OF NORTH ARLINGTON
LETTER OF COMMENTS AND RECOMMENDATIONS
GENERAL COMMENTS (Continued)
Our audit of the municipal court indicated the following:
•
The fines and bail bank accounts were not accurately reconciled to the ATS/ ACS system on a
monthly basis.
•
117 tickets assigned to officers in excess of 6 months old have not been issued.
With respect to the municipal court, it is recommended that:
•
The fines and bail bank accounts be reconciled with the ATS/ ACS system on a monthly basis.
•
Tickets assigned to officers in excess of 6 months in age be recalled.
Our audit of the recreation department indicated that a receipt ledger is not currently being maintained. It is
recommended that a daily cash receipts ledger be maintained by the recreation department.
Our audit of the Borough's payroll indicated the following:
•
Salaries for library employees do not appear to have been formally approved.
•
An employee who appears to be eligible for pension coverage has not been enrolled into the State
pension system.
•
An employee's salary earnings for 2014 exceeded the maximum established by ordinance for the
respective position.
With respect to the Borough's payroll, it is recommended that:
•
Salaries established for library employees be formally approved.
•
Employees who are eligible for pension coverage be promptly enrolled in the appropriate State
pension system.
•
Salary payments be made in accordance with the approved Borough salary ordinance to ensure
maximum amounts are not exceeded.
Contracts and Agreements Required To Be Advertised For NJS 40a:ll-4
NJS 40A: 11-4 states "Every contract or agreement, for the performance of any work or the furnishing or hiring of
any materials or supplies, the cost or the contract price whereof is to be paid with or out of public funds not included
within the terms of Section 3 of this act, shall be made or awarded only by the Governing Body of the contracting
unit after public advertising for bids and bidding therefore, except as is provided otherwise in this act or specifically
by any other law. No work, materials or supplies shall be undertaken, acquired or furnished for a sum exceeding in
the aggregate $17,500, except by contract or agreement".
The Governing Body of the Borough has the responsibility of determining whether the expenditures in any category
will exceed $17,500 within the year. Where question arises as to whether any contract or agreement might result in
violation of the statute, the Borough Counsel's opinion should be sought before a commitment is made.
The minutes indicate that bids were requested by public advertising for the following items:
NAVES Bathroom Upgrade
Inlet Repair- Phase I1
2013 Road Program- Phase I
106
BOROUGH OF NORTH ARLINGTON
LETTER OF COMMENTS AND RECOMMENDATIONS
GENERAL COMMENTS
Contracts and Agreements Required To Be Advertised For NJS 40a:ll-4 (Continued)
The minutes indicate that resolutions were adopted and advertised, authorizing the awarding of contracts or
agreements for "Professional Services" per N.J.S. 40A: 11-5.
Inasmuch as the system of records did not provide for an accumulation of payments for categories for the
performance of any work or the furnishing or hiring of any materials or supplies, the results of such an accumulation
could not reasonably be ascertained. Disbursements were reviewed, however, to determine whether any clear-cut
violations existed.
Collection of Interest of Delinquent Taxes and Assessments
The statute provides the method for authorizing interest and the maximum rate to be charged for the non-payment of
taxes or assessments on or before the date when they would become delinquent.
Taxes and Tax Title Liens
A tax sale was held on May 14,2014.
2014
2013
2012
Number of Liens
5
5
3
It is essential to good management that all means provided by statute be utilized to liquidate tax title liens in order to
get such properties back on a tax paying basis.
107
BOROUGH OF NORTH ARLINGTON
SUPPLEMENTARY DATA
RECOMMENDATIONS
It is recommended that:
*
*
*
*
1. A course of action be developed and implemented to eliminate the Borough's operating deficit.
2. Internal controls be enhanced to ensure all contracts be encumbered when awarded or incurred in the
General Capital Fund.
3. Cash deficits of capital improvement authorizations over five years old be funded.
4. Reconciling items reported on the monthly operating bank account reconciliation be reviewed and be
appropriately cleared.
5. The Borough adopt formal policies for procedures related to the utilization of store credit cards.
6. In all instances, tax exempt properties be properly classified in the tax duplicate to ensure that the
affected property is not included in the quarterly tax billings.
7. Subsequent taxes on properties held in municipal tax title liens be added to the lien balance at year end.
8. Aging tax overpayment balances be reviewed for validity and either be refunded or otherwise cleared of
record.
9. Efforts be made to collect outstanding grant receivable balances and to utilize unexpended grant reserve
balances, or otherwise be cleared of record.
10. The Borough maintain a financial reporting software system that provides for the maintenance of a
general ledger.
11. Dog licenses be issued in sequential order to ensure an accurate accounting of licenses issued.
12. A detail escrow account and activity ledger, by developer, be developed and maintained.
13. The fixed assets appraisal report by updated on an annual basis.
14. With respect to the municipal court, it is recommended that:
* a. The fines and bail bank accounts be reconciled with the ATS/ACS system on a monthly basis.
b. Tickets assigned to officers in excess of 6 months in age be recalled.
15. A daily cash receipts ledger be maintained by the recreation department.
16. With respect to the Borough's payroll, it is recommended that:
•
Salaries established for library employees be formally approved.
•
Employees who are eligible for pension coverage be promptly enrolled in the appropriate State
pension system.
•
Salary payments be made in accordance with the approved Borough salary ordinance to ensure
maximum amounts are not exceeded.
**********
108
BOROUGH OF NORTH ARLINGTON
SUPPLEMENTARY DATA
Status of Prior Year's Audit Findings/Recommendations
A review was performed on all prior year recommendations and corrective action was taken on all except those
denoted with an asterisk(*).
The problems and weaknesses noted in our review were not of such magnitude that they would affect our ability to
express an opinion on the financial statements taken as a whole.
Should any questions arise as to our comments or recommendations, or should you desire assistance m
implementing our recommendations, please do not hesitate to call us.
109
,~··~);..a ,o!
H, VINCI & HIGGINS, LLP
Certtfied Public Accountants
Registered Municipal Accountants
~~
¥j.J."Lerch
R istered Municipal Accountant
RMA Number CR00457
Protected Document Content
Start your free trial to view the raw municipal bid documents and web text.
Unlock Full AccessDetailed Risk Breakdown
local preference
No Flags Found
performance bond
Evidence Detected
"...Comparison of Levies and Collection Currently Delinquent Taxes and Tax Title Liens Comparative Schedule of Fund Balances Officials in Office and Surety Bonds General Comments Recommendations 91-92 93 94 95 96-100 101 102 102 103 103 104 105-107 108-109 BOROUGH OF NORTH ARLINGTON BERGEN..."
liquidated damages
No Flags Found
Quick Actions
Explore More
Timeline
First Discovered
Apr 2, 2026
Last Info Update
Apr 2, 2026
Start your 7-day free trial
Get instant notifications and full bid analysis. Existing users will be logged in automatically.
Start Free Trial