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Executive Summary
The Borough of Surf City's 2021 audit reveals the financial status of various funds, including the Current Fund, Trust Funds, General Capital Fund, and Water/Sewer Utility Fund. The Independent Auditor's Report expresses an unmodified opinion on the regulatory basis financial statements and an adverse opinion on U.S. Generally Accepted Accounting Principles (GAAP) due to the use of a regulatory basis of accounting as prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey. A material weakness was identified in internal controls regarding the maintenance of a complete and accurate general ledger system. The audit also includes supplementary information like cash schedules, tax receivables analyses, and schedules of various reserves, providing a comprehensive financial overview.
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--- Document: 2021 Audit Document ---
BOROUGH OF SURF CITY
COUNTY OF OCEAN, NEW JERSEY
FOR THE YEAR ENDED DECEMBER 31, 2021
Exhibit
Page
Independent Auditor's Report
1
Independent Auditor's Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Statements Performed in Accordance with Government Auditing Standards
5
Basic Financial Statements
Current Fund
Statements of Assets, Liabilities, Reserves and Fund Balance - Regulatory Basis
A
9
Statements of Operations and Changes in Fund Balance - Regulatory Basis
A-1
11
Statement of Revenues - Regulatory Basis
A-2
12
Statement of Expenditures - Regulatory Basis
A-3
14
Trust Fund
Statements of Assets, Liabilities, Reserves and Fund Balance - Regulatory Basis
B
19
General Capital Fund
Statements of Assets, Liabilities, Reserves and Fund Balance - Regulatory Basis
C
20
Statements of Fund Balance - Regulatory Basis
C-1
21
Water/Sewer Utility Fund
Statements of Assets, Liabilities, Reserves and Fund Balance - Regulatory Basis
D
22
Statements of Operations and Changes in Fund Balance - Regulatory Basis
D-1
23
Statement of Fund Balance - Regulatory Basis
D-1a
24
Statement of Revenues - Regulatory Basis
D-2
25
Statement of Expenditures - Regulatory Basis
D-3
26
General Fixed Assets Account Group
Statements of Assets, Liabilities, Reserves and Fund Balance - Regulatory Basis
E
27
Notes to Financial Statements
31
Supplementary Exhibits:
Current Fund
Schedule of Cash - Collector/Treasurer
A-4
65
Schedule of Due From State of New Jersey - Senior Citizens' and Veterans' Deductions
A-5
66
Schedule of Taxes Receivable and Analysis of Property Tax Levy
A-6
67
Schedule of Tax Title Liens Receivable
A-7
68
Schedule of Revenue Accounts Receivable
A-8
69
Schedule of 2020 Appropriation Reserves
A-9
70
Schedule of Encumbrances Payable
A-10
73
Schedule of Prepaid Taxes
A-11
74
Schedule of County Taxes Payable
A-12
75
Schedule of Local District School Taxes Payable
A-13
76
Schedule of Regional School Taxes Payable
A-14
77
Schedule of Various Reserves
A-15
78
Schedule of Federal and State Grants Receivable
A-16
79
Schedule of Reserve for Federal and State Grants – Appropriated
A-17
80
Schedule of Reserve for Federal and State Grants – Unappropriated
A-18
81
BOROUGH OF SURF CITY
COUNTY OF OCEAN, NEW JERSEY
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2021
PART I
Exhibit
Page
BOROUGH OF SURF CITY
COUNTY OF OCEAN, NEW JERSEY
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 20221
PART I
Trust Fund
Schedule of Cash Receipts and Disbursements
B-1
85
Schedule of Due From Current Fund
B-2
86
Schedule of Due To/(From) Water Sewer Operating Fund
B-3
87
Schedule of Due to Current Fund - Dog License Fund
B-4
88
Schedule of Reserve for Dog Fund Expenditures
B-5
89
Schedule of Trust - Other Reserves
B-6
90
Schedule of Investments in LOSAP
B-7
91
Schedule of Reserve for LOSAP
B-8
91
General Capital Fund
Schedule of Cash
C-2
95
Schedule of Analysis of Cash
C-3
96
Schedule of Due (From)/To Current Fund
C-4
97
Schedule of Grants Recievable
C-5
98
Schedule of Deferred Charges To Future Taxation - Unfunded
C-6
99
Schedule of Improvement Authorizations
C-7
100
Schedule of Capital Improvement Fund
C-8
101
Schedule of Various Reserves
C-9
102
Schedule of Bonds and Notes Authorized but Not Issued
C-10
103
Water-Sewer Utility Fund
Schedule of Cash - Treasurer
D-4
107
Schedule of Analysis of Water/Sewer Utility Capital Fund Cash
D-5
108
Schedule of Water/Sewer Rents
D-6
109
Schedule of Fixed Capital
D-7
110
Schedule of Fixed Capital Authorized and Incomplete
D-8
111
Schedule of 2020 Appropriation Reserves
D-9
112
Schedule of Encumbrances Payable
D-10
113
Schedule of Prepaid Rents
D-11
114
Schedule of Accounts Payable
D-12
115
Schedule of Reserve for American Recovery Act
D-13
116
Schedule of Due From/(To) Water-Sewer Utility Capital Fund
D-14
117
Schedule of Due From/(To) Current Fund
D-15
118
Schedule of Improvement Authorizations
D-16
119
Schedule of Capital Improvement Fund
D-17
120
Schedule of Reserve for Amortization
D-18
121
Schedule of Reserve for Deferred Amortization
D-19
122
Schedule of Bonds and Notes Authorized but Not Issued
D-20
123
General Fixed Assets Account Group
Schedule of Changes in General Fixed Assets
E-1
127
Schedule of Financial Statement Findings - Government Auditing Standards
Schedule of Financial Statement Findings
131
Summary Schedule of Prior Year Audit Findings and Questioned Costs as Prepared by Management
132
Letter of Comments and Recommendations - Regulatory Basis:
Officials in Office and Surety Bonds
135
General Comments & Findings
137
Acknowledgment
139
PART II
PART III
************
BOROUGH OF SURF CITY
COUNTY OF OCEAN, NEW JERSEY
PART I
INDEPENDENT AUDITOR'S REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and Members
of the Borough Council
Borough of Surf City
Surf City, New Jersey
Opinions
We have audited the accompanying financial statements of the various funds and account group of the Borough of
Surf City, which comprise the statements of assets, liabilities, reserves and fund balance – regulatory basis as of
December 31, 2021 and 2020, and the related statements of operations and changes in fund balance – regulatory
basis for the years then ended and the statements of revenues – regulatory basis and statement of expenditures –
regulatory basis for the year ended December 31, 2021, and the related notes to the financial statements.
Unmodified Opinion on Regulatory Basis of Accounting
In our opinion, the financial statements referred to above present fairly, in all material respects, the assets,
liabilities, reserves and fund balance – regulatory basis of the Borough of Surf City, as of December 31, 2021 and
2020, and the results of its operations and changes in fund balance – regulatory basis for the years then ended and
the statements of revenues – regulatory basis, statements of expenditures – regulatory basis for the year ended
December 31, 2021, in accordance with the financial reporting provisions of the Division of Local Government
Services, Department of Community Affairs, State of New Jersey as described in Note 1.
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 section of our report, 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 the Borough of Surf City, as of December 31, 2021 and 2020, or the results of its operations
and changes in fund balance for the years then ended.
Basis for Opinions
We conducted our audit in accordance with 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; and in compliance with audit requirements prescribed by the Division of
Local Government Services, Department of Community Affairs, State of New Jersey. Our responsibilities under
those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements
section of our report. We are required to be independent of the Borough of Surf City and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
1
Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles
As described in Note 1, the financial statements are prepared by the Borough of Surf City, on the basis of the
financial reporting provisions of the Division of Local Government Services, Department of Community Affairs,
State of New Jersey, which is a basis of accounting other than accounting principles generally accepted in the
United States of America, to meet the requirements of the Division of Local Government Services, Department of
Community Affairs, State 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 and pervasive.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with the financial reporting provisions of 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
misstatement, whether due to fraud or error.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that
an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and
audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs,
State of New Jersey will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered
material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment
made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards,
and audit requirements prescribed by the Division of Local Government Services, Department of Community
Affairs, State of New Jersey, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal controls relevant to the audit 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 Borough of Surf City's internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the Borough of Surf City's ability to continue as a going concern for a reasonable
period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control-related matters that we
identified during the audit.
2
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the Borough of Surf City’s basic financial statements. The accompanying supplemental schedules presented for the
various funds and letter of comments and recommendations section are presented for purposes of additional
analysis as required by the Division of Local Government Services, Department of Community Affairs, State of
New Jersey and are not a required part of the basic financial statements. Such information 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. The 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 information is fairly stated, in all material
respects, in relation to the financial statements of each of the respective individual funds and account group taken as
a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 11, 2022, on
our consideration of the Borough of Surf City’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 solely 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 the effectiveness of the
Borough of Surf City’s internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering the Borough of
Surf City’s internal control over financial reporting and compliance.
Respectfully submitted,
HOLMAN FRENIA ALLISON, P.C.
Jerry W. Conaty
Certified Public Accountant
Registered Municipal Accountant
RMA No. 581
Lakewood, New Jersey
November 11, 2022
3
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4
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Honorable Mayor and Members
of the Borough Council
Borough of Surf City
Surf City, New Jersey
We have audited, in accordance with the auditing standards generally accepted in the United States of
America, the standards applicable to financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States and audit requirements as prescribed by the Division of
Local Government Services, Department of Community Affairs, State of New Jersey, the financial
statements-regulatory basis of the Borough of Surf City, as of and for the year ended December 31, 2021,
and the related notes to the financial statements, which collectively comprise the Borough's basic
financial statements, and have issued our report thereon dated November 11, 2022. Our report indicated
that the Borough’s financial statements were not prepared in accordance with accounting principles
generally accepted in the United States of America but rather prepared in accordance with the regulatory
basis of accounting prescribed by the Division of Local Government Services, Department of Community
Affairs, State of New Jersey.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Borough's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the Borough’s internal control. Accordingly, we
do not express an opinion on the effectiveness of the Borough’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 and therefore, material weaknesses or significant
deficiencies may exist that were not identified. We identified certain deficiencies in internal control,
described in the accompanying schedule of financial statement findings as item 2021-001 that we
consider to be a material weakness.
5
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Borough'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 instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards and audit requirements as prescribed by the Division of Local
Government Services, Department of Community Affairs, State of New Jersey and which are described in
the accompanying schedule of financial statement findings as Finding No. 2021-001.
Borough of Surf City’s Response to Findings
The Borough of Surf City’s response to the findings identified in our audit is described in the
accompanying schedule of financial statement findings and questioned costs. The Borough’s response
was not subjected to the auditing procedures applied in the audit of the financial statements and,
accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Borough's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards and audit requirements as prescribed by the Division of Local
Government Services, Department of Community Affairs, State of New Jersey in considering the
Borough’s internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
Respectfully Submitted,
HOLMAN FRENIA ALLISON, P.C.
Jerry W. Conaty
Certified Public Accountant
Registered Municipal Accountant
RMA No. 581
Lakewood, New Jersey
November 11, 2022
6
BASIC FINANCIAL STATEMENTS
7
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8
EXHIBIT A
Assets
Reference
2021
2020
Cash - Treasurer
A-4
9,577,474.40
$
8,678,402.50
$
Cash - Change Funds
A
600.00
600.00
9,578,074.40
8,679,002.50
Receivables With Full Reserves:
Taxes Receivable
A-6
95,422.21
123,677.10
Tax Title Liens Receivable
A-7
998.89
956.50
Property Acquired for Taxes - Assessed Value
A
4,725.00
4,725.00
Revenue Accounts Receivable
A-8
749.60
598.22
Due From Dog License Fund
B
376.52
223.67
Due from Capital Fund
C
170,828.49
170,720.12
273,100.71
300,900.61
9,851,175.11
8,979,903.11
Federal and State Grant Fund:
Grant Receivable
7,493.40
12,422.60
Due From Current Fund
A-16
A
28,262.14
23,498.17
35,755.54
35,920.77
Total Assets
9,886,930.65
$
9,015,823.88
$
DECEMBER 31, 2021 AND 2020
BOROUGH OF SURF CITY
CURRENT FUND
STATEMENTS OF ASSETS, LIABILITIES, RESERVES AND
FUND BALANCE - REGULATORY BASIS
The accompanying Notes to Financial Statements are an integral part of this statement.
9
EXHIBIT A
Liabilities, Reserves and Fund Balance
Reference
2021
2020
Appropriation Reserves
A-3, A-9
982,746.47
$
1,153,420.35
$
Encumbrances Payable
A-10
30,604.03
87,339.87
Tax Overpayments
A-4
9,923.23
-
Prepaid Taxes
A-11
428,309.18
379,722.67
Local District School Tax Payable
A-13
258,798.73
256,685.73
Regional School Tax Payable
A-14
1,949,392.91
1,774,483.41
Due To:
Federal & State Grant Fund
A
28,262.14
23,498.17
Trust Other Fund
B
36,655.93
51,331.89
Utility Operating Fund
D
-
100,000.00
Utility Capital Fund
D
345,000.00
-
County for Added Tax
A-12
51,691.82
55,312.42
State of NJ for Exemptions
A-5
667.75
1,167.75
Reserve for Prepaid Beach Badges
A-15
27,676.00
27,787.00
Reserve for Hurricane Expense
A-15
114,818.01
76,973.20
Reserve for Library Aid
A-15
14.00
14.00
Reserve for Ocean County CARES Grant
A-15
187,862.99
-
4,452,423.19
3,987,736.46
Reserve for Receivables
A
273,100.71
300,900.61
Fund Balance
A-1
5,125,651.21
4,691,266.04
9,851,175.11
8,979,903.11
Federal and State Grant Fund:
Reserve for Grant Expenditures:
Appropriated
A-17
21,396.46
23,397.13
Unappropriated
A-18
14,359.08
12,523.64
35,755.54
35,920.77
Total Liabilities, Reserves and Fund Balance
9,886,930.65
$
9,015,823.88
$
DECEMBER 31, 2021 AND 2020
BOROUGH OF SURF CITY
CURRENT FUND
STATEMENTS OF ASSETS, LIABILITIES, RESERVES AND
FUND BALANCE - REGULATORY BASIS
The accompanying Notes to Financial Statements are an integral part of this statement.
10
EXHIBIT A-1
Reference
2021
2020
Revenue and Other Income Realized:
Fund Balance Utilized
A-2
1,550,000.00
$
1,523,000.00
$
Miscellaneous Revenue Anticipated
A-2
1,143,044.84
1,115,205.33
Receipts From Delinquent Taxes
A-2
123,677.10
96,954.75
Non-Budget Revenue
A-2
189,261.36
181,725.90
Receipts From Current Taxes
A-2, A-6
17,787,103.84
16,951,067.20
Other Credits To Income:
Unexpended Balance of Appropriation
Reserves
A-9
1,100,643.35
918,800.25
Cancellation of Grant Appropriations
A-17
4,929.20
-
Prior Years Interfunds Returned
A-1
20,409.05
18,214.03
Total Revenues
21,919,068.74
20,804,967.46
Expenditures:
Budget Appropriations Within "CAPS":
Operations:
Salaries and Wages
A-3
2,930,911.12
2,894,371.36
Other Expenses
A-3
2,828,088.88
2,778,653.64
Deferred Charges and Statutory
Expenditures
A-3
637,093.00
591,097.00
Appropriations Excluded From "CAPS":
Other Expenses
A-3
75,432.82
78,062.18
Capital Improvements
A-3
125,000.00
100,000.00
Deferred Charges
A-3
203,684.10
170,000.00
County Taxes
A-12
7,507,427.35
7,314,292.00
County Share of Added Taxes
A-12
51,691.82
55,312.42
Local District School Tax
A-13
861,394.00
857,168.00
Regional High School Tax
A-14
4,691,203.00
4,154,709.00
Cancellation of Grant Receivables
A-16
4,929.20
-
Interfunds Advances
A
17,828.28
55,909.07
Total Expenditures
19,934,683.57
19,049,574.67
Statutory Excess To Fund Balance
1,984,385.17
1,755,392.79
Fund Balance, January 1
A
4,691,266.04
4,458,873.25
6,675,651.21
6,214,266.04
Decreased By:
Utilized as Anticipated Revenue
A-2
1,550,000.00
1,523,000.00
Fund Balance, December 31
A
5,125,651.21
$
4,691,266.04
$
REGULATORY BASIS
YEARS ENDED DECEMBER 31, 2021 AND 2020
BOROUGH OF SURF CITY
CURRENT FUND
STATEMENTS OF OPERATIONS AND CHANGES IN FUND BALANCE -
The accompanying Notes to Financial Statements are an integral part of this statement.
11
EXHIBIT A-2
SPECIAL
EXCESS/
BUDGET
N.J.S.A. 40:4-87
REALIZED
(DEFICIT)
Fund Balance Anticipated
1,550,000.00
$
-
$
1,550,000.00
$
-
$
Miscellaneous Revenues:
Licenses:
Alcohol Beverages
1,400.00
-
1,400.00
-
Fees & Permits
10,000.00
-
25,381.00
15,381.00
Interest & Costs on Taxes
25,002.18
-
29,741.02
4,738.84
Beach Badge Fees
575,000.00
-
793,017.00
218,017.00
Energy Receipts Taxes
164,430.00
-
164,430.00
-
Uniform Construction Code Fees
95,000.00
-
112,643.00
17,643.00
Recycling Tonnage Grant
5,248.53
-
5,248.53
-
Clean Communities Program
11,184.29
-
11,184.29
-
887,265.00
-
1,143,044.84
255,779.84
Receipts From Delinquent Taxes
92,500.00
-
123,677.10
31,177.10
Amount to be Raised by Taxes for
Support of Municipal Budget:
Local Tax for Municipal Purposes
4,710,380.00
-
5,086,782.67
376,402.67
Budget Totals
7,240,145.00
-
7,903,504.61
663,359.61
Non-Budget Revenue
-
-
189,261.36
189,261.36
7,240,145.00
$
-
$
8,092,765.97
$
852,620.97
$
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
STATEMENT OF REVENUES - REGULATORY BASIS
The accompanying Notes to Financial Statements are an integral part of this statement.
12
EXHIBIT A-2
Analysis of Realized Revenue
Allocation of Current Tax Collection:
Revenue From Collections
17,787,103.84
$
Allocated To School and County Taxes
13,111,716.17
Balance for Support of Municipal Budget
4,675,387.67
Add:
Appropriation Reserve for Uncollected Taxes
411,395.00
Balance for Support of Municipal Budget
Appropriations
5,086,782.67
$
Delinquent Taxes:
Taxes Receivable
123,677.10
$
Analysis of Non-Budget Revenue
Miscellaneous revenue not anticipated:
Revenue Accounts Receivable:
$
Municipal Court Fines & Costs
26,605.68
$
Interst on Investments & Deposits
7,203.75
Vendors' Licenses
5,000.00
T.V. Cable Franchise Fee
19,679.42
Zoning/Planning/Occupancy Fees
29,782.00
Land Use Board Reimbursement and Fees
3,650.00
Insurance Refunds & Claims
69,682.78
Senior Citizens and Vets Administrative Fee
475.00
Miscellaneous
1,182.62
Prior Year Health Insurance Premium Refunds
17,569.51
Recycling Receipts
8,430.60
162,655.68
189,261.36
$
YEAR ENDED DECEMBER 31, 2021
STATEMENT OF REVENUES - REGULATORY BASIS
BOROUGH OF SURF CITY
CURRENT FUND
The accompanying Notes to Financial Statements are an integral part of this statement.
13
EXHIBIT A-3
ORIGINAL
BUDGET AFTER
PAID OR
BUDGET
MODIFICATIONS
CHARGED
ENCUMBERED
RESERVED
CANCELLED
General Appropriations
Operations - Within "CAPS"
GENERAL GOVERNMENT
General Administration
Salaries & Wages
75,000.00
$
75,000.00
$
63,682.50
$
-
$
11,317.50
$
-
$
Other Expenses
23,000.00
23,000.00
11,857.88
1,340.75
9,801.37
-
Human Resources
Other Expenses
7,000.00
7,000.00
-
-
7,000.00
-
Mayor and Council
Salaries & Wages
52,000.00
52,000.00
51,461.00
-
539.00
-
Other Expenses
5,500.00
5,500.00
2,336.91
2,156.19
1,006.90
-
Municipal Clerk
Salaries & Wages
100,000.00
100,000.00
64,418.05
-
35,581.95
-
Other Expenses
14,500.00
14,500.00
7,573.49
681.29
6,245.22
-
Financial Administration
Salaries & Wages
95,000.00
95,000.00
82,747.96
-
12,252.04
-
Other Expenses
15,000.00
17,500.00
14,554.47
609.72
2,335.81
-
Audit Services
Other Expenses - Annual Audit
20,000.00
20,000.00
16,100.00
-
3,900.00
-
Collection of Taxes
Salaries & Wages
55,000.00
55,000.00
42,657.95
-
12,342.05
-
Other Expenses
21,500.00
21,500.00
8,852.72
178.35
12,468.93
-
Assessment of Taxes
Salaries & Wages
23,000.00
23,000.00
17,868.24
-
5,131.76
-
Other Expenses
11,000.00
11,000.00
1,385.39
1,070.19
8,544.42
-
Legal Services
Other Expenses
17,000.00
17,000.00
5,437.50
496.00
11,066.50
-
Revision of Ordinances
Other Expenses
4,500.00
4,500.00
-
-
4,500.00
-
Engineering Services
Other Expenses
10,500.00
15,500.00
10,500.00
-
5,000.00
-
Review/Revision of Master Plan
Other Expenses
4,500.00
4,500.00
3,883.03
-
616.97
-
Municipal Court
Salaries & Wages
67,000.00
67,000.00
45,386.39
-
21,613.61
-
Other Expenses
8,500.00
8,500.00
4,309.20
803.93
3,386.87
-
Public Defender
Other Expenses
1,800.00
1,800.00
572.25
577.50
650.25
-
Land Use Administration:
Land Use Board
Salaries & Wages
10,000.00
10,000.00
6,019.88
-
3,980.12
-
Other Expenses
10,000.00
10,000.00
686.37
436.50
8,877.13
-
APPROPRIATIONS
EXPENDED
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
The accompanying Notes to Financial Statements are an integral part of this statement.
14
EXHIBIT A-3
ORIGINAL
BUDGET AFTER
PAID OR
BUDGET
MODIFICATIONS
CHARGED
ENCUMBERED
RESERVED
CANCELLED
APPROPRIATIONS
EXPENDED
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
Code Enforcement & Administration:
Other Code Enforcement Functions
Salaries & Wages
15,000.00
15,000.00
14,706.05
-
293.95
-
Other Expenses
3,000.00
3,000.00
100.00
-
2,900.00
-
Zoning Officer
Salaries & Wages
15,000.00
15,000.00
14,705.56
-
294.44
-
Other Expenses
2,500.00
2,500.00
-
-
2,500.00
-
Insurance:
General Liability
85,000.00
85,000.00
74,542.00
-
10,458.00
-
Workers Compensation
102,000.00
102,000.00
94,100.67
-
7,899.33
-
Employee Group Health
1,325,000.00
1,325,000.00
1,097,225.41
100.00
227,674.59
-
Health Benefit Waiver
Salaries & Wages
55,000.00
55,000.00
38,333.34
-
16,666.66
-
Public Safety Functions:
Police Department
Salaries & Wages
1,350,000.00
1,350,000.00
1,306,070.66
-
43,929.34
-
Other Expenses
70,000.00
70,000.00
62,880.15
5,953.99
1,165.86
-
Police Dispatch/911
Other Expenses
60,000.00
60,000.00
54,780.80
-
5,219.20
-
Office of Emergency Management
Salaries & Wages
3,500.00
3,500.00
3,000.00
-
500.00
-
Other Expenses
10,000.00
10,000.00
1,288.15
-
8,711.85
-
Aid to Volunteer Fire Company
25,000.00
25,000.00
25,000.00
-
-
-
Fire Hydrant Service
100,000.00
100,000.00
100,000.00
-
-
-
Municipal Prosecutor's Office
Other Expenses
10,000.00
10,000.00
7,791.63
826.00
1,382.37
-
Public Work Functions:
Streets and Road Maintenance
Salaries & Wages
75,000.00
75,000.00
47,669.92
-
27,330.08
-
Other Expenses
35,000.00
36,000.00
31,452.60
1,872.42
2,674.98
-
Solid Waste Collection
Salaries & Wages
290,000.00
276,500.00
193,852.08
-
82,647.92
-
Other Expenses
30,000.00
30,000.00
8,600.01
1,636.05
19,763.94
-
Building and Grounds
Salaries & Wages
145,000.00
145,000.00
141,488.27
-
3,511.73
-
Other Expenses
60,000.00
60,000.00
39,873.01
3,774.84
16,352.15
-
Vehicle Maintenance (Incl. Police Vehicles)
Salaries & Wages
48,500.00
48,500.00
47,798.13
-
701.87
-
Other Expenses
95,000.00
95,000.00
50,468.41
4,045.98
40,485.61
-
Health & Human Services Functions:
Board of Health
Salaries & Wages
3,000.00
3,000.00
1,227.00
-
1,773.00
-
Other Expenses
66,000.00
66,000.00
65,234.00
-
766.00
-
Environmental Health Services
The accompanying Notes to Financial Statements are an integral part of this statement.
15
EXHIBIT A-3
ORIGINAL
BUDGET AFTER
PAID OR
BUDGET
MODIFICATIONS
CHARGED
ENCUMBERED
RESERVED
CANCELLED
APPROPRIATIONS
EXPENDED
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
Salaries & Wages
5,000.00
5,000.00
-
-
5,000.00
-
Other Expenses
1,000.00
1,000.00
-
-
1,000.00
-
Animal Control Services
Other Expenses
9,000.00
9,000.00
7,392.00
672.00
936.00
-
Contributions to Social Service Agencies
Senior Citizen Center (NJS 40:48-9.4)
5,000.00
5,000.00
-
-
5,000.00
-
Health Care Facilities (NJS 44:5-2)
100.00
100.00
-
-
100.00
-
Mental Health Facilities (NJS 40:48-9.4a)
100.00
100.00
-
-
100.00
-
Recreation of Services and Programs
Salaries & Wages
5,000.00
5,000.00
-
-
5,000.00
-
Other Expenses
2,000.00
2,000.00
-
-
2,000.00
-
Maintenance of Parks
Salaries & Wages
39,000.00
39,000.00
26,498.85
-
12,501.15
-
Other Expenses - Veterans' Memorial Park
2,500.00
2,500.00
773.17
-
1,726.83
-
Other Expenses - Other Facilities
4,000.00
4,000.00
-
-
4,000.00
-
Beach & Boardwalk Operations
Salaries & Wages
375,000.00
375,000.00
363,432.44
-
11,567.56
-
Other Expenses
67,500.00
67,500.00
65,720.97
20.82
1,758.21
-
Other Common Operating Functions (Unclassified)
Municipal Bus Service
Other Expenses
20,000.00
20,000.00
20,000.00
-
-
-
Accumulated Leave Compensation
Salaries & Wages
8,000.00
8,000.00
8,000.00
-
-
-
Celebration of Public Events
Other Expenses
1,000.00
1,000.00
94.44
-
905.56
-
Utility Expenses & Bulk Purchases
Electricity
30,000.00
30,000.00
15,653.82
524.59
13,821.59
-
Street Lighting
57,000.00
57,000.00
47,827.27
-
9,172.73
-
Telephone
38,000.00
38,000.00
27,456.28
-
10,543.72
-
Gas (natural or propane)
20,000.00
20,000.00
14,494.20
-
5,505.80
-
Telecommunications
5,000.00
5,000.00
3,247.51
-
1,752.49
-
Gasoline
60,000.00
60,000.00
30,283.78
1,802.52
27,913.70
-
Landfill/Solid Waste Disposal Costs:
Landfill/Solid Waste Disposal Costs
Other Expenses
175,000.00
180,000.00
154,385.70
806.39
24,807.91
-
Uniform Construction Code - Appropriations Offset
by Dedicated Revenues (N.J.A.C.5:23-4.17)
Construction Official
Salaries & Wages
21,000.00
21,000.00
18,899.30
-
2,100.70
-
Other Expenses
75,000.00
75,000.00
38,679.35
218.01
36,102.64
-
Contingent
4,000.00
4,000.00
-
-
4,000.00
-
Total Operations Including Contingent Within CAPS
5,759,000.00
5,759,000.00
4,827,318.11
30,604.03
901,077.86
-
Detail:
The accompanying Notes to Financial Statements are an integral part of this statement.
16
EXHIBIT A-3
ORIGINAL
BUDGET AFTER
PAID OR
BUDGET
MODIFICATIONS
CHARGED
ENCUMBERED
RESERVED
CANCELLED
APPROPRIATIONS
EXPENDED
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
Salaries & Wages
2,930,000.00
2,916,500.00
2,599,923.57
-
330,987.55
-
Other Expenses
2,829,000.00
2,842,500.00
2,227,394.54
30,604.03
570,090.31
-
5,759,000.00
5,759,000.00
4,827,318.11
30,604.03
901,077.86
-
Deferred Charges & Statutory Expenditures - Within CAPS:
Statutory Expenditures:
Contribution to:
Public Employees' Retirement System
101,435.00
101,435.00
101,435.00
-
-
-
Social Security System (O.A.S.I)
210,200.00
210,200.00
196,228.07
-
13,971.93
-
Police and Firemen's System of NJ
311,213.00
311,213.00
311,213.00
-
-
-
Unemployment Insurance
12,000.00
12,000.00
10,748.98
-
1,251.02
-
Defined Contribution Retirement Program
2,245.00
2,245.00
939.19
-
1,305.81
-
Total Statutory Expenditures Within CAPS
637,093.00
637,093.00
620,564.24
-
16,528.76
-
Total General Appropriations Within CAPS
6,396,093.00
6,396,093.00
5,447,882.35
30,604.03
917,606.62
-
Operations Excluded from CAPS:
Length of Service Awards Program (L.O.S.A.P.)
Other Expenses
52,000.00
52,000.00
-
-
52,000.00
-
Recycling Tax (P.L. 2007, c. 311)
Other Expenses
7,000.00
7,000.00
5,708.01
-
1,291.99
-
Public & Private Programs Offset by Revenues:
Clean Communities Program
11,184.29
11,184.29
11,184.29
-
-
-
Recycling Tonnage Grant
5,248.53
5,248.53
5,248.53
-
-
-
State & Federal Programs - Local Match
3,540.08
3,540.08
-
-
-
3,540.08
Total Operations Excluded from CAPS
78,972.90
78,972.90
22,140.83
-
53,291.99
3,540.08
Detail:
Other Expenses
78,972.90
78,972.90
22,140.83
-
53,291.99
3,540.08
78,972.90
78,972.90
22,140.83
-
53,291.99
3,540.08
Capital Improvements - Excluded from CAPS:
Capital Improvement Fund
50,000.00
50,000.00
50,000.00
-
-
-
Rehabilitation of / Enhancement to Borough Property
75,000.00
75,000.00
63,152.14
-
11,847.86
-
Total Capital Improvements
125,000.00
125,000.00
113,152.14
-
11,847.86
-
Municipal Debt Service - Excluded from CAPS:
Interest of Notes
25,000.00
25,000.00
-
-
-
25,000.00
The accompanying Notes to Financial Statements are an integral part of this statement.
17
EXHIBIT A-3
ORIGINAL
BUDGET AFTER
PAID OR
BUDGET
MODIFICATIONS
CHARGED
ENCUMBERED
RESERVED
CANCELLED
APPROPRIATIONS
EXPENDED
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
Total Municipal Debt Services
25,000.00
25,000.00
-
-
-
25,000.00
Deferred Charges - Municipal - Excluded from CAPS
Deferred Charges to Future Taxation - Unfunded:
Beach Replenishment
51,036.77
51,036.77
51,036.77
-
-
-
Acquisition of Fire Apparatus & Related Equipment
92,647.33
92,647.33
92,647.33
-
-
-
Replacement of Bulkheads
60,000.00
60,000.00
60,000.00
-
-
-
Total Deferred Charges
203,684.10
203,684.10
203,684.10
-
-
-
Total General Appropriations Excluded from CAPS
432,657.00
432,657.00
338,977.07
-
65,139.85
28,540.08
Subtotal General Appropriations
6,828,750.00
6,828,750.00
5,786,859.42
30,604.03
982,746.47
28,540.08
Reserve for Uncollected Taxes
411,395.00
411,395.00
411,395.00
-
-
-
Total General Appropriations
7,240,145.00
$
7,240,145.00
$
6,198,254.42
$
30,604.03
$
982,746.47
$
28,540.08
$
Federal & State Grants
16,432.82
$
Due to Trust Fund
8,000.00
Reserve for Uncollected Taxes
411,395.00
Cash
5,762,426.60
6,198,254.42
$
The accompanying Notes to Financial Statements are an integral part of this statement.
18
EXHIBIT B
Assets
Reference
2021
2020
Animal Control Fund:
Cash
B-1
785.15
$
609.30
$
Due From State Department of Health
B
3.00
-
788.15
609.30
Trust - Other Fund:
Cash
B-1
460,869.20
332,504.00
Due from Water/Sewer Capital
B-3
1,109.41
6,069.72
Due from Current Fund
B-2
36,655.93
51,331.89
498,634.54
389,905.61
Length of Service Award Program Fund ("LOSAP"):
Investments
B-7
1,238,293.20
1,086,207.90
1,238,293.20
1,086,207.90
Total Assets
1,737,715.89
$
1,476,722.81
$
Reserves
Animal Control Fund:
Due Current Fund
B-4
376.52
$
223.67
$
Reserve for Dog Fund Expendiures
B-5
411.63
385.63
788.15
609.30
Trust - Other Fund:
Various Reserves
B-6
498,634.54
389,905.61
498,634.54
389,905.61
Length of Service Award Program Fund ("LOSAP"):
Miscellaneous Reserve
B-8
1,238,293.20
1,086,207.90
1,238,293.20
1,086,207.90
Total Reserves
1,737,715.89
$
1,476,722.81
$
FUND BALANCE - REGULATORY BASIS
DECEMBER 31, 2021 AND 2020
BOROUGH OF SURF CITY
TRUST FUND
STATEMENTS OF ASSETS, LIABILITIES, RESERVES AND
The accompanying Notes to Financial Statements are an integral part of this statement.
19
EXHIBIT C
Assets
Reference
2021
2020
Cash
C-2
1,418,323.41
$
1,528,276.66
$
Grant Receivable
C-5
128,450.00
-
Deferred Charges To Future Taxation:
Unfunded
C-6
2,477,129.51
2,117,063.61
Total Assets
4,023,902.92
$
3,645,340.27
$
Liabilities, Reserves and Fund Balance
Improvement Authorizations:
Funded
C-7
698,057.08
$
711,240.79
$
Unfunded
C-7
1,958,369.25
1,768,160.86
Reserve for Encumbrances
C-7
65,479.60
-
Due To Current Fund
C-4
170,828.49
170,720.12
Capital Improvement Fund
C-8
865,432.50
857,932.50
Reserve for Debt Service
C-9
36,683.33
36,683.33
Reserve for Purchase of Lifeguard Boat
C-9
18,150.00
18,150.00
Reserve for Grant Receivable
C-5
128,450.00
-
Capital Fund Balance
C-1
82,452.67
82,452.67
Total Liabilities, Reserves and Fund Balance
4,023,902.92
$
3,645,340.27
$
There were bonds and notes authorized but not issued on December 31, 2021 of $2,477,129.51 and
on December 31, 2020 of $2,117,063.61.
DECEMBER 31, 2021 AND 2020
BOROUGH OF SURF CITY
GENERAL CAPITAL FUND
STATEMENTS OF ASSETS, LIABILITIES, RESERVES AND
FUND BALANCE - REGULATORY BASIS
The accompanying Notes to Financial Statements are an integral part of this statement.
20
EXHIBIT C-1
82,452.67
$
Balance, December 31, 2021 and 2020
REGULATORY BASIS
YEARS ENDED DECEMBER 31, 2021 AND 2020
BOROUGH OF SURF CITY
GENERAL CAPITAL FUND
STATEMENT OF CAPITAL FUND BALANCE -
The accompanying Notes to Financial Statements are an integral part of this statement.
21
EXHIBIT D
Assets
Reference
2021
2020
Operating Fund:
Cash
D-4
2,539,790.04
$
1,952,469.96
$
Change Fund
D
250.00
250.00
Due from Current Fund
A
-
100,000.00
Due from Utility Capital Fund
D-14
19.67
11.43
Subtotal
2,540,059.71
2,052,731.39
Water/Sewer Rents Receivable
D-6
48,713.14
35,800.40
Total Operating Fund
2,588,772.85
2,088,531.79
Capital Fund:
Cash
D-4
46,999.49
88,992.01
Due from Current Fund
D-15
345,000.00
-
Fixed Capital - Completed
D-7
8,360,588.16
8,360,588.16
Fixed Capital - Authorized and Uncompleted
D-8
1,195,887.98
370,887.98
Total Capital Fund
9,948,475.63
8,820,468.15
Total Assets
12,537,248.48
$
10,908,999.94
$
Liabilities, Reserves and Fund Balances
Operating Fund:
Accounts Payable
D-12
7,644.37
$
7,644.37
$
Encumbrances Payable
D-10
5,443.13
8,316.07
Appropriation Reserves
D-3
683,755.21
706,934.18
Due to Trust-Other Fund
1,109.41
6,069.72
Prepaid Rents
D-11
19,050.13
17,905.68
Reserve for American Recovery Act
D-13
62,748.80
-
Subtotal
779,751.05
746,870.02
Reserve for Water/Sewer Rents Receivables
48,713.14
35,800.40
Operating Fund Balance
D-1
1,760,308.66
1,305,861.37
Total Operating Fund
2,588,772.85
2,088,531.79
Capital Fund:
Due To Utility Operating Fund
D
19.67
11.43
Capital Improvement Fund
D-17
503,315.51
519,565.51
Improvement Authorizations:
Funded
D-16
41,250.00
-
Unfunded
D-16
883,687.84
296,938.60
Reserve for Amortization
D-18
8,441,476.14
7,966,476.14
Reserve for Deferred Amortization
D-19
71,250.00
30,000.00
Capital Fund Balance
D-1(a)
7,476.47
7,476.47
Total Capital Fund
9,948,475.63
8,820,468.15
Total Liabilities, Reserves and Fund Balances
12,537,248.48
$
10,908,999.94
$
There were bonds and notes authorized but not issued on December 31, 2021 of $1,043,750.00 and
on December 31, 2020 was $735,000.00.
BOROUGH OF SURF CITY
WATER/SEWER UTILITY FUND
STATEMENTS OF ASSETS, LIABILITIES, RESERVES AND
FUND BALANCE - REGULATORY BASIS
DECEMBER 31, 2021 AND 2020
The accompanying Notes to Financial Statements are an integral part of this statement.
22
EXHIBIT D-1
Reference
2021
2020
Revenue and Other Income Realized:
Fund Balance Anticipated
D-2
980,000.00
$
945,000.00
$
Water/Sewer Rents
D-2
2,137,059.82
2,008,414.08
Fire Hydrant Service
D-2
118,400.00
118,400.00
Miscellaneous Revenues Not Anticipated
D-2
80,712.24
92,604.63
Other Credits to Income:
Appropriation Reserves Lapsed
D-9
698,275.23
340,369.76
Total Revenues
4,014,447.29
3,504,788.47
Expenditures:
Budget Appropriations:
Operating
D-3
2,235,000.00
2,205,000.00
Capital Improvements
D-3
110,000.00
110,000.00
Deferred Charges and
Statutory Expenditures
D-3
235,000.00
200,000.00
Total Expenditures
2,580,000.00
2,515,000.00
Excess in Revenue
1,434,447.29
989,788.47
Fund Balance, January 1
D
1,305,861.37
1,261,072.90
2,740,308.66
2,250,861.37
Decreased By:
Utilized as Anticipated Revenue
D-1
980,000.00
945,000.00
Fund Balance, December 31
D
1,760,308.66
$
1,305,861.37
$
BOROUGH OF SURF CITY
YEARS ENDED DECEMBER 31, 2021 AND 2020
REGULATORY BASIS
STATEMENTS OF OPERATIONS AND CHANGES IN FUND BALANCE
WATER/SEWER UTILITY OPERATING FUND
The accompanying Notes to Financial Statements are an integral part of this statement.
23
EXHIBIT D-1(a)
7,476.47
$
Balance, December 31, 2021 and 2020
YEARS ENDED DECEMBER 31, 2021 AND 2020
BOROUGH OF SURF CITY
WATER/SEWER UTILITY CAPITAL FUND
STATEMENT OF FUND BALANCE -
REGULATORY BASIS
The accompanying Notes to Financial Statements are an integral part of this statement.
24
EXHIBIT D-2
EXCESS/
ANTICIPATED
REALIZED
(DEFICIT)
Surplus Anticipated
980,000.00
$
980,000.00
$
-
$
Water Rents
785,000.00
1,181,736.57
396,736.57
Sewer Rents
765,000.00
955,323.25
190,323.25
Fire Hydrant Service
75,000.00
118,400.00
43,400.00
Miscellaneous Revenues Not Anticipated
-
80,712.24
80,712.24
2,605,000.00
$
3,316,172.06
$
711,172.06
$
Analysis of Miscellaneous Revenue Not Anticipated
Miscellaneous
78,411.72
$
Interest on Delinquents
2,227.11
80,638.83
Interest Earned in Utility Capital Fund
73.41
Total Miscellaneous Revenue Not Anticipated
80,712.24
$
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
STATEMENT OF REVENUES - REGULATORY BASIS
WATER/SEWER UTILITY OPERATING FUND
The accompanying Notes to Financial Statements are an integral part of this statement.
25
EXHIBIT D-3
ORIGINAL
BUDGET AFTER
PAID OR
BUDGET
MODIFICATION
CHARGED
ENCUMBERED
RESERVED
CANCELLED
Operating:
Salaries and Wages
580,000.00
$
580,000.00
$
362,568.75
$
-
$
217,431.25
$
-
$
Other Expenses
1,655,000.00
1,655,000.00
1,294,451.60
5,443.13
355,105.27
-
Total Operating
2,235,000.00
2,235,000.00
1,657,020.35
5,443.13
572,536.52
-
Capital Improvements:
Capital Improvement Fund
25,000.00
25,000.00
25,000.00
-
-
-
Capital Outlay
85,000.00
85,000.00
-
-
85,000.00
-
Total Capital Improvements
110,000.00
110,000.00
25,000.00
-
85,000.00
-
Debt Service:
Interest on Notes
25,000.00
25,000.00
-
-
-
25,000.00
Total Debt Service
25,000.00
25,000.00
-
-
-
25,000.00
Deferred Charges & Statutory Expenditures:
Deferred Charges:
Costs of Improvements Authorized:
Improvements to Water/Sewer System
130,000.00
130,000.00
130,000.00
-
-
-
Total Deferred Charges
130,000.00
130,000.00
130,000.00
-
-
-
Statutory Expenditures:
Contribution To:
Public Employees' Retirement System
54,621.00
54,621.00
54,621.00
-
-
-
Social Security System (O.A.S.I.)
45,000.00
45,000.00
22,479.26
-
22,520.74
-
Defined Contribution Retirement Plan
786.00
786.00
406.75
-
379.25
-
Unemployment Compensation Insurance
4,593.00
4,593.00
1,274.30
-
3,318.70
-
Total Statutory Expenditures
105,000.00
105,000.00
78,781.31
-
26,218.69
-
Total Water/Sewer Utility Fund Appropriations
2,605,000.00
$
2,605,000.00
$
1,890,801.66
$
5,443.13
$
683,755.21
$
25,000.00
$
APPROPRIATIONS
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
WATER/SEWER UTILITY OPERATING FUND
STATEMENT OF EXPENDITURES - REGULATORY BASIS
The accompanying Notes to Financial Statements are an integral part of this statement.
26
EXHIBIT E
BALANCE
BALANCE
DECEMBER 31,
DECEMBER 31,
Reference
2021
2020
Land
E-1
748,506.36
$
748,506.36
$
Buildings
E-1
1,017,160.67
949,506.71
Equipment
E-1
739,828.63
728,208.45
Motor Vehicles
E-1
3,088,894.62
2,955,200.36
Total General Fixed Assets
5,594,390.28
$
5,381,421.88
$
Investment in General Fixed Assets
E
5,594,390.28
$
5,381,421.88
$
BOROUGH OF SURF CITY
DECEMBER 31, 2021 AND 2020
REGULATORY BASIS
STATEMENTS OF GENERAL FIXED ASSETS -
GENERAL FIXED ASSETS ACCOUNT GROUP
The accompanying Notes to Financial Statements are an integral part of this statement.
27
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28
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
COUNTY OF OCEAN, NEW JERSEY
29
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30
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 1. Summary of Significant Accounting Policies
Description of Financial Reporting Entity
The Borough of Surf City, County of Ocean, New Jersey (hereafter referred to as the “Borough") is
incorporated under the laws of the State of New Jersey. The financial statements of the reporting entity
include those of the Borough of Surf City only.
Component Units - GASB Statement 14, as amended by GASB Statements 39, 61, 80 & 90, establishes
criteria to be used in determining the component units, which should be included in the financial
statements of a primary government. The financial statements of the Borough are not presented in
accordance with GAAP (as discussed below). Therefore, the Borough had no component units as
defined by GASB Statement No. 14, as amended by GASB Statements 39, 61, 80, & 90.
Basis of Accounting, Measurement Focus and Basis of Presentation - The financial statements of the
Borough contain all funds and account groups in accordance with the “Requirements of Audit” as
promulgated by the State of New Jersey, Department of Community Affairs, Division of Local
Government Services. The principles and practices established by the Requirements of Audit are
designed primarily for determining compliance with legal provisions and budgetary restrictions and as a
means of reporting on the stewardship of public officials with respect to public funds. Generally, the
financial statements are presented using the flow of current financial resources measurement focus and
modified accrual basis of accounting with minor exceptions as mandated by these “Requirements”. In
addition, the prescribed accounting principles previously referred to differ in certain respects from
accounting principles generally accepted in the United State of America applicable to local government
units. The more significant differences are explained further in this note.
In accordance with the “Requirements”, the Borough accounts for its financial transactions through the
use of separate funds, which are described as follows:
Current Fund – This fund accounts for revenues and expenditures for governmental operations
of a general nature, including federal and state grant funds.
Trust Funds – These funds account for receipts, custodianship and disbursement of funds in
accordance with the purpose for which each reserve was created.
General Capital Fund – This fund accounts for receipt and disbursement of funds for the
acquisition of general capital facilities, other than those acquired in the Current Fund.
Utility Operating and Capital Funds – These funds accounts for utility operations that are
financed through user fees. The funds are operated on a basis similar to private business
enterprises where the intent is that the costs of providing the utility to the general public be
financed through user fees. Operations relating to the acquisition of capital facilities for utility
purposes are recorded in the Utility Capital Fund.
General Fixed Asset Account Group – The Fixed Asset Account Group of accounts is utilized
to account for property, land, buildings, and equipment that have been acquired by other funds of
the Borough.
LOSAP Fund – This fund accounts for the receipts and disbursements of the Length of Service
Awards Program Fund. This Fund is not an audited opinion unit.
31
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 1. Summary of Significant Accounting Policies (continued)
Budgets and Budgetary Accounting - The Borough must adopt an annual budget for its Current and
Utility Fund in accordance with N.J.S.A.40A:4 et seq. N.J.S.A.40A:4-5 requires the governing body to
introduce and approve the annual municipal budget no later than February 10th of each year. At
introduction, the governing body must fix the time and place for a public hearing on the budget and must
advertise the time and place at least ten days prior to the hearing in a newspaper published and circulating
in the municipality. The public hearing must not be held less than twenty-eight days after the date the
budget was introduced. After the hearing has been held, the governing body may, by majority vote, adopt
the budget or may amend the budget in accordance with N.J.S.A.40A:4-9. Amendments to adopted
budgets, if any are detailed in the statements of revenues and expenditures.
An extension of the statutory dates for introduction, approval and adoption of the municipal budget may
be granted by the Director of Local Government Services, with the permission of the Local Finance
Board. Budgets are adopted on the same basis of accounting utilized for the preparation of the Borough’s
financial statements. Once a budget is approved it may be amended after November 1, by a resolution
adopted by the governing body.
Cash, Cash Equivalents and Investments - Cash and Cash equivalents include petty cash, change funds
and cash on deposit with public depositories. All certificates of deposit are recorded as cash regardless of
the date of maturity. Under GAAP, investments are reported at fair value but under regulatory basis of
accounting, investments are stated at cost with the exception of LOSAP investments which are reported at
fair value. Therefore unrealized gains or losses on investments have not been recorded.
New Jersey municipal units are required by N.J.S.A.40A:5-14 to deposit public funds in a bank or trust
company having its place of business in the State of New Jersey and organized under the laws of the
United States or of the State of New Jersey or in the New Jersey Cash Management Fund. N.J.S.A.40A:5-
15.1 provides a list of investments, which may be purchased by New Jersey municipal units. In addition,
other State statutes permit investments in obligations issued by local utilities and other state agencies.
N.J.S.A.17:9-41 et seq. establishes the requirements for the security of deposits of governmental units.
The statute requires that no governmental unit shall deposit public funds in a public depository unless
such funds are secured in accordance with the Governmental Unit Deposit Protection Act, which was
enacted in 1970 to protect governmental units from a loss of funds on deposit with a failed banking
institution in New Jersey. Public depositories include State or federally chartered banks savings banks or
associations located in or having a branch office in the State of New Jersey, the deposits of which are
federally insured. All public depositories must pledge collateral, having a market value at least equal to
five percent of the average daily balance of collected public funds, to secure the deposits of Governmental
Units. If a public depository fails, the collateral it has pledged, plus the collateral of all other public
depositories, is available to pay the amount of their deposits to the Governmental Units.
The cash management plan adopted by the Borough requires it to deposit funds in public depositories
protected from loss under the provisions of the Act.
Interfunds - Interfund receivables and payables that arise from transactions between funds are recorded
by all funds affected by such transactions in the period in which the transaction is executed. 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.
32
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 1. Summary of Significant Accounting Policies (continued)
Inventories and Supplies - The cost of inventories of supplies for all funds are recorded as expenditures
at the time individual items are purchased. The costs of inventories are not included on the various
statements of assets, liabilities, reserves and fund balance.
General Fixed Assets – Accounting for governmental fixed assets, as required by N.J.A.C.5:30-5.6,
differs in certain respects from accounting principles generally accepted in the United States of America.
In accordance with the regulations, all local units, including municipalities, must maintain a general fixed
assets reporting system that establishes and maintains a physical inventory of nonexpendable, tangible
property as defined and limited by the U.S. Office of Management and Budget Circular A-87 (Attachment
B, Section 19), except that the useful life of such property is at least five years. The Borough has adopted
a capitalization threshold of $5,000.00, the maximum amount allowed by the Circular. Generally, assets
are valued at historical cost; however, assets acquired prior to December 31, 1985 are valued at actual
historical cost or estimated historical cost. In some instances, assets are valued at the assessed valuation of
the property at the time of acquisition, which approximates fair value. No depreciation of general fixed
assets is recorded. Donated general fixed assets are recorded at their acquisition value as of the date of
the transaction. Interest costs relative to the acquisition of general fixed assets are recorded as
expenditures when paid. Public domain ("infrastructure") general fixed assets consisting of certain
improvements such as roads, bridges, curbs and gutters, streets and sidewalks and drainage systems are
not capitalized. Expenditures for construction in progress are recorded in the capital funds until such time
as the construction is completed and put into operation. The Borough is required to maintain a subsidiary
ledger detailing fixed assets records to control additions, retirements, and transfers of fixed assets. In
addition, a statement of general fixed assets, reflecting the activity for the year, must be included in the
Borough's basic financial statements.
The regulations require that general fixed assets, whether constructed or acquired through purchase, grant
or gift be included in the aforementioned inventory. In addition, property management standards must be
maintained that includes accurate records indicating asset description, source, ownership, acquisition cost
and date, the percentage of federal participation (if any), and the location, use, and condition of the asset.
Periodically, physical inventories must be taken and reconciled with these records. All fixed assets must
be adequately controlled to safeguard against loss, damage, or theft.
Utility Fixed Assets – Property and equipment purchases by a utility fund are recorded in the utility
capital account at cost and are adjusted for disposition. The amounts shown do not represent replacement
cost or current value. The reserve for amortization and deferred reserve for amortization in the utility
capital fund represent the cost of the utility fixed assets reduced by the outstanding balances of bonds,
loans, notes, or other borrowings that are attributable to the acquisition, construction or improvement of
those assets.
Foreclosed property – Foreclosed Property or “Property Acquired for Taxes” is recorded in the Current
Fund at the assessed valuation when such property was acquired and is fully reserved. Ordinarily it is the
intention of the Borough to resell foreclosed property in order to recover all or a portion of the delinquent
taxes or assessments and to return the property to a taxpaying basis. For this reason, the value of
foreclosed property has not been included in the General Fixed Assets Account Group. If such property
is converted to a municipal use, it will be recorded in the General Fixed Assets Account Group.
Deferred Charges – The recognition of certain expenditures is deferred to future periods. These
expenditures or deferred charges are generally overexpenditures of legally adopted budget appropriations
33
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 1. Summary of Significant Accounting Policies (continued)
or emergency appropriations made in accordance with N.J.S.A.40A:4-46 et seq. Deferred charges are
subsequently raised as items of appropriation in budgets of succeeding years.
Fund Balance – Fund Balance included in the Current and Utility Operating Fund represent the amount
available for anticipation as revenue in future year’s budgets, with certain restrictions.
Revenues – are recorded when received in cash except for certain amounts, which are due from other
governmental units. Revenue from Federal and State grants are realized when anticipated as such in the
Borough’s budget. Receivables for property taxes are recorded with offsetting reserves on the statement
of assets, liabilities, reserves and fund balance of the Borough’s Current Fund; accordingly, such amounts
are not recorded as revenue until collected. Other amounts that are due the Borough, which are
susceptible to accrual are also recorded as receivables with offsetting reserves and recorded as revenues
when received.
Utility Revenues – Utility charges are billed quarterly based upon a flat service charge and if applicable,
an excess consumption or usage charge. Revenues from these sources are recognized on a cash basis.
Receivables that are susceptible to accrual are recorded with offsetting reserves on the balance sheet of
the Boroughs utility operating fund.
Property Tax Revenues – are collected in quarterly installments due February 1, May 1, August 1 and
November 1. The amount of tax levied includes not only the amount required in support of the Borough’s
annual budget, but also the amounts required in support of the budgets of the County of Ocean, Long
Beach Island Consolidated School District and Southern Regional School District. Unpaid property taxes
are subject to tax sale in accordance with statutes.
County Taxes – The municipality is responsible for levying, collecting and remitting County taxes for
the County of Ocean. Operations is charged for the amount due the County for the year, based upon the
ratables required to be certified to the County Board of Taxation by January 10th of the current year. In
addition, operations is charged for the County share of Added and Omitted Taxes certified to the County
Board of Taxation by October 10th of the current year and due to be paid to the County by February 15th
of the following year.
School Taxes – The municipality is responsible for levying, collecting and remitting school taxes for the
Long Beach Island Consolidated School District and Southern Regional School District. Operations are
charged for the full amount required to be raised from taxation to operate the local and regional school
district July 1 to June 30.
Deferred School Taxes – School taxes raised in advance in the Current Fund for a school fiscal year
(July I to June 30) which remain unpaid at December 31 of the calendar year levied may be deferred to
fund balance to the extent of not more than 50% of the annual levy providing no requisition has been
made by the school district for such amount.
Reserve for Uncollected Taxes – The inclusion of the “Reserve for Uncollected Taxes” appropriation in
the Borough’s annual budget protects the Borough from taxes not paid currently. The Reserve, the
minimum amount of which is determined on the percentage of collections experienced in the immediate
preceding year, with certain exceptions, is required to provide assurance that cash collected in the current
year will provide sufficient cash flow to meet expected obligations.
34
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 1. Summary of Significant Accounting Policies (continued)
Expenditures – are recorded on the “budgetary” basis of accounting. Generally, expenditures are
recorded when an amount is encumbered through the issuance of a numerically controlled purchase order
or when a contract is executed as required by Technical Accounting Directive No. 85-1. When an
expenditure is paid, the amount encumbered is simultaneously liquidated in its original amount.
Encumbrances are offset by an account entitled reserve for encumbrances. The reserve is classified as a
cash liability under New Jersey municipal accounting. At December 31, this reserve represents the
portion of appropriation reserves that has been encumbered and is subject to the same statutory provisions
as appropriation reserves. Appropriations for interest payments on outstanding general capital bonds and
notes are provided on the cash basis. Appropriations for interest payments on outstanding utility capital
bonds and notes are provided on the accrual basis.
Appropriation Reserves – Appropriation reserves covering unexpended appropriation balances are
automatically created at year-end and recorded as liabilities, except for amounts, which may be cancelled
by the governing body. Appropriation reserves and reserve for encumbrances at current year end are
available until December 31st of the succeeding year to meet specific claims, commitments or contracts
incurred during the preceding year. Any unspent balances at this time are lapsed appropriation reserves
and recorded as income.
Long-Term Debt - Long-Term Debt relative to the acquisition of capital assets, is recorded as a liability
in the General and Utility Capital Fund. Where an improvement is a “local improvement”, i.e. assessable
upon completion, long-term debt associated with that portion of the cost of the improvement to be funded
by assessments is transferred to the Trust Fund upon the confirmation of the assessments or when the
improvement is fully and permanently funded.
Compensated Absences – Expenditures relating to obligations for unused vested accumulated vacation
and sick leave are not recorded until paid; however, municipalities may establish and budget reserve
funds subject to NJSA 40A:4-39 for the future payment of compensated absences.
Recent Accounting Pronouncements – The Governmental Accounting Standards Board (GASB) is the
accepted standard-setting body for establishing governmental accounting and financial reporting
principles. GASB adopts accounting statements to be used by governmental units when reporting
financial position and results of operations in accordance with accounting principles generally accepted in
the United States of America (GAAP). The municipalities in the State of New Jersey do not prepare their
financial statements in accordance with GAAP and thus do not comply with all of the GASB
pronouncements.
Accounting Pronouncements Adopted in Current Year
The following GASB Statements became effective for the fiscal year ended December 31, 2021:
Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period.
The requirements of this Statement are effective for reporting periods beginning after December
15, 2020.
Statement No. 93, Replacement of Interbank Offered Rates. The requirements of this Statement,
except for paragraphs 11b, 13, and 14 are effective for reporting periods beginning after June 15,
2020. The requirement in paragraph 11b is effective for reporting periods ending after December
31, 2021. The requirements in paragraphs 13 and 14 are effective for fiscal years beginning after
June 15, 2021.
35
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 1. Summary of Significant Accounting Policies (continued)
Management has determined that the implementation of these Statements did not have a significant
impact on the Borough’s financial statements.
Accounting Pronouncements Effective in Future Reporting Periods
Statement No. 87, Leases. The requirements of this Statement are effective for fiscal years
beginning after June 15, 2021.
Statement No. 93, Replacement of Interbank Offered Rates. The requirements of this Statement,
except for paragraphs 11b, 13, and 14 are effective for reporting periods beginning after June 15,
2020. The requirement in paragraph 11b is effective for reporting periods ending after December
31, 2021. The requirements in paragraphs 13 and 14 are effective for fiscal years beginning after
June 15, 2021.
Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting
for Internal Revenue Code Section 457 Deferred Compensation Plans – an amendment of GASB
Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32. Requirements of
this pronouncement related to section 1, paragraph 4 are effective immediately. All other
requirements will be effective for reporting periods beginning June 15, 2021. Management has
determined the implementation of certain provisions within this Statement did not have a
significant impact on the Borough’s financial statements.
Management has not yet determined the impact these Statements will have on the Borough’s financial
statements.
Note 2. Deposits and Investments
The Borough is governed by the deposit and investment limitations of New Jersey state law.
Deposits
Custodial Credit Risk Related to Deposits - Custodial credit risk is the risk that, in the event of a bank
failure, the Borough’s deposits may not be returned. Although the Borough does not have a formal policy
regarding custodial credit risk, NJSA 17:9-41 et seq. requires that the governmental units shall deposit
public funds in public depositories protected from loss under the provisions of the Governmental Unit
Deposit Protection Act (GUDPA). GUDPA is a supplemental insurance program set forth by the New
Jersey Legislature to protect the deposits of local governmental agencies. The program is administered by
the Commissioner of the New Jersey Department of Banking and Insurance. Under the Act, the first
$250,000 of governmental deposits in each insured depository is protected by FDIC. Public funds owned
by the Borough 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 funds that may pass to the
Borough relative to the happening of a future condition. Such funds are shown as Uninsured and
Uncollateralized in the schedule below.
36
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 2. Deposits and Investments (continued)
As of December 31, 2021, the Borough’s bank balance of $14,062,989.81 was insured or collateralized as
follows:
Insured under FDIC and GUDPA
13,305,266.62
$
NJ Cash Management Fund
135,581.18
Uninsured and Uncollateralized
622,142.01
14,062,989.81
$
Investments
Under the regulatory basis of accounting, investments are measured at cost in the Borough’s financial
statements. However, had the financial statements been prepared in accordance with generally accepted
accounting principles (GAAP), investments would be reported at fair value (except for fully benefit-
responsive investment contracts, which would be reported at contract value). Contract value is the
relevant measure for the portion of the Length of Service Awards Program (LOSAP) Plan attributable to
fully benefit-responsive investment contracts because contract value is the amount participants normally
would receive if they were to initiate permitted transactions under the terms of the LOSAP Plan.
Investments at Fair Value – The fair value measurements of investments are required to be reported based
on the hierarchy established by GAAP. Under GAAP, investments are required to be categorized based
on the fair value of inputs of Levels 1, 2 and 3. Under Level 1 inputs, investments are required to be
categorized based on quoted market prices in active markets for identical investments. Level 2 inputs are
based primarily on using observable measurement criteria, including quoted market prices of similar
investments in active and inactive markets and other observable corroborated factors. Level 3 inputs are
assets measured at fair value on a recurring basis using significant unobservable measurement criteria
based on the best information available. As of December 31, 2021 the Borough had investments held at
Level 2 or 3.
Following is a description of the valuation methodologies used for investments measured at fair value.
Money Market Funds: Valued at the quoted NAV of shares held by the Borough at year-end.
Mutual Funds: Valued at quoted market prices which represent the net asset value (“NAV”) shares
held by the Borough at year-end.
The Borough’s fair value, hierarchy level and maturities of its investments at December 31, 2021 was as
follows:
Carrying
Value
Level 1
Total
Investment Type
Mutual Funds
902,579.69
$
902,579.69
$
902,579.69
$
Money Market
29,020.18
29,020.18
29,020.18
931,599.87
$
931,599.87
$
931,599.87
$
Fund
Trust Fund - LOSAP
931,599.87
$
931,599.87
$
931,599.87
$
931,599.87
$
931,599.87
$
$ 931,559.87
Fair Value as of December 31,
2021
37
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 2. Deposits and Investments (continued)
Investments at Contract Value - The Borough held a fully benefit-responsive investment contract with the
Lincoln Financial Group (Lincoln) totaling $306,693.33 as of December 31, 2021. Lincoln maintains the
contributions in the group fixed annuity contracts (fixed accounts). The accounts are credited with
earnings on the underlying investments and charged for participant withdrawals and administrative
expenses. The traditional investment contracts held by the Borough are guaranteed investment contracts.
The contract issuer is contractually obligated to repay the principal and interest at a specified interest rates
that are guaranteed to the LOSAP Plan. The Borough’s ability to receive amounts due in accordance with
the fully benefit-responsive investment contracts is dependent on the contract issuer’s ability to meet its
financial obligations. The fixed accounts continue in-force until they are terminated by Lincoln or the
LOSAP Plan and do not define a maturity date.
The total Trust Fund LOSAP value held by the Borough at December 31, 2021 was as follows:
Trust Fund - LOSAP (Fair Value)
931,599.87
$
Trust Fund - LOSAP (Contract Value)
306,693.33
Total Trust Fund - LOSAP
1,238,293.20
$
Custodial credit risk related to Investments - This is the risk that in the event of the failure of the
counterparty (e.g., broker-dealer) to a transaction, the Borough will not be able to recover the value of its
investment or collateral securities that are in the possession of another party. Other than the rules and
regulations promulgated by N.J.S.A. 40A:5-15.1, the Borough has no investment policy to limit exposure
to custodial credit risk.
Interest rate risk - This is the risk that changes in interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value
to changes in market interest rates. Other than the rules and regulations promulgated by N.J.S.A. 40A:5-
15.1, the Borough does not have a formal investment policy that limits investment maturities as a means
of managing its exposure to fair value losses arising from increasing interest rates.
Credit risk - Credit risk is the risk that an issuer to an investment will not fulfill its obligation to the holder
of the investment. This is measured by assignment of a rating by a nationally recognized rating
organization. U.S. Government securities or obligations explicitly guaranteed by the U.S. government are
not considered to have credit risk exposure.
Concentration of Credit Risk – Concentration of credit risk is the risk of loss attributed to the magnitude
of a government’s investment in a single issuer. Other than the rules and regulations promulgated by
N.J.S.A. 40A; 5-15.1, the Borough’s investment policies place no limit in the amount the Borough may
invest in any one issuer. More than 5% of the Borough’s investments are in money market funds and
fixed account investments. These investments represent 100% of the Borough’s total investments.
38
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 3. Property Taxes
The following is a three-year comparison of certain statistical information relative to property taxes and
property tax collections for the current and previous two years.
Comparison Schedule of Tax Rates
2021
2020
2019
Tax Rate
0.902
$
0.873
$
0.871
$
Apportionment of Tax Rate:
Municipal
0.239
0.239
0.239
County
0.381
0.377
0.382
Local School
0.044
0.044
0.044
Regional School
0.238
0.213
0.206
Assessed Valuation
Year
Amount
2021
2020
2019
$ 1,970,216,404.00
1,946,547,104.00
1,925,753,995.00
Comparison of Tax Levies and Collections
Cash
Percentage Of
Year
Tax Levy
Collections
Collection
2021
17,891,018.73
$
17,787,103.84
$
99.41%
2020
17,086,731.38
16,951,067.20
99.20%
2019
16,904,325.66
16,779,309.64
99.26%
Delinquent Taxes and Tax Title Liens
Tax Title
Delinquent
Total
Percentage Of
Year
Liens
Taxes
Delinquent
Tax Levy
2021
998.89
$
95,422.21
$
96,421.10
$
0.54%
2020
956.50
123,677.10
124,633.60
0.73%
2019
915.47
95,029.21
95,944.68
0.57%
39
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 3. Property Taxes (continued):
Year
Number
2021
1
2020
1
2019
1
Number of Tax Title Liens
The last tax sale was held on October 20, 2017. There was no tax sale held in 2021.
Note 4. Property Acquired By Tax Title Lien Liquidation
The value of properties acquired by liquidation of tax title liens based on the last assessed valuation of
such properties as of December 31, was as follows:
Year
Amount
2021
4,725.00
$
2020
4,725.00
2019
4,725.00
Note 5. Water/Sewer Utility Service Charges
The following is a three-year comparison of water/sewer utility charges (rents) and collections for the
current and previous two years.
Cash
Percentage Of
Year
Beginning Balance
Billings
Total
Collections
Collection
2021
35,800.40
$
2,149,972.56
$
2,185,772.96
$
2,137,059.82
$
97.77%
2020
28,237.30
2,015,977.18
2,044,214.48
2,008,414.08
98.24%
2019
50,157.32
2,012,250.01
2,062,407.33
2,034,170.03
98.63%
40
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 6. Fund Balances Appropriated
The following schedule details the amount of fund balances available at the end of the current year and
four previous years and the amounts utilized in the subsequent year’s budgets:
Utilized in
Percentage
Balance
Budget of
of Fund
Year
December 31,
Succeeding Year
Balance Used
Current Fund:
2021
5,125,651.21
$
1,672,500.00
$
32.63%
2020
4,691,266.04
1,550,000.00
33.04%
2019
4,458,873.59
1,500,000.00
34.16%
Utility Operating Fund:
2021
1,760,308.66
$
980,000.00
$
55.67%
2020
1,305,861.37
980,000.00
75.05%
2019
1,261,072.90
945,000.00
74.94%
Note 7. Disaggregated Receivable and Payable Balances
There are no significant components of receivable and payable balances reported in the financial
statements.
Note 8. Interfund Receivables, Payables and Transfers
The following interfund balances were recorded in the various statements of assets liabilities, reserves and
fund balances at December 31, 2021:
Interfund
Interfund
Fund
Receivable
Payable
Current Fund
171,205.01
$
409,918.07
$
State and Federal Grant Fund
28,262.14
-
Animal Control Trust
-
376.52
Trust Other Fund
36,655.93
-
Capital Fund
-
170,828.49
Utility Operating Fund
19.67
-
Utility Capital Fund
345,000.00
19.67
581,142.75
$
581,142.75
$
The interfund receivables and payables above predominately resulted from payment made by certain
funds on behalf of other funds. All interfund balances are expected to be repaid within one year.
Interfund transfers for the year ended December 31, 2021 are as follows:
Fund
Transfers In
Transfers Out
Current Fund
607,387.90
$
722,171.68
$
Animal Control Trust
-
0.55
Trust Other Fund
19,636.27
-
Capital Fund
607,495.72
607,387.35
Utility Operating Fund
100,065.17
4,960.31
Utility Capital Fund
-
65.17
1,334,585.06
$
1,334,585.06
$
41
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 9. Fixed Assets
The following is a summary of changes in the General Fixed Assets Account Group for the year ended
December 31, 2021.
Balance
Balance
December 31,
December 31,
2020
Additions
Deletions
2021
Land
748,506.36
$
-
$
-
$
748,506.36
$
Buildings
949,506.71
67,653.96
-
1,017,160.67
Equipment
728,208.45
21,620.18
10,000.00
739,828.63
Motor Vehicles
2,955,200.36
142,011.26
8,317.00
3,088,894.62
5,381,421.88
$
231,285.40
$
18,317.00
$
5,594,390.28
$
Note 10. Pension Obligations
A. Public Employees’ Retirement System (PERS)
Plan Description - The State of New Jersey, Public Employees' Retirement System (PERS) is a cost-
sharing multiple-employer defined benefit pension plan administered by the State of New Jersey,
Division of Pensions and Benefits (the Division). For additional information about PERS, please refer to
Division's
Comprehensive
Annual
Financial
Report
(CAFR)
which
can
be
found
at
http://www.state.nj.us/treasury/pensions/annual-reports.shtml.
The vesting and benefit provisions are set by N.J.S.A. 43:15A. PERS provides retirement, death and
disability benefits. All benefits vest after ten years of service.
The following represents the membership tiers for PERS:
Tier
Definition
1
Members who were enrolled prior to July 1, 2007
2
Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008
3
Members who were eligible to enroll on or after November 2, 2008 and prior to May 22, 2010
4
Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011
5
Members who were eligible to enroll on or after June 28, 2011
Service retirement benefits of 1/55th of final average salary for each year of service credit is available to
tiers 1 and 2 members upon reaching age 60 and to tier 3 members upon reaching age 62. Service
retirement benefits of 1/60th of final average salary for each year of service credit is available to tier 4
members upon reaching age 62 and tier 5 members upon reaching age 65. Early retirement benefits are
available to tiers 1 and 2 members before reaching age 60, tiers 3 and 4 with 25 or more years of service
credit before age 62 and tier 5 with 30 or more years of service credit before age 65. Benefits are reduced
by a fraction of a percent for each month that a member retires prior to the age at which a member can
receive full early retirement benefits in accordance with their respective tier. Tier 1 members can receive
an unreduced benefit from age 55 to age 60 if they have at least 25 years of service. Deferred retirement is
available to members who have at least 10 years of service credit and have not reached the service
retirement age for the respective tier.
42
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
A. Public Employees’ Retirement System (PERS) (continued):
Basis of Presentation - The schedules of employer and nonemployer allocations and the schedules of
pension amounts by employer and nonemployer (collectively, the Schedules) present amounts that are
considered elements of the financial statements of PERS or its participating employers. Accordingly, they
do not purport to be a complete presentation of the financial position or changes in financial position of
PERS or the participating employers. The accompanying Schedules were prepared in accordance with
U.S. generally accepted accounting principles. Such preparation requires management of PERS to make a
number of estimates and assumptions relating to the reported amounts. Due to the inherent nature of these
estimates, actual results could differ from those estimates.
Contributions - The contribution policy for PERS is set by N.J.S.A. 43:15A and requires contributions by
active members and contributing employers. State legislation has modified the amount that is contributed
by the State. The State's pension contribution is based on an actuarially determined amount, which
includes the employer portion of the normal cost and an amortization of the unfunded accrued liability.
Funding for noncontributory group insurance benefits is based on actual claims paid. For the fiscal year
2020, the State's pension contribution was less than the actuarial determined amount. The local
employers' contribution amounts are based on an actuarially determined rate, which includes the normal
cost and unfunded accrued liability. Chapter 19, P.L. 2009 provided an option for local employers of
PERS to contribute 50% of the normal and accrued liability contribution amounts certified for payments
due in State fiscal year 2009. Such employers will be credited with the full payment and any such
amounts will not be included in their unfunded liability. The actuaries will determine the unfunded
liability of those retirement systems, by employer, for the reduced normal and accrued liability
contributions provided under this law. This unfunded liability will be paid by the employer in level
annual payments over a period of 15 years beginning with the payments due in the fiscal year ended June
30, 2012 and will be adjusted by the rate of return on the actuarial value of assets. For the year ended
December 31, 2021, the Borough’s contractually required contribution to PERS plan was $125,548.00.
Components of Net Pension Liability - At December 31, 2021, the Borough’s proportionate share of the
PERS net pension liability was $1,269,309.00. The net pension liability was measured as of June
30, 2021. The total pension liability used to calculate the net pension liability was determined using
update procedures to roll forward the total pension liability from an actuarial valuation as of July 1,
2020, which was rolled forward to June 30, 2021. The Borough’s proportion of the net pension liability
was based on the Borough’s actual contributions to the plan relative to the total of all
participating employers’ contributions for the year ended June 30, 2021. The Borough’s proportion
measured as of June 30, 2021, was 0.0107203706% which was a decrease of 0.0035450037% from its
proportion measured as of June 30, 2020.
12/31/2021
12/30/2020
Actuarial valuation date (including roll forward)
June 30, 2021
June 30, 2020
Deferred Outflows of Resources
170,776
$
465,501
$
Deferred Inflows of Resources
1,507,582
1,112,579
Net Pension Liability
1,269,989
2,326,309
Borough's portion of the Plan's total Net Pension Liability
0.01072%
0.01427%
Balances at December 31, 2021 and December 31, 2020
43
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
A. Public Employees’ Retirement System (PERS) (continued):
Pension Expense (Credit) and Deferred Outflows/Inflows of Resources - At December 31, 2021, the
Borough’s proportionate share of the PERS expense (credit), calculated by the plan as of the June 30,
2020 measurement date is $(241,044). This expense is not recognized by the Borough because of the
regulatory basis of accounting as described in Note 1, but as previously mentioned the Borough
contributed $125,548 to the plan in 2021.
At December 31, 2021, the Borough reported 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
and Actual Experience
20,029
$
9,092
$
Changes of Assumptions
6,614
452,124
Net Difference between Projected
and Actual Earnings on Pension
Plan Investments
-
334,548
Changes in Proportion and Differences
between Borough Contributions and
Proportionate Share of Contributions
144,133
711,818
170,776
$
1,507,582
$
44
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
A. Public Employees’ Retirement System (PERS) (continued):
The Borough will amortize the above sources of deferred outflows and inflows related to PERS over the
following number of years:
Deferred
Deferred
Outflow of
Inflow of
Resources
Resources
Differences between Expected
and Actual Experience
Year of Pension Plan Deferral:
June 30, 2015
5.72
-
June 30, 2016
5.57
-
June 30, 2017
5.48
-
June 30, 2018
5.63
-
June 30, 2019
5.21
-
June 30, 2020
5.16
-
June 30, 2021
5.13
-
Changes of Assumptions
Year of Pension Plan Deferral:
June 30, 2016
5.57
-
June 30, 2017
-
5.48
June 30, 2018
-
5.63
June 30, 2019
-
5.21
June 30, 2020
-
5.16
June 30, 2021
-
5.13
Net Difference between Projected
and Actual Earnings on Pension
Plan Investments
Year of Pension Plan Deferral:
June 30, 2014
-
5.00
June 30, 2015
-
5.00
June 30, 2016
5.00
-
June 30, 2017
5.00
-
June 30, 2018
5.00
-
June 30, 2019
5.00
-
June 30, 2020
5.00
-
June 30, 2021
5.00
-
Changes in Proportion and Differences
between Contributions and
Proportionate Share of Contributions
Year of Pension Plan Deferral:
June 30, 2016
5.57
5.57
June 30, 2017
5.48
5.48
June 30, 2018
5.63
5.63
June 30, 2019
5.21
5.21
June 30, 2020
5.16
5.16
June 30, 2021
5.13
5.13
45
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
A. Public Employees’ Retirement System (PERS) (continued):
The following is a summary of the deferred outflows of resources and deferred inflows of resources
related to PERS that will be recognized in future periods:
Year Ending
June 30,
Amount
2022
(472,600)
$
2023
(373,429)
2024
(318,042)
2025
(127,618)
2026
(45,117)
(1,336,806)
$
Actuarial Assumptions - The total pension asset/(liability) as of the measurement date was determined
by using an actuarial valuation as noted in the table below, with update procedures used to roll forward
the total pension liability to the measurement date. The actuarial valuations used the following actuarial
assumptions:
Inflation
Price
2.75%
Wage
3.25%
Salary Increases:
Through 2026
2.00 - 6.00% Based on Years of Service
Thereafter
3.00 - 7.00% Based on Years of Service
Investment Rate of Return
7.00%
Mortality Rate Table
Pub-2010 General Below-Median Income Employee mortality table
PERS
with fully generational mortality improvement projections
from the central year using Scale MP-2021
Period of Actuarial Experience
Study upon which Actuarial
Assumptions were Based
July 1, 2014 - June 30, 2018
Pre-retirement mortality rates were based on the Pub-2010 General Below-Median Income Employee
Mortality Table with an 82.2% adjustment for males and 101.4% adjustment for females, and with
future improvement from the base year of 2010 on a generational basis. Post-retirement mortality rates
were based on the Pub-2010 General Below-Median Income Healthy Retiree mortality table with a
91.4%
46
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
A. Public Employees’ Retirement System (PERS) (continued):
adjustment for males and 99.7% adjustment for females, and with future improvement from the base year
of 2010 on a generational basis. Disability retirement rates used to value disabled retirees were based on
the Pub-2010 Non-Safety Disabled Retiree mortality table with a 127.7% adjustment for males and
117.2% adjustment for females, and with future improvement from the base year of 2010 on a
generational basis. Mortality improvement is based on Scale MP-2020.
The actuarial assumptions used in the July 1, 2020 valuation were based on the results of an actuarial
experience study for the period July 1, 2014 to June 30, 2018. 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 the experience
deviates, the larger the impact on future financial statements.
Long-Term Expected Rate of Return - In accordance with State statute, the long-term expected rate of
return on plan investments (7.00% at June 30, 2020) is determined by the State Treasurer, after
consultation with the Directors of the 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 rates of return for each major asset class included in PERS’s target asset allocation as of June
30, 2020 are summarized in the following table:
Long-Term
Target
Expected Real
Asset Class
Allocation
Rate of Return
U.S. Equity
27.00%
8.09%
Non-U.S. Developed Markets Equity
13.50%
8.71%
Emerging Markets Equity
5.50%
10.96%
Private Equity
13.00%
11.30%
Real Estate
8.00%
9.15%
Real Assets
3.00%
7.40%
High Yield
2.00%
3.75%
Private Credit
8.00%
7.60%
Investment Grade Credit
8.00%
1.68%
Cash Equivalents
4.00%
0.50%
U.S. Treasuries
5.00%
0.95%
Risk Mitigation Strategies
3.00%
3.35%
100.00%
47
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
A. Public Employees’ Retirement System (PERS) (continued):
Discount Rate - The discount rate used to measure the total pension liability was 7.00% as of June 30,
2021. The single blended discount rate was based on long-term expected rate of return on pension plan
investments of 7.00%, and a municipal bond rate of 3.50% as of June 30, 2020 based on the Bond Buyer
Go 20-Bond Municipal Bond Index, which includes tax-exempt general obligation municipals 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 based on 70% of the actuarially determined contributions for
the State employer and 100% of actuarially determined contributions for the local employers. 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 2057. Therefore, the long-term expected rate of return
on plan investments was applied to projected benefit payments through 2057 and the municipal bond rate
was applied to projected benefit payments after that date in determining the total pension liability.
Sensitivity of the Borough’s proportionate share of the Net Pension Liability to Changes in the
Discount Rate - The following presents the Borough’s proportionate share of the net pension liability
calculated using the discount rate as disclosed above, as well as what the Borough’s proportionate share
of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point
lower (6.00%) or 1-percentage-point higher (8.00%) than the current rate:
1%
Current
1%
Decrease
Discount Rate
Increase
(6.00%)
(7.00%)
(8.00%)
Borough's Proportionate Share
of the Net Pension Liability
1,747,903
$
1,269,989
$
889,438
$
B. Police and Firemen’s Retirement System (PFRS)
Plan Description – The State of New Jersey, Police and Firemen’s Retirement System (PFRS) is a cost-
sharing multiple-employer defined benefit pension plan administered by the State of New Jersey,
Division of Pensions and Benefits (the Division). For additional information about PFRS, please refer to
the Division’s Comprehensive Annual Financial Report (CAFR) which can be found at
http://www.state.nj.us/treasury/pensions/annual-reports.shtml.
The vesting and benefit provisions are set by N.J.S.A. 43:16A. PFRS provides retirement as well as death
and disability benefits. All benefits vest after ten years of service, except disability benefits which vest
after four years of service.
The following represents the membership tiers for PFRS:
Tier
Definition
1
Members who were enrolled prior to May 22, 2010.
2
Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011
3
Members who were eligible to enroll on or after June 28, 2011
48
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
B. Police and Firemen’s Retirement System (PFRS) (continued):
Service retirement benefits are available at age 55 and are generally determined to be 2% of final
compensation for each year of creditable service, as defined, up to 30 years plus 1% for each year of
service in excess of 30 years. Members may seek special retirement after achieving 25 years of creditable
service, in which benefits would equal 65% (tiers 1 and 2 members) and 60% (tier 3 members) of final
compensation plus 1 % for each year if creditable service over 25 years but not to exceed 30 years.
Members may elect deferred retirement benefits after achieving ten years of service, in which case
benefits would begin at age 55 equal to 2% of final compensation for each year of service.
Basis of Presentation - The schedule of employer and nonemployer allocations and the schedule of
pension amounts by employer and nonemployer (collectively, the Schedules) present amounts that are
considered elements of the financial statements of PFRS, its participating employers or the State as a
nonemployer contributing entity. Accordingly, they do not purport to be a complete presentation of the
financial position or changes in financial position of PFRS, the participating employers, or the State. The
accompanying Schedules were prepared in accordance with U.S. generally accepted accounting
principles. Such preparation requires management of PFRS to make a number of estimates and
assumptions relating to the reported amounts. Due to the inherent nature of these estimates, actual results
could differ from those estimates.
Contributions - The contribution policy for PFRS is set by N.J.S.A. 43:16A and requires contributions by
active members and contributing employers. State legislation has modified the amount that is contributed
by the State. The State's contribution amount is based on an actuarially determined rate which includes
the normal cost and unfunded accrued liability. For fiscal year 2020, the State contributed an amount less
than the actuarially determined amount. The Local employers’ contribution amounts are based on an
actuarially determined rate which includes the normal cost and unfunded accrued liability. Chapter 19,
P.L. 2009 provided an option for local employers of PFRS to contribute 50% of the normal and accrued
liability contribution amounts certified for payments due in State fiscal year 2009. Such employers will be
credited with the full payment and any such amounts will not be included in their unfunded liability. The
actuaries will determine the unfunded liability of those retirement systems, by employer, for the reduced
normal and accrued liability contributions provided under this law. This unfunded liability will be paid by
the employer in level annual payments over a period of 15 years beginning with the payments due in the
fiscal year ended June 30, 2012 and will be adjusted by the rate of return on the actuarial value of assets.
For the year ended December 31, 2021, the Borough’s contractually required contributions to PFRS plan
was $333,326.
Net Pension Liability and Pension Expense - At December 31, 2021 the Borough’s proportionate share
of the PFRS net pension liability was $2,090,438. The net pension liability was measured as of June 30,
2021. The total pension liability used to calculate the net pension liability was determined using update
procedures to roll forward the total pension liability from an actuarial valuation as of July 1, 2020, to the
measurement date of June 30, 2021. The Borough’s proportion of the net pension liability was based on
the Borough’s actual contributions to the plan relative to the total of all participating employers’
contributions for the year ended June 30, 2021. The Borough’s proportion measured as of June 30, 2021,
was 0.0286005477%, which was an increase of 0.0007433047% from its proportion measured as of June
30, 2020.
49
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
B. Police and Firemen’s Retirement System (PFRS) (continued):
12/31/2021
12/30/2020
Actuarial valuation date (including roll forward)
June 30, 2021
June 30, 2020
Deferred Outflows of Resources
517,779
$
792,716
$
Deferred Inflows of Resources
1,867,259
1,153,044
Net Pension Liability
2,090,438
3,599,523
Borough's portion of the Plan's total net pension Liability
0.02860%
0.02786%
Balances at December 31, 2021 and December 31, 2020
Pension Expense and Deferred Outflows/Inflows of Resources – At December 31, 2021, the
Borough’s proportionate share of the PFRS expense, calculated by the plan as of the June 30, 2021
measurement date was $(186,524). This expense is not recognized by the Borough because of the
regulatory basis of accounting as described in Note 1, but as previously mentioned the Borough
contributed $333,326 to the plan in 2021.
At December 31, 2021, the Borough had deferred outflows of resources and deferred inflows of resources
related to PFRS from the following sources:
Deferred Outflows
Deferred Inflows
of Resources
of Resources
Differences between Expected
and Actual Experience
23,849
$
250,413
$
Changes of Assumptions
11,123
626,495
Net Difference between Projected
and Actual Earnings on Pension
Plan Investments
-
890,803
Changes in Proportion and Differences
between Borough Contributions and
Proportionate Share of Contributions
482,807
99,548
517,779
$
1,867,259
$
50
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
B. Police and Firemen’s Retirement System (PFRS) (continued):
The Borough will amortize the above sources of deferred outflows and inflows related to PFRS over the
following number of years:
Deferred
Deferred
Outflow of
Inflow of
Resources
Resources
Differences between Expected
and Actual Experience
Year of Pension Plan Deferral:
June 30, 2016
-
5.58
June 30, 2017
5.59
-
June 30, 2018
5.73
-
June 30, 2019
-
5.92
June 30, 2020
5.90
-
June 30, 2021
-
6.17
Changes of Assumptions
Year of Pension Plan Deferral:
June 30, 2016
5.58
-
June 30, 2017
-
5.59
June 30, 2018
-
5.73
June 30, 2019
-
5.92
June 30, 2020
-
5.90
June 30, 2021
6.17
-
Net Difference between Projected
and Actual Earnings on Pension
Plan Investments
Year of Pension Plan Deferral:
June 30, 2017
-
5.00
June 30, 2018
-
5.00
June 30, 2019
5.00
-
June 30, 2020
5.00
-
June 30, 2021
-
5.00
Changes in Proportion and Differences
between Contributions and
Proportionate Share of Contributions
Year of Pension Plan Deferral:
June 30, 2016
5.58
5.58
June 30, 2017
5.59
5.59
June 30, 2018
5.73
5.73
June 30, 2019
5.92
5.92
June 30, 2020
5.90
5.90
June 30, 2021
6.17
6.17
51
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
B. Police and Firemen’s Retirement System (PFRS) (continued):
The following is a summary of the deferred outflows of resources and deferred inflows of resources
related to PFRS that will be recognized in future periods:
Year Ending
June 30,
Amount
2022
(909,442)
$
2023
(248,979)
2024
(155,379)
2025
(114,571)
2026
78,891
(1,349,480)
$
Special Funding Situation – Under N.J.S.A. 43:16A-15, local participating employers are responsible
for their own contributions based on actuarially determined amounts, except where legislation was passed
which legally obligated the State if certain circumstances occurred. The legislation which legally
obligates the state is as follows: Chapter 8, P.L. 2000, Chapter 318, P.L. 2001, Chapter 86, P.L. 2001,
Chapter 511, P.L, 1991, Chapter 109, P.L. 1979, Chapter 247, P.L. 1993 and Chapter 201, P.L. 2001. The
amounts contributed on behalf of the local participating employers under this legislation is considered to
be a special funding situation as defined by GASB Statement No. 68 and the State is treated as a non-
employer contributing entity. Since the local participating employers do not contribute under this
legislation directly to the plan (except for employer specific financed amounts), there is no net pension
liability to report in the financial statements of the local participating employers related to this legislation.
Additionally, the State’s proportionate share of the PFRS net pension liability attributable to the Borough
is $587,935.00 as of December 31, 2021. The net pension liability was measured as of June 30, 2021. The
total pension liability used to calculate the net pension liability was determined using update procedures
to roll forward the total pension liability from an actuarial valuation as of July 1, 2020, to the
measurement date of June 30, 2021. The State’s proportion of the net pension liability associated with the
Borough was based on a projection of the Borough’s long-term share of contributions to the pension plan
relative to the projected contributions of all participating members, actuarially determined. The State’s
proportion measured as of June 30, 2021 was 0.0286005477%, which was an increase of 0.0007433047%
from its proportion measured as of June 30, 2020, which is the same proportion as the Borough’s. At
December 31, 2021, the Borough’s and the State of New Jersey’s proportionate share of the PFRS net
pension liability were as follows:
Borough's Proportionate Share of Net Pension Liability
2,090,438
$
State of New Jersey's Proportionate Share of Net Pension
Liability Associated with the Borough
587,935
2,678,373
$
52
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
B. Police and Firemen’s Retirement System (PFRS) (continued):
At December 31, 2021, the State’s proportionate share of the PFRS expense, associated with the Borough,
calculated by the plan as of the June 30, 2021 measurement date was $65,479.
Actuarial Assumptions - The total pension asset/(liability) as of the measurement date was determined
by using an actuarial valuation as noted in the table below, with update procedures used to roll forward
the total pension liability to the measurement date. The actuarial valuations used the following actuarial
assumptions:
Inflation
Price
2.75%
Wage
3.25%
Salary Increases:
Through all future years
3.25 - 15.25%
Based on Years of Service
Investment Rate of Return
7.00%
Mortality Rate Table
Pub-2010 Safety Employee mortality table
PFRS
with fully generational mortality improvement projections
from the central year using Scale MP-2021
Period of Actuarial Experience
Study upon which Actuarial
Assumptions were Based
July 1, 2013 - June 30, 2018
Pre-retirement mortality rates were based on the Pub-2010 Safety Employee mortality table with a
105.6% adjustment for males and 102.5% adjustment for females, and with future improvement from the
base year of 2010 on a generational basis. Post-retirement mortality rates were based on the Pub-2010
Safety Retiree Below-Median Income Weighted mortality table with a 96.7% adjustment for males and
96.0% adjustment for females, and with future improvement from the base year of 2010 on a generational
basis. For beneficiaries (contingent annuitants), the Pub-2010 General Retiree Below-Median Income
Weighted mortality table was used, unadjusted, and with future improvement from the base year of 2010
on a generational basis. Disability rates were based on the Pub-2010 Safety Disabled Retiree mortality
table with a 152.0% adjustment for males and 109.3% adjustment for females, and with future
improvement from the base year of 2010 on a generational basis. Mortality improvement is based
on Scale MP-2021.
The actuarial assumptions used in the July 1, 2020 valuation were based on the results of an actuarial
experience study for the period July 1, 2013 to June 30, 2018.
53
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
B. Police and Firemen’s Retirement System (PFRS) (continued):
Long-Term Expected Rate of Return - In accordance with State statute, the long-term expected rate of
return on plan investments (7.00% at June 30, 2021) is determined by the State Treasurer, after
consultation with the Directors of the 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 rates of return for each major asset class included in PFRS’s target asset allocation as of June
30, 2020 are summarized in the following table:
Long-Term
Target
Expected Real
Asset Class
Allocation
Rate of Return
U.S. Equity
27.00%
8.09%
Non-U.S. Developed Markets Equity
13.50%
8.71%
Emerging Markets Equity
5.50%
10.96%
Private Equity
13.00%
11.30%
Real Estate
8.00%
9.15%
Real Assets
3.00%
7.40%
High Yield
2.00%
3.75%
Private Credit
8.00%
7.60%
Investment Grade Credit
8.00%
1.68%
Cash Equivalents
4.00%
0.50%
U.S. Treasuries
5.00%
0.95%
Risk Mitigation Strategies
3.00%
3.35%
100.00%
Discount Rate - The discount rate used to measure the total pension liability was 7.00% as of June 30,
2021. 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 and the nonemployer contributing entity will be based on 78% of the actuarially determined
contributions for the State employer and 100% of actuarially determined contributions for local
employers. Based on those assumptions, the plan’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term expected
rate of return on plan investments was applied to all projected benefit payments to determine the total
pension liability.
54
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 10. Pension Obligations (continued):
B. Police and Firemen’s Retirement System (PFRS) (continued):
Sensitivity of the Borough’s proportionate share of the Net Pension Liability to Changes in the
Discount Rate - The following presents the Borough’s proportionate share of the net pension liability
calculated using the discount rate as disclosed above, as well as what the Borough’s proportionate share
of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point
lower (6.00%) or 1-percentage-point higher (8.00%) than the current rate:
1%
Current
1%
Decrease
Discount Rate
Increase
(6.00%)
(7.00%)
(8.00%)
Borough's Proportionate Share
of the Net Pension Liability
3,174,265
$
2,090,438
$
1,188,269
$
State of New Jersey's Proportionate
Share of Net Pension Liability
associated with the Borough
892,761
587,935
334,200
4,067,026
$
2,678,373
$
1,522,469
$
Related Party Investments - The Division of Pensions and Benefits does not invest in securities issued
by the Borough.
Note 11. Municipal Debt
The following schedule represents the Borough’s summary of debt, as filed in the Borough’s Annual Debt
Statement required by the Local Bond Law of New Jersey for the current and two previous years:
2021
2020
2019
Authorized but not issued:
General:
Bonds, Notes and Loans
2,477,129.51
$
2,117,063.61
$
2,182,054.20
$
Utility:
Bonds, Notes and Loans
1,043,750.00
735,000.00
835,000.00
Total Authorized But Not Issued
3,520,879.51
2,852,063.61
3,017,054.20
Total Gross Debt
3,520,879.51
$
2,852,063.61
$
3,017,054.20
$
55
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 11. Municipal Debt (continued):
Deductions:
General:
Funds on Hand For Payment of Bonds and Notes:
Reserve for Debt Service
36,683.33
$
36,683.33
$
36,683.33
$
Utility:
Self Liquidating Debt
1,043,750.00
735,000.00
1,030,000.00
Total Deductions
1,080,433.33
771,683.33
1,066,683.33
Total Net Debt
2,440,446.18
$
2,080,380.28
$
1,730,045.03
$
Summary of Statutory Debt Condition - Annual Debt Statement
The following schedule is a summary of the previous schedule and is prepared in accordance with the
required method of setting up the Annual Debt Statement:
Gross Debt
Deductions
Net Debt
General Debt
2,477,129.51
$
36,683.33
$
2,440,446.18
$
Utility Debt
1,043,750.00
1,043,750.00
-
3,520,879.51
$
1,080,433.33
$
2,440,446.18
$
Net Debt $2,440,446.18 divided by the average Equalized Valuation Basis per N.J.S.A 40A:2-2 as
amended, $2,008,505,140.33 equals 0.122%. New Jersey statute 40A:2-6, as amended, limits the debt of
a Municipality to 3.5% of the last three preceding year’s average equalized valuations of real estate,
including improvements and the assessed valuation of Class II Railroad Property. The
remaining borrowing power in dollars at December 31, 2021 is calculated as follows:
Borrowing Power Under N.J.S. 40A:2-6 as Amended
3 1/2% of Equalized Valuation Basis (Municipal)
70,297,679.91
$
Net Debt
2,440,446.18
Remaining Borrowing Power
67,857,233.73
$
56
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 11. Municipal Debt (continued)
Self-Liquidating Utility Calculation per N.J.S.A. 40A:2-46
Cash Receipts From Fees, Rents
or Other Charges for the Year
3,298,192.97
$
Deductions:
Operating and Maintenance Costs
2,365,000.00
$
Total Deductions
2,365,000.00
Excess/(Deficit) in Revenue
933,192.97
$
*If Excess in Revenues all Utility Debt is Deducted
General Debt
A. Serial Bonds Payable
The Borough had no serial bonds payable outstanding in the General Capital Fund at December 31, 2021.
B. Bond Anticipation Notes Payable – Short Term Debt
The Borough had no bond anticipation notes outstanding in the General Capital Fund at December 31,
2021.
C. Bonds and Notes Authorized But Not Issued
As of December 31, 2021, the Borough had $2,477,129.51 in various General Capital bonds and notes
authorized but not issued.
Water/Sewer Utility Debt
A. Serial Bonds Payable
The Borough had no serial bonds payable outstanding in the Water/Sewer Utility Capital Fund at
December 31, 2021.
B. Bond Anticipation Notes Payable – Short Term Debt
The Borough had no bond anticipation notes outstanding in the Utility Capital Fund at December 31,
2021.
C. Bonds and Notes Authorized But Not Issued
As of December 31, 2021 the Borough had $1,043,750.00 in various Utility bonds and notes authorized
but not issued.
57
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 12. Deferred School Taxes
School taxes have been raised and the liability deferred by statutes. The balance of unpaid local and
regional school taxes levied, amount deferred and the amount reported as a liability (payable) at
December 31, are as follows:
Local Taxes
2021
2020
Total Balance of Local Tax
430,698.00
$
428,585.00
$
Deferred Taxes
171,899.27
171,899.27
Local Tax Payable
258,798.73
$
256,685.73
$
Regional Tax
Total Balance of Regional Tax
2,345,601.39
$
2,170,691.89
$
Deferred Taxes
396,208.48
396,208.48
Regional Tax Payable
1,949,392.91
$
1,774,483.41
$
Balance, December 31,
Note 13. Accrued Sick, Vacation and Compensation Time
As discussed in Note 1 and in accordance with accounting principles prescribed by the State of New
Jersey, the cash basis of accounting is followed for recording the Borough’s liability related to unused
vacation, sick pay and compensation time. The Borough permits certain employees within limits to
accumulate unused vacation, sick pay and compensation time, which may be taken as time off or paid at a
later date at an agreed upon rate. In accordance with New Jersey accounting principles, this unused
accumulated absences amount is not reported as a liability in the accompanying financial statements. It is
estimated that accrued benefits for compensated absences are valued at $100,506.61 at December 31,
2021.
The Borough has established a Trust Fund in accordance with NJSA 40A:4-39 to set aside funds for
future payments of compensated absences. As of December 31, 2021, the Borough has reserved in the
Other Trust Fund $98,676.82 to fund compensated absences in accordance with NJSA 40A:4-39.
58
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 14. Risk Management
The Borough 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.
Joint Insurance Pool
The Borough is a member of the Ocean County Municipal Joint Insurance Fund. The Fund provides the
Borough with the following primary coverage and limits:
Crime
$50,000
Commercial General Liability
$300,000
The following “excess” coverage and limits are provided to the Fund’s member local units by their
membership in the Municipal Excess Liability Joint Insurance Fund (MEL):
Worker’s Compensation
$2,000,000
Commercial General Liability
$300,000
Auto Liability
$300,000
Crime
$1,000,000
Contributions to the Funds are payable in two installments and are based on actuarial assumptions determined
by the Funds’ actuaries. The Fund publishes its own financial report for the year ended December 31, 2021
which can be obtained on the Fund’s website.
Note 15. Contingencies
Grantor Agencies
The Borough receives financial assistance from the State of New Jersey and the U.S. government in the form
of grants. Entitlement to the funds is generally conditional upon compliance with terms and conditions of the
grant agreements and applicable regulations, including the expenditure of the funds for eligible purposes.
Substantially all grants, entitlements and cost reimbursements are subject to financial and compliance audits
by grantors. As a result of these audits, costs previously reimbursed could be disallowed and require
repayment to the grantor agency. As of December 31, 2021, the Borough estimates that no material liabilities
will result from such audits.
Litigation
The Borough is a defendant in several legal proceedings that are in various stages of litigation. It is believed
that the outcome, or exposure to the Borough, from such litigation is either unknown or potential losses, if
any, would not be material to the financial statements.
Tax Appeals
Losses arising from tax appeals are recognized at the time a decision is rendered by an administrative or
judicial body; however, municipalities may establish reserves transferred from tax collections or by budget
appropriation for future payments of tax appeal losses. There are no significant pending tax appeals as of
December 31, 2021.
Note 16. Length of Service Awards Program
The Borough’s length of service awards program (“LOSAP”) is reported in the Borough’s trust fund Statement
of Assets, Liabilities, Reserves and Fund Balance - Regulatory Basis. The LOSAP provides tax deferred
income benefits to active volunteer firefighters and emergency medical personnel.
59
BOROUGH OF SURF CITY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021
Note 16. Length of Service Awards Program (Continued)
The tax deferred income benefits for the active volunteer firefighters and emergency medical personnel serving the
residents the of the Borough come from contributions made solely by the governing body of the Borough, on behalf
of those volunteers who meet the criteria of a plan created by that governing body. Participants should refer to the
Plan agreement for a more complete description of the Plan’s provisions.
Contributions - If an active member meets the year of active service requirement, a length of service awards
program must provide a benefit between the minimum contribution of $100 and a maximum contribution of
$1,150.00 per year. While the maximum amount is established by statute, it is subject to periodic increases that are
related to the consumer price index (N.J.S.A. 40A:14-185(f)). The Division of Local Government Services of the
State of New Jersey will issue the permitted maximum annually. The Borough elected to contribute between $0.00
and $1,150.00 for the year ended December 31, 2021 per eligible volunteer, into the Plan, depending on how many
years the volunteer has served. During the year ended December 31, 2021, the Borough contributed a total of
$32,765.00 to the plan. Participants direct the investment of the contributions into various investment options
offered by the Plan. The Borough has no authorization to direct investment contributions on behalf of eligible
volunteers nor has the ability to purchase or sell investment options offered by the Plan. The types of investment
options, and the administering of such investments, rests solely with the plan administrator.
Participant Accounts - Each participant’s account is credited with the Borough’s contribution and Plan earnings,
and charged with administrative expenses. The benefit to which a participant is entitled is the benefit that can be
provided from the participant’s vested account. The Borough has placed the amounts deferred, including earnings,
in a trust maintained by a third-party administrator for the exclusive benefit of the plan participants and their
beneficiaries. Such funds, although subject to the claims of the Borough’s creditors until distributed as benefit
payments, are not available for funding the operations of the Borough. The funds may also be used to pay the
administrative fees charged by the Plan Administrator. Lincoln Financial Group (“Plan Administrator”), an
approved Length of Service Awards Program provider, is the administrator of the Plan. The Borough’s practical
involvement in administering the Plan is essentially limited to verifying the eligibility of each participant and
remitting the funds to the Plan Administrator.
Vesting - Benefits, plus actual earnings thereon, are one hundred percent (100%) vested after five (5) years of
service.
Payment of Benefits - Upon retirement or disability, participants may select various payout options, which include
lump sum, periodic, or annuity payments. In the case of death, with certain exceptions, any amount invested under
the participant's account is paid to the beneficiary or the participant's estate. In the event of an unforeseeable
emergency, as outlined in the Plan document, a participant or a beneficiary entitled to vested accumulated deferrals
may request the local plan administrator to payout a portion of vested accumulated deferrals. During the year ended
December 31, 2021 payouts of $66,701.64 were made to vested participants.
Forfeited Accounts – During the year ended December 31, 2021, no accounts were forfeited.
Plan Information - Additional information about the Borough’s length of service awards program can be obtained
by contacting the Plan Administrator.
Note 17. Subsequent Events
On August 10, 2022 the Borough adopted an ordinance to increase the authorization of a 2021 ordinance from
$700,000 to $850,000, appropriating an additional $150,000 therefor and authorizing the issuance of an additional
$142,500 in bonds and notes to finance a portion of the cost thereof.
On August 10, 2022 the Borough adopted an ordinance providing for road reconstruction and improvements,
appropriating $700,000 therefor and authorizing the issuance of $665,000.00 in bonds and notes to finance a
portion of the cost thereof.
60
SUPPLEMENTARY EXHIBITS
61
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62
CURRENT FUND
63
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64
EXHIBIT A-4
8,678,402.50
$
Increased By:
Miscellaneous Revenue Not Anticipated
162,655.68
$
Due from State for Exemptions
23,750.00
Taxes Receivable
17,506,808.27
Revenue Accounts Receivable
1,125,430.70
Prepaid Taxes
428,309.18
Tax Overpayments
9,923.23
Reserve for Grants Unappropriated
13,019.73
Due from Animal Control Fund
0.55
Due from General Capital Fund
607,387.35
Due from Utility Capital Fund
345,000.00
Various Reserves
253,383.80
20,475,668.49
29,154,070.99
Decreased By:
2021 Budget Appropriations
5,762,426.60
2020 Appropriation Reserves
140,116.87
County Taxes
7,562,739.77
Local District School Tax
859,281.00
Regional School Tax
4,516,293.50
Reserve for Grants Appropriated
13,504.29
Due from Animal Control Fund
62.88
Due to Trust Other Fund
14,675.96
Due to General Capital Fund
607,495.72
Due to Utility Operating Fund
100,000.00
19,576,596.59
9,577,474.40
$
Balance, December 31, 2020
Balance, December 31, 2021
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
COUNTY OF OCEAN, NEW JERSEY
CURRENT FUND
SCHEDULE OF CASH - COLLECTOR/TREASURER
65
EXHIBIT A-5
(1,167.75)
$
Increased By:
Senior Citizens' Deductions per Tax Billings
4,250.00
$
Veterans' Deductions per Tax Billing
19,500.00
Deductions Allowed By Collector:
Senior Citizens' & Veterans - Current Year
500.00
24,250.00
23,082.25
Decreased By:
Cash Receipts
23,750.00
23,750.00
(667.75)
$
Balance, December 31, 2021
SENIOR CITIZENS' AND VETERANS' DEDUCTIONS
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF DUE FROM/(TO) STATE OF NEW JERSEY -
Balance, December 31, 2020
66
EXHIBIT A-6
SENIOR CITIZENS'
AND VETERANS'
BALANCE
DEDUCTIONS
TRANSFER
BALANCE
DECEMBER 31,
2021
ALLOWED/
TO TAX
ADJUSTMENTS/
DECEMBER 31,
YEAR
2020
LEVY
2020
2021
(DISALLOWED)
TITLE LIENS
(CANCELLED)
2021
2020
123,677.10
$
-
$
-
$
123,677.10
$
-
$
-
$
-
$
-
$
2021
-
17,891,018.73
379,722.67
17,383,131.17
24,250.00
42.39
(8,450.29)
95,422.21
123,677.10
$
17,891,018.73
$
14,409,110.79
$
17,506,808.27
$
24,250.00
$
42.39
$
(8,450.29)
$
95,422.21
$
Analysis of Property Tax Levy
Tax Yield:
General Purpose Tax
17,771,352.09
$
Added and Omitted Taxes (N.J.S.A 54:4-63.1 et seq)
119,666.64
17,891,018.73
$
Tax Levy:
Local School Taxes
861,394.00
$
Regional School Taxes
4,691,203.00
County Taxes
7,507,427.35
$
Due To County for Added
and Omitted Taxes
51,691.82
7,559,119.17
Local Tax for Municipal
Purposes
4,710,380.00
Additional Tax Levied
68,922.56
4,779,302.56
Total
17,891,018.73
$
COLLECTIONS
CURRENT FUND
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF TAXES RECEIVABLE AND ANALYSIS OF PROPERTY TAX LEVY
67
EXHIBIT A-7
956.50
$
Increased By:
Transfers From Taxes Receivable
42.39
998.89
$
Balance, December 31, 2020
Balance, December 31, 2021
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF TAX TITLE LIENS RECEIVABLE
68
EXHIBIT A-8
BALANCE
BALANCE
DECEMBER 31,
ACCRUED IN
DECEMBER 31,
2020
2021
COLLECTED
2021
Liquor License
-
$
1,400.00
$
1,400.00
$
-
$
Other Fees & Permits
-
25,381.00
25,381.00
-
Interest & Costs on Taxes
-
29,741.02
29,741.02
-
Municipal Court Fines & Costs
598.22
26,757.06
26,605.68
749.60
Beach Badge Fees
-
793,017.00
793,017.00
-
Energy Receipts Taxes
-
164,430.00
164,430.00
-
Uniform Construction Code Fees
-
112,643.00
112,643.00
-
598.22
$
1,153,369.08
$
1,153,217.70
$
749.60
$
Cash Receipts
1,125,430.70
$
Prior Year Prepaid Beach Badges
27,787.00
1,153,217.70
$
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF REVENUE ACCOUNTS RECEIVABLE
YEAR ENDED DECEMBER 31, 2021
69
EXHIBIT A-9
BALANCE
BALANCE
DECEMBER 31,
AFTER
PAID OR
BALANCE
2020
TRANSFER
CHARGED
LAPSED
GENERAL GOVERNMENT
General Administration
Salaries & Wages
2,974.55
$
2,974.55
$
-
$
2,974.55
$
Other Expenses
2,144.52
2,144.52
1,390.84
753.68
Human Resources
Other Expenses
7,500.00
7,500.00
-
7,500.00
Mayor and Council
Salaries & Wages
112.00
112.00
-
112.00
Other Expenses
3,134.91
3,134.91
2,120.58
1,014.33
Municipal Clerk
Salaries & Wages
27,495.24
27,495.24
-
27,495.24
Other Expenses
2,472.43
2,472.43
818.28
1,654.15
Financial Administration
Salaries & Wages
6,019.76
6,019.76
-
6,019.76
Other Expenses
5,615.80
5,615.80
403.16
5,212.64
Audit Services
Other Expenses
2,150.00
2,150.00
-
2,150.00
Collection of Taxes
Salaries & Wages
11,362.34
11,362.34
-
11,362.34
Other Expenses
11,286.82
11,286.82
2,125.27
9,161.55
Assessment of Taxes
Salaries & Wages
5,017.22
5,017.22
-
5,017.22
Other Expenses
7,067.71
7,067.71
377.49
6,690.22
Legal Services
Other Expenses
10,911.50
10,911.50
1,682.45
9,229.05
Revision of Ordinances
Other Expenses
4,500.00
4,500.00
-
4,500.00
Engineering Services
Other Expenses
1,655.61
1,655.61
-
1,655.61
Review/Revision of Master Plan
Other Expenses
7,500.00
7,500.00
-
7,500.00
Municipal Court
Salaries & Wages
341.55
341.55
-
341.55
Other Expenses
3,595.25
3,595.25
2,793.26
801.99
Public Defender
Other Expenses
794.00
794.00
-
794.00
Land Use Administration:
Land Use Board
Salaries & Wages
13,982.22
13,982.22
-
13,982.22
Other Expenses
10,245.65
10,245.65
-
10,245.65
Code Enforcement & Administration:
Other Code Enforcement Functions
Salaries & Wages
6,135.26
6,135.26
-
6,135.26
Other Expenses
3,000.00
3,000.00
-
3,000.00
Zoning Officer
Salaries & Wages
2,717.88
2,717.88
-
2,717.88
Insurance:
General Liability
7,259.31
7,259.31
-
7,259.31
Workers Compensation
8,602.67
8,602.67
-
8,602.67
Employee Group Health
189,932.10
189,932.10
-
189,932.10
Health Benefit Waiver
Salaries & Wages
5,000.00
5,000.00
-
5,000.00
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF 2020 APPROPRIATION RESERVES
YEAR ENDED DECEMBER 31, 2021
70
EXHIBIT A-9
BALANCE
BALANCE
DECEMBER 31,
AFTER
PAID OR
BALANCE
2020
TRANSFER
CHARGED
LAPSED
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF 2020 APPROPRIATION RESERVES
YEAR ENDED DECEMBER 31, 2021
Public Safety Functions:
Police Department
Salaries & Wages
119,596.69
119,596.69
-
119,596.69
Other Expenses
31,493.40
31,493.40
6,252.58
25,240.82
Police Dispatch/911
Other Expenses
2,199.70
2,199.70
-
2,199.70
Office of Emergency Management
Salaries & Wages
500.00
500.00
-
500.00
Other Expenses
57.80
57.80
-
57.80
Municipal Prosecutor's Office
Other Expenses
2,208.37
2,208.37
708.37
1,500.00
Public Work Functions:
Streets and Road Maintenance
Salaries & Wages
33,116.13
33,116.13
-
33,116.13
Other Expenses
10,626.91
10,626.91
930.56
9,696.35
Solid Waste Collection
Salaries & Wages
126,767.46
126,767.46
-
126,767.46
Other Expenses
16,001.16
16,001.16
1,788.90
14,212.26
Building and Grounds
Salaries & Wages
23,375.92
23,375.92
-
23,375.92
Other Expenses
22,504.96
22,504.96
6,851.54
15,653.42
Vehicle Maintenance (Incl. Police Vehicles)
Salaries & Wages
3,864.52
3,864.52
-
3,864.52
Other Expenses
35,498.82
35,498.82
5,932.13
29,566.69
Health & Human Services Functions:
Board of Health
Salaries & Wages
1,791.00
1,791.00
-
1,791.00
Other Expenses
11,188.96
11,188.96
-
11,188.96
Environmental Health Services
Salaries & Wages
5,000.00
5,000.00
-
5,000.00
Other Expenses
1,000.00
1,000.00
-
1,000.00
Animal Control Services
Other Expenses
2,280.00
2,280.00
672.00
1,608.00
Contributions to Social Service Agencies
Senior Citizen Center (NJS 40:48-9.4)
5,000.00
5,000.00
-
5,000.00
Health Care Facilities (NJS 44:5-2)
100.00
100.00
-
100.00
Mental Health Facilities (NJS 40:48-9.4a)
100.00
100.00
-
100.00
Recreation of Services and Programs
Salaries & Wages
6,000.00
6,000.00
-
6,000.00
Other Expenses
1,974.45
1,974.45
-
1,974.45
Maintenance of Parks
Salaries & Wages
17,125.27
17,125.27
-
17,125.27
Other Expenses - Veterans' Memorial Park
1,531.04
1,531.04
-
1,531.04
Other Expenses - Other Facilities
4,000.00
4,000.00
-
4,000.00
Beach & Boardwalk Operations
Salaries & Wages
35,056.43
35,056.43
474.00
34,582.43
Other Expenses
9,667.78
9,667.78
59.50
9,608.28
71
EXHIBIT A-9
BALANCE
BALANCE
DECEMBER 31,
AFTER
PAID OR
BALANCE
2020
TRANSFER
CHARGED
LAPSED
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF 2020 APPROPRIATION RESERVES
YEAR ENDED DECEMBER 31, 2021
Other Common Operating Functions (Unclassified)
Celebration of Public Events
Other Expenses
1,000.00
1,000.00
-
1,000.00
Utility Expenses & Bulk Purchases
Electricity
17,504.30
17,504.30
-
17,504.30
Street Lighting
5,106.15
5,106.15
-
5,106.15
Telephone
11,809.52
11,809.52
-
11,809.52
Gas (natural or propane)
6,339.55
6,339.55
-
6,339.55
Telecommunications
2,464.24
2,464.24
-
2,464.24
Gasoline
38,881.32
38,881.32
4,675.46
34,205.86
Landfill/Solid Waste Disposal Costs:
Other Expenses
46,546.62
46,546.62
3,976.96
42,569.66
Uniform Construction Code:
Salaries & Wages
11,623.38
11,623.38
-
11,623.38
Other Expenses
61,945.31
61,945.31
52,672.84
9,272.47
Contingent
4,000.00
4,000.00
-
4,000.00
Statutory Expenditures:
Contribution to:
Public Employees' Retirement System
-
-
-
-
Police and Firemen's Retirement System
29,366.82
29,366.82
-
29,366.82
Social Security System (O.A.S.I.)
-
-
-
-
Unemployment
1,686.52
1,686.52
-
1,686.52
Defined Contribution Retirement Program
1,911.02
1,911.02
701.35
1,209.67
Length of Service Awards Program (L.O.S.A.P.)
Other Expenses
52,000.00
52,000.00
32,768.00
19,232.00
Recycling Tax (P.L. 2007, c. 311):
Other Expenses
1,368.40
1,368.40
319.35
1,049.05
Capital Improvements:
Rehabilitation of / Enhancement to Borough Property
47,054.00
47,054.00
9,622.00
37,432.00
1,240,760.22
$
1,240,760.22
$
140,116.87
$
1,100,643.35
$
Appropriation Reserves
1,153,420.35
$
Encumbrances Payable
87,339.87
1,240,760.22
$
Cash Disbursed
140,116.87
$
140,116.87
$
72
EXHIBIT A-10
87,339.87
$
Increased By:
Current Appropriations
30,604.03
117,943.90
Decreased By:
Transferred To Appropriation Reserves
87,339.87
30,604.03
$
Balance, December 31, 2020
Balance, December 31, 2021
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF ENCUMBRANCES PAYABLE
73
EXHIBIT A-11
379,722.67
$
Increased By:
Prepaid Taxes Collected
428,309.18
808,031.85
Decreased By:
Applied To Taxes Receivable
379,722.67
428,309.18
$
Balance, December 31, 2020
Balance, December 31, 2021
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF PREPAID TAXES
74
EXHIBIT A-12
55,312.42
$
Increased By:
2021 Tax Levy:
County Taxes
6,555,318.23
$
County Library Taxes
715,180.28
County Open Space Taxes
236,928.84
Due To County for Added and Omitted Taxes
51,691.82
7,559,119.17
7,614,431.59
Decreased By:
Cash Disbursements
7,562,739.77
51,691.82
$
Balance, December 31, 2020
Balance, December 31, 2021
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF COUNTY TAXES PAYABLE
75
EXHIBIT A-13
School Tax Payable
256,685.73
$
School Tax Deferred
171,899.27
428,585.00
$
Increased By:
861,394.00
1,289,979.00
Decreased By:
Cash Disbursements
859,281.00
School Tax Payable
258,798.73
School Tax Deferred
171,899.27
430,698.00
$
Tax Payable, December 31, 2021
258,798.73
$
Tax Paid
859,281.00
1,118,079.73
Less:
256,685.73
Amount Charged to 2020 Operations
861,394.00
$
Balance, December 31, 2020:
BALANCE, DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF LOCAL DISTRICT SCHOOL TAXES
Balance, December 31, 2021:
Levy - July 1, 2021 to June 30, 2022
Tax Payable, December 31, 2020
2019 Liability for Regional High School Tax
76
EXHIBIT A-14
School Tax Payable
1,774,483.41
$
School Tax Deferred
396,208.48
2,170,691.89
$
4,691,203.00
6,861,894.89
Cash Disbursements
4,516,293.50
School Tax Payable
1,949,392.91
School Tax Deferred
396,208.48
2,345,601.39
$
Tax Payable, December 31, 2021
1,949,392.91
$
Tax Paid
4,516,293.50
6,465,686.41
Less:
1,774,483.41
Amount Charged to 2019 Operations
4,691,203.00
$
BALANCE, DECEMBER 31, 2021
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF REGIONAL SCHOOL TAXES
Tax Payable, December 31, 2020
Balance, December 31, 2020:
Increased By:
Decreased By:
Balance, December 31, 2021:
2019 Liability for Regional School Tax
Levy - July 1, 2021 to June 30, 2022
77
EXHIBIT A-15
BALANCE
BALANCE
DECEMBER 31,
CASH
DECEMBER 31,
2020
RECEIPTS
DECREASED
2021
Library Aid
14.00
$
-
$
-
$
14.00
$
Hurricane Expense (Special Emergency)
76,973.20
37,844.81
-
114,818.01
Prepaid Beach Badges
27,787.00
27,676.00
27,787.00
27,676.00
Reserve for Ocean County CARES Grant
-
187,862.99
-
187,862.99
104,774.20
$
253,383.80
$
27,787.00
$
330,371.00
$
Anticipated as Revenue
27,787.00
$
27,787.00
$
BOROUGH OF SURF CITY
CURRENT FUND
SCHEDULE OF VARIOUS RESERVES
BALANCE DECEMBER 31, 2021
78
EXHIBIT A-16
BALANCE
REVENUE
TRANSFERRED
BALANCE
AS OF
ANTICIPATED
2021
FROM
AS OF
DECEMBER 31, 2020
2021
RECEIVED
UNAPPROPRIATED
CANCELLED
DECEMBER 31, 2021
Federal Grants:
Community Development Block Grant
7,493.40
$
-
$
-
$
-
$
-
$
7,493.40
$
Total Federal Grants
7,493.40
-
-
-
-
7,493.40
State Grants:
Recycling Tonnage Grant
-
5,248.53
5,248.53
-
-
-
966 Reimbursement Program - 2018
4,929.20
-
-
-
4,929.20
-
Clean Communities
-
11,184.29
-
11,184.29
-
-
Total State Grants
4,929.20
16,432.82
5,248.53
11,184.29
4,929.20
-
12,422.60
$
16,432.82
$
5,248.53
$
11,184.29
$
4,929.20
$
7,493.40
$
Program
BOROUGH OF SURF CITY
FEDERAL AND STATE GRANT FUND
SCHEDULE OF GRANTS RECEIVABLE
BALANCE DECEMBER, 31, 2021
79
EXHIBIT A-17
BALANCE
TRANSFERRED
BALANCE
DECEMBER 31,
FROM
DECEMBER 31,
Program
2020
BUDGET
EXPENDED
CANCELLED
2021
Federal Grants:
Municipal Public Access Plan Grant
7,813.50
$
-
$
-
$
-
$
7,813.50
$
Community Development Block Grant
8,509.50
-
2,320.00
-
6,189.50
Total Federal Grants
16,323.00
-
2,320.00
-
14,003.00
State Grants:
Clean Communities Program
-
11,184.29
11,184.29
-
-
Body Armor Replacement
2,144.93
-
-
-
2,144.93
Recycling Tonnage Grant
-
5,248.53
-
-
5,248.53
966 Reimbursement Program -2018
4,929.20
-
-
4,929.20
-
Total State Grants
7,074.13
16,432.82
11,184.29
4,929.20
7,393.46
23,397.13
$
16,432.82
$
13,504.29
$
4,929.20
$
21,396.46
$
Original Budget
16,432.82
$
16,432.82
$
BOROUGH OF SURF CITY
FEDERAL AND STATE GRANT FUND
SCHEDULE OF RESERVE FOR GRANT EXPENDITURES - APPROPRIATED
BALANCE DECEMBER 31, 2021
80
EXHIBIT A-18
BALANCE
BALANCE
DECEMBER 31,
CASH
REALIZED IN
DECEMBER 31,
2020
RECEIPTS
2021 BUDGET
2021
Body Armor Replacement Fund
1,339.35
$
1,113.83
$
-
$
2,453.18
$
Clean Communities Program
11,184.29
11,905.90
11,184.29
11,905.90
12,523.64
$
13,019.73
$
11,184.29
$
14,359.08
$
Program
BOROUGH OF SURF CITY
FEDERAL AND STATE GRANT FUND
SCHEDULE OF RESERVE FOR GRANT EXPENDITURES - UNAPPROPRIATED
BALANCE DECEMBER 31, 2021
81
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82
TRUST FUND
83
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84
EXHIBIT B-1
ANIMAL
TRUST-
CONTROL
OTHER
609.30
$
332,504.00
$
Increased By Receipts:
Dog License Fees Collected
178.80
-
State Registration Fees
100.20
-
Interest Earned
0.60
-
Due to Water/Sewer Operating Fund
-
4,960.31
Various Reserves
-
4,180,313.72
279.60
4,185,274.03
888.90
4,517,778.03
Decreased By Disbursements:
State Registration Fees
103.20
-
Due to Current Fund
0.55
-
Various Reserves
-
4,056,908.83
103.75
4,056,908.83
785.15
$
460,869.20
$
Balance, December 31, 2020
Balance, December 31, 2021
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
TRUST FUND
85
EXHIBIT B-2
Balance, December 31, 2020
51,331.89
$
Decreased By:
Cash Disbursed by Current Fund
14,675.96
Balance, December 31, 2021
36,655.93
$
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
SCHEDULE OF DUE FROM CURRENT FUND
TRUST - OTHER FUND
86
EXHIBIT B-3
Balance, December 31, 2020
6,069.72
$
Decreased By:
Cash Receipts
4,960.31
Balance, December 31, 2021
1,109.41
$
BOROUGH OF SURF CITY
SCHEDULE OF DUE (TO)/FROM WATER SEWER OPERATING FUND
TRUST - OTHER FUND
YEAR ENDED DECEMBER 31, 2021
87
EXHIBIT B-4
Balance, December 31, 2020
223.67
$
Increased By:
Interest Earned
0.60
$
Cash Disbursed by Current Fund
62.88
Statutory Excess Due To Current Fund
89.92
153.40
377.07
Decreased By:
Cash Disbursement
0.55
Balance, December 31, 2021
376.52
$
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF DUE TO CURRENT FUND
TRUST - OTHER FUND
DOG LICENSE FUND
88
EXHIBIT B-5
385.63
$
Increased By:
Dog License Fees Collected
178.80
564.43
Decreased By:
Dog Fund Expenditures Paid by Current Fund
62.88
$
Statutory Excess Due Current Fund
89.92
152.80
411.63
$
Year
Amount
2020
213.00
$
2019
198.63
411.63
$
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
ANIMAL CONTROL FUND
SCHEDULE OF RESERVE FOR DOG FUND EXPENDITURES
Balance, December 31, 2021
Balance, December 31, 2020
89
EXHIBIT B-6
BALANCE
BALANCE
DECEMBER 31,
DECEMBER
2020
INCREASES
DECREASES
2021
Tax Certificate
-
$
28,917.35
$
28,917.35
$
-
$
Confiscated Funds Reserve
1,093.71
0.84
0.84
1,093.71
Cash Bonds & Escrowed Fees
181,716.44
328,609.68
195,075.80
315,250.32
P.O.A.A.
1,083.05
102.00
-
1,185.05
Veterans' Memorial Park
17,444.92
700.00
440.00
17,704.92
Public Defender Fund
-
200.00
-
200.00
Beach Wheels
1,708.50
455.00
-
2,163.50
Memorial Benches
12,007.29
8,100.00
5,193.13
14,914.16
Accumulated Absences
98,676.82
8,000.00
8,000.00
98,676.82
Payroll Deductions
39,857.58
3,715,384.85
3,732,714.27
22,528.16
Construction Inspection Fees
36,317.30
89,844.00
101,243.40
24,917.90
389,905.61
$
4,180,313.72
$
4,071,584.79
$
498,634.54
$
Cash Disbursements
4,056,908.83
$
Due To Current Fund
14,675.96
4,071,584.79
$
BOROUGH OF SURF CITY
TRUST - OTHER FUND
SCHEDULE OF TRUST - OTHER RESERVES
YEAR ENDED DECEMBER 31, 2021
90
EXHIBIT B-7
1,086,207.90
$
Increased By:
Board Contributions
32,768.00
$
Investment Earnings
187,643.94
220,411.94
1,306,619.84
Decreased By:
Withdrawals
66,701.64
Accounting Charges
1,625.00
68,326.64
1,238,293.20
$
EXHIBIT B-8
1,086,207.90
$
Increased By:
Board Contributions
32,768.00
$
Investment Earnings
187,643.94
220,411.94
1,306,619.84
Decreased By:
Withdrawals
66,701.64
Accounting Charges
1,625.00
68,326.64
1,238,293.20
$
Balance, December 31, 2021
SCHEDULE OF LOSAP RESERVE
YEAR ENDED DECEMBER 31, 2021
Balance, December 31, 2020
Balance, December 31, 2021
Balance, December 31, 2020
BOROUGH OF SURF CITY
LENGTH OF SERVICE AWARDS PROGRAM FUND ("LOSAP")
SCHEDULE OF INVESTMENTS
YEAR ENDED DECEMBER 31, 2021
91
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92
GENERAL CAPITAL FUND
93
This page intentionally left blank.
94
EXHIBIT C-2
1,528,276.66
$
Increased By:
Capital Improvement Fund
50,000.00
$
Deferred Charges Raised by Budget Appropriation
203,684.10
NJ DOT Receipts
243,750.00
497,434.10
2,025,710.76
Decreased By:
Due To Current Fund
607,387.35
607,387.35
1,418,323.41
$
Balance, December 31, 2020
Balance, December 31, 2021
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF CASH
GENERAL CAPITAL FUND
95
EXHIBIT C-3
BALANCE
DECEMBER 31,
2021
Capital Improvement Fund
865,432.50
$
Reserve for Debt Service
36,683.33
Reserve for Purchase of Lifeguard Boat
18,150.00
Reserve for Encumbrances
65,479.60
Due (From)/To Current Fund
170,828.49
Capital Fund Balance
82,452.67
Ordinance
Ordinance
Improvement Authorizations
15-04
Rehabilitation of DPW Facilities
296,358.12
15-09
Removal of Underground Storage Tank/Monitoring
2,685.07
16-06
Reconstruction/Resurfacing of Various Streets
(125,335.25)
17-07
Reconstruction/Resurfacing of Various Streets
(12,000.00)
18-02
Acquisition of Trash Truck
(5,883.40)
18-04
Removal of Underground Storage Tank
6,250.00
18-15
Repair/Resurfacing of Various Roads
104,513.89
19-11
Repair/Resurfacing of Various Roads & Related Expenses
(174,935.75)
19-13
Replacement/Repair of Various Roads & Related Expenses
(19,620.69)
20-02
Road Improvement Project
(36,973.91)
21-03/13
Acquisition of Beach Equipment
(134,511.26)
21-11
Road Improvement Project
278,750.00
1,418,323.41
$
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF ANALYSIS OF CASH
GENERAL CAPITAL FUND
96
EXHIBIT C-4
(170,720.12)
$
Increased by:
Cash Disbursed to Current Fund
607,387.35
436,667.23
Decreased By:
Cash Disbursed by Current Fund
607,495.72
(170,828.49)
$
Balance, December 31, 2020
Balance, December 31, 2021
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
GENERAL CAPITAL FUND
SCHEDULE OF DUE FROM/(TO) CURRENT FUND
97
EXHIBIT C-5
BALANCE
BALANCE
DECEMBER 31,
2021
CASH
DECEMBER 31,
2020
AUTHORIZED
RECEIPTS
CANCELLED
2021
21-11 Road Improvement Project
-
$
372,200.00
$
243,750.00
$
-
$
128,450.00
$
BOROUGH OF SURF CITY
GENERAL CAPITAL FUND
SCHEDULE OF GRANTS RECIEVABLE
YEAR ENDED DECEMBER 31, 2021
98
EXHIBIT C-6
BALANCE
REFUND OF
FUNDED BY
BALANCE
UNEXPENDED
Ordinance DECEMBER 31,
2021
PRIOR YEAR
BUDGET
CASH
GRANT
DECEMBER 31,
IMPROVEMENT
Date
2020
AUTHORIZED
GRANTS
APPROPRIATION
RECEIPTS
RECEIPTS
CANCELLED
2021
EXPENDITURES
AUTHORIZATIONS
06-15 Beach Replenishment
11/30/06
177,500.00
$
-
$
-
$
51,036.77
$
-
$
-
$
-
$
126,463.23
$
-
$
126,463.23
$
11-03 Acquisition of Trash Truck
05/11/11
32,000.00
-
-
-
-
-
-
32,000.00
-
32,000.00
13-05 Acquisition of Trash Truck
10/09/13
29,231.00
-
-
-
-
-
-
29,231.00
-
29,231.00
13-06 Acquisition of a Beach Rake
10/09/13
13,997.36
-
-
-
-
-
-
13,997.36
-
13,997.36
14-05 Acquisition of Fire Apparatus & Related Equipment
09/10/14
130,000.00
-
-
92,647.33
-
-
-
37,352.67
-
37,352.67
15-03 Replacement/Repair of Various Bulkheads
03/11/15
62,000.00
-
-
60,000.00
-
-
-
2,000.00
2,000.00
-
16-06 Reconstruction/Resurfacing of Various Streets
06/08/16
125,335.25
-
-
-
-
-
-
125,335.25
125,335.25
-
17-07 Reconstruction/Resurfacing of Various Streets
07/12/17
12,000.00
-
-
-
-
-
-
12,000.00
12,000.00
-
18-02 Acquisition of Trash Truck
03/14/18
20,000.00
-
-
-
-
-
-
20,000.00
5,883.40
14,116.60
18-04 Removal of Underground Storage Tank
03/14/18
118,750.00
-
-
-
-
-
-
118,750.00
-
118,750.00
18-15 Repair/Resurfacing of Various Roads
12/12/18
42,500.00
-
-
-
-
-
-
42,500.00
-
42,500.00
19-11 Repair/Resurfacing of Various Roads & Related Expenses
08/14/19
380,000.00
-
-
-
-
-
-
380,000.00
174,935.75
205,064.25
19-13 Replacement/Repair of Various Roads & Related Expenses
09/11/19
380,000.00
-
-
-
-
-
-
380,000.00
19,620.69
360,379.31
20-02 Road Improvement Project
04/08/20
593,750.00
-
-
-
-
-
-
593,750.00
36,973.91
556,776.09
21-03/13 Acquisition of Beach Equipment
12/13/21
-
142,500.00
-
-
-
-
-
142,500.00
142,011.26
488.74
21-11 Road Improvement Project
12/13/21
-
665,000.00
-
-
-
243,750.00
-
421,250.00
-
421,250.00
2,117,063.61
$
807,500.00
$
-
$
203,684.10
$
-
$
243,750.00
$
-
$
2,477,129.51
$
518,760.26
$
1,958,369.25
$
Improvement Authorizations
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
GENERAL CAPITAL FUND
SCHEDULE OF DEFERRED CHARGES TO FUTURE TAXATION - UNFUNDED
Analysis of Balance
99
EXHIBIT C-7
Transferred
Ordinance
Ordinance
2021
To
Improvement Authorizations
Date
Amount
Funded
Unfunded
Authorizations
Expended
Encumbrances
Funded
Unfunded
06-15 Beach Replenishment
11/30/06
350,000.00
$
-
$
126,463.23
$
-
$
-
$
-
$
-
$
126,463.23
$
11-03 Acquisition of Trash Truck
05/11/11
200,000.00
-
32,000.00
-
-
-
-
32,000.00
13-05 Acquisition of Trash Truck
10/09/13
200,000.00
-
29,231.00
-
-
-
-
29,231.00
13-06 Acquisition of a Beach Rake
10/09/13
65,000.00
-
13,997.36
-
-
-
-
13,997.36
14-05 Acquisition of Fire Apparatus & Related Equipment
09/10/14
800,000.00
-
37,352.67
-
-
-
-
37,352.67
15-03 Replacement/Repair of Various Bulkheads
03/11/15
100,000.00
-
-
-
-
-
-
-
15-04 Rehabilitation of DPW Facilities
03/11/15
450,000.00
298,358.12
-
-
-
-
298,358.12
-
15-09 Removal of Underground Storage Tank/Monitoring
12/09/15
50,000.00
5,945.07
-
-
3,260.00
-
2,685.07
-
17-07 Reconstruction/Resurfacing of Various Streets
07/12/17
375,000.00
-
-
-
-
-
-
-
18-02 Acquisition of Trash Truck
03/14/18
200,000.00
-
14,116.60
-
-
-
-
14,116.60
18-04 Removal of Underground Storage Tank
03/14/18
125,000.00
6,250.00
118,750.00
-
-
-
6,250.00
118,750.00
18-15 Repair/Resurfacing of Various Roads
12/12/18
500,000.00
104,513.89
42,500.00
-
-
-
104,513.89
42,500.00
19-11 Repair/Resurfacing of Various Roads & Related Expenses
08/14/19
700,000.00
262,029.76
380,000.00
-
436,965.51
-
-
205,064.25
19-13 Replacement/Repair of Various Roads & Related Expenses
09/11/19
400,000.00
4,693.95
380,000.00
-
24,314.64
-
-
360,379.31
20-02 Road Improvement Project
04/08/20
625,000.00
29,450.00
593,750.00
-
66,423.91
-
-
556,776.09
21-03/13 Acquisition of Beach Equipment
12/13/21
150,000.00
-
-
150,000.00
76,531.66
65,479.60
7,500.00
488.74
21-11 Road Improvement Project
12/13/21
700,000.00
-
-
700,000.00
-
-
278,750.00
421,250.00
711,240.79
$
1,768,160.86
$
850,000.00
$
607,495.72
$
65,479.60
$
698,057.08
$
1,958,369.25
$
Deferred Charges - Unfunded
807,500.00
$
Capital Improvement Fund
42,500.00
850,000.00
$
BOROUGH OF SURF CITY
GENERAL CAPITAL FUND
SCHEDULE OF IMPROVEMENT AUTHORIZATIONS
December 31, 2020
Balance
YEAR ENDED DECEMBER 31, 2021
December 31, 2021
Balance
100
EXHIBIT C-8
857,932.50
$
Increased By:
2021 Budget Appropriation
50,000.00
907,932.50
Decreased By:
Utilized To Finance Improvement Authorizations
42,500.00
865,432.50
$
Balance, December 31, 2021
YEAR ENDED DECEMBER 31, 2021
GENERAL CAPITAL FUND
BOROUGH OF SURF CITY
SCHEDULE OF CAPITAL IMPROVEMENT FUND
Balance, December 31, 2020
101
EXHIBIT C-9
BALANCE
BALANCE
DECEMBER 31,
DECEMBER 31,
2020
INCREASED
2021
Reserve for Debt Service
36,683.33
$
-
$
36,683.33
$
Reserve for Purchase of Lifeguard Boat
18,150.00
-
18,150.00
54,833.33
$
-
$
54,833.33
$
YEAR ENDED DECEMBER 31, 2021
GENERAL CAPITAL FUND
BOROUGH OF SURF CITY
SCHEDULE OF VARIOUS RESERVES
102
EXHIBIT C-10
BALANCE
BALANCE
Ordinance
DECEMBER 31,
2021
DECEMBER 31,
Number
Improvement Authorizations
2020
AUTHORIZATIONS
DECREASED
2021
06-15
Beach Replenishment
177,500.00
$
-
$
51,036.77
$
126,463.23
$
11-03
Acquisition of Trash Truck
32,000.00
-
-
32,000.00
13-05
Acquisition of Trash Truck
29,231.00
-
-
29,231.00
13-06
Acquisition of a Beach Rake
13,997.36
-
-
13,997.36
15-03
Acquisition of Fire Apparatus & Related Equipment
130,000.00
-
92,647.33
37,352.67
15-04
Replacement/Repair of Various Bulkheads
62,000.00
-
60,000.00
2,000.00
16-06
Reconstruction/Resurfacing of Various Streets
125,335.25
-
-
125,335.25
17-07
Reconstruction/Resurfacing of Various Streets
12,000.00
-
-
12,000.00
18-02
Acquisition of Trash Truck
20,000.00
-
-
20,000.00
18-04
Removal of Underground Storage Tank
118,750.00
-
-
118,750.00
18-15
Repair/Resurfacing of Various Roads
42,500.00
-
-
42,500.00
19-11
Repair/Resurfacing of Various Roads & Related Expenses
380,000.00
-
-
380,000.00
19-13
Replacement/Repair of Various Roads & Related Expense
380,000.00
-
-
380,000.00
20-02
Road Improvement Project
593,750.00
-
-
593,750.00
21-03/13
Acquisition of Beach Equipment
-
142,500.00
-
142,500.00
21-11
Road Improvement Project
-
665,000.00
243,750.00
421,250.00
2,117,063.61
$
807,500.00
$
447,434.10
$
2,477,129.51
$
NJ DOT Receipts
243,750.00
$
Funded By Budget Appropriations
203,684.10
447,434.10
$
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF BONDS AND NOTES AUTHORIZED BUT NOT ISSUED
GENERAL CAPITAL FUND
103
This page intentionally left blank.
104
WATER/SEWER UTILITY FUND
105
This page intentionally left blank.
106
EXHIBIT D-4
1,952,469.96
$
88,992.01
$
Increased By Receipts:
Miscellaneous Revenue Not Anticipated
80,638.83
$
-
$
Fire Hydrant Service
118,400.00
-
Water/Sewer Rents Receivable
2,119,154.14
-
Prepaid Rents
19,050.13
-
Capital Improvement Fund
-
25,000.00
Budget Appropriations - Deferred Charges
-
130,000.00
Reserve for American Recovery Act
62,748.80
Due To/From Current Fund
100,000.00
-
Due From Utility Capital Fund
65.17
-
Due To/From Utility Operating Fund
-
73.41
2,500,057.07
155,073.41
4,452,527.03
244,065.42
Decreased By Disbursements:
2021 Budget Appropriations
1,890,801.66
-
2020 Appropriation Reserves
16,975.02
-
Due From Trust - Other Fund
4,960.31
-
Due To Utility Operating Fund
-
65.17
Improvement Authorization
-
197,000.76
1,912,736.99
197,065.93
2,539,790.04
$
46,999.49
$
BOROUGH OF SURF CITY
Balance, December 31, 2020
Balance, December 31, 2021
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF CASH - TREASURER
WATER/SEWER UTILITY OPERATING FUND
OPERATING
CAPITAL
107
EXHIBIT D-5
BALANCE
DECEMBER 31, 2021
Capital Improvement Fund
503,315.51
$
Due To Utility Operating Fund
19.67
Due From Current Fund
(345,000.00)
Fund Balance
7,476.47
Ordinance
Number
Improvement Authorizations
09-07
Improvements to Water/Sewer System
(35,000.00)
18-16
Improvements to Water/Sewer System
(125,062.16)
21-15
Rehabilitation of Borough Water Tower
41,250.00
46,999.49
$
BOROUGH OF SURF CITY
WATER/SEWER UTILITY CAPITAL FUND
SCHEDULE OF ANALYSIS OF WATER/SEWER UTILITY CAPITAL FUND CASH
YEAR ENDED DECEMBER 31, 2021
108
EXHIBIT D-6
35,800.40
$
Increased By:
2021 Billings
2,149,972.56
2,185,772.96
Decreased By:
Cash Collections
2,119,154.14
$
Prepaid Rents Applied
17,905.68
2,137,059.82
48,713.14
$
Balance, December 31, 2020
Balance, December 31, 2021
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF WATER/SEWER RENTS
WATER/SEWER UTILITY OPERATING FUND
109
EXHIBIT D-7
Balance,
Balance,
December 31,
December 31,
2020
Additions
2021
Water Fund:
Land
5,623.38
$
-
$
5,623.38
$
Springs and Wells
1,170,538.06
-
1,170,538.06
Pumping Station & Equipment
169,915.01
-
169,915.01
Distribution Mains & Accessories
921,335.92
-
921,335.92
Meters & Accessories
96,475.00
-
96,475.00
Garage & Storage Building
72,384.87
-
72,384.87
Tower, Standpipe & Storage Tanks
2,321,164.07
-
2,321,164.07
Fire Hydrants
49,213.51
-
49,213.51
Trucks & Other Equipment
181,239.47
-
181,239.47
Water Plant & Equipment
578,742.57
-
578,742.57
Office Facilities
13,938.13
-
13,938.13
Computer System
8,973.23
-
8,973.23
Wells
863,592.15
-
863,592.15
Sewer Fund:
Collection System
1,600,045.63
-
1,600,045.63
Landscaping
2,774.20
-
2,774.20
Meters & Accessories
6,573.45
-
6,573.45
Trucks & Other Equipment
201,415.82
-
201,415.82
Garage & Storage Building
74,202.32
-
74,202.32
Office Facilities
13,938.12
-
13,938.12
Computer System
8,503.25
-
8,503.25
8,360,588.16
$
-
$
8,360,588.16
$
BOROUGH OF SURF CITY
SCHEDULE OF FIXED CAPITAL
YEAR ENDED DECEMBER 31, 2021
110
EXHIBIT D-8
BALANCE
TRANSFERRED
BALANCE
Ordinance
DECEMBER 31,
TO FIXED
DECEMBER 31,
Number
DATE
AMOUNT
2020
AUTHORIZED
CAPITAL
2021
18-16
Improvements to Water/Sewer System
12/12/18
600,000.00
$
370,887.98
$
-
$
-
$
370,887.98
$
21-15
Rehabilitation of Borough Water Tower
12/13/21
825,000.00
-
825,000.00
-
825,000.00
370,887.98
$
825,000.00
$
-
$
1,195,887.98
$
Purpose
ORDINANCE
BOROUGH OF SURF CITY
WATER/SEWER UTILITY CAPITAL FUND
SCHEDULE OF FIXED CAPITAL AUTHORIZED AND UNCOMPLETED
YEAR ENDED DECEMBER 31, 2021
111
EXHIBIT D-9
BALANCE
BALANCE
DECEMBER 31,
AFTER
BALANCE
2020
TRANSFERS
EXPENDED
LAPSED
Operating:
Salaries and Wages
209,434.43
$
209,434.43
$
-
$
209,434.43
$
Other Expenses
399,554.00
399,554.00
16,674.43
382,879.57
Capital Improvements:
Capital Outlay
80,479.00
80,479.00
-
80,479.00
Statutory Expenditures:
Contribution To:
Social Security System (O.A.S.I.)
22,054.06
22,054.06
-
22,054.06
Defined Contribution Retirement Plan
786.00
786.00
300.59
485.41
Unemployment Compensation Insurance
2,942.76
2,942.76
-
2,942.76
715,250.25
$
715,250.25
$
16,975.02
$
698,275.23
$
Appropriation Reserves
706,934.18
$
Encumbrances Payable
8,316.07
715,250.25
$
Appropriation
BOROUGH OF SURF CITY
WATER/SEWER UTILITY OPERATING FUND
SCHEDULE OF 2020 APPROPRIATION RESERVES
YEAR ENDED DECEMBER 31, 2021
112
EXHIBIT D-10
8,316.07
$
5,443.13
13,759.20
Transferred To Appropriation Reserves
8,316.07
5,443.13
$
Increased By:
Current Appropriations
Decreased By:
Balance, December 31, 2021
BOROUGH OF SURF CITY
WATER/SEWER UTILITY OPERATING FUND
SCHEDULE OF ENCUMBRANCES PAYABLE
YEAR ENDED DECEMBER 31, 2021
Balance, December 31, 2020
113
EXHIBIT D-11
17,905.68
$
Increased By:
Cash Receipts
19,050.13
36,955.81
Decreased By:
Applied To Rents Receivable
17,905.68
19,050.13
$
Balance, December 31, 2021
BOROUGH OF SURF CITY
WATER/SEWER UTILITY OPERATING FUND
SCHEDULE OF PREPAID RENTS
YEAR ENDED DECEMBER 31, 2021
Balance, December 31, 2020
114
EXHIBIT D-12
7,644.37
$
BOROUGH OF SURF CITY
WATER/SEWER UTILITY OPERATING FUND
SCHEDULE OF ACCOUNTS PAYABLE
YEAR ENDED DECEMBER 31, 2021
Balance, December 31, 2021 and 2020
115
EXHIBIT D-13
-
$
62,748.80
62,748.80
$
Increased By:
Cash Receipts
Balance, December 31, 2021
BOROUGH OF SURF CITY
WATER/SEWER UTILITY OPERATING FUND
SCHEDULE OF RESERVE FOR AMERICAN RECOVERY ACT
YEAR ENDED DECEMBER 31, 2021
Balance, December 31, 2020
116
EXHIBIT D-14
11.43
$
73.41
84.84
Cash Receipts
65.17
19.67
$
Balance, December 31, 2020
BOROUGH OF SURF CITY
WATER/SEWER UTILITY OPERATING FUND
SCHEDULE OF DUE FROM/(TO) WATER/SEWER UTILITY CAPITAL FUND
YEAR ENDED DECEMBER 31, 2021
Increased By:
Interest Earned in Water/Sewer Utility Capital Fund
Decreased By:
Balance, December 31, 2021
117
EXHIBIT D-15
-
$
345,000.00
345,000.00
$
Increased By:
HMPG Grant Received in Current Fund
Balance, December 31, 2021
Balance, December 31, 2020
BOROUGH OF SURF CITY
WATER/SEWER UTILITY OPERATING FUND
SCHEDULE OF DUE FROM/(TO) CURRENT FUND
YEAR ENDED DECEMBER 31, 2021
118
EXHIBIT D-16
Ordinance
2021
Paid or
Number
Purpose
Date
Amount
Funded
Unfunded
Authorization
Charged
Funded
Unfunded
18-16
Improvements to Water/Sewer System
12/12/18
600,000.00
$
-
$
296,938.60
$
-
$
197,000.76
$
-
$
99,937.84
$
21-15
Rehabilitation of Borough Water Tower
12/13/21
825,000.00
-
-
825,000.00
-
41,250.00
783,750.00
-
$
296,938.60
$
825,000.00
$
197,000.76
$
41,250.00
$
883,687.84
$
Ordinance
BOROUGH OF SURF CITY
WATER/SEWER UTILITY CAPITAL FUND
SCHEDULE OF IMPROVEMENT AUTHORIZATIONS
YEAR ENDED DECEMBER 31, 2021
December 31, 2021
Balance
Balance
December 31, 2020
119
EXHIBIT D-17
Balance, December 31, 2020
519,565.51
$
Increased By:
2021 Budget Appropriations
25,000.00
544,565.51
Decreased By:
Improvement Authorization Down Payment
41,250.00
503,315.51
$
Balance, December 31, 2021
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF CAPITAL IMPROVEMENT FUND
WATER/SEWER UTILITY CAPITAL FUND
120
EXHIBIT D-18
7,966,476.14
$
Increased By:
Grant Receipts
345,000.00
$
Funding of Costs of Improvements Authorized By Budget
130,000.00
475,000.00
8,441,476.14
$
Balance, December 31, 2021
BOROUGH OF SURF CITY
WATER/SEWER UTILITY CAPITAL FUND
SCHEDULE OF RESERVE FOR AMORTIZATION
YEAR ENDED DECEMBER 31, 2021
Balance, December 31, 2020
121
EXHIBIT D-19
30,000.00
$
Increased By:
Funding of Costs of Improvements Via Capital Improvement Fund
41,250.00
71,250.00
$
Balance, December 31, 2021
BOROUGH OF SURF CITY
WATER/SEWER UTILITY CAPITAL FUND
SCHEDULE OF RESERVE FOR DEFERRED AMORTIZATION
YEAR ENDED DECEMBER 31, 2021
Balance, December 31, 2020
122
EXHIBIT D-20
BALANCE
BALANCE
Ordinance
DECEMBER 31,
DECEMBER 31,
Number
2020
INCREASED
DECREASED
2021
2009-07
Improvements to Water & Sewer System
165,000.00
$
-
$
130,000.00
$
35,000.00
$
2018-16
Improvements to Water & Sewer System
570,000.00
-
345,000.00
225,000.00
2021-15
Rehabilitation of Borough Water Tower
-
783,750.00
-
783,750.00
735,000.00
$
783,750.00
$
475,000.00
$
1,043,750.00
$
Funded By Budget Appropriations
130,000.00
$
Grant Receipts
345,000.00
475,000.00
$
Purpose
YEAR ENDED DECEMBER 31, 2021
BOROUGH OF SURF CITY
WATER/SEWER UTILITY CAPITAL FUND
SCHEDULE OF BONDS AND NOTES AUTHORIZED BUT NOT ISSUED
123
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124
GENERAL FIXED ASSETS ACCOUNT GROUP
125
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126
EXHIBIT E-1
BALANCE
BALANCE
DECEMBER 31,
DECEMBER 31,
2020
ADDITIONS
DELETIONS
2021
Land
748,506.36
$
-
$
-
$
748,506.36
$
Buildings
949,506.71
67,653.96
-
1,017,160.67
Equipment
728,208.45
21,620.18
10,000.00
739,828.63
Motor Vehicles
2,955,200.36
142,011.26
8,317.00
3,088,894.62
5,381,421.88
$
231,285.40
$
18,317.00
$
5,594,390.28
$
BOROUGH OF SURF CITY
YEAR ENDED DECEMBER 31, 2021
SCHEDULE OF GENERAL FIXED ASSETS
GENERAL FIXED ASSETS ACCOUNT GROUP
127
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128
BOROUGH OF SURF CITY
PART II
SCHEDULE OF FINANCIAL STATEMENT FINDINGS -
GOVERNMENT AUDITING STANDARDS
FOR THE YEAR ENDED DECEMBER 31, 2021
129
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130
BOROUGH OF SURF CITY
SCHEDULE OF FINANCIAL STATEMENT FINDINGS
FOR THE YEAR ENDED DECEMBER 31, 2021
Section II – Financial Statement Findings
This section identifies the significant deficiencies, material weaknesses and instances of noncompliance
related to the basic financial statements that are required to be reported in accordance with Government
Auditing Standards and with audit requirements prescribed by the Division of Local Government
Services, Department of Community Affairs, State of New Jersey.
Finding 2021-001*
Criteria or specific requirement:
In accordance with maintaining an internal control environment that is effective in the prevention and/or
identification of potential financial statement misstatement and/or misclassification, the Borough should
properly maintain a complete and accurate general ledger system.
Condition:
The general ledger was not properly maintained in the Borough’s main financial reporting system
(Edmunds).
Context:
The Borough did not maintain or reconcile the subsidiary ledgers to the financial reporting system within
Edmunds.
Effect or potential effect:
The Borough does not have proper support for general ledger balances and transactions.
Cause:
The Borough maintained a separate, stand alone general ledger outside of the Edmunds accounting
software package.
Recommendation:
That internal control policies and procedures should be developed to properly maintain a single general
ledger system.
View of responsible official:
The responsible official agrees with this finding and will address the matter as part of their corrective
action plan.
* Denotes a Prior Year Finding
131
BOROUGH OF SURF CITY
SUMMARY SCHEDULE OF PRIOR YEAR AUDIT FINDINGS
FOR THE YEAR ENDED DECEMBER 31, 2021
This section identifies the status of prior year findings related to the financial statements, federal awards
and state financial assistance that are required to be reported in accordance with Government Auditing
Standards, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Cost Principals, and Audit Requirements for Federal Awards (Uniform Guidance), and
New Jersey OMB’s Circular 15-08.
Financial Statement Findings
Finding 2020-001
Condition:
The general ledger was not properly maintained in the Borough’s main financial reporting system
(Edmunds).
Current Status:
This finding has not been corrected.
Finding 2020-002
Condition:
The Borough’s general ledger accounting data was lost due to hardware failure and unable to be
recovered.
Current Status:
This finding has been corrected.
132
BOROUGH OF SURF CITY
PART III
LETTER OF COMMENTS AND RECOMMENDATIONS – REGULATORY BASIS
FOR THE YEAR ENDED DECEMBER 31, 2021
133
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134
Officials in Office and Surety Bonds
Amount
Corporate
Name of Official
of Bond
Surety
Francis R. Hodgson, Sr.
Mayor
John H. Klose
Council President
John G. Hadash III
Councilman
William D. Hodgson
Councilman
Peter M. Hartney
Councilman
James B. Russell
Councilman
Jacqueline Siciliano
Councilwoman
Christine Hannemann
Borough Administrator
*
JIF
Municipal Clerk
Assessment Search Officer
Registrar of Vital Statistics
Michael Gross
Chief Financial Officer,
*
JIF
Treasurer Water/Sewer Rents
James A. Liguori
Municipal Court Judge
*
JIF
Constance Motter
Court Administrator
*
JIF
Walter R. Higgins, Jr.
Assessor
Christopher J. Connors, Esq.
Solicitor
Frank Little
Engineer
All of the bonds were examined and appear to be properly executed.
* Joint Insurance Fund (JIF) Blanket Crime coverage in the amount of $1,000,000.00
BOROUGH OF SURF CITY
COMMENTS
YEAR ENDED DECEMBER 31, 2021
Title
135
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136
Honorable Mayor and Members
of the Borough Council
Borough of Surf City
County of Ocean
Surf City, New Jersey
In accordance with requirements prescribed by the Division of Local Government Services, Department
of Community Affairs, State of New Jersey, the following are the General Comments and
Recommendations for the year ended December 31, 2021.
GENERAL COMMENTS:
Contracts and Agreements required to be advertised by (N.J.S.A.40A:11-4)
N.J.S.A.40A:11-4 states every contract or agreement, for the performance of any work or furnishing or
hiring of any materials or supplies, the cost or the contract price whereof is to be paid with or out of
public funds not included within the terms of Section 3 of this act, shall be made or awarded only by the
Governing Body of the contracting unit after public advertising for bids and bidding therefore, except as
is provided otherwise in this act or specifically by any other Law. No work, materials or supplies shall be
undertaken, acquired or furnished for a sum exceeding in the aggregate the bid threshold, except by
contract or agreement.
The bid threshold in accordance with N.J.S.A. 40A:11-4 was $44,000 for the year ended December 31, 2021.
It is pointed out that the governing body of the municipality has the responsibility of determining whether
the expenditures in any category will exceed the statutory minimum within the fiscal year. Where
question arises as to whether any contract or agreement might result in violation of the statute, the
solicitor's opinion should be sought before a commitment is made.
Inasmuch as the system of records did not provide for an accumulation of payments for categories for the
performance of any work or the furnishing or hiring of any materials or supplies, the results of such an
accumulation could not reasonably be ascertained. Disbursements were reviewed, however, to determine
whether any clear-cut violations existed.
Our examination of expenditures did not reveal any individual payments or contracts in excess of the bid
threshold “for the performance of any work, or the furnishing of any materials, supplies or labor” 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.A.40A:11-6.
137
Collection of Interest on Delinquent Taxes and Assessments
N.J.S.54:4-67, 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 1, 2021 adopted the following resolution authorizing interest to be
charged on delinquent taxes:
NOW THEREFORE, BE IT RESOLVED, that if said taxes are deemed to be delinquent for non-
payment of taxes, the Tax Collector shall charge eight (8%) percent per annum on the first
$1,500.00 of the delinquency, and eighteen (18%) percent per annum on any amount in excess of
$1,500.00; and
BE IT FURTHER RESOLVED, by the Borough Council of the Borough of Surf City, that the Tax
Collector shall allow that no interest will be charged on payments received and made by the tenth
calendar day following the date upon which the same became payable; and
BE IT FURTHER RESOLVED, by the Borough Council of the Borough of Surf City, that the Tax
Collector shall charge, in addition to the interest for delinquent taxes, as noted above, a penalty
of six (6%) percent of the amount of the delinquency in taxes in excess of $10,000.00 to a
taxpayer who fails to pay the delinquency prior to the end of the calendar year.
It appears from an examination of the Collector's record that interest was collected in accordance with the
foregoing resolution.
OTHER COMMENTS (FINDINGS):
*Finding 2021-001
The general ledger was not properly maintained in the Borough’s main financial reporting system
(Edmunds).
RECOMMENDATIONS:
*Finding 2021-001
That internal control policies and procedures should be developed to properly maintain a single general
ledger system.
*Denotes Prior Year Finding
138
Appreciation
We express our appreciation for the assistance and courtesies extended to the members of the audit team.
Respectfully submitted,
HOLMAN FRENIA ALLISON, P. C.
Jerry W. Conaty
Certified Public Accountant
Registered Municipal Accountant
RMA No. 581
Lakewood, New Jersey
November 11, 2022
139
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"...Audit Findings and Questioned Costs as Prepared by Management 132 Letter of Comments and Recommendations - Regulatory Basis: Officials in Office and Surety Bonds 135 General Comments & Findings 137 Acknowledgment 139 PART II PART III ************ BOROUGH OF SURF CITY COUNTY OF OCEAN, NEW JERSEY PART I INDEP..."
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