Town of Portsmouth 2010 Financial Statements

155 South Main Street Providence, RI 02903

Introduction

Presentation will review the Town’s 2010 Audit Results Discussion of observations and recommendations Feel free to ask questions at any time

Topics of Discussion

Financial Statements

Observations and recommendations

Required Communication to Audit Committee

The General Fund

Total Fund Balance increased by $663,437 Budgeted change was zero Undesignated Fund Balance = $2,734,147 Undesignated Fund Balance represents roughly

5.8% of Operating Budget Current level is well below analyst benchmarks

(15% , one year debt svc, etc.)

Fund Balance: last 11 years

Results of Operations

Revenues were above budget by $19,309 Property taxes $41,582 above what was anticipated Tax collection percentages:

96.0% collection of current year assessment 99.6% collection of all assessments outstanding

when compared to net current assessment

Tax Collections:% of current levy

Results of Operations (cont.)

Expenditures were $687,069 below appropriated amounts

Public/social services and debt service functions exceeded budget by less than 1%

Significant favorable results in these areas: General government Public safety Public works Recreation

Net Bonded Debt per capita

School Department

Unrestricted fund ended year with fund balance of $1,381,503

$9,229 of this fund balance consists of outstanding, but unfilled, purchase commitments (encumbrances)

$316,000 is designated for 2010-11 expenditures Balance of $1,056,274 is undesignated

School Department

Revenues were $938,835 below anticipated amounts, primarily due to reductions in state aid

Expenditures were $1,517,331 below appropriations Current year increase in fund balance of $524,012

from operating surplus School Lunch Fund recognized net income of $12,476 Improvement in condition of records and readiness for

year-end audit

Wind Turbine

Revenues amounted to $508,545 Operating expenses were $165,597 (including non-

cash depreciation of $151,461) Interest expense was $37,577 for the fiscal year Operating income transferred to General Fund and

School Fund ($80,465 and $179,100 respectively) $204,000 of revenue bond principal retired during

year

Transfer Station

Revenues amounted to $582,877 Expenses were $673,097 Operating loss covered by transfer from General

Fund of $90,220 Fund has net assets of $37,250 – invested entirely

in capital assets used in operations

Town Pension Plan

Funded status has deteriorated significantly since 2000 80.1% funded as of 1/1/2000 60.6% funded as of 7/1/2010

While all actuarially required contributions have been made, these amounts have significantly increased over past 10 years and town must anticipate significant increases in coming years. In addition, continue taking steps to manage cost of future benefits.

Pension Funded Status

Unfunded Pension Obligation

Other Post-Employment

Benefits Town plan ended year with accumulated balance of

$146,923 available for benefits while School plan was unfunded at June 30th

Based on latest actuarial data available, combined unfunded liability is in excess of $17,500,000

Combined actuarially determined contribution was approximately $2,080,000 while actual contributions aggregated $968,080 (46.5% of required contribution)

While full funding of benefits is highly recommended, it is not currently required by law or accounting standards

Observations & Recommendations

No material weaknesses in internal controls noted One compliance finding noted regarding

expenditure of federal financial assistance We have discussed readiness for implementation of

GASB Statement 54 with management We received complete cooperation from

management and staff while conducting the audit

Questions?

The End

Thank you!