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Executive Summary
The City of Port Republic's audit report for the year ended December 31, 2018, includes an independent auditor's report, comparative balance sheets, statements of operations and changes in fund balance, and statements of revenues and expenditures. The audit was conducted according to generally accepted auditing standards in the United States and the audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. The report expresses an adverse opinion on the financial statements regarding U.S. Generally Accepted Accounting Principles (GAAP) and a qualified opinion on the regulatory basis of accounting due to an unaudited Length of Service Award Program (LOSAP).
The financial statements cover various funds, including the Current Fund, Trust Funds, Capital Fund, and General Fixed Assets Account Group. Key areas of focus include the City's financial position, revenue and expenditure analysis, and compliance with relevant laws and regulations. The audit also assesses internal controls over financial reporting and compliance, but does not express an opinion on their effectiveness. The auditor’s report was issued on July 19, 2019.
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Document Text
--- Document: 2018 Audit Document ---
CITY OF PORT REPUBLIC
ATLANTIC COUNTY
NEW JERSEY
AUDIT REPORT
FOR THE YEAR ENDED
DECEMBER 31, 2018
Exhibit
Page
PART 1
Independent Auditor's Report
1 - 3
CURRENT FUND
Comparative Balance Sheet - Regulatory Basis
A
4 - 5
Comparative Statement of Operations and Change in
Fund Balance - Regulatory Basis
A-1
6 - 7
Statement of Revenues -Regulatory Basis
A-2
8 - 10
Statement of Expenditures - Regulatory Basis
A-3
11 - 15
TRUST FUND
Comparative Balance Sheet - Regulatory Basis
B
16
CAPITAL FUND
Comparative Balance Sheet - Regulatory Basis
C
17
Schedule of Fund Balance - Regulatory Basis
C-1
18
GENERAL FIXED ASSETS ACCOUNT GROUP
Balance Sheet - Regulatory Basis
G
19
NOTES TO FINANCIAL STATEMENTS
20 - 38
SUPPLEMENTARY DATA
Independent Auditor's Report - Government Auditing Standards
39-40
CURRENT FUND
Schedule of Cash - Treasurer
A-4
41
Schedule of Taxes Receivable and Analysis of
Property Tax Levy
A-5
42
Schedule of Tax Title Liens
A-6
43
Schedule of Revenue Accounts Receivable
A-7
44
Schedule of Appropriation Reserves
A-8
45
Schedule of Local District School Tax
A-9
46
CITY OF PORT REPUBLIC
TABLE OF CONTENTS
Exhibit
Page
CITY OF PORT REPUBLIC
TABLE OF CONTENTS
Schedule of State Grants Receivable
A-10
47
Schedule of Reserve for State Grants - Appropriated
A-11
48
Schedule of Reserve for State Grants - Unappropriated
A-12
49
TRUST FUNDS
Schedule of Cash - Treasurer
B-1
50
Schedule of Reserve for Dog Expenditures
B-2
51
Schedule of Amount Due to/(from) Current Fund - Dog License Fund
B-3
52
Schedule of Amount Due to State of New Jersey - Department of Health
B-4
52
Schedule of Due to/(From Current Fund
B-5
53
Schedule of Miscellaneous Reserves
B-6
54
CAPITAL FUNDS
Schedule of Cash - Treasurer
C-2
55
Analysis of Cash
C-3
56
Schedule of Capital Improvement Fund
C-4
57
Schedule of Deferred Charges to Future Taxation - Funded
C-5
58
Schedule of Deferred Charges to Future Taxation - Unfunded
C-6
59
Statement of Improvement Authorizations
C-7
60
Schedule of General Serial Bonds
C-8
61
Schedule of Bond Anticipation Notes
C-9
62
Schedule of Bonds and Notes Authorized but Not Issued
C-10
63
PART II
General Comments
64-66
Findings and Recommendations
67
Status of Prior Recommendations
67
Recommendations
67
CITY OF PORT REPUBLIC
PART I
REPORT ON AUDIT OF FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA
YEAR ENDED DECEMBER 31, 2018
{THIS PAGE IS INTENTIONALLY LEFT BLANK}
Independent Auditor’s Report
The Honorable Mayor and
Members of City Council
City of Port Republic, New Jersey
Report on the Financial Statements
We have audited the accompanying balance sheets - regulatory basis of the various funds and account
group of the City of Port Republic, as of December 31, 2018 and 2017, the related statement of
operations and changes in fund balance - regulatory basis for the years then ended, and the related
statement of revenues - regulatory basis and statement of expenditures - regulatory basis of the various
funds for the year ended December 31, 2018, and the related notes to the financial statements, which
collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with the basis of accounting prescribed by the Division of Local Government Services,
Department of Community Affairs, State of New Jersey. Management is also responsible for the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America, the audit requirements prescribed by the Division of Local Government Services, Department of
Community Affairs, State of New Jersey (the “Division”), and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
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.
1
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Basis for Adverse Opinion on U.S Generally Accepted Accounting Principles.
As described in Note 1 of the financial statements, the financial statements are prepared by the City of
Port Republic on the basis of the financial reporting provisions prescribed by the Division of Local
Government Services, Department of Community Affairs, State of New Jersey, which is a basis of
accounting other than accounting principles generally accepted in the United States of America, to meet
the requirements of New Jersey.
The effects on the financial statements of the variances between the regulatory basis of accounting
described in Note 1 and accounting principles generally accepted in the United States of America,
although not reasonably determinable, are presumed to be material.
Adverse Opinion on U.S. Generally Accepted Accounting Principles
In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on
U.S Generally Accepted Accounting Principles” paragraph, the financial statements referred to above do
not present fairly, in accordance with accounting principles generally accepted in the United States of
America, the financial position of each fund of the City of Port Republic as of December 31, 2018 and
2017, or changes in financial position for the years then ended.
Basis for Qualified Opinion on Regulatory Basis of Accounting
As described in Note 16 of the financial statements, the City participates in a Length of Service Award
Program (LOSAP) for its volunteer fire and rescue personnel. The amount reflected in the trust fund
statements of $183,704.81 and $197,006.85 for 2018 and 2017 respectively were not audited and,
therefore, we express no opinion on the LOSAP program.
Qualified Opinion on Regulatory Basis of Accounting
In our opinion, except for the effects of the matter described in the “Basis for Qualified Opinion on
Regulatory Basis of Accounting” paragraph, the financial statements referred to above present fairly, in all
material respects, the regulatory basis balance sheets and account group as of December 31, 2018 and
2017, the regulatory basis statements of operations for the years then ended and the regulatory basis
statements of revenues and expenditures for the year ended December 31, 2018 in accordance with the
basis of financial reporting prescribed by the Division of Local Government Services, Department of
Community Affairs, State of New Jersey as described in Note 1.
Other Matters
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City of Port Republic’s basic financial statements. The supplementary information listed in
the table of contents and the letter of comments and recommendations section are presented for
purposes of additional analysis and are not a required part of the basic financial statements.
2
The supplemental information listed in the table of contents is the responsibility of management and was
derived from and relates directly to the underlying accounting and other records used to prepare the basic
financial statements. Such information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the supplemental information listed in the table of contents, is fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
The letter of comments and recommendations section has not been subject to the auditing procedures
applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or
provide any assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated July 19, 2019
on our consideration of the City of Port Republic’s internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City of Port Republic’s internal
control over financial reporting and compliance.
Very truly yours,
Ford, Scott & Associates, L.L.C.
FORD, SCOTT & ASSOCIATES, L.L.C.
CERTIFIED PUBLIC ACCOUNTANTS
Nancy Sbrolla
Nancy Sbrolla
Certified Public Accountant
Registered Municipal Accountant
No. 542
July 19, 2019
3
{THIS PAGE IS INTENTIONALLY LEFT BLANK}
EXHIBIT A - CURRENT FUND
{THIS PAGE IS INTENTIONALLY LEFT BLANK}
Exhibit A
Sheet 1
2018
2017
ASSETS
Regular Fund:
Cash:
Cash Treasurer
$
1,315,743.17
1,454,052.11
Cash - Change
150.00
100.00
Total Cash
1,315,893.17
1,454,152.11
Receivables and Other Assets with Full Reserves:
Delinquent Property Taxes Receivable
74,616.08
83,258.90
Tax Title and Other Liens
7,748.26
6,678.94
Property Acquired for Taxes -
at Assessed Valuation
923,101.00
923,101.00
Property Deeded to the City
386,300.00
386,300.00
Revenue Accounts Receivable
2,407.03
2,011.64
Interfund Receivable:
Grant Fund
25,118.63
53,023.42
Dog Trust
3,234.08
2,908.13
Other Trust Funds
295.05
4,495.88
Total Receivables and Other Assets
1,422,820.13
1,461,777.91
Deferred Charges:
Special Emergency Appropriation
29,727.00
47,527.00
Total Deferred Charges
29,727.00
47,527.00
Total Regular Fund
2,768,440.30
2,963,457.02
Federal and State Grant Fund:
Cash
-
-
Federal and State Grants Receivable
447,442.77
465,373.17
Total Federal and State Grant Fund
447,442.77
465,373.17
Total Current Fund
$
3,215,883.07
3,428,830.19
CURRENT FUND
COMPARATIVE BALANCE SHEET - REGULATORY BASIS
AS OF DECEMBER 31,
The accompanying Notes to Financial Statements are an integral part of this statement
4
Exhibit A
Sheet 2
2018
2017
LIABILITIES, RESERVES AND FUND BALANCE
Regular Fund:
Liabilities:
Appropriation Reserves
$
74,510.97
62,721.07
Reserve for Encumbrances
16,325.63
16,757.16
Prepaid Taxes
64,535.53
242,597.44
Overpaid Taxes
14.68
896.72
Local School Tax Payable
436,645.52
408,103.04
County Added Tax Payable
2,070.86
5,973.38
Due to State:
DCA Fees
239.00
-
Veterans and Senior Citizens
13,649.00
13,862.15
Reserve for Tax Map
700.00
700.00
Reserve for Revaluation
3,469.20
3,469.20
Reserve for Gravel
8,250.00
-
Interfund Payable:
Open Space Trust
23,035.00
66,641.17
General Capital
20,780.41
20,780.52
664,225.80
842,501.85
Reserve for Receivables and Other Assets
1,422,820.13
1,461,777.91
Fund Balance
681,394.37
659,177.26
Total Regular Fund
2,768,440.30
2,963,457.02
Federal and State Grant Fund:
Unappropriated Reserves
2,993.04
2,993.04
Appropriated Reserves
417,373.71
409,356.71
Encumbrances Payable
1,957.39
-
Due to Current Fund
25,118.63
53,023.42
Total Federal and State Grant Fund
447,442.77
465,373.17
Total Current Fund
$
3,215,883.07
3,428,830.19
CURRENT FUND
COMPARATIVE BALANCE SHEET - REGULATORY BASIS
AS OF DECEMBER 31,
The accompanying Notes to Financial Statements are an integral part of this statement
5
Exhibit A - 1
Sheet 1
2018
2017
Revenue and Other Income Realized
Fund Balance
$
220,000.00
190,000.00
Miscellaneous Revenue Anticipated
275,562.45
401,708.07
Receipts from Delinquent Taxes
83,258.90
68,864.46
Receipts from Current Taxes
3,020,235.64
2,941,738.10
Non Budget Revenue
74,608.15
52,247.56
Other Credits to Income:
Unexpended Balance of Appropriation Res.
65,845.79
78,541.08
Interfund Returned
31,851.83
5,164.21
Total Income
3,771,362.76
3,738,263.48
Expenditures
Budget and Emergency Appropriations:
Appropriations Within "CAPS"
Operations:
Salaries and Wages
331,259.00
315,149.00
Other Expenses
500,944.00
518,047.00
Deferred Charges & Statutory Expenditures
54,687.00
49,491.00
Appropriations Excluded from "CAPS"
Operations:
Other Expenses
10,631.00
8,906.00
Capital Improvements
7,500.00
12,500.00
Debt Service
105,250.00
206,250.00
Deferred Charges
17,800.00
17,800.00
Local District School Tax
1,793,295.00
1,736,210.00
County Tax
682,673.79
662,263.34
County Share of Added Tax
2,070.86
5,973.38
Municipal Open Space Taxes
23,035.00
22,978.10
Interfund Created
-
-
Total Expenditures
3,529,145.65
3,555,567.82
Excess in Revenue
242,217.11
182,695.66
CURRENT FUND
COMPARATIVE STATEMENT OF OPERATIONS AND CHANGES
IN FUND BALANCE - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31,
The accompanying Notes to Financial Statements are an integral part of this statement
6
Exhibit A - 1
Sheet 2
2018
2017
Adjustments to Income before Fund Balance:
Expenditures included above which are by
Statute Deferred Charges to Budgets of
Succeeding Year
-
Emergency Appropriation
Total Adjustments
-
-
Statutory Excess to Fund Balance
242,217.11
182,695.66
Fund Balance January 1
659,177.26
666,481.60
901,394.37
849,177.26
Decreased by:
Utilization as Anticipated Revenue
220,000.00
190,000.00
Fund Balance December 31
$
681,394.37
659,177.26
IN FUND BALANCE - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31,
CURRENT FUND
COMPARATIVE STATEMENT OF OPERATIONS AND CHANGES
The accompanying Notes to Financial Statements are an integral part of this statement
7
Exhibit A-2
Excess or
Budget
N.J.S. 40A:4-87
Realized
(Deficit)
Fund Balance Anticipated
$
220,000.00
220,000.00
-
Total Fund Balance Anticipated
220,000.00
-
220,000.00
-
Miscellaneous Revenues:
Section A: Local Revenues
Fines and Costs:
Municipal Court
22,000.00
23,329.63
1,329.63
Interest and Costs on Taxes
12,000.00
15,477.13
3,477.13
Interest Earned on Investments
3,000.00
2,990.78
(9.22)
Communication Tower Rental - Bell Atlantic Nynex & Sprint
73,000.00
57,457.91
(15,542.09)
Total Section A: Local Revenues
110,000.00
-
99,255.45
(10,744.55)
Section B: State Aid Without Offsetting Appropriations
Energy Receipts Tax
176,307.00
176,307.00
-
Total Section B: State Aid Without Offsetting Appropriations
176,307.00
-
176,307.00
-
Section F: Special Items - Public and Private Programs
Off-Set with Appropriations
Clean Communities
4,000.00
4,000.00
-
Municipal Alliance
10,323.00
10,323.00
-
NJDEP
1,150.00
1,150.00
-
Total Section F: Special Items - Public and Private Programs
Off-Set with Appropriations
1,150.00
14,323.00
15,473.00
-
CURRENT FUND
STATEMENT OF REVENUES - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
Anticipated
The accompanying Notes to Financial Statements are an integral part of this statement
8
Exhibit A-2
Excess or
Budget
N.J.S. 40A:4-87
Realized
(Deficit)
CURRENT FUND
STATEMENT OF REVENUES - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
Anticipated
Section G: Special Items of Revenue Anticipated with Prior
Written Consent of Director
Reserve for Gravel
-
-
Total Section G: Special Items of Revenue Anticipated with Prior
-
-
-
-
Written Consent of Director
Total Miscellaneous Revenues:
287,457.00
14,323.00
291,035.45
(10,744.55)
Receipts from Delinquent Taxes
77,500.00
83,258.90
5,758.90
Amount to be Raised by Taxes for Support of Municipal Budget
Local Tax for Municipal Purposes
586,870.00
611,766.99
24,896.99
Total Amount to be Raised by Taxes for Support of Municipal Budget
586,870.00
-
611,766.99
24,896.99
Budget Totals
1,171,827.00
14,323.00
1,206,061.34
19,911.34
Non- Budget Revenues:
Other Non- Budget Revenues:
74,608.15
74,608.15
1,171,827.00
14,323.00
1,280,669.49
94,519.49
The accompanying Notes to Financial Statements are an integral part of this statement
9
Exhibit A - 2
Sheet 3
Analysis of Realized Revenues
Allocation of Current Tax Collections:
Revenue from Collections
3,020,235.64
$
Less: Reserve for Tax Appeals Pending
-
Net Revenue from Collections
3,020,235.64
Allocated to:
School, County and Other Taxes
2,501,074.65
Balance for Support of Municipal Budget Appropriations
519,160.99
Increased by:
Appropriation "Reserved for Uncollected Taxes"
92,606.00
Amount for Support of Municipal Budget Appropriations
611,766.99
Receipts from Delinquent Taxes:
Delinquent Tax Collection
83,258.90
Tax Title Lien Collections
-
Total Receipts from Delinquent Taxes
83,258.90
Analysis of Non-Budget Revenue:
Miscellaneous Revenue Not Anticipated:
Building Permits
35,075.73
Miscellaneous
26,288.44
Reimbursements
13,243.98
Total Miscellaneous Revenue Not Anticipated:
74,608.15
$
Non-Budget Revenue:
CURRENT FUND
STATEMENT OF REVENUES - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
The accompanying Notes to Financial Statements are an integral part of this statement
10
Exhibit A - 3
(Over expended)
Unexpended
Budget After
Paid or
Balance
Budget
Modifications
Charged
Encumbered
Reserved
Cancelled
OPERATIONS WITHIN "CAPS"
GENERAL GOVERNMENT:
Mayor and Council
Salaries and Wages
$
4,200.00
4,200.00
3,978.17
221.83
-
Other Expenses
1,600.00
1,600.00
1,368.60
202.84
28.56
-
Municipal Clerk
Salaries and Wages
121,640.00
121,640.00
114,219.24
7,420.76
-
Other Expenses
31,500.00
32,000.00
31,568.39
428.62
2.99
-
Financial Administration
Salaries and Wages
12,360.00
14,760.00
14,740.00
20.00
-
Other Expenses
3,900.00
3,900.00
3,694.00
206.00
-
-
Audit Services
Other Expenses
24,750.00
24,750.00
24,750.00
-
-
Revenue Administration (Tax Collector)
Salaries and Wages
15,000.00
15,000.00
14,503.78
496.22
-
Other Expenses
5,000.00
5,000.00
4,274.89
357.52
367.59
-
Tax Assessment Administration
Salaries and Wages
11,124.00
11,124.00
11,124.00
-
-
Other Expenses
1,700.00
1,700.00
763.50
319.55
616.95
-
Legal Services
Other Expenses
27,000.00
27,000.00
23,204.21
90.00
3,705.79
-
Liquidation of Tax Title Liens and Foreclosed Property
Other Expenses
100.00
100.00
-
100.00
-
Engineering Services and Costs
Other Expenses
9,600.00
9,600.00
1,137.00
8,463.00
-
MUNICIPAL COURT
Salaries and Wages
16,200.00
16,200.00
15,924.21
275.79
-
Other Expenses
9,000.00
9,000.00
5,827.72
548.25
2,624.03
-
Public Defender (P.L. 1997, C.256)
Other Expenses
1,050.00
1,050.00
-
1,050.00
-
LAND USE ADMINISTRATION
Planning Board
Salaries and Wages
1,030.00
1,030.00
987.58
42.42
-
Other Expenses
2,000.00
3,000.00
1,404.00
1,596.00
-
Appropriations
Expended
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
The accompanying Notes to Financial Statements are an integral part of this statement
11
Exhibit A - 3
(Over expended)
Unexpended
Budget After
Paid or
Balance
Budget
Modifications
Charged
Encumbered
Reserved
Cancelled
Appropriations
Expended
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
INSURANCE
Disability Insurance
400.00
400.00
245.50
154.50
-
Liability Insurance
48,244.00
48,244.00
48,244.00
-
-
Group Insurance Plan for Employees
83,800.00
78,900.00
70,328.41
8,571.59
-
PUBLIC SAFETY
Police
Other Expenses
4,500.00
4,500.00
4,500.00
-
-
911 Services
2,000.00
2,000.00
-
2,000.00
-
Emergency Management Services
Salaries and Wages
3,600.00
3,600.00
1,600.00
2,000.00
-
Other Expenses
3,400.00
3,400.00
2,186.18
1,213.82
-
Aid to Volunteer Fire Company
25,000.00
25,000.00
25,000.00
-
-
First Aid Organization - Contribution
10,000.00
10,000.00
10,000.00
-
-
Municipal Prosecutor
Other Expenses
6,000.00
6,000.00
6,000.00
-
-
PUBLIC WORKS
Streets and Road Maintenance
Salaries and Wages
107,000.00
107,000.00
97,601.21
9,398.79
-
Other Expenses
21,000.00
21,000.00
15,142.69
2,986.07
2,871.24
-
Garbage and Trash Removal
Salaries and Wages
1.00
1.00
-
1.00
Other Expenses
74,000.00
74,000.00
67,937.10
5,008.67
1,054.23
-
Monitoring Wells
2,000.00
2,000.00
1,008.00
972.00
20.00
-
Buildings and Grounds
Other Expenses
33,000.00
33,000.00
26,202.77
1,675.18
5,122.05
-
HEALTH AND HUMAN SERVICES
Dog Regulation
Other Expenses
2,600.00
2,600.00
810.00
810.00
980.00
-
Aid to Outreach
2,000.00
2,000.00
2,000.00
-
-
PARKS AND RECREATION
Parks and Playgrounds
Salaries and Wages
9,700.00
10,700.00
10,370.50
329.50
-
Other Expenses
Miscellaneous Other Expenses
12,700.00
12,700.00
4,827.15
831.00
7,041.85
-
The accompanying Notes to Financial Statements are an integral part of this statement
12
Exhibit A - 3
(Over expended)
Unexpended
Budget After
Paid or
Balance
Budget
Modifications
Charged
Encumbered
Reserved
Cancelled
Appropriations
Expended
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
UNIFORM CONSTRUCTION CODE
Construction Official
Salaries and Wages
11,520.00
11,520.00
11,520.00
-
-
Other Expenses
1,000.00
1,000.00
954.08
45.92
-
Plumbing Inspector
Salaries and Wages
2,640.00
2,640.00
2,640.00
-
-
Building Inspector
Salaries and Wages
2,640.00
2,640.00
2,640.00
-
-
Electrical Inspector
Salaries and Wages
4,203.00
4,203.00
4,202.00
1.00
-
Code Enforcement
Salaries and Wages
5,001.00
5,001.00
5,000.44
0.56
-
UNCLASSIFIED
Celebration of Public Events
5,800.00
5,800.00
5,800.00
-
-
UTILITY EXPENSES AND BULK PURCHASES
Electric
200.00
200.00
118.68
81.32
-
Street Lighting
33,000.00
33,000.00
31,978.20
1,021.80
(0.00)
-
Telephone
11,000.00
11,000.00
10,131.87
868.13
(0.00)
-
Heating Oil
3,500.00
3,500.00
2,706.02
793.98
-
Motor Fuel
2,000.00
2,000.00
544.08
1,455.92
-
TOTAL OPERATIONS WITHIN "CAPS"
832,203.00
832,203.00
745,708.17
16,325.63
70,169.20
-
Contingent
-
TOTAL OPERATIONS INCLUDING
CONTINGENT WITHIN "CAPS"
832,203.00
832,203.00
745,708.17
16,325.63
70,169.20
-
Detail:
Salaries and Wages
327,859.00
331,259.00
311,051.13
-
20,207.87
-
Other Expenses
504,344.00
500,944.00
434,657.04
16,325.63
49,961.33
-
The accompanying Notes to Financial Statements are an integral part of this statement
13
Exhibit A - 3
(Over expended)
Unexpended
Budget After
Paid or
Balance
Budget
Modifications
Charged
Encumbered
Reserved
Cancelled
Appropriations
Expended
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
DEFERRED CHARGES AND STATUTORY
EXPENDITURES:
Statutory Expenditures:
Contributions to:
Public Employees' Retirement System
28,687.00
28,687.00
28,186.58
500.42
-
Social Security System (O.A.S.I.)
25,000.00
25,000.00
23,315.45
1,684.55
-
Unemployment Compensation Insurance
1,000.00
1,000.00
-
1,000.00
-
TOTAL DEFERRED CHARGES AND
STATUTORY EXPENDITURES:
54,687.00
54,687.00
51,502.03
-
3,184.97
-
TOTAL GENERAL APPROPRIATIONS FOR
MUNICIPAL PURPOSES WITHIN "CAPS"
886,890.00
886,890.00
797,210.20
16,325.63
73,354.17
-
OPERATIONS - EXCLUDED FROM "CAPS"
(A) Operations - Excluded from "CAPS"
LOSAP Contribution - Fire
8,050.00
8,050.00
8,050.00
-
-
Group Insurance Plan for Employees
-
-
-
8,050.00
8,050.00
8,050.00
-
-
-
(A) Public and Private Programs Off-Set by
Revenues
Municipal Alliance Program - Local Match
2,581.00
2,581.00
2,581.00
-
-
Municipal Alliance Program
10,323.00
10,323.00
10,323.00
-
-
Alcohol Education Rehabilitation
-
-
-
-
-
Recycling Tonnage Grant
-
-
-
-
-
Clean Communities
4,000.00
4,000.00
4,000.00
-
-
Community Development Block Grant
-
-
-
-
NJ Dep of Enviromental Protection
1,150.00
1,150.00
1,150.00
-
-
Total Public and Private Programs Off-Set by
Revenues
18,054.00
18,054.00
18,054.00
-
-
-
Total Operations - Excluded from "CAPS"
26,104.00
26,104.00
26,104.00
-
-
-
Detail:
Other Expenses
11,781.00
11,781.00
10,631.00
-
-
-
The accompanying Notes to Financial Statements are an integral part of this statement
14
Exhibit A - 3
(Over expended)
Unexpended
Budget After
Paid or
Balance
Budget
Modifications
Charged
Encumbered
Reserved
Cancelled
Appropriations
Expended
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2018
(C) Capital Improvements
Capital Improvement Fund
-
-
-
Purchase of Equipment
20,000.00
20,000.00
-
20,000.00
Office Equipment/Building Upgrades
30,000.00
30,000.00
-
30,000.00
Purchase of Generator
-
-
-
Purchase of Truck
-
-
-
Firefighter Equipment
7,500.00
7,500.00
6,343.20
1,156.80
-
Public and Private Programs Offset by Revenues:
New Jersey DOT Trust Fund Authority Act
-
Total Capital Improvements
57,500.00
57,500.00
6,343.20
-
1,156.80
50,000.00
(D) Debt Service
Payment of Bond Anticipation Notes
100,000.00
100,000.00
100,000.00
-
-
Interest on Notes
5,250.00
5,250.00
5,232.42
17.58
Total Debt Service
105,250.00
105,250.00
105,232.42
-
-
17.58
(E) Deferred Charges
Special Emergency Authorizations - 5 years
17,800.00
17,800.00
17,800.00
-
-
Total Deferred Charges
17,800.00
17,800.00
17,800.00
-
-
-
TOTAL GENERAL APPROPRIATIONS FOR
MUNICIPAL PURPOSES EXCLUDED
FROM "CAPS"
206,654.00
206,654.00
155,479.62
-
1,156.80
50,017.58
SUBTOTAL GENERAL APPROPRIATIONS
1,093,544.00
1,093,544.00
952,689.82
16,325.63
74,510.97
50,017.58
(M) Reserve for Uncollected Taxes
92,606.00
92,606.00
92,606.00
-
TOTAL GENERAL APPRORIATIONS
$
1,186,150.00
1,186,150.00
1,045,295.82
16,325.63
74,510.97
50,017.58
Budget
1,171,827.00
Cancelled
50,017.58
Appropriations by 40A:4-87
14,323.00
Overexpended
-
Emergency Appropriations
-
1,186,150.00
50,017.58
Reserve for Uncollected Taxes
92,606.00
Capital Improvement Fund
-
Federal and State Grants
18,054.00
Deferred Charges
17,800.00
Disbursements
916,835.82
1,045,295.82
The accompanying Notes to Financial Statements are an integral part of this statement
15
EXHIBIT B - TRUST FUNDS
{THIS PAGE IS INTENTIONALLY LEFT BLANK}
Exhibit B
ASSETS
2018
2017
Dog License Fund:
Cash
$
9,755.61
3,774.30
Due from State of New Jersey
33.40
32.40
9,789.01
3,806.70
Length of Service Award Program (unaudited)
Investments held for LOSAP
183,704.81
197,006.85
183,704.81
197,006.85
Other Funds:
Cash - Treasurer
167,421.71
111,450.58
Due from Current Fund - Open Space
23,035.00
66,641.17
Due from Dog Trust
5,675.33
-
196,132.04
178,091.75
389,625.86
378,905.30
LIABILITIES, RESERVES AND FUND BALANCE
Dog License Fund:
Due to Current Fund
3,234.08
2,908.13
Due to Other Trusts
5,675.33
Reserve for Dog Fund Expenditures
879.60
898.57
9,789.01
3,806.70
Length of Service Award Program (unaudited)
Reserve for LOSAP
183,704.81
197,006.85
183,704.81
197,006.85
Other Funds:
Due to Current Fund
295.05
4,495.88
Miscellaneous Reserves
195,836.99
173,595.87
196,132.04
178,091.75
$
389,625.86
378,905.30
TRUST FUND
COMPARATIVE BALANCE SHEET - REGULATORY BASIS
AS OF DECEMBER 31,
The accompanying Notes to Financial Statements are an integral part of this statement
16
{THIS PAGE IS INTENTIONALLY LEFT BLANK}
EXHIBIT C - GENERAL CAPITAL FUND
{THIS PAGE IS INTENTIONALLY LEFT BLANK}
Exhibit C
2018
2017
ASSETS
Cash
$
173.35
173.24
Deferred Charges to Future Taxation -
Funded
-
-
Unfunded
236,249.00
336,249.00
Interfunds and Receivables
Due from Current Fund
20,780.41
20,780.52
257,202.76
357,202.76
LIABILITIES, RESERVES AND FUND BALANCE
Bond Anticipation Notes Payable
200,000.00
300,000.00
Encumbrances Payable
-
-
Improvement Authorizations:
Funded
9,772.50
9,772.50
Unfunded
59.26
59.26
Capital Improvement Fund
17,454.00
17,454.00
Fund Balance
29,917.00
29,917.00
$
257,202.76
357,202.76
There were bonds and notes authorized but not issued at December 31,
2017
36,249.00
2018
36,249.00
GENERAL CAPITAL FUND
COMPARATIVE BALANCE SHEET - REGULATORY BASIS
AS OF DECEMBER 31,
The accompanying NOtes to Financial Statements are an integral part of this statement
17
Exhibit C - 1
2018
2017
Beginning Balance January 1
$
29,917.00
29,917.00
No current year activity
Ending Balance December 31
$
29,917.00
29,917.00
GENERAL CAPITAL FUND
COMPARATIVE STATEMENT OF FUND BALANCE -
REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31,
The accompanying NOtes to Financial Statements are an integral part of this statement
18
EXHIBIT G - GENERAL FIXED ASSETS
{THIS PAGE IS INTENTIONALLY LEFT BLANK}
Exhibit G
GENERAL FIXED ASSETS ACCOUNT GROUP
STATEMENT OF GENERAL FIXED ASSETS - REGULATORY BASIS
AS OF DECEMBER 31,
2018
2017
General Fixed Assets:
Land
$
2,060,028.00
2,060,028.00
Buildings
1,234,981.91
1,234,981.91
Transportation Equipment
223,858.00
218,218.00
Total General Fixed Assets
3,518,867.91
3,513,227.91
Investment in General Fixed Assets
$
3,518,867.91
3,513,227.91
The accompanying Notes to Financial Statements are an integral part of this statement
19
{THIS PAGE IS INTENTIONALLY LEFT BLANK}
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting City
Except as noted below, the financial statements of the City of Port Republic include every board,
body, office or commission supported and maintained wholly or in part by funds appropriated by
the City of Port Republic, as required by N.J.S. 40A:5-5.
Component units are legally separate organizations for which the City is financially accountable.
The City is financially accountable for an organization if the City appoints a voting majority of the
organization’s governing board and (1) the City is able to significantly influence the programs or
services performed or provided by the organization; or (2) the City is legally entitled to or can
otherwise access the organization’s resources; the City is legally obligated or has otherwise
assumed the responsibility to finance the deficits of or provide financial support to the organization;
or the City is obligated for the debt of the organization. Component units may also include
organizations that are fiscally dependent on the City in that the City approves the budget, the
issuance of debt or the levying of taxes. The Board of Education of the City is a component unit.
However, under the regulatory basis of accounting in New Jersey, the component unit is neither
blended nor shown in a discrete presentation in the financial statements of the City. The Board of
Education does have an independent audit performed and a copy is available at the Board’s
offices.
B. Description of Funds
The accounting policies of the City of Port Republic conform to the accounting principles applicable
to municipalities which have been prescribed by the Division of Local Government Services,
Department of Community Affairs, State of New Jersey. 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 the respect to public funds.
Under this method of accounting, the City of Port Republic accounts for its financial transactions
through the following separate funds:
Current Fund -- resources and expenditures for governmental operations of a general nature,
including Federal and State grant funds.
Trust Funds -- receipts, custodianship and disbursement of funds in accordance with the purpose
for which each reserve was created.
General Capital Fund -- receipt and disbursement of funds for the acquisition of general facilities,
other than those acquired in the Current Fund.
General Fixed Assets Account Group -- All fixed assets used in governmental fund type operations
(general fixed assets) are accounted for in the general fixed assets account group, rather than in
governmental funds.
20
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
C. Basis of Accounting
The accounting principles and practices prescribed for municipalities by the State of New Jersey
differ in certain respects from generally accepted accounting principles applicable to local
governmental units. The more significant policies in New Jersey follow.
A modified accrual basis of accounting is followed with minor exceptions.
Revenues -- are recorded as received in cash except for certain amounts, which are due from
other governmental units. Receipts from Federal and State grants are realized as revenue when
anticipated in the City budget. Receivables for property taxes are recorded with offsetting reserves
on the balance sheet of the City's Current Fund, accordingly, such amounts are not recorded as
revenue until collected. Other amounts that are due to the City which are susceptible to accrual are
also recorded as receivables with offsetting reserves and recorded as revenue when received.
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 the Encumbrance Accounting System. Outstanding
encumbrances at December 31 are reported as a cash liability in the financial statements.
Appropriation reserves covering unencumbered appropriation balances are automatically created
at December 31st of each year and recorded as liabilities, except for amounts which may be
canceled by the Governing Body. Appropriation reserves are available, until lapsed at the close of
the succeeding year, to meet specific claims, commitments or contracts incurred during the
preceding fiscal year. Lapsed appropriation reserves are recorded as income. Appropriations for
principal payments on outstanding general capital bonds and notes are provided on the cash basis;
interest on general capital indebtedness is on the cash basis. Compensated absences are treated
on a pay as you go basis with no amount charged to operations in the year incurred.
Foreclosed Property -- Foreclosed property is recorded in the Current Fund at the assessed
valuation when such property was acquired and is fully reserved.
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.
Inventories of Supplies - The cost of inventories of supplies for all funds are recorded as
expenditures at the time individual items are purchased. The cost of inventories is not included on
the various balance sheets.
General Fixed Assets -- The City has developed a fixed assets accounting and reporting system,
as promulgated by the Division of Local Government Services, which differs in certain respects
from generally accepted accounting principles.
As required by New Jersey Statutes, foreclosed property is reported in the current operating fund
of the municipality.
21
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
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 drainage systems are not capitalized.
All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is
not available except for land which is valued at estimated market value on the date of acquisition.
Expenditures for long lived assets with an original cost in excess of $5,000 are capitalized.
No depreciation has been provided for in the financial statements.
Expenditures for construction in progress are recorded in the Capital funds until such time as the
construction is completed and put into operation.
Fixed assets acquired through grants in aid or contributed capital have not been accounted for
separately.
Levy of Taxes -- The County Board of Taxation certifies the tax levy of the municipality each year.
The tax levy is based on the assessed valuation of taxable property within the municipality. Taxes
are payable on the first day of February, May, August, and November. Any taxes that have not
been paid by 11th day of the 11th month in the fiscal year levied are subject to being included in
the tax sale and the lien enforced by selling the property in accordance with NJSA 54:5 et. seq.
The municipality is responsible for remitting 100% of the school and county taxes to the respective
agency. The loss for delinquent or uncollectible accounts is borne by the municipality and not the
school district or county.
Interest on Delinquent Taxes – It is the policy of the City of Port Republic to collect interest for the
nonpayment of taxes or assessments on or before the date when they would become delinquent.
The Tax Collector is authorized to charge eight percent (8%) per annum on the first $1,500.00 of
taxes becoming delinquent after due date and eighteen percent (18%) per annum on any amount
of taxes in excess of $1,500.00 becoming delinquent after due date and if a delinquency is in
excess of $10,000.00 and remains in arrears beyond December 31st, an additional penalty of six
percent (6%) shall be charged against the delinquency. There is a ten day grace period.
Capitalization of Interest -- It is the policy of the City of Port Republic to treat interest on projects as
a current expense and the interest is included in the current operating budget.
Use of Estimates -- The preparation of financial statements in conformity with generally accepted
accounting principles or the statutory basis of accounting requires management to make estimates
and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
22
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
D. Required Financial Statements
The State of New Jersey requires the following financial statements to be presented for each fund
on the regulatory basis of accounting: Balance Sheet, Statement of Operations and Changes in
Fund Balance, Statement of Revenue and Statement of Expenditures. These statements differ
from those presented under Generally Accepted Accounting Principles, which requires a Statement
of Net Position and Statement of Activities in addition to the fund financial statements.
E. Comparative Data
Comparative total data for the prior year has been presented in the accompanying Balance Sheets
and Statement of Operations in order to provide an understanding of changes in the City's financial
position. However, comparative (i.e., presentation of prior year totals by fund type) data have not
been presented in the Statement of Revenue-Regulatory Basis and Statement of Expenditures-
Regulatory Basis since their inclusion would make the statements unduly complex and difficult to
read.
F. Recent Accounting Pronouncements Not Yet Effective
In November 2016, the Governmental Accounting Standards Board (GASB) issued Statement No.
83 “Certain Asset Retirement Obligations”. This statement, which is effective for fiscal periods
beginning after June 15, 2018, will not have any effect on the Borough’s financial reporting.
In January 2017, the Governmental Accounting Standards Board (GASB) issued Statement No. 84
“Fiduciary Activities”. This statement, which is effective for fiscal periods beginning after December
15, 2018, will not have any effect on the Borough’s financial reporting.
In June 2017, the Governmental Accounting Standards Board (GASB) issued Statement No. 87
“Leases”. This statement, which is effective for fiscal periods beginning after December 15, 2019,
will not have any effect on the Borough’s financial reporting.
In April 2018, the Governmental Accounting Standards Board (GASB) issued Statement No. 88
“Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements”. This
statement, which is effective for fiscal periods beginning after June 15, 2019, will not have any
effect on the Borough’s financial reporting.
In June 2018, the Governmental Accounting Standards Board (GASB) issued Statement No. 89
“Accounting for Interest Cost Incurred before the End of a Construction Period”. This statement,
which is effective for fiscal periods beginning after December 15, 2019, will not have any effect on
the Borough’s financial reporting.
In August 2018, the Governmental Accounting Standards Board (GASB) issued Statement No. 90
“Majority Equity Interests - an amendment of GASB Statements No. 14 and No. 61”. This
statement, which is effective for fiscal periods beginning after December 15, 2018, will not have
any effect on the Borough’s financial reporting.
In May 2019, the Governmental Accounting Standards Board (GASB) issued Statement No. 91,
“Conduit Debt Obligations”. This statement is effective for fiscal periods beginning after December
15, 2020, will not have any effect on the City’s financial reporting.
23
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Note 2: BUDGETARY INFORMATION
Under New Jersey State Statutes, the annual budget is required to be a balanced cash basis
document. To accomplish this, the municipality is required to establish a reserve for uncollected
taxes. The 2018 and 2017 statutory budgets included a reserve for uncollected taxes in the
amount of $92,606 and $92,600. To balance the budget, the municipality is required to show a
budgeted fund balance. The amount of fund balance budgeted to balance the 2018 and 2017
statutory budgets was $220,000 and $190,000.
The Chief Financial Officer has the discretion of approving intra department budgetary transfers
throughout the year. Inter department transfers are not permitted prior to November 1. After
November 1 these transfers can be made in the form of a resolution and approved by City Council.
There were no significant budget transfers during the 2018 or 2017 calendar years
NJSA 40A:4-87 permits special items of revenue and appropriations to be inserted into the annual
budget when the item has been made available by any public or private funding source and the
item was not determined at the time of budget adoption. During 2017 and 2016, the following
significant budget insertions were approved:
Budget Category
2018
2017
Current Fund:
Clean Communities
4,000.00
4,000.00
$
Municipal Alliance
10,323.00
7,742.00
Recycling Tonnage
-
1,592.25
The City may make emergency appropriations, after the adoption of the budget, for a purpose
which was not foreseen at the time the budget was adopted or for which adequate provision was
not made therein. This type of appropriation shall be made to meet a pressing need for public
expenditure to protect or promote the public health, safety, morals or welfare or to provide
temporary housing or public assistance prior to the next succeeding fiscal year. Emergency
appropriations, except those classified as a special emergency, must be raised in the budgets of
the succeeding year. Special emergency appropriations are permitted to be raised in the budgets
of the succeeding three or five years. The City approved a special emergency appropriation in
2016 for $60,000. The emergency was for a revaluation. The unfunded balance as of December
31, 2018 was $24,000. The City approved a special emergency appropriation in 2014 for $29,000
for revisions of the tax maps. The unfunded balance as of December 31, 2018 was $5,727.
24
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Note 3: INVESTMENTS
Interest Rate Risk. The municipality 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. However, New Jersey Statutes 40A:5-15.1(a) limits the length of time for
most investments to 397 days.
Credit Risk. New Jersey Statutes 40A:5-15.1(a) limits municipal investments to those specified in
the Statutes. The type of allowable investments are Bonds of the United States of America or of
the local unit or school districts of which the local unit is a part of: obligations of federal agencies
not exceeding 397 days; government money market mutual funds; the State of New Jersey Cash
Management Plan; local government investment pools; or repurchase of fully collateralized
securities.
Concentration of Credit Risk. The municipality places no limit on the amount the City can invest
in any one issuer.
Note 4: CASH
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 municipality’s policy is based on
New Jersey Statutes requiring cash be deposited only in New Jersey based banking institutions
that participate in the New Jersey Governmental Depository Protection Act (GUDPA) or in qualified
investments established in New Jersey Statutes 40A:5-15.1(a) that are treated as cash
equivalents. Under the act, all demand deposits are covered by the Federal Deposit Insurance
Corporation (FDIC). Public funds owned by the municipality in excess of FDIC insured amounts
are protected by GUDPA. However, GUDPA does not protect intermingled trust funds such as
salary withholdings, bail funds or fund that may pass to the municipality relative to the happening of
a future condition. As of December 31, 2018 and 2017, $0 of the municipality’s bank balance of
$1,472,112.05 and $1,543,144.46 was exposed to custodial credit risk.
Note 5: FIXED ASSETS
The following schedules are a summarization of the changes in general fixed assets for the
calendar years ended December 31, 2018 and 2017:
Balance
Retirements/
Balance
12/31/2017
Additions
Adjustments
12/31/2018
Land
2,060,028.00
$
2,060,028.00
Building
1,234,981.91
1,234,981.91
Transportation Equipment
218,218.00
5,640.00
223,858.00
3,513,227.91
$
5,640.00
-
3,518,867.91
25
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Balance
Balance
12/31/2016
Additions
Retirements
12/31/2017
Land
2,060,028.00
$
2,060,028.00
Building
1,222,583.91
12,398.00
1,234,981.91
Transportation Equipment
218,218.00
218,218.00
3,500,829.91
$
12,398.00
-
3,513,227.91
Note 6: SHORT-TERM OBLIGATIONS
Balance
12/31/17
Issued
Retired
Balance
12/31/18
Bond Anticipation
Notes payable:
General
300,000.00
$
100,000.00
200,000.00
300,000.00
$
-
100,000.00
200,000.00
Balance
12/31/16
Issued
Retired
Balance
12/31/17
Bond Anticipation
Notes payable:
General
500,000.00
$
200,000.00
300,000.00
500,000.00
$
-
200,000.00
300,000.00
The note was issued on September 24, 2015 and is due and payable on September 23, 2016 with
interest at 1.5%. As of December 31, 2018 the City has authorized but not issued bonds in the
amount of $36,249 in the General Capital Fund.
Summary of Municipal Debt
Year 2018
Year 2017
Year 2016
Issued:
General - Bonds and Notes
$ 200,000.00 300,000.00 500,000.00
Total Issued
200,000.00 300,000.00 500,000.00
Authorized but not issued:
General - Bonds and Notes
36,249.00 36,249.00 36,249.00
Total Authorized But Not Issued
36,249.00
36,249.00
36,249.00
Total Bonds & Notes Issued and
Authorized But Not Issued
$ 236,249.00 $ 336,249.00 536,249.00
26
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Summary of Statutory Debt Condition - Annual Debt Statement
The summarized statement of debt condition which follows is prepared in accordance with the
required method of setting up the Annual Debt Statement and indicates a statutory net debt of
.194%.
Gross Debt
Deductions
Net Debt
Local School District Debt
-
$
-
-
General Debt
236,249.00
-
236,249.00
236,249.00
$
-
236,249.00
Net Debt $236,249 ÷ Equalized Valuation Basis per N.J.S.A. 40A:2-2 as amended,
$121,911,959.00 = .194%.
Borrowing Power Under N.J.S.A. 40A:2-6 as Amended
3 1/2% of Equalized Valuation Basis ( Municipal)
4,266,918.57
$
Net Debt
236,249.00
Remaining Borrowing Power
4,030,669.57
$
The City of Port Republic School District, as a K-8 school district, is permitted to borrow up to 3%
of the average equalized valuation for the past three years. State statutes allow a school district to
exceed the districts limitation with voter approval. Any amount approved by the voters in excess of
the limit is treated as an impairment of the municipal limit.
Note 7: FUND BALANCES APPROPRIATED
Fund balances at December 31, 2018 and 2017, which were appropriated and included as
anticipated revenue in their own respective funds for the year ending December 31, 2019 and 2018
were as follows:
2019
2018
Current Fund
$
270,110
220,000
27
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Note 8: DEFERRED CHARGES TO BE RAISED IN SUCCEEDING BUDGETS
Certain expenditures are required to be deferred to budgets of succeeding years. At December 31,
2018, the following deferred charges are shown on the balance sheets of the various funds:
Balance
December
31, 2018
2019 Budget
Appropriation
Balance to
Succeeding
Current fund:
Special Emergency Appropriation
24,000.00
$
12,000.00
12,000.00
Special Emergency Appropriation
5,727.00
5,727.00
-
29,727.00
$
17,727.00
12,000.00
The appropriations in the 2019 Budget are not less than that required by statute.
Note 9: SCHOOL TAXES
Local District School Taxes have been raised and a liability deferred by statute, resulting in the
school tax payable set forth in the Current Fund liabilities as follows:
12/31/2018
12/31/2017
Balance of Tax
896,645.52
$
868,103.04
Deferred
460,000.00
460,000.00
Tax Payable
436,645.52
$
408,103.04
Note 10: TAXES COLLECTED IN ADVANCE
Taxes collected in advance are recorded as cash liabilities in the financial statements. Following is
a comparison of the liability for the previous two years:
Balance
12/31/18
Balance
12/31/17
Prepaid Taxes
64,535.53
$
242,597.44
Cash Liability for Taxes Collected in Advance
64,535.53
$
242,597.44
28
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Note 11: PENSION FUNDS
Description of Plans
Substantially all of the City's employees participate in the Public Employees' Retirement System
(PERS) cost sharing multiple-employer defined benefit pension plan which has been established
by State Statute and are administered by the New Jersey Division of Pensions and Benefits
(Division). According to the State of New Jersey Administrative Code, all obligations of the System
will be assumed by the State of New Jersey should the system terminate. The Division issues a
publicly available financial report that includes the financial statements and required supplementary
information for the systems. This report may be obtained by writing to the Division of Pension and
Benefits, PO Box 295, Trenton, New Jersey 08625 or the report can be accessed on the internet at
-
http://www.state.nj.us/treasury/pensions/annrprts.shtml.
Public Employees’ Retirement System
The Public Employees' Retirement System was established in January, 1955 under the provisions
of N.J.S.A. 43:15A to provide retirement, death, disability and medical benefits to certain qualified
members. The PERS is a cost-sharing multiple-employer plan. Membership is mandatory for
substantially all full time employees of the State or any county, municipality, school district or public
agency provided the employee is not required to be a member of another State-administered
retirement system.
Funding Policy
The contribution policy is set by N.J.S.A. 43:15A, Chapter 62, P.L. of 1994, Chapter 115, P.L. of
1997 and N.J.S.A. 18:66, and requires contributions by active members and contributing
employers. Plan member and employer contributions may be amended by State of New Jersey
legislation. PERS provided for employee contributions of 7.20% through June 30, 2017 and 7.34%
thereafter of employee’s annual compensation, as defined. Employers are required to contribute to
an actuarially determined rate in PERS. The City’s contributions to PERS for the years ended
December 31, 2018, 2017, and 2016 were $28,186.58, $25,746.00, and $25,120.00, respectively.
The total payroll for the year ended December 31, 2018, 2017 and 2016 was $314,009.69,
$303,668.63, and $282,175.77, respectively. Payroll covered by PERS was $195,126.00,
$192,934.00, and $196,302.00.
Significant Legislation
Chapter 78, P.L. 2011, effective June 28, 2011 made various changes to the manner in which the
Public Employees’ Retirement System (PERS) and the Police and Firemen’s Retirement System
(PFRS) operate and to the benefit provisions of those systems.
Chapter 78’s provisions impacting employee pension and health benefits include:
•
New members of the PERS hired on or after June 28, 2011 (Tier 5 members) will need 30
years of creditable service and age 65 for receipt of the early retirement benefit without a
reduction of ¼ of 1% for each month that the member is under age 65.
29
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
•
The eligibility age to qualify for a service retirement in the PERS is increased from age 63 to
65 for Tier 5 members.
•
The annual benefit under special retirement for new PFRS members enrolled after June 28,
2011 (Tier 3 members), will be 60% instead of 65% of the member’s final compensation
plus 1% for each year of creditable service over 25 years but not to exceed 30 years.
•
Increases in active member contribution rates. PERS active member rates increase from
5.5% of annual compensation to 6.5% plus an additional 1% phased-in over 7 years; PFRS
active member rate increase from 8.5% to 10%. For fiscal year 2013, the member
contribution rates increased in October 2011. The phase-in of the additional incremental
member contribution rates 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 is suspended until reactivated as permitted by this law.
•
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 Chapter 78’s effective date with a minimum
contribution required to be at least 1.5% of salary.
•
In addition, this new legislation changes the method for amortizing the pension systems’
unfunded accrued liability (from a level percent of pay method to a level dollar of pay).
Chapter 1, P.L. 2010, effective May 21, 2010, made a number of changes to the State-
administered retirement systems concerning eligibility, the retirement allowance formula, the
definition of compensation, the positions eligible for service credit, the non-forfeitable right to a
pension, the prosecutor’s part of the PERS, special retirement under the PFRS, and employer
contributions to the retirement systems.
Also, Chapter 1, P.L. 2010 changed the membership eligibility criteria for new members of PERS
from the amount of annual compensation to the number of hours worked weekly. Also, it returned
the benefit multiplier for new members of PERS to 1/60th from 1/55th, and it provided that new
members of PERS have the retirement allowance calculated using the average annual
compensation for the last five years of service instead of the last three years of service. New
members of PERS will no longer receive pension service credit from more than one employer.
Pension service credit will be earned for the highest paid position only. This law also closed the
Prosecutors Part of the PERS to new members and repealed the law for new members that
provided a non-forfeitable right to receive a pension based on the laws of the retirement system in
place at the time 5 years of pension service credit is attained. The law also requires the State to
make its full pension contribution, defined a 1/7th of the required amount, beginning in fiscal years
2012.
Chapter 3, P.L. 2010, effective May 21, 2010, replaced the accidental and ordinary disability
retirement for new members of the PERS with disability insurance coverage similar to that provided
by the State to individuals enrolled in the State’s Defined Contribution Retirement Program.
Chapter 92, P.L. 2007 implemented certain recommendations contained in the December 1, 2006
report of the Joint Legislative Committee on Public Employee Benefits Reform; established a
DCRP for elected and certain appointed officials, effective July 1, 2007; the new pension loan
interest rate became 4.69% per year, and an $8.00 processing fee per loan was charged, effective
30
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
January 1, 2008. The legislation also removed language from existing law that permits the State
Treasurer to reduce employer pension contributions needed to fund the Funds and Systems when
excess assets are available.
Note 12: PENSION LIABILITIES
In 2012, the Governmental Accounting Standards Board issued GASB statement 68. This
statement is effective for fiscal years beginning after June 15, 2014. This statement changes the
method of reporting the municipality’s pension liabilities. However, due to the fact that the
municipality reports on the regulatory basis of accounting, no financial statement impact will be
recognized.
The following represents the municipality’s pension liabilities as June 30, 2018:
Public Employees’ Retirement System
The Municipality has a liability of $525,989 for its proportionate share of the net pension liability.
The net pension liability was measured as of June 30, 2018, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of July 1, 2017 that
was rolled forward to June 30, 2018. The Municipality’s proportion of the net pension liability was
based on a projection of the Municipality’s long-term share of contributions to the pension plan
relative to the projected contributions of all participating employers, actuarially determined. At
June 30, 2018, the Municipality’s proportion would be 0.00267142020%, which would be an
decrease of 11.27% from its proportion measured as of June 30, 2017.
For the year ended December 31, 2018, the Municipality would have recognized pension expense
of $36,847. At December 31, 2018, the Municipality would report deferred outflows of resources
and deferred inflows of resources related to PERS from the following sources:
Deferred Outflows
Deferred Inflows
of Resources
of Resources
Differences between expected & actual experience
10,031
$
(2,712.00)
Changes of assumptions
86,674
(168,183.00)
Changes in proportion
47,440
(66,544.00)
Net difference between projected and actual earnings
on pension plan investments
-
(4,934.00)
Total
144,145
$
(242,373)
Amounts that would be reported as deferred outflows of resources and deferred inflows of
resources related to pensions would be recognized in pension expense as follows:
31
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Year ended
June 30,
2019
3,963
$
2020
(6,793)
2021
(43,568)
2022
(39,034)
2023
(12,796)
Total
(98,228)
$
Actuarial Assumptions
The total pension liability for the June 30, 2018 measurement date was determined by an actuarial
valuation as of July 1, 2017, which was rolled forward to June 30, 2018. This actuarial valuation
used the following assumptions, applied to all periods in the measurement:
Inflation rate
2.25%
Salary increases:
Through 2026
1.65% - 4.15% (based on age)
Thereafter
2.65% - 5.15% (based on age)
Investment rate of return:
7.00%
Pre-retirement mortality rates were based on the RP-2000 Employee Preretirement Mortality Table
for male and female active participants. For State employees, mortality tables are set back 4 years
for males and females. For local employees, mortality tables are set back 2 years for males and 7
years for females. In addition, the tables provide for future improvements in mortality from the
base year of 2013 using a generational approach based on the Conduent modified 2014 projection
scale. Post-retirement mortality rates were based on the RP-2000 Combined Healthy Male and
Female Mortality Tables (set back 1 year for males and females) for service retirements and
beneficiaries of former members and a one-year static projection based on mortality improvement
Scale AA. In addition, the tables for service retirements and beneficiaries of former members
provide for future improvements in mortality from 2012 to 2013 using Projection Scale AA and
using a generational approach based on the Conduent 2014 projection scale thereafter. Disability
retirement rates used to value disabled retirees were based on the RP-2000 Disabled Mortality
Table (set back 3 years for males and set forward 1 year for females).
The actuarial assumptions used in the July 1, 2017 valuation were based on the results of an
actuarial experience study for the period July 1, 2011 to June 30, 2014. It is likely that future
experience will not exactly conform to these assumptions. To the extent that actual experience
deviates from these assumptions, the emerging liabilities may be higher or lower than anticipated.
The more experience deviates, the larger the impact on future financial statements.
In accordance with State statute, the long-term expected rate of return on plan investments (7.00%
at June 30, 2018) is determined by the State Treasurer, after consultation with the Directors of the
32
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Division of Investments and Division of Pensions and Benefits, the board of trustees and the
actuaries. The long term expected rate of return was determined using a building block method in
which best-estimate ranges of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each major asset class. These ranges
are combined to produce the long-term expected rate of return by weighting the expected future
real rates of return by the target asset allocation percentage and by adding expected inflation.
Best estimates of arithmetic real rates of return for each major asset class included in PERS’s
target asset allocation as of June 30, 2018 are summarized in the following table:
Long-Term
Target
Expected Real
Asset Class
Allocation
Rate of Return
Risk mitigation strategies
5.00%
5.51%
Cash equivalents
5.50%
1.00%
U.S. Treasuries
3.00%
1.87%
Investment grade credit
10.00%
3.78%
High yield
2.50%
6.82%
Global diversified credit
5.00%
7.10%
Credit oriented hedge funds
1.00%
6.60%
Debt related private equity
2.00%
10.63%
Debt related real estate
1.00%
6.61%
Private real estate
2.50%
11.83%
Equity related real estate
6.25%
9.23%
U.S. equity
30.00%
8.19%
Non-U.S. developed markets equity
11.50%
9.00%
Emerging markets equity
6.50%
11.64%
Buyouts/venture capital
8.25%
13.08%
Discount Rate
The discount rate used to measure the total pension liability was 5.66% as of June 30, 2018. This
single blended discount rate was based on the long-term expected rate of return on pension plan
investments of 7.00%, and a municipal bond rate of 3.87% as of June 30, 2018, based on the
Bond Buyer Go 20-Bond Municipal Bond Index which includes tax-exempt general obligation
municipal bonds with an average rating of AA/Aa or higher. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members will be made at the
current member contribution rates and that contributions from employers will be made based on
the contribution rate in the most recent fiscal year. The State employer contributed 50% of the
actuarially determined contributions and the local employers contributed 100% of the actuarially
determined contributions. Based on those assumptions, the plan’s fiduciary net position was
projected to be available to make projected future benefit payments of current plan members
through June 30, 2046. Therefore, the long-term expected rate of return on plan investments was
applied to projected benefit payments through June 30, 2043 and the municipal bond rate was
applied to projected benefit payments after that date in determining the total pension liability.
33
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Sensitivity of the Municipality’s proportionate share of the net pension liability to changes in the
discount rate.
The following presents the Municipality’s proportionate share of the net pension liability calculated
using the discount rate of 5.66%, as well as what the Municipality’s proportionate share of the net
pension liability would be if it were calculated using a discount rate that is 1-percentage point lower
(4.66%) or 1-percentage point higher (6.66%) than the current rate:
1%
Current Discount
1%
Decrease
Rate
Increase
(4.66%)
(5.66%)
(6.66%)
Municipality's proportionate share of
the net pension liability
632,372
$
525,989
436,794
Pension plan fiduciary net position.
Detailed information about the pension plan’s fiduciary net position is available in the separately
issued PERS financial report.
Note 13: POST-RETIREMENT BENEFITS
Plan Description The City of Port Republic contributes to the State Health Benefits Program
(SHBP) a cost-sharing, multi-employer defined benefit post-employment healthcare plan
administered by the State of New Jersey Division of Pensions and Benefits. The SHBP was
established in 1961 under N.J.S.A. 52:14-17.25 et seq. to provide health benefits to State
employees, retirees, and their dependents.
The SHBP was extended to employees, retirees, and dependents of participating local public
employers in 1964. Local employers must adopt a resolution to participate in the SHBP. Rules
governing the operation and administration of the program are found in Title 17, Chapter 9 of the
New Jersey Administrative Code. SHBP provides medical, prescription drugs, mental
health/substance abuse, and Medicare Part B reimbursement to retirees and their covered
dependents.
The State Health Benefits Commission is the executive body established by statute to be
responsible for the operation of the SHBP. The State of New Jersey Division of Pensions and
Benefits issues a publicly available financial report that includes financial statements and required
supplementary information for the SHBP. That report may be obtained by writing to: State of New
Jersey Division of Pensions and Benefits, P.O. Box 295, Trenton, NJ 08625-0295 or by visiting
their website at to http://www.state.nj.us/treasury/pensions/shbp.htm
34
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Funding Policy Participating employers are contractually required to contribute based on the
amount of premiums attributable to their retirees. Post-retirement medical benefits under the plan
have been funded on a pay-as-you-go basis since 1994. Prior to 1994, medical benefits were
funded on an actuarial basis.
Contributions to pay for the health premiums of participating retirees in the SHBP are billed to the
City of Port Republic on a monthly basis. The rates charged by the system for the year ended
December 31, 2018 vary according to the type of coverage selected by the retiree and range from
$378 to $1,770 monthly per retiree.
The City of Port Republic contributions to SHBP for post-retirement benefits for the year ended
December 31, 2018 and 2017, were $0 and $0 respectively, which equaled the required
contribution for the year.
Note 14: ACCRUED SICK AND VACATION BENEFITS
The City has permitted employees to accrue unused vacation and sick pay, which may be taken as
time off. The City allows the employees to accumulate a maximum of 24 days of sick time and 7
days of vacation time. The City has no policy of payments to employees at retirement or
termination.
Note 15: ECONOMIC DEPENDENCY
The City of Port Republic is not economically dependent on any one business or industry as a
major source of tax revenue for the City.
Note 16: RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of
assets; errors and omissions; injuries to employees; and natural disasters.
Property and Liability Insurance - The City maintains commercial insurance coverage for
property, liability and surety bonds. During the year ended December 31, 2018 and 2017 the City
did not incur claims in excess of their coverage and the amount of coverage did not significantly
decrease.
The City is a member of the Atlantic County Joint Insurance Fund (JIF) and the Municipal Excess
Liability Fund (MEL) which also includes other municipalities throughout the region. The City is
obligated to remit insurance premiums into these funds for sufficient insurance coverage. There is
an unknown contingent liability with the Atlantic County Municipal Joint Insurance Fund if there is a
catastrophic insurance claim from any member of the fund. The City has a general liability limit of
$100,000 under JIF, which increases to $5,000,000 under MEL.
35
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
New Jersey Unemployment Compensation Insurance – The City has elected to fund its New
Jersey Unemployment Compensation Insurance under the “Benefit Reimbursement Method”.
Under this plan, the City 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 City is billed
quarterly for amounts due to the State. The following is a summary of City contributions, employee
contributions, reimbursements to the State for benefits and the ending balance of the City’s trust
fund for the previous three years:
Calendar
Year
City
Contributions
Employee
Contributions
Amount
Reimbursed
Ending
Balance
2018
-
$
694.04
-
6,794.83
2017
-
598.05
91.66
6,100.79
2016
-
867.00
5,594.40
Note 16: LENGTH OF SERVICE AWARDS PROGRAM (UNAUDITED)
In 2001, the voters of the City of Port Republic approved the establishment of a Length of Service
Awards Program (LOSAP) Deferred Compensation Plan. This plan is made available to all bona
fide eligible volunteers who are performing qualified services which are defined as fire fighting and
prevention services, emergency medical services, and ambulance services pursuant to Section
457 of the Internal Revenue Code of 1986, as amended, except for provisions added by reason of
the LOSAP as enacted into federal law in 1997. The establishment of this LOSAP will also comply
with New Jersey Public Law 1997, Chapter 388 and the LOSAP document.
Note 17: DEFERRED COMPENSATION
Employees of the City of Port Republic may participate in a deferred compensation plan adopted
under the provisions of Internal Revenue Code Section 457 (Deferred Compensation Plans With
Respect to Service for State and Local Governments). The deferred compensation plan is
available to all employees of the City. Under the plan, employees may elect to defer a portion of
their salaries and avoid paying taxes on the deferred portion until the withdrawal date. The
deferred compensation amount is not available for withdrawal by employees until termination,
retirement, death, or unforeseeable emergency.
An unrelated financial institution administers the deferred compensation plan. Under the terms of
an IRC Section 457 deferred compensation plan, all deferred compensation and income
attributable to the investment of the deferred compensation amounts held by the financial
institution, until paid or made available to the employees or beneficiaries, are the property of the
employees.
As part of its fiduciary role, the City has an obligation of due care in selecting the third party
administrator. In the opinion of the City's legal counsel, the City has acted in a prudent manner
and is not liable for losses that may arise from the administration of the plan.
36
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Note 18: CONTINGENT LIABILITIES
From time to time, the City is a defendant in legal proceedings relating to its operations as a
municipality. In the best judgment of the City’s management, the outcome of any present legal
proceedings will not have any adverse material effect on the accompanying financial statements.
Note 19: INTERFUND BALANCES
During the most current calendar year ended December 31, 2018, the following interfunds were
included on the balance sheets of the various funds of the City of Port Republic:
Due
Due
From
To
Current Fund:
Animal Control Fund
$ 3,234.08
Open Space Trust
23,035.00
Other Trust Funds
295.05
General Capital
20,780.41
Grant Fund
25,118.63
Grant Fund:
Current Fund
25,118.63
Animal Control Fund:
Current Fund
3,234.08
Other Trust Funds
5,675.33
Trust Fund:
Current - Open Space Trust
23,035.00
Current - Other Trusts
295.05
Animal Control Fund - Other Trusts
5,675.33
General Capital Fund:
Current Fund
20,780.41
78,138.50
$
78,138.50
The interfunds occurred since the Grant and the Capital funds do not have separate bank
accounts. The interfund with the Animal Control Fund is due to the statutory excess resulting
during the current year. The interfund in the other trust funds is due to interest earnings that were
not transferred to the Current Fund prior to December 31 and bills paid by the Current Fund.
37
CITY OF PORT REPUBLIC
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2018 AND 2017
Note 20: OPEN SPACE TAXING DISTRICT
The voters of the City approved the establishment of an Open Space, Recreation, Farmland and
Historic Preservation Trust Fund Taxing District effective January 1, 2005. The amount assessed
each year, $.02 per $100 of assessed valuation, will be placed in an interest bearing account for
the acquisition, development, capital maintenance and payment of debt service on lands acquired
for recreation and conservation purposes. During 2018, $23,035.00 was raised and was paid to
the Open Space Trust Fund.
Note 21: SUBSEQUENT EVENTS
The City has evaluated subsequent events through July 19, 2019, the date which the financial
statements were available to be issued and identified no events requiring disclosure.
38
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SUPPLEMENTARY INFORMATION
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Independent Auditor’s Report
The Honorable Mayor and
Member of City Council
City of Port Republic, New Jersey
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the regulatory basis financial statements of the
various funds and account group as of and for the year ended December 31, 2018, and the related notes
to the financial statements, which collectively comprise the City’s basic financial statements, and have
issued our report thereon dated July 19, 2019, which was adverse due to being presented in accordance
with the New Jersey regulatory basis of accounting.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s control over
financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of the City’s internal control.
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 entity’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 identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’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 no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
39
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 entity’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 entity’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Ford, Scott & Associates, L.L.C.
FORD, SCOTT & ASSOCIATES, L.L.C.
CERTIFIED PUBLIC ACCOUNTANTS
Nancy Sbrolla
Nancy Sbrolla
Certified Public Accountant
Registered Municipal Accountant
No. 542
July 19, 2019
40
A-4
Balance December 31, 2017
$
1,454,052.11
Increased by Receipts:
Taxes Receivable
2,764,388.20
Delinquent Taxes
83,258.90
Revenue Accounts Receivable
275,562.45
Miscellaneous Revenue
73,578.99
Prepaid Taxes
64,535.53
Due to Grants
36,203.40
Due from Clerk
Due from Other Trust
4,076.47
State of New Jersey
Senior Citizens and Veterans
13,036.85
Marriage Licenses
25.00
DCA Fees
2,175.00
Reserve for Gravel
8,250.00
3,325,090.79
4,779,142.90
Decreased by Disbursements:
Current Year Appropriation
916,835.82
Prior Year Appropriations
13,632.44
County Taxes
682,673.79
Local District School Taxes
1,764,752.52
County Added Taxes
5,973.38
Due to Federal and State Grant Fund
10,879.61
Due to Payroll
Due to State of New Jersey
Marriage Licenses
25.00
DCA Fees
1,936.00
Due to Municipal Open Space
66,641.17
Petty Cash
50.00
3,463,399.73
Balance December 31, 2018
$
1,315,743.17
Current Fund
CURRENT FUND
SCHEDULE OF CASH - TREASURER
41
Exhibit A - 5
Transferred
Balance
Current
To Tax
Balance
Year
Dec. 31, 2017
Year Levy
Added Taxes
2017
2018
Adjustments
Title Lien
Arrears
Dec. 31, 2018
Arrears
$
-
-
2017
83,258.90
83,258.90
-
83,258.90
-
-
-
83,258.90
-
-
-
-
2018
3,065,736.28
30,320.31
242,597.44
2,777,638.20
135.55
1,069.32
74,616.08
$
83,258.90
3,065,736.28
30,320.31
242,597.44
2,860,897.10
135.55
1,069.32
-
74,616.08
2,847,647.10
Cash Receipts
13,250.00
Senior Citizens and Veterans
2,860,897.10
Analysis of Current Year Tax Levy
Tax Yield:
2,885,435.84
General Property Tax
3,065,736.28
Added Taxes (54:4-63.1 et. Seq.)
30,320.31
3,096,056.59
Tax Levy:
General County Taxes
613,205.30
County Library Taxes
41,064.64
County Open Space Taxes
1,632.40
County Health Taxes
26,771.45
County Added and Omitted Taxes
2,070.86
Municipal Open Space Tax
23,035.00
Total County Taxes
707,779.65
Local School District Tax
1,793,295.00
Local Tax for Municipal Purposes
586,870.00
Add: Additional Tax Levied
8,111.94
594,981.94
3,096,056.59
CURRENT FUND
SCHEDULE OF TAXES RECEIVABLE AND ANALYSIS OF PROPERTY TAX LEVY
Collections by Cash
42
Exhibit A - 6
Balance December 31, 2017
$
6,678.94
Increased by:
Transfers from Taxes Receivable
1,069.32
Interest and Costs Accrued by Sale
1,069.32
7,748.26
Decreased by:
Collections
-
-
Balance December 31, 2018
$
7,748.26
CURRENT FUND
SCHEDULE OF TAX TITLE AND OTHER LIENS
43
Exhibit A - 7
Balance
Accrued
Collected by
Balance
Dec. 31, 2017
in 2018
Treasurer
Dec. 31, 2018
Interest on Taxes
$
-
15,477.13
15,477.13
-
Fines and Costs:
Municipal Court
2,011.64
23,725.02
23,329.63
2,407.03
Energy Receipts Tax
-
176,307.00
176,307.00
-
Communication Tower Rental
-
57,457.91
57,457.91
-
Investment Interest
-
2,990.78
2,990.78
-
Miscellaneous Revenue Not Anticipated
74,608.15
74,608.15
-
$
2,011.64
350,565.99
350,170.60
2,407.03
Reserves
-
Cash
350,170.60
350,170.60
CURRENT FUND
SCHEDULE OF REVENUE ACCOUNTS RECEIVABLE
44
Exhibit A - 8
Balance
Balance
After
Paid or
Balance
Over-
Dec. 31, 2017
Transfers
Charges
Lapsed
Expended
OPERATIONS WITHIN "CAPS"
GENERAL GOVERNMENT:
Municipal Clerk
Other Expenses
$
6,288.67
6,288.67
407.35
5,881.32
-
Revenue Administration (Tax Collector)
Other Expenses
346.63
346.63
100.00
246.63
-
Tax Assessment Administration
Other Expenses
3,145.12
3,145.12
116.40
3,028.72
-
Legal Services and Costs
Other Expenses
3,753.21
3,085.21
1,061.91
2,023.30
-
MUNICIPAL COURT
Other Expenses
3,483.83
3,483.83
703.53
2,780.30
-
Public Defender (P.L. 1997, C.256)
Other Expenses
600.00
600.00
150.00
450.00
-
LAND USE ADMINISTRATION
Planning Board
Other Expenses
1,059.00
1,059.00
634.50
424.50
-
PUBLIC WORKS
Streets and Road Maintenance
Other Expenses
2,163.22
2,163.22
292.62
1,870.60
-
Garbage and Trash Removal
Other Expenses
4,147.71
4,815.71
4,815.57
0.14
-
Monitoring Wells
300.00
300.00
300.00
-
-
Building and Grounds
Other Expenses
4,861.34
4,861.34
4,240.56
620.78
-
HEALTH AND HUMAN SERVICES
Dog Regulation
Other Expenses
1,441.00
1,441.00
810.00
631.00
-
Other accounts with no change
47,888.50
47,888.50
47,888.50
-
$
79,478.23
79,478.23
13,632.44
65,845.79
-
CURRENT FUND
SCHEDULE OF APPROPRIATION RESERVES - PRIOR YEAR
45
Exhibit A - 9
Balance December 31, 2017
School Tax Payable
$
408,103.04
School Tax Deferred
460,000.00
868,103.04
$
Increased by:
Levy - School Year July 1, 2017 to June 30, 2018
1,793,295.00
2,661,398.04
Decreased by:
Payments
1,764,752.52
Balance December 31, 2018
School Tax Payable
436,645.52
School Tax Deferred
460,000.00
896,645.52
Current Year Liability for Local School District School Tax:
Tax Paid
1,764,752.52
Tax Payable Ending
436,645.52
2,201,398.04
Less: Tax Payable Beginning
408,103.04
Amount charged to Current Year Operations
1,793,295.00
$
CURRENT FUND
SCHEDULE OF LOCAL DISTRICT SCHOOL TAX
46
Exhibit A - 10
Transferred
Balance
From 2018
Balance
Purpose
Dec. 31, 2017
Revenues
Received
Adjustments
Dec. 31, 2018
FEDERAL GRANTS:
Help America Vote Act
$
8,575.00
8,575.00
Community Development Block Grant
38,600.00
38,600.00
Total Federal
47,175.00
-
-
-
47,175.00
STATE GRANTS:
New Jersey Transportation Grant
Church
88,383.50
88,383.50
Mill Road
7,088.11
7,088.11
Blake
93,392.50
26,657.50
66,735.00
Clean Communities Program
-
4,000.00
4,000.00
-
Wetland Preservation Park
6,508.00
6,508.00
Dept. of Environmental Protection
1,705.00
1,705.00
NJDEP
-
1,150.00
1,150.00
Alcohol Education Rehabilitation
-
-
Recycling Tonnage Grant
-
-
Atlantic County Municipal Alliance
8,788.56
10,323.00
2,745.90
16,365.66
Atlantic County Open Spaces
61,804.00
61,804.00
Atlantic County Open Spaces - 6
2,983.50
2,983.50
Atlantic County Open Spaces - 8
147,545.00
147,545.00
Comcast Technology
-
-
Total State
418,198.17
15,473.00
33,403.40
-
400,267.77
$
465,373.17
15,473.00
33,403.40
-
447,442.77
Cash
33,403.40
Unappropriated Reserves
-
33,403.40
CURRENT FUND
SCHEDULE OF FEDERAL AND STATE GRANTS RECEIVABLE
47
Exhibit A - 11
Reserve for
2018
Prior Encumbrances
Balance
Appropriated
Encumbrances
Appropriations
Disbursed
Encumbrances
Canceled
Dec. 31, 2018
FEDERAL GRANTS:
Help America Vote Act
$
8,575.00
8,575.00
Houing and Urban Development
Community Development Block Grant
37,075.00
37,075.00
Dept. of Environmental Protection
Municipal Stormwater Regulation
4,444.31
4,444.31
Total Federal
50,094.31
-
-
-
-
-
50,094.31
STATE GRANTS:
Recycling Tonnage
11,102.75
11,102.75
Clean Communities Grant
7,801.13
4,000.00
3,889.73
1,157.39
6,754.01
New Jersey Transportation Grant
Church
43,510.24
43,510.24
Mill Road
7,088.11
7,088.11
Blake
63,734.25
63,734.25
NJDEP
-
1,150.00
1,150.00
Comcast Technology
3,059.33
3,059.33
Alcohol Education Rehabilitation
6,654.25
6,654.25
Atlantic County Drug Alliance - County
21,587.93
10,323.00
4,189.88
800.00
26,921.05
Atlantic County Drug Alliance - Local
24,107.00
2,581.00
26,688.00
Atlantic County Open Spaces - 4
30,992.41
30,992.41
Atlantic County Open Spaces - 9
139,625.00
139,625.00
Total State
359,262.40
-
18,054.00
8,079.61
1,957.39
-
367,279.40
409,356.71
-
18,054.00
8,079.61
1,957.39
-
417,373.71
CURRENT FUND
SCHEDULE OF APPROPRIATED RESERVES FOR FERERAL AND STATE GRANTS
Balance December 31, 2017
48
Exhibit A - 12
Transferred
Balance
To 2018
Balance
Purpose
Dec. 31, 2017
Approproriations
Received
Adjustments
Dec. 31, 2018
STATE GRANTS:
Recycling Tonnage Grant
942.41
$
942.41
Municipal Alliance
2,050.63
2,050.63
Total State
2,993.04
$
-
-
-
2,993.04
CURRENT FUND
SCHEDULE OF FEDERAL AND STATE GRANTS - UNAPPROPRIATED RESERVES
49
Exhibit B-1
SCHEDULE OF CASH - TREASURER
Dog Licenses
Other
Balance December 31, 2017
$
3,774.30
111,450.58
Increased by Receipts:
Dog License Fees 2018
306.98
Due to State of New Jersey
110.40
Other
-
Due to Other Trusts
5,675.33
Miscellaneous Trust Reserves
2,220.54
Due to Current
66,641.17
6,092.71
68,861.71
9,867.01
180,312.29
Decreased by Disbursements
Statutory Expenditures
-
Due to State of New Jersey
111.40
Miscellaneous Trust Reserves
3,138.78
Due drom Dog
5,675.33
Due to Current
-
4,076.47
111.40
12,890.58
Balance December 31, 2018
$
9,755.61
167,421.71
TRUST FUND
50
Exhibit B-2
SCHEDULE OF RESERVE FOR DOG FUND EXPENDITURES
Balance December 31, 2017
$
898.57
Increased by:
Dog License Fees Collected
306.98
Other
-
306.98
1,205.55
Decreased by:
Statutory Excess
325.95
Expenditures under N.J.S. 4:19-15:11
325.95
Balance December 31, 2018
$
879.60
License Fees Collected:
Year
Amount
2017
$
437.60
2016
442.00
$
879.60
TRUST FUND
51
Exhibit B-3
SCHEDULE OF AMOUNT DUE TO CURRENT FUND - DOG LICENSE FUND
Balance December 31, 2017
$
2,908.13
Increased by:
Statutory Excess
325.95
325.95
3,234.08
Decreased by:
Payment
Balance December 31, 2018
$
3,234.08
Exhibit B-4
SCHEDULE OF AMOUNT DUE TO(FROM) STATE OF NEW JERSEY - DEPARTMENT OF HEALTH
Balance December 31, 2017
$
(32.40)
Increased by:
2018 State License Fees
110.40
110.40
78.00
Decreased by:
Disbursements to the State
111.40
Balance December 31, 2018
$
(33.40)
TRUST FUND
TRUST FUND
52
Exhibit B-5
Increased by
Collections
2018
made by
Balance
Budget
Current
Balance
Reserve
Dec 31, 2017
Receipts
Disbursements
Appropriation
Fund
Dec 31, 2018
Other Trust Funds
$
4,495.88
4,076.47
124.36
295.05
-
$
4,495.88
-
4,076.47
-
124.36
295.05
Decreased by
TRUST - OTHER FUNDS
SCHEDULE OF DUE TO/(FROM) CURRENT FUND
FOR THE YEAR ENDED DECEMBER 31, 2018
53
Exhibit B-6
Collections
Payments
made by
Receipts
Disbursments
made by
Balance
Interfunds
Current
Held in
Interfunds
Held in
Current
Balance
Reserve
Dec 31, 2017
Created
Fund
Trust
Cancelled
Trust
Fund
Dec 31, 2018
Unemployment Compensation
$
6,100.79
694.04
6,794.83
TTL Redemption
-
0.54
0.53
0.01
Escrow Deposits
15.78
124.36
1,262.56
1,402.70
(0.00)
Recycling Trust
2,749.95
1.69
2,751.64
Celebration Trust
4.71
4.71
(0.00)
Open Space Trust
141,938.42
23,035.00
253.34
165,226.76
Recreation Trust
244.83
0.15
244.98
Historical
1,177.50
0.73
1,178.23
Quality Properties Esrow
5,459.84
2.19
5,462.03
Holly Creek Construction Escrow
12,672.96
5.07
12,678.03
Gravel Security
1,500.25
0.23
1,500.48
Glenn Marienski Tenant
330.73
330.73
-
Oscar Halldorson Escrow
1,400.11
1,400.11
-
$
173,595.87
-
23,159.36
2,220.54
-
3,138.78
-
195,836.99
TRUST - OTHER FUNDS
SCHEDULE OF MISCELLANEOUS RESERVES
FOR THE YEAR ENDED DECEMBER 31, 2018
Increased by
Decreased by
54
Exhibit C - 2
Balance December 31, 2017
$
173.24
Increased by:
Interest
0.11
0.11
173.35
Decreased by:
No current year activity
-
-
Balance December 31, 2018
$
173.35
GENERAL CAPITAL FUND
SCHEDULE OF CASH - TREASURER
55
Exhibit C - 3
Balance
Improvement
Balance
Dec. 31, 2017
Miscellaneous
Debt Issued
Authorizations
Miscellaneous
From
To
Dec. 31, 2018
Fund Balance
$
29,917.00
29,917.00
Capital Improvement Fund
17,454.00
17,454.00
Due from Current Fund
(20,780.52)
0.11
(20,780.41)
Encumbrances Payable
-
-
Improvement Authorizations:
-
-
05-14
Computer/Equipment
(36,189.74)
(36,189.74)
02-13
Construction of New City Hall
-
-
03-11
Construction of New City Hall/Backhoe
-
-
01-02
Construction of Park and Landfill Closure
9,772.50
9,772.50
$
173.24
0.11
-
-
-
-
-
173.35
GENERAL CAPITAL FUND
ANALYSIS OF CASH
Receipts
Disbursements
Transfers
56
Exhibit C - 4
Balance December 31, 2017
$
17,454.00
Increased by:
Budget Appropriation
-
17,454.00
Decreased by:
Down Payment on Bond Ordinance
-
-
Balance December 31, 2018
$
17,454.00
GENERAL CAPITAL FUND
SCHEDULE OF CAPITAL IMPROVEMENT FUND
57
Exhibit C - 5
Balance December 31, 2017
$
-
No current year activity
Balance December 31, 2018
$
-
GENERAL CAPITAL FUND
SCHEDULE OF DEFERRED CHARGES TO FUTURE TAXATION - FUNDED
58
Exhibit C - 6
Raised in
Bond
Unexpended
Balance
2018
2018
Balance
Anticipation
Improvement
Dec. 31, 2017
Authorizations
Budget
Debt Issued
Dec. 31, 2018
Notes
Expenditures
Authorizations
Construction of New City Hall/Backhoe
$
300,000.00
100,000.00
200,000.00
200,000.00
Construction of New City Hall
-
-
-
Computer/Equipment
36,249.00
36,249.00
36,189.74
59.26
$
336,249.00
-
100,000.00
-
236,249.00
200,000.00
36,189.74
59.26
Improvement Authorizations Unfunded
59.26
Less:
Unexpended Proceeds of Bond
Anticipation Notes Issued:
Ord. Number
-
-
59.26
$
2014-5
2013-2
GENERAL CAPITAL FUND
SCHEDULE OF DEFERRED CHARGES TO FUTURE TAXATION - UNFUNDED
Improvement Description
Ord #
2011-3
Analysis of Balance
59
Exhibit C - 7
Deferred
Charges to
Ord.
Other
Future
Paid or
Date
Amount
Funded
Unfunded
Funding
Taxation
Charged
Funded
Unfunded
Computer/Equipment
6/17/2014
38,157.00
$
-
59.26
59.26
Construction of Park and Landfill Closure
3/15/2003
14,000
9,772.50
9,772.50
$
9,772.50
59.26
-
-
-
9,772.50
59.26
Disbursements
-
Encumbrances
-
Authorizations
2014-5
Balance December 31, 2017
2002-1
GENERAL CAPITAL FUND
SCHEDULE OF IMPROVEMENT AUTHORIZATIONS
Ord #
Improvement Description
Balance December 31, 2018
60
Exhibit C - 8
Amount of
Date of
Original
Interest
Balance
Balance
Issue
Issue
Date
Amount
Rate
Dec. 31, 2017
Increased
Decreased
Dec. 31, 2018
No Current Year Activity
$
$
-
-
-
-
Maturities of Bonds
Outstanding
December 31, 2018
Purpose
GENERAL CAPITAL FUND
SCHEDULE OF GENERAL SERIAL BONDS
61
Exhibit C - 9
Date of
Ordinance
Original
Date of
Date of
Interest
Balance
Balance
Number
Issue
Issue
Maturity
Rate
Dec. 31, 2017
Increased
Decreased
Dec. 31, 2018
Construction of New City Hall/Backhoe
2011-3
9/28/2011
9/19/2018
9/18/2019
2.680% $
300,000.00
100,000.00
200,000.00
$
300,000.00
-
100,000.00
200,000.00
GENERAL CAPITAL FUND
SCHEDULE OF BOND ANTICIPATION NOTES
Improvement Description
62
Exhibit C - 10
Ordinance
Balance
2018
Debt
Balance
Number
Dec. 31, 2017
Authorizations
Issued
Other
Dec. 31, 2018
2014-5
Computer/Equipment
$
36,249.00
36,249.00
$
36,249.00
-
-
-
36,249.00
GENERAL CAPITAL FUND
SCHEDULE OF BOND AND NOTES AUTHORIZED BUT NOT ISSUED
Improvement Description
63
{THIS PAGE IS INTENTIONALLY LEFT BLANK}
CITY OF PORT REPUBLIC
PART II
LETTER OF COMMENTS AND RECOMMENDATIONS
YEAR ENDED DECEMBER 31, 2018
GENERAL COMMENTS
Contracts and Agreements Required to be Advertised for N.J.S. 40A:11-4
N.J.S.A. 40A:11-4 states, “Every contract awarded by the contracting agent for the provision or performance
of any goods or services, the cost of which in the aggregate exceeds the bid threshold, shall be awarded
only by resolution of the governing body of the contracting unit to the lowest responsible bidder after public
advertising for bids and bidding therefore, except as is provided otherwise in this act or specifically by any
other law. Due to the City having a Qualified Purchasing Agent, pursuant to N.J.S.A. 40A:11-3(a), the
maximum bid threshold is $40,000.
The governing body of the City of Port Republic has the responsibility of determining whether the
expenditures in any category will exceed $40,000 within the fiscal year. Where question arises as to whether
any contract or agreement might result in violation of the statute, the City’s counsel's opinion should be
sought before a commitment is made.
The minutes indicate that bids were requested for the following by public advertising:
No bids during 2018
The minutes indicate 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 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.
Our examination of expenditures did not reveal any payments in excess of $40,000 "for the performance of
any work or the furnishing or hiring of any materials or supplies" other than those where bids had been
previously sought by public advertisement or where a resolution had been previously adopted under the
provisions of N.J.S. 40A:11-6.
Collection of Interest on Delinquent Taxes and Assessments
The statute provides the method for authorizing interest and the maximum rates to be charged for the
nonpayment of taxes or assessments on or before the date when they would become delinquent.
The governing body, on January 2, 2018, adopted the following resolution authorizing interest to be charged
on delinquent taxes:
"BE IT RESOLVED by the City Council of the City of Port Republic, in accordance with N.J.S.A.
54:4-67, which authorizes the Governing Body to fix the rate of interest to be charged, in the City of Port
Republic, for the nonpayment of taxes and assessments, said rate of interest shall be and is hereby fixed at
eight percent (8%) per annum on the first $1,500 of taxes becoming delinquent after due date and eighteen
percent (18%) per annum on any amount in excess of $1,500 of the delinquent to be calculated from the
date when the taxes and assessments become delinquent. There will be a ten (10) day grace period of
quarterly tax payments made by cash, check or money order.”
Our examination of interest collected on delinquent taxes did not reveal any charges that were not in
agreement with the above resolution.
64
Delinquent Taxes and Tax Title Liens
No tax sale was necessary for 2018.
The following comparison is made of the number of tax title liens receivable on December 31st of the last
three years:
Year
Number
2018
3
2017
3
2016
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 taxpaying basis.
Verification of Delinquent Taxes and Other Charges
A test verification of delinquent charges and current payments was made in accordance with the regulations
of the Division of Local Government Services, including the mailing of verification notices as follows:
Type
Number Mailed
Payments of 2018 and 2017 Taxes
5
Delinquent Taxes
3
Municipal Court
5
As of the date of this audit report, all verifications have not been returned. However, no problems were
noted with those that have been returned.
Comparison of Tax Levies and Collections Currently
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.
Cash
Percentage of
Year
Tax Levy
Collections
Collections
2018
3,096,057
$
3,020,236
97.55%
2017
2,998,057
2,941,739
98.12%
2016
2,909,463
2,828,790
97.23%
2015
2,904,491
2,823,441
97.21%
2014
2,820,983
2,742,160
97.21%
65
Comparative Schedule of Tax Rate Information
2018
2017
2016
2015
2014
Tax Rate
2.680
2.636
3.717
3.705
3.622
Apportionment of Tax
Rate:
Municipal
0.510
0.509
0.650
0.650
0.653
Municipal Open Space
0.020
0.020
0.020
0.021
0.020
County
0.592
0.583
0.865
0.852
0.796
Local School
1.558
1.524
2.182
2.182
2.153
Assessed Valuation
115,501,800
113,866,000
78,129,800
78,132,706
77,420,428
Delinquent Taxes and Tax Title Liens
This tabulation includes a comparison, expressed in percentage, of the total delinquent taxes and tax title
liens, in relation to the tax levies of the last five years.
Amount of
Amount of
Percentage
Tax Title
Delinquent
Total
of Tax
Year
Liens
Taxes
Delinquent
Levy
2018
7,748
$
74,616
82,364
2.66%
2017
6,679
83,259
89,938
3.00%
2016
5,627
68,864
74,491
2.56%
2015
2,469
77,920
80,389
2.77%
2014
2,098
75,400
77,498
2.75%
66
FINDINGS AND RECOMMENDATIONS
None
STATUS OF PRIOR RECOMMENDATIONS
None
FINDINGS
None
The problems and weaknesses noted in my review were not of such magnitude that they would affect my ability to
express an opinion on the financial statements taken as a whole.
Should any questions arise as to my comments or recommendations, or should you desire assistance in
implementing my recommendations, please do not hesitate to call.
Very truly yours,
Ford, Scott & Associates, LLC
FORD, SCOTT & ASSOCIATES, L.L.C.
CERTIFIED PUBLIC ACCOUNTANTS
Nancy Sbrolla
Nancy Sbrolla
Certified Public Accountant
Registered Municipal Accountant
No. 542
July 19, 2019
67
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