2023 Auditor's Report
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Certified Public Accountants and Business Consultants
September 9, 2024 To the Board of Selectmen Town of Durham, Maine
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Durham, Maine for the year ended December 31, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our discussion with the Board Chair on February 12, 2024. Professional standards also require that we communicate to you the following information related to our audit.
Our Responsibilities under U.S. Generally Accepted Auditing Standards and Government Auditing Standards
As stated in our engagement letter dated February 12, 2024, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities.
As part of our audit, we considered the system of internal control of the Town of Durham, Maine. Such considerations are solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we also performed tests of the Town of Durham, Maine’s compliance with certain provisions of laws, regulations, contracts, and grants. However, providing an opinion on compliance with those provisions was not an objective of our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Town of Durham, Maine are described in the notes to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2023. We noted no transactions entered into by the Town of Durham, Maine during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Board of Selectmen
Page 2
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were:
• Management’s estimate of depreciation expense, which is based on estimated useful lives of assets.
• Management’s estimate of unavailable tax revenue, which is based on estimated tax collections.
• Management’s estimates of the net pension and OPEB liabilities and related expense, which are based on actuarial reports.
We evaluated the methods, assumptions, and data used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
During the year, the Town experienced turnover in staff and transitioned its accounting function to a third party. The turnover and changes in procedures created delays in obtaining certain audit documentation.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. See the attached “Adjusting Journal Entries” which reports misstatements detected as a result of audit procedures and corrected by management, some of which were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
The attached “Passed Adjustments” schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. The uncorrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in our judgment, such uncorrected misstatements are immaterial to the financial statements under audit.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated September 9, 2024.
Board of Selectmen
Page 3
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Town’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Town’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the schedules related to the net pension and OPEB liabilities, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the individual fund financial statements, including the detailed budgetary comparison, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
Restriction on Use This information is intended solely for the information and use of the Board of Selectmen serving as audit committee and management of the Town of Durham, Maine and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours,
Town of Durham
Adjusting Journal Entries 12/31/2023
Account Description Debit Credit 001 To record change in Rescue Receivables for year-end. AA-1-00-1200 Accounts Receivable 14,801.96 0.00 AA-6-14-6470 Charges for Services-Ambulance Fees 0.00 14,801.96 Total 14,801.96 14,801.96 002 To remove invalid A/P invoice found during testing - TRIO for 2024. AA-7-20-7356 Administration-Software Licenses 0.00 22,990.06 AA-3-00-3000 Accounts Payable 22,990.06 0.00 Total 22,990.06 22,990.06 003 To bring on old RE Taxes Receivables (1993-2003). AA-1-00-1250 RE Taxes Receivable 15,450.83 0.00 AA-6-19-6999 Other Revenue-Miscellaneous Revenue 0.00 15,450.83 Total 15,450.83 15,450.83
004
To record retainage for FY 2023.
HD-7-40-7720 Public Works Cap-Public Works-Infrastructure 14,072.50 0.00 HD-3-00-3000 Accounts Payable 0.00 14,072.50 Total 14,072.50 14,072.50 005 To adjust unearned revenue to actual at year end. AA-4-00-4500 Unavailable Property Taxes 0.00 40,500.00 AA-6-10-6000 Property Taxes-Property Taxes 40,500.00 0.00
Total 40,500.00 40,500.00
Account Description Debit Credit
006
To reverse PY A/R and bring on CY plus A/R found in search.
AA-6-19-6999 Other Revenue-Miscellaneous Revenue 0.00 9,690.84
AA-6-11-6105 Excise Taxes-Other Excise 0.00 2,032.34
AA-6-10-6000 Property Taxes-Property Taxes 0.00 33.37
AA-1-00-1200 Accounts Receivable 11,756.55 0.00
AA-6-13-6399 Intergovernmental-Miscellaneous 0.00 56,633.13
AA-1-00-1200 Accounts Receivable 56,633.13 0.00
AA-1-00-1200 Accounts Receivable 0.00 80,800.60
AA-6-13-6305 Intergovernmental-Homestead Exemption 80,800.60 0.00
Total 149,190.28 149,190.28
007
To record accrued PR for year end.
AA-7-20-7000 Administration-Department Head Wages 2,119.23 0.00
AA-7-20-7015 Administration-Full Time Staff Wages 1,480.64 0.00
AA-7-20-7020 Administration-Part Time Staff Wages 674.50 0.00
AA-7-20-7030 Administration-Elected Official Wages 860.00 0.00
AA-7-20-7050 Administration-Payroll Taxes 470.67 0.00
AA-7-21-7020 Municipal Buildings-Part Time Staff Wages 82.50 0.00
AA-7-21-7050 Municipal Buildings-Payroll Taxes 6.31 0.00
Planning and Code Enf-Department Head
AA-7-27-7000 Wages 1,106.70 0.00
AA-7-27-7050 Planning and Code Enf-Payroll Taxes 415.97 0.00
AA-7-30-7000 Fire Department-Department Head Wages 1,594.00 0.00
AA-7-30-7020 Fire Department-Part Time Staff Wages 2,965.76 0.00
AA-7-30-7050 Fire Department-Payroll Taxes 391.86 0.00
AA-7-40-7000 Public Works-Department Head Wages 1,413.20 0.00
AA-7-40-7015 Public Works-Full Time Staff Wages 4,593.20 0.00
AA-7-40-7020 Public Works-Part Time Staff Wages 418.53 0.00
AA-7-40-7050 Public Works-Payroll Taxes 653.68 0.00
AA-3-00-3200 Accrued Payroll 0.00 19,246.75Total 19,246.75 19,246.75
Town of Durham
Passed Adjustments 12/31/2023
Account Description Debit Credit 200 To post back to 2022 invoices for curbside trash and recycling. AA-7-42-7231 Solid Waste-Hauling 0.00 3,383.87 AA-7-42-7231 Solid Waste-Hauling 0.00 18,952.17 AA-5-00-5400 Unassigned Fund Balance 22,336.04 0.00 Total 22,336.04 22,336.04 201 To record a right-to-use asset and liability, with first year amortization and interest expenses for a copier lease. Entity-wide capital assets Right-to-use asset 9,953.40 0.00 Entity-wide liabilities Lease liability 0.00 9,953.40 Entity-wide expenses Amortization expense 281.59 0.00 Entity-wide expenses Interest expense 234.78 0.00 Entity-wide expenses Rental expense 0.00 1,924.32 Entity-wide capital assets Accumulated amortization 281.59 Entity-wide liabilities 1,689.54 0.00
Total 12,159.31 12,159.31
TOWN OF DURHAM, MAINE
Reports Required by Government Auditing Standards
For the Year Ended December 31, 2023
Certified Public Accountants and Business Consultants
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
To the Board of Selectmen Town of Durham, Maine
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Durham, Maine as of and for the year ended December 31, 2023, and the related notes to the financial statements, which collectively comprise the Town of Durham, Maine’s basic financial statements, and have issued our report thereon dated September 9, 2024.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town of Durham, Maine's internal control over financial reporting (internal control) as a basis for designing 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 Town of Durham, Maine’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town of Durham, Maine’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 Town of Durham, Maine’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. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We identified a certain deficiency in internal control, described in the accompanying schedule of findings and other comments as items 2023- 001 that we consider to be a significant deficiency.
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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, CONTINUED
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town of Durham, Maine'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 financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted other matters that we reported under the heading “Other Comments” that are opportunities for strengthening internal controls and operating efficiency.
The Town of Durham, Maine’s Responses to Finding and Other Comments
Government Auditing Standards requires the auditor to perform limited procedures on the Town of Durham, Maine’s responses to the finding and other comments identified in our audit and described in the accompanying schedule of findings and other comments. The Town of Durham, Maine’s responses were not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the responses.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
September 9, 2024 South Portland, Maine
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TOWN OF DURHAM, MAINE
Schedule of Findings and Other Comments December 31, 2023
Findings Required to be Reported under Government Auditing Standards
SIGNIFICANT DEFICIENCY
2023-001 Purchase Card Disbursements
Criteria: The Town has a policy that requires all users of purchase cards to turn in supporting documentation for their purchases, such as a receipt or invoice. Per the policy, repeat offenders will potentially have their purchase card access revoked. Each purchase card user is also supposed to sign a credit card agreement to ensure they will not use the card for unauthorized purposes. In addition, the Town is supposed to retain documentation to support transactions.
Condition: We selected twenty-nine transactions from three separate months in 2023. Of those transactions, ten were missing a receipt or invoice. In addition, there were two employees who were missing signed credit card agreements. We also selected the month of February 2023 to test and the credit card statement and related documentation could not be located.
Cause: The Town experienced turnover in the central office staff, which created inconsistencies in filing and retaining documentation.
Effect: Missing documentation could lead to an increased risk of fraud or error. Employees who are not provided the proper instructions and forms regarding credit card use could inappropriately commit the Town to a purchase that otherwise would not have been executed.
Recommendation: Management should reinforce to all purchase card users the importance of keeping receipts and turning them in to the central office. In addition, management should review the list of purchase card users and verify all have signed credit card agreements on file. In addition, the Town should consider either revising its purchase card policy if it does not intend to reinforce penalties for repeat offenders, or should follow through and revoke purchase card privileges for certain employees. The Town should also review its procedures for filing documentation so that there are no future issues in locating documentation.
OTHER COMMENTS
Cash Disbursements
During the audit, we selected forty cash disbursements to test controls. Of those forty transactions, there were three disbursements for which the invoices could not be located. In addition, there were two disbursements that were missing documentation of approvals, both of which were for the Fire Department. The disbursements with the missing documentation/approval were all from February and March 2023, which is before the Town switched to the services of Royer and Advisors. As the disbursement process has once again been taken over by the Town, management should reinforce the importance of maintaining documentation and obtaining the required approvals.
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TOWN OF DURHAM, MAINE
Schedule of Findings and Other Comments, Continued December 31, 2023
Findings Required to be Reported under Government Auditing Standards, Continued
OTHER COMMENTS, continued
Payroll Documentation
As part of the audit, we selected fifteen employees to test. Of those employees selected, four were missing supporting documentation for their current pay rate. One of the employees was paid at a rate higher than the documentation in the employee’s file. Per management, the employee received a raise in 2023 but the raise was not documented. Although the Town has worked to improve the documentation of approved wage rates, there are still gaps in the documentation. We recommend that staff continue reviewing personnel files to ensure that the most recent support for wage rates is included in the files.
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TOWN OF DURHAM, MAINE
Annual Financial Report
For the Year Ended December 31, 2023
TOWN OF DURHAM, MAINE
Annual Financial Report
For the Year Ended December 31, 2023
Table of Contents
Statement Page(s)
Independent Auditor's Report 1-3
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 1 7
Statement of Activities 2 8
Fund Financial Statements:
Balance Sheet - Governmental Funds 3 9
Statement of Revenues, Expenditures, and Changes in Fund
Balances - Governmental Funds 4 10
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of Governmental Funds to the Statement of Activities 5 11
Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual - Budgetary Basis - General Fund 6 12
Notes to Basic Financial Statements 13-29
Required Supplementary Information:
Schedule of Town’s Proportionate Share of the Net Pension Liability (Asset) 30
Schedule of Town Contributions 30
Schedule of Changes in Town’s Total Health Plan OPEB Liability and Related Ratios 31
Notes to Required Supplementary Information 32
Individual and Combining Fund Financial Statements: Exhibit
General Fund:
Comparative Balance Sheets A-1 35
Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and
Actual - Budgetary Basis A-2 36-38
Other Governmental Funds:
Combining Balance Sheet – Nonmajor Governmental Funds B-1 41
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances –
Nonmajor Governmental Funds B-2 42
Combining Balance Sheet – Nonmajor Special Revenue Funds C-1 45
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances –
Nonmajor Special Revenue Funds C-2 46
Combining Balance Sheet – Nonmajor Capital Projects Funds D-1 49
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances –
Nonmajor Capital Projects Funds D-2 50Certified Public Accountants and Business Consultants
Independent Auditor's Report
Board of Selectmen Town of Durham, Maine
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Durham, Maine, as of and for the year ended December 31, 2023, and the related notes to the financial statements, which collectively comprise the Town of Durham, Maine’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Durham, Maine, as of December 31, 2023, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
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. 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 Town of Durham, Maine 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.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Town of Durham, Maine’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Board of Selectmen
Page 2
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 opinions. 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 and Government Auditing Standards 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 and Government Auditing Standards, 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 control 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 Town of Durham, Maine’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 Town of Durham, Maine’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.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the required supplementary information related to the net pension and OPEB liabilities, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.
Board of Selectmen
Page 3
We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town of Durham, Maine’s basic financial statements. The accompanying individual fund financial statements are presented for purposes of additional analysis 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 individual fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated September 9, 2024 on our consideration of the Town of Durham, Maine’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 Town of Durham, Maine’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 Town of Durham, Maine’s internal control over financial reporting and compliance.
September 9, 2024 South Portland, Maine
Statement 1
TOWN OF DURHAM, MAINE
Statement of Net Position December 31, 2023 Governmental Activities
ASSETS
Cash $ 4,456,469
Receivables:
Taxes and liens 442,001
Accounts receivable 12,808
Rescue receivables 54,017
Due from other governments 56,633
RSU #5 debt service payments 653,010
Nondepreciable capital assets 239,332
Depreciable capital assets, net 8,502,490
Total assets 14,416,760
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources related to OPEB 345
Deferred outflows of resources related to pensions 69,195
Total deferred outflows of resources 69,540
LIABILITIES
Accounts payable 130,502
Accrued wages 19,248
Unearned revenues 169,630
Accrued interest 31,953
Noncurrent liabilities:
Due within one year 800,702
Due in more than one year 3,317,592
Total liabilities 4,469,627
DEFERRED INFLOWS OF RESOURCES
Taxes paid in advance 13,171
Deferred inflows of resources related to OPEB 58,659
Deferred inflows of resources related to pensions 30,498
Total deferred inflows of resources 102,328
NET POSITION
Net investment in capital assets 5,523,753
Restricted:
Nonexpendable principal -permanent funds 3,450
Expendable earnings - permanent funds 4,283
Donations and grants 40,111
Unrestricted 4,342,748
Total net position $ 9,914,345
See accompanying notes to the basic financial statements.7
Statement 2
TOWN OF DURHAM, MAINE
Statement of Activities
For the year ended December 31, 2023
Net (expense) revenue
and changes
Program Revenues in net position
Operating Capital Primary Government
Charges for grants and grants and Governmental
Functions/programs Expenses services contributions contributions activities
Primary government:
Governmental activities:
General government $ 1,357,191 121,323 8,540 - (1,227,328)
Public safety 655,983 107,414 - - (548,569)
Public works 1,447,645 - - 386,831 (1,060,814)
Solid waste disposal 374,150 30,074 - - (344,076)
Community services 13,507 - - - (13,507)
Education 5,718,355 - - - (5,718,355)
Interest on debt 101,868 - - - (101,868)
Total governmental activities 9,668,699 258,811 8,540 386,831 (9,014,517)
Total primary government $ 9,668,699 258,811 8,540 386,831 (9,014,517)
General revenues:
Property taxes 8,046,081
Excise taxes 1,078,472
Grants and contributions not restricted to specific programs:
State Revenue Sharing 740,214
Homestead and BETE exemption 221,900
Other 97,048
Unrestricted interest income 45,475
Miscellaneous 14,474
Total general revenues 10,243,664
Change in net position 1,229,147
Net position - beginning, restated 8,685,198
Net position - ending $ 9,914,345
See accompanying notes to the basic financial statements.8
Statement 3
TOWN OF DURHAM, MAINE
Balance Sheet Governmental Funds December 31, 2023 Aggregate General Other
Fund ARPA Funds Total
ASSETS
Cash $ 4,404,286 - 52,183 4,456,469
Receivables:
Taxes and liens 442,001 - - 442,001
Accounts receivable 12,808 - - 12,808
Rescue receivables 54,017 - - 54,017
Due from other governments 56,633 - - 56,633
Interfund receivables - 169,630 615,299 784,929
RSU #5 debt service payments 653,010 - - 653,010
Total assets 5,622,755 169,630 667,482 6,459,867
LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable 116,429 - 14,073 130,502
Accrued wages 19,248 - - 19,248
Interfund payables 782,929 - 2,000 784,929
Unearned revenues - 169,630 - 169,630
Total liabilities 918,606 169,630 16,073 1,104,309
Deferred Inflows of Resources:
Taxes paid in advance 13,171 - - 13,171
Unavailable revenue - property taxes 354,500 - - 354,500
Unavailable revenue - RSU #5 debt service payments 653,010 - - 653,010
Total deferred inflows of resources 1,020,681 - - 1,020,681
Fund Balances:
Nonspendable - - 3,450 3,450
Restricted - - 44,394 44,394
Committed - - 603,565 603,565
Assigned 668,000 - - 668,000
Unassigned 3,015,468 - - 3,015,468
Total fund balances 3,683,468 - 651,409 4,334,877
Total liabilities, deferred inflows of resources, and fund balances 5,622,755 169,630 667,482
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds. 8,741,822
Other long-term assets are not available to pay for current period expenditures
and, therefore, are unavailable in the funds. 1,007,510
Long-term liabilities, including notes payable, are not due and payable in the current
period and therefore, are not reported in the funds.
Notes payable (3,871,079)
OPEB liability with deferred inflows and outflows of resources (97,948)
Net pension liability with deferred inflows and outflows of resources (141,024)
Accrued compensated absences (27,860)
Accrued interest (31,953)
Net position of governmental activities $ 9,914,345
See accompanying notes to the basic financial statements.9
Statement 4
TOWN OF DURHAM, MAINE
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds For the year ended December 31, 2023 Aggregate General Other
Fund ARPA Funds Total
Revenues:
Property taxes $ 8,005,581 - - 8,005,581
Excise taxes 1,078,472 - - 1,078,472
Intergovernmental revenues 1,122,270 178,393 149,330 1,449,993
Charges for services 258,811 - - 258,811
Other revenues 16,474 - 2,540 19,014
Interest 45,053 - 422 45,475
Total revenues 10,526,661 178,393 152,292 10,857,346
Expenditures:
Current:
General government 635,952 - - 635,952
Public safety 522,286 - - 522,286
Public works 1,275,799 - - 1,275,799
Solid waste disposal 374,150 - - 374,150
Community services 13,018 - 489 13,507
Education 5,716,355 - 2,000 5,718,355
County tax 677,388 - - 677,388
Unclassified 8,386 - - 8,386
Debt service 958,390 - - 958,390
Capital outlay - 178,393 602,695 781,088
Total expenditures 10,181,724 178,393 605,184 10,965,301
Excess (deficiency) of revenues
over (under) expenditures 344,937 - (452,892) (107,955)
Other financing sources (uses):
Transfers from other funds - - 1,144,384 1,144,384
Transfers to other funds (1,096,630) - (47,754) (1,144,384)
Total other financing sources (uses) (1,096,630) - 1,096,630 -
Net change in fund balances (751,693) - 643,738 (107,955)
Fund balance, beginning of year 4,435,161 - 7,671 4,442,832
Fund balance, end of year $ 3,683,468 - 651,409 4,334,877
See accompanying notes to the basic financial statements.10
Statement 5
TOWN OF DURHAM, MAINE
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the year ended December 31, 2023
Net change in fund balances - total governmental funds (from Statement 4) $ (107,955)
Amounts reported for governmental activities in the statement of activities (Statement 2) are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. These are the changes in amounts related to capital assets: capital outlay 1,001,439 depreciation expense (530,289) book value of disposed capital assets (5,535)
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 40,500
Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. These are the changes in the other liability balances: accrued interest 8,462 accrued compensated absences (2,492) opeb liability 24,738 deferred inflows and outflows of resources related to the opeb liability (31,029) net pension liability (54,489) deferred inflows and outflows of resources related to the net pension liability 37,737 (17,073)
Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. These are the changes in long-term debt: note principal payments 956,895
The Town has bonds that were originally issued for School purposes. These amounts will be funded by Regional School Unit #5 when the debt service payments are due. The Town has recorded a long-term receivable for the amount that will be paid by the School Unit for these notes. The amount of the receivable at year-end was $653,010 with principal amounts paid off during the year totaling $108,835. (108,835)
Change in net position of governmental activities (see Statement 2) $ 1,229,147
See accompanying notes to the basic financial statements.11
Statement 6
TOWN OF DURHAM, MAINE
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Budgetary Basis - General Fund
For the year ended December 31, 2023 Variance with final budget
Original Final positive Budget Budget Actual (negative)
Revenues:
Taxes $ 9,061,710 9,061,710 9,084,053 22,343
Intergovernmental revenues 936,174 936,174 1,122,270 186,096
Charges for services 182,535 182,535 258,811 76,276
Other revenues 2,845 2,845 16,474 13,629
Interest 20,955 20,955 45,053 24,098
Total revenues 10,204,219 10,204,219 10,526,661 322,442
Expenditures:
Current:
General government 683,944 683,944 635,952 47,992
Public safety 522,470 522,470 522,286 184
Public works 1,338,920 1,338,920 1,275,799 63,121
Solid waste disposal 384,540 384,540 374,150 10,390
Community services 16,965 16,965 13,018 3,947
Education 5,716,356 5,716,356 5,716,355 1
County tax 677,388 677,388 677,388 -
Unclassified 35,246 35,246 8,386 26,860
Debt service 958,390 958,390 958,390 -
Total expenditures 10,334,219 10,334,219 10,181,724 152,495
Excess (deficiency) of revenues over
(under) expenditures (130,000) (130,000) 344,937 474,937
Other financing sources (uses):
Transfers to other funds (110,000) (110,000) (1,096,630) (986,630)
Total other financing sources (uses) (110,000) (110,000) (1,096,630) (986,630)
Net change in fund balance (240,000) (240,000) (751,693) (511,693)
Fund balance, beginning of year 4,435,161
Fund balance, end of year $ 3,683,468
See accompanying notes to the basic financial statements.12
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Town of Durham, Maine conform to accounting principles generally accepted in the United States of America as applicable to governmental units. The following is a summary of the more significant policies.
A. Reporting Entity
In evaluating how to define the reporting entity, for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit is made by applying the criteria set forth in GAAP which defines the reporting entity as the primary government and those component units for which the primary government is financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board, and either a) the ability to impose will by the primary government, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. Application of this criterion and determination of type of presentation involves considering whether the activity benefits the government and/or its citizens, or whether the activity is conducted within the geographic boundaries of the government and is generally available to its citizens. Based upon the application of these criteria, there were no potential component units required to be included in this report.
B. Description of Government-wide Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the Town. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are typically reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. The Town currently does not have any business-type activities.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The Town has elected not to allocate indirect costs among the programs, functions, and segments. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues.
C. Basis of Presentation – Financial Statements
While separate government-wide and fund financial statements are represented, they are interrelated. The governmental activities column incorporates data from governmental funds. For the most part, the effect of interfund activity has been removed from these statements.
D. Basis of Presentation – Fund Financial Statements
Separate financial statements are provided for governmental funds. Major individual governmental funds are reported as separate columns in the fund financial statements.
13
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
The Town reports the following major governmental funds:
The General Fund is the Town’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
The ARPA Fund accounts for the receipt of federal ARPA grant funds and related expenditures.
E. Measurement Focus and Basis of Accounting
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as certain compensated absences and claims and judgments, are recorded only when the payment is due.
Those revenues susceptible to accrual are property taxes, interest, and charges for services. Other receipts and taxes become measurable and available when cash is received by the Town and are recognized as revenue at that time. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met.
Amounts reported as program revenues on the Statement of Activities include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
F. Cash and Investments
The Town considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents.
G. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items. The Town utilizes the consumption method for prepaid items in which items purchased are recorded as an asset and the recognition of the expenditure is deferred until the period the prepaid item is actually consumed or used.
14
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
H. Interfund Receivables and Payables
Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as interfund loans or as interfund advances (i.e., the noncurrent portion of interfund loans).
I. Capital Assets
Capital assets, which include property, plant, and equipment, are reported in the governmental activities column in the government-wide financial statements. Capital assets are defined by the Town as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition cost at the date of donation.
The costs of normal repairs and maintenance that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.
Property, plant, and equipment of the primary government are depreciated using the straight-line method over the assets' estimated useful lives ranging from 5 to 50 years.
J. Deferred Outflows and Inflows of Resources
In addition to assets and liabilities, the statement of net position and balance sheet will sometimes report separate sections for deferred outflows of resources and deferred inflows of resources. These separate financial statement elements, deferred outflows of resources and deferred inflows of resources, represent a consumption or acquisition of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) or inflow of resources (revenue) until that time. The governmental funds report three deferred inflows of resources: unavailable revenue from property taxes, prepaid property taxes, and unavailable revenue from Regional School Unit #5 debt service payments. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The governmental activities have deferred outflows and inflows that relate to the net pension and OPEB liabilities, which include the Town’s contributions subsequent to the measurement date, which is recognized as a reduction of the net pension/OPEB liabilities in the subsequent year. They also include changes in assumptions, differences between expected and actual experience, and changes in proportion and differences between Town contributions and proportionate share of contributions, which are deferred and amortized over the average expected remaining service lives of active and inactive members in the plan. They also include the net difference between projected and actual earnings on pension plan investments, which is deferred and amortized over a five-year period.
K. Long-term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net position. Debt premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Debt payable is reported net of the applicable premium or discount.
15
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
L. Pensions
For purposes of measuring the net pension liability/asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Maine Public Employees Retirement System Consolidated Plan for Participating Local Districts (PLD Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
M. Other postemployment benefits (OPEB) - For purposes of measuring the OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net positions of the plan and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
N. Use of Estimates
Preparation of the Town’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent items at the date of the financial statements and the reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates.
O. Accrued Compensated Absences
Under the terms of personnel policies, vacation and sick leave are granted in varying amounts according to length of service. The Town accrues accumulated vacation leave and vested sick leave. Accumulated vacation and sick time has been recorded in the Statement of Net Position for the governmental activities. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.
P. Unearned Revenues
Unearned revenues in 2023 consist of grant revenues that have not yet met all of the requirements to be recognized as revenue under the terms of the grant.
16
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Q. Comparative Data/Reclassifications
Comparative data for the prior year have been presented only for certain funds in the fund financial statements in order to provide an understanding of the changes in the financial position and operations of these funds. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation.
R. Fund Balance/Net Position
Governmental fund balance is reported in five classifications that comprise a hierarchy based primarily on the extent to which the Town is bound to honor constraints on the specific purposes for which those funds can be spent.
The five classifications of fund balance for the Governmental Funds are as follows:
• Nonspendable – resources which cannot be spent because they are either a) not in spendable form or;
b) legally or contractually required to be maintained intact.
• Restricted – resources with constraints placed on the use of resources which are either a) externally imposed by creditors (such as through debt covenants), grantors, contributors or laws or regulations of other governments or; b) imposed by law through constitutional provisions or enabling legislation.
• Committed – resources which are subject to limitations the government imposes on itself at its highest level of decision making authority, and that remain binding unless removed in the same manner.
• Assigned – resources that are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed.
• Unassigned – resources which have not been assigned to other funds and that have not been restricted, committed, or assigned to specific purposes within the General Fund. The General Fund should be the only fund that reports a positive unassigned fund balance amount.
The voters have the responsibility for committing fund balance amounts and likewise would be required to modify or rescind those commitments. For assigned fund balance amounts, the Board of Selectmen has been authorized by Charter/Policy to assign unspent budgeted amounts to specific purposes in the General Fund at year end based on Department requests. The Town does not have a formal fund balance policy.
When both restricted and unrestricted resources are available for use, it is the Town’s policy to use restricted resources first, then unrestricted resources as they are needed. When committed, assigned, and unassigned resources are available for use, it is the Town’s policy to use committed or assigned resources first, and then unassigned resources as they are needed.
STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
The Town utilizes a formal budgetary accounting system to control operations accounted for in the General Fund. This budget is established through the passage of a Town warrant at the annual Town meeting. It is prepared on a basis consistent with generally accepted accounting principles (GAAP) except for certain appropriations, which are budgeted on a net basis, and encumbrances. Under the net budget basis, certain revenues are not estimated but are credited to the particular appropriation account.
17
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY, CONTINUED
The level of control (level at which expenditures may not exceed appropriations) is the warrant article. Generally, all unexpended budgetary accounts lapse at the close of the fiscal year with the exception of some non-lapsing accounts and ongoing projects which are carried forward to the next fiscal year.
DEPOSITS
Custodial Credit Risk-Town Deposits: Custodial credit risk is the risk that in the event of a bank failure, the Town’s deposits may not be returned to it. The Town does not have a deposit policy for custodial credit risk. As of December 31, 2023, the Town’s bank balances of $4,390,618 were covered by FDIC.
PROPERTY TAX
Property taxes for the current year were committed on June 27, 2023 on the assessed value listed as of the prior April 1 for all real and personal property located in the Town. Assessed values are periodically established by the Town's Assessor at 67% of assumed market value. The Town is permitted by the laws of the State of Maine to levy taxes up to 105% of its net budgeted expenditures for the related fiscal period. The amount raised in excess of 100% is referred to as overlay, and amounted to $35,246 for the year ended December 31, 2023.
Tax liens are placed on real property within twelve months following the tax commitment date if taxes are delinquent. The Town has the authority to foreclose on property eighteen months after the filing of the lien if the tax liens and associated costs remain unpaid. Property taxes levied during the year were recorded as receivables at the time the levy was made. The receivables collected during the year and in the first sixty days following the end of the fiscal year have been recorded as revenues. The remaining receivables have been recorded as deferred revenues.
The following summarizes the levy:
2023 2022
Assessed value $ 376,000,600 373,440,400
Tax rate (per $1,000) 21.35 20.70
Commitment 8,027,613 7,730,216
Supplemental taxes assessed 18,435 10,284
8,046,048 7,740,500
Less:
Collections and abatements 7,764,446 7,518,668
Current year taxes receivable at end of year $ 281,602 221,832
Due date August 14, 2023 August 5, 2022
Interest rate on delinquent taxes 8.00% 4.00%
Collection rate 96.50% 97.13%18
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2023 was as follows:
Balance Balance
December 31, December 31,
2022 Increases Decreases 2023
Governmental activities:
Capital assets, not being depreciated:
Land $ 239,332 - - 239,332
Construction in process 8,576 541,013 549,589 -
Total capital assets not being depreciated 247,908 541,013 549,589 239,332
Capital assets, being depreciated:
Land improvements 17,771 - - 17,771
Buildings and building improvements 1,729,861 - - 1,729,861
Infrastructure 6,564,004 549,589 - 7,113,593
Vehicles and equipment 3,137,987 460,426 110,700 3,487,713
Total capital assets being depreciated 11,449,623 1,010,015 110,700 12,348,938
Less accumulated depreciation for:
Land improvements 4,212 444 - 4,656
Buildings and building improvements 573,542 35,446 - 608,988
Infrastructure 1,042,494 213,323 - 1,255,817
Vehicles and equipment 1,801,076 281,076 105,165 1,976,987
Total accumulated depreciation 3,421,324 530,289 105,165 3,846,448
Total capital assets being depreciated, net 8,028,299 479,726 5,535 8,502,490
Governmental activities capital assets, net $ 8,276,207 1,020,739 555,124 8,741,822Depreciation expense was charged to functions/programs of the primary government as follows:
General government $ 18,316 Public safety 124,461 Public works, including depreciation of infrastructure assets 387,512 Total depreciation expense – governmental activities $ 530,289
19
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
INTERFUND RECEIVABLES AND PAYABLES
Individual Interfund receivables and payables and transfers at December 31, 2023 were as follows:
Interfund Interfund Interfund receivables payables transfers General Fund $ - 782,929 (1,096,630) ARPA 169,630 - - Nonmajor governmental funds: Nonmajor special revenue funds 225,889 2,000 242,471 Nonmajor capital projects funds 389,410 - 854,159 Total Nonmajor Governmental Funds 615,299 2,000 1,096,630 Totals $ 784,929 784,929 -
During the year, management reclassified all reserves that had previously been reported as components of the General Fund as separate special revenue and capital projects funds. The result of the classification was a transfer out totaling $986,630 from the General Fund to the newly created funds based on the prior fiscal year ending balances. There were a couple of transfers to the other funds to be used for future spending.
CHANGES IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2023 was as follows:
Beginning
balance Ending Due within
restated Additions Reductions balance one year
Governmental activities:
Net pension liability $ 125,232 54,489 - 179,721 -
Other postemployment liability 35,534 4,100 - 39,634 -
Accrued compensated absences 25,368 2,492 - 27,860 -
Notes from direct borrowings 4,827,974 - 956,895 3,871,079 800,702
Governmental activities
long-term liabilities $ 5,014,108 61,081 956,895 4,118,294 800,702OVERLAPPING DEBT AND OTHER CONTINGENCIES
Overlapping Debt
The Town’s proportionate share of Regional School Unit No. 5’s debt of $11,889,825 is $2,546,801 (21.42%) as of June 30, 2023, which is the most readily available information. This debt service is included in the annual assessments to the Town.
20
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
LONG-TERM DEBT
Notes from direct borrowings at December 31, 2023 are comprised of the following:
Amount Final
originally Interest maturity
Notes from direct borrowings issued rate date Balance
2014 public works property $ 975,000 4.55% 2029 460,662
2014 public works equipment 1,150,000 3.96% 2024 127,380
2018 fire truck 480,000 3.90% 2028 262,887
2018 road paving bond 2,000,000 Varies 2028 1,000,000
2019 road paving bond 2,350,000 Varies 2029 1,367,140
2009 school projects* 2,176,696 Varies 2029 653,010
Total bonds $ 3,871,079*RSU 5 will reimburse the Town of Durham for all of the Durham School Department notes from direct borrowings when the debt service payments are due. The Town has recorded a receivable of $653,010, which is the outstanding amount of notes from direct borrowings related to the School Department.
The annual requirements to amortize the notes from direct borrowings are as follows:
Principal Interest Total
2024 $ 800,702 115,566 916,268
2025 678,437 93,857 772,294
2026 683,741 74,308 758,049
2027 653,568 55,393 708,961
2028 659,338 35,193 694,531
2029 395,293 13,557 408,850
Totals $ 3,871,079 387,874 4,258,953STATUTORY DEBT LIMIT
In accordance with Maine law, no municipality shall incur debt for specified purposes in excess of certain percentages of state valuation of such municipality. At December 31, 2023, the Town was in compliance with these limitations.
21
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
FUND BALANCES
As of December 31, 2023, fund balance components consisted of the following:
Aggregate
General Fund Other Funds Total
Nonspendable:
Nonexpendable permanent fund principal $ - 3,450 3,450
Restricted:
Expendable permanent fund principal - 4,283 4,283
Zoning compliance grant - 5,000 5,000
River Park donations - 8,021 8,021
School scholarships - 12,797 12,797
Heating assistance - 10,956 10,956
The giving tree - 1,884 1,884
Historic district commission - 1,330 1,330
Jackson Tupper memorial - 123 123
Committed:
Emergency fund - 16,953 16,953
Grant match - 27,077 27,077
Recreation - 23,742 23,742
Telecommunication - 78,824 78,824
Revaluation - 60,000 60,000
Eureka capital - 3,719 3,719
Fire rescue capital - 142,091 142,091
Buildings capital - 90,512 90,512
Public works capital - 139,015 139,015
Union church restoration - 21,632 21,632
Assigned:
Subsequent year’s budget 668,000 - 668,000
Unassigned:
General fund 3,015,468 - 3,015,468
Total $ 3,683,468 651,409 4,334,877NET POSITION
Net position represents the difference between assets, deferred outflows of resources, and liabilities and deferred inflows of resources. The net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of bonds and adding back any school-related debt for which the Town no longer has the assets. The Town’s net investment in capital assets was calculated as follows at December 31, 2023:
Capital assets $ 12,588,270 Accumulated depreciation (3,846,448) Notes payable (3,871,079) Add back school related debt – assets transferred to RSU #5 653,010 Total invested in capital assets net of related debt $ 5,523,753
22
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
NET POSITION, CONTINUED
The school-related debt has been added back in the calculation because the Town issued debt related to the new elementary school construction for the local share of debt. As required by the Reorganization Plan for the Regional School Unit (RSU), the Town retains the obligation for this debt. However, the related assets were transferred to the RSU in accordance with the agreement.
OTHER POST EMPLOYMENT BENEFITS (OPEB)
General Information about the OPEB Plan
Plan Description - The Town sponsors a post-retirement benefit plan providing health insurance to employees (hereafter referred to as the Town Health Plan). The plan is a single-employer defined benefit OPEB plan administered by the Maine Municipal Employees Health Trust (MMEHT). The Town Select Board has the authority to establish and amend the benefit terms and financing requirements. No assets are accumulated in a trust that meets the criteria of paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.
Benefits Provided - Retirees with a minimum of age 55 and 5 years of service at retirement are eligible for postretirement health insurance benefits. Eligible retirees are required to pay 100% of health insurance premiums to receive health benefit coverage and therefore, the Town makes no actual contributions.
Employees Covered by Benefit Terms – At January 1, 2023, the following employees were covered by the Health Plan benefit terms:
Inactive employees or beneficiaries currently receiving benefits - Inactive employee entitled to but not yet receiving benefits - Active employees 7 Total 7
OPEB Liability, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
The Town’s total Health Plan OPEB liability of $39,634 was measured as of January 1, 2023, and was determined by an actuarial valuation as of January 1, 2022.
23
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
OTHER POST EMPLOYMENT BENEFITS (OPEB), CONTINUED
Changes in the Total Health Plan OPEB Liability
Total OPEB
Liability
Balance at December 31, 2022 $ 35,534
Changes for the year:
Service cost 7,687
Interest 889
Changes of benefit terms -
Differences between expected and actual experience -
Changes in assumptions or other inputs (4,340)
Benefit payments (136)
Net changes 4,100
Balance at December 31, 2023 $ 39,634Change in assumptions reflects a change in the discount rate to 3.72% from 2.06%.
For the year ended December 31, 2023, the Town recognized an OPEB expense of $6,636 related to the Town Health Plan. At December 31, 2023, the Town reported deferred outflows of resources and deferred inflows of resources related to the Health Plan from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience $ - 55,479
Changes of assumption or other inputs - 3,180
Contributions subsequent to the measurement date 345 -
Total $ 345 58,659Amounts reported as deferred outflows of resources and deferred inflows of resources related to the Health Plan OPEB will be recognized in OPEB expense as follows:
Year ended December 31: 2024 $ (2,325) 2025 (12,891) 2026 (14,274) 2027 (14,274) 2028 (14,275) Thereafter (620)
Actuarial Assumptions and Other Inputs
The total OPEB liability in the January 1, 2022 actuarial valuation, rolled forward, for the Town Health Plan was determined using the following assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:
24
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
OTHER POST EMPLOYMENT BENEFITS (OPEB), CONTINUED
Inflation 3.00% per year
Salary increases 2.75% per year
Discount rate 3.72%
Healthcare cost trend rates Non-Medicare 8.35% for 2023, grading to 4.55% in 2043
Medicare 9.20% for 2023, grading to 4.55% in 2043
Retirees’ share of the benefit related costs 100%Mortality rates for the Health Plan were based on the 2010 Public Plan General Benefits-Weighted Employee Mortality Table, for males and females.
The actuarial assumptions used in the January 1, 2022 valuation for the Health Plan were based on the results of an actuarial experience study for the period June 30, 2016 through June 30, 2020.
Discount Rate - The rate used to measure the total OPEB liability for the Town Health Plan was 3.72%. The discount rate was based upon high quality AA/Aa or higher bond yields in effect for 20 years, tax-exempt general obligation municipal bonds using the Bond Buyer 20-Bond GO Index.
Sensitivity of the Total Health Plan OPEB Liability to Changes in the Discount Rate - The following presents the Town’s total OPEB liability related to the Town Health Plan calculated using the discount rate of 3.72%, as well as what the Town’s total OPEB liability would be if it were calculated using a discount rate that is 1 percentage-point lower or 1 percentage-point higher than the current rate:
1% Discount 1% Decrease Rate Increase (2.72%) (3.72%) (4.72%) Total OPEB liability $ 45,753 39,634 34,545
Sensitivity of the Total Health Plan OPEB Liability to Changes in the Healthcare Cost Trend Rates - The following presents the Town’s total OPEB liability related to the Health Plan calculated using the healthcare cost trend rates, as well as what the Town’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage-point lower or 1 percentage-point higher than the current healthcare cost trend rates:
Healthcare Cost
1% Decrease Trend Rates 1% Increase
Total OPEB liability $ 33,506 39,634 47,211PENSION PLAN
General Information about the Pension Plan
Plan Description - Employees of the Town are provided with pensions through the Maine Public Employees Retirement System Consolidated Plan for Local Participating Districts (PLD Plan), a cost-sharing multiple-employer defined benefit pension plan, administered by the Maine Public Employees Retirement System (MPERS). Benefit terms are established in Maine statute; in the case of the PLD Plan, an advisory group, also established by statute, reviews the terms of the plan and periodically makes recommendations to the Maine State Legislature to amend the terms. MPERS issues a publicly available financial report that can be obtained at www.mainepers.org.
25
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
PENSION PLAN, CONTINUED
Benefits Provided - The PLD Plan provides defined retirement benefits based on members’ average final compensation and service credit earned as of retirement. Vesting (i.e., eligibility for benefits upon reaching qualification) occurs upon the earning of five years of service credit. In some cases, vesting occurs on the earning of one year of service credit immediately preceding retirement at or after normal retirement age. For PLD members, normal retirement age is 60 (65 for new members to the PLD Plan on or after July 1, 2014).
The monthly benefit of members who retire before normal retirement age by virtue of having at least 25 years of service credit is reduced by a statutorily prescribed factor for each year of age that a member is below her/his normal retirement age at retirement. MPERS also provides disability and death benefits, which are established by contract under applicable statutory provisions.
Contributions - Employee contribution rates are defined by law or Board rule and depend on the terms of the plan under which an employee is covered. Employer contributions are determined by actuarial valuations. Required contributions were as follows:
Employee Age 60 Employee Age 65 Employer All Plans January to June 7.0% 6.25% 8.5% July to December 6.9% 6.15% 8.9%
The employer contribution rate is actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Contributions to the pension plan from the Town were $52,006 for the year ended December 31, 2023.
Pension Liability, Pension Expense, and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
At December 31, 2023, the Town reported a pension liability of $179,721 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term share of contributions to the pension plan relative to the projected contributions of all participating local districts, actuarially determined. At June 30, 2023, the Town’s proportion was 0.0563%.
For the year ended December 31, 2023, the Town recognized a net pension expense of $68,758. At December 31, 2023, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
26
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
PENSION PLAN, CONTINUED
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual experience $ 33,365 -
Net difference between projected and actual
earnings on pension plan investments - 30,498
Changes in proportion and differences
between Town contributions and
proportionate share of contributions 9,188 -
Change of assumptions - -
Town contributions subsequent to the
measurement date 26,642 -
Total $ 69,195 $30,498An amount of $26,642 is reported as deferred outflows of resources related to pensions resulting from Town contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the year ended December 31, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Year ended December 31: 2024 $ (1,440) 2025 (18,855) 2026 30,933 2027 1,417
Actuarial Assumptions - The total pension liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:
Inflation 2.75% Salary increases 2.75% - 11.48% Investment return 6.50% Cost of living benefit increases 1.91%
Mortality rates were based on the 2010 Public Plan General Benefits Weighted Healthy Retiree Mortality table.
The actuarial assumptions used in the June 30, 2023 valuation were based on the results of an actuarial experience study for the period July 1, 2015 to June 30, 2020.
27
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
PENSION PLAN, CONTINUED
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2023 are summarized in the following table:
Target Asset Long-term Expected Asset Class Allocation Real Rate of Return Public equities 30.0% 6.0% US government 10.0% 2.6% Private equity 12.5% 7.6% Real estate 10.0% 5.2% Infrastructure 10.0% 5.3% Natural resources 5.0% 5.0% Traditional credit 5.0% 3.2% Alternative credit 10.0% 7.4% Diversifiers 7.5% 5.0%
Discount Rate - The discount rate used to measure the total pension liability was 6.50%. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that contributions from participating local districts will be made at contractually required rates, actuarially determined. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the Town’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The
following presents the Town’s proportionate share of the net pension liability calculated using the discount rate
of 6.50%, as well as what the Town’s proportionate share of the net pension liability would be if it were calculated
using a discount rate that is 1-percentage-point lower (5.50%) or 1 percentage-point higher (7.50%) than the
current rate:
1% Current 1%
Decrease Discount Rate Increase
(5.50%) (6.50%) (7.50%)
Town’s proportionate share of
the net pension liability (asset) $492,448 179,721 (78,254)Pension Plan Fiduciary Net Position - Detailed information about the pension plan’s fiduciary net position is available in the separately issued MPERS financial report.
Payables to the Pension Plan - None
28
TOWN OF DURHAM, MAINE
Notes to Basic Financial Statements, continued
RISK MANAGEMENT
The Town is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors and omissions, and natural disasters, for which the Town either carries commercial insurance or participates in a public entity risk pool. Currently, the Town participates in several public entity and self-insured pools sponsored by the Maine Municipal Association. Based on the coverage provided by the pools, as well as coverage provided by commercial insurance purchased, the Town is not aware of any material actual or potential claim liabilities which should be recorded at December 31, 2023.
PRIOR PERIOD ADJUSTMENT
In 2023, the Town determined that it should have recognized in prior years an OPEB liability with related deferred inflows and outflows of resources related to its health insurance plan. Net position as of January 1, 2023 has been restated on Statement 2 for the amounts that should have been recognized in prior years and was reduced by $91,657, from $8,776,855 to $8,685,198.
29
TOWN OF DURHAM, MAINE
Required Supplementary Information
Schedule of Town’s Proportionate Share of the Net Pension Liability (Asset) and Schedule of Town Contributions Maine Public Employees Retirement System Consolidated Plan (PLD)
Last 10 Fiscal Years*
2023 2022 2021 2020 2019 2018 2017 2016 2015 Town’s proportion of the net pension liability (asset) $ 0.0563% 0.0471% 0.0553% 0.0598% 0.0580% 0.0572% 0.0545% 0.0471% 0.0374% Town’s proportionate share of the net pension liability (asset) 179,721 125,232 (17,777) 237,542 177,380 156,524 223,262 250,050 119,183 Town’s covered payroll 596,754 535,489 500,078 523,493 486,281 453,563 430,673 386,029 281,807 Town’s proportionate share of the net pension liability (asset) as a percentage of its covered payroll 30.12% 23.39% -3.55% 45.38% 36.48% 34.51% 51.84% 64.77% 42.29% Plan fiduciary net position as a percentage of the total pension liability 92.34% 93.26% 100.86% 88.35% 90.62% 91.14% 86.43% 81.60% 88.27% 2023 2022 2021 2020 2019 2018 2017 2016 2015*** Contractually required contribution $ 52,006 43,471 37,321 39,691 37,006 34,077 28,212 26,046 18,264 Contributions in relation to the contractually required contribution (52,006) (43,471) (37,321) (39,691) (37,006) (34,077) (28,212) (26,046) (18,264) Contribution deficiency (excess) $ - - - - - - - - - Town’s covered payroll $ 597,748 524,739 478,584 533,154 503,517 476,878 418,004 429,576 386,029 Contributions as a percentage of covered payroll 8.70% 8.28% 7.80% 7.44% 7.35% 7.15% 6.75% 6.06% 4.73%
* The amounts presented for each year were determined as of the prior June 30th. **Only nine years of information available. ***In 2015, employer contributions were offset by IUUAL credits.
30
TOWN OF DURHAM, MAINE
Required Supplementary Information
Schedule of Changes in the Town’s Total Health Plan OPEB Liability and Related Ratios Last 10 Fiscal Years*
2023 2022 2021 2020 2019 2018
Total OPEB Liability
Service cost $ 7,687 12,501 11,114 7,035 7,640 5,284
Interest 889 2,785 3,142 2,059 1,584 1,289
Changes of benefit terms - - - (2,156) - -
Differences between expected and actual experience - (87,802) - 36,183 - (256)
Changes of assumptions or other inputs (4,340) (7,777) 6,915 20,217 (4,295) 3,395
Benefit payments (136) (6,003) (5,772) (161) (155) (90)
Net change in total OPEB Liability 4,100 (86,296) 15,399 63,177 4,774 9,622
Total OPEB liability - beginning 35,534 121,830 106,431 43,254 38,480 28,858
Total OPEB liability - ending $ 39,634 35,534 121,830 106,431 43,254 38,480
Covered-employee payroll $ 332,439 332,439 445,166 445,166 413,007 413,007
Total OPEB liability as a percent of
covered-employee payroll 11.92% 10.69% 27.37% 23.91% 10.47% 9.32%*Only six years of information available.
31
TOWN OF DURHAM, MAINE
Notes to Required Supplementary Information
Net Pension Liabilities
Changes of Benefit Terms (Pension) - None
Changes of Assumptions (Pension) - The following are changes in actuarial assumptions used in the most recent valuations:
2020 2018 2016 2015 2014 Discount rate - PLD 6.500% 6.750% 6.875% 7.125% 7.250% Inflation rate 2.75% 2.75% 2.75% 3.50% 3.50% Salary increases - PLD 2.75-11.48% 2.75-9.00% 2.75-9.00% 3.50-9.50% 3.50-9.50% Cost of living increases - PLD 1.91% 1.91% 2.20% 2.55% 3.12%
Mortality rates:
In 2015, mortality rates were based on the RP2000 Combined Mortality Table projected forward to 2015 using Scale AA. In 2016 to 2020, mortality rates were based on the RP2014 Total Data Set Healthy Annuitant Mortality Table. In 2020 and going forward, mortality rates were based on the 2010 Public Plan General Benefits - Weighted Healthy Retiree Mortality Table, for males and females, projected generationally using the RPEC_2020 model.
Total OPEB Liabilities - Health Insurance
MMEHT Health Plan
Changes of Benefit Terms - None
Changes of Assumptions - The following are changes in actuarial assumptions used in the most recent valuations:
2023 2022 2021 2020 2019 2018 2017 Discount rate 3.72% 2.06% 2.12% 2.74% 4.10% 3.44% 3.78%
2017 - 2021 Mortality rates were based on the RP2014 Total Dataset Healthy Annuitant Mortality Table, for males and females. 2022 and going forward, Mortality rates were based on the 2010 Public Plan General Benefits - Weighted Employee Mortality Table for males and females.
*This schedule is intended to show information for ten years, but only the years in which a change occurred have been displayed. Additional years' information will be displayed as it becomes available.
32
GENERAL FUND
Exhibit A-1
TOWN OF DURHAM, MAINE
General Fund Comparative Balance Sheets December 31, 2023 and 2022 2023 2022
ASSETS
Cash $ 4,404,286 4,810,224
Receivables:
Taxes and liens 442,001 348,094
Accounts receivable 12,808 -
Rescue receivables 54,017 39,215
Due from other governments 56,633 80,817
RSU #5 debt service payments 653,010 761,845
Total assets 5,622,755 6,040,195
LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable 116,429 144,060
Accrued wages and benefits 19,248 25,061
Interfund payables 782,929 -
Unearned revenues - 348,024
Total liabilities 918,606 517,145
Deferred Inflows of Resources:
Taxes paid in advance 13,171 12,044
Unavailable revenue - property taxes 354,500 314,000
Unavailable revenue - RSU #5 debt service payments 653,010 761,845
Total deferred inflows of resources 1,020,681 1,087,889
Fund Balances:
Restricted - 35,875
Committed - 955,912
Assigned 668,000 2,518,574
Unassigned 3,015,468 924,800
Total fund balances 3,683,468 4,435,161
Total liabilities, deferred inflows of resources, and fund balances $ 5,622,755 6,040,195Exhibit A-2
TOWN OF DURHAM, MAINE
General Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Budgetary Basis For the year ended December 31, 2023 (with comparative totals for year ended December 31, 2022)
2023
Variance Original Final positive 2022 budget budget Actual (negative) Actual
Revenues:
Taxes:
Property taxes $ 8,027,613 8,027,613 8,027,613 - 7,730,216
Supplemental taxes - - 18,435 18,435 10,284
Change in unavailable taxes - - (40,467) (40,467) (17,000)
Excise taxes 1,034,097 1,034,097 1,078,472 44,375 1,034,097
Total taxes 9,061,710 9,061,710 9,084,053 22,343 8,757,597
Intergovernmental revenue:
State Revenue Sharing 551,052 551,052 740,214 189,162 753,372
Homestead exemption 305,116 305,116 221,886 (83,230) 322,683
BETE 1,429 1,429 14 (1,415) 1,041
Public roads assistance (LRAP) 54,724 54,724 63,108 8,384 54,724
Grant revenues - - - - 74,190
Other intergovernmental 23,853 23,853 97,048 73,195 23,853
Total intergovernmental revenue 936,174 936,174 1,122,270 186,096 1,229,863
Charges for services:
Permits and fees 75,847 75,847 76,067 220 79,047
Solid waste user fees 33,381 33,381 30,074 (3,307) 33,381
Fire and rescue services 68,471 68,471 107,414 38,943 82,278
Cable TV franchise fees - - 42,596 42,596 -
Other charges for services 4,836 4,836 2,660 (2,176) -
Total charges for services 182,535 182,535 258,811 76,276 194,706
Other revenues:
Donations - - 2,000 2,000 -
Other revenue 2,845 2,845 14,474 11,629 77,941
Total other revenues 2,845 2,845 16,474 13,629 77,941
Interest:
Interest income 20,955 20,955 45,053 24,098 21,022
Total interest 20,955 20,955 45,053 24,098 21,022
Total revenues 10,204,219 10,204,219 10,526,661 322,442 10,281,129Exhibit A-2, Cont.
TOWN OF DURHAM, MAINE
General Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Budgetary Basis, Continued
2023
Variance
Original Final positive 2022
budget budget Actual (negative) Actual
Expenditures:
Current:
General government:
Administration expenses $ 535,924 535,924 504,721 31,203 423,034
Animal control 18,600 18,600 18,406 194 17,915
Assessing 21,000 21,000 20,525 475 18,000
Telecommunications 52,000 52,000 47,754 4,246 43,056
Planning board/appeals 56,420 56,420 44,546 11,874 35,749
Total general government 683,944 683,944 635,952 47,992 537,754
Public safety:
Fire and rescue 522,470 522,470 522,286 184 499,388
Total public safety 522,470 522,470 522,286 184 499,388
Public works:
Public works 1,338,920 1,338,920 1,275,799 63,121 1,210,165
Total public works 1,338,920 1,338,920 1,275,799 63,121 1,210,165
Solid waste disposal 384,540 384,540 374,150 10,390 299,732
Community services:
Cemeteries 450 450 449 1 4,854
Conservation - - - - 300
Eureka Center 6,535 6,535 5,949 586 4,490
Parks and recreation 9,380 9,380 6,620 2,760 2,155
General assistance 600 600 - 600 -
Total community services 16,965 16,965 13,018 3,947 11,799
Education 5,716,356 5,716,356 5,716,355 1 5,537,963
County tax 677,388 677,388 677,388 - 600,8863
Exhibit A-2, Cont.
TOWN OF DURHAM, MAINE
General Fund Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Budgetary Basis, Continued
2023
Variance
Original Final positive 2022
budget budget Actual (negative) Actual
Expenditures, continued:
Current, continued:
Unclassified:
Overlay/abatements $ 35,246 35,246 8,386 26,860 16,703
Total unclassified 35,246 35,246 8,386 26,860 16,703
Debt service:
Principal 848,060 848,060 848,060 -
Interest 110,330 110,330 110,330 - 969,801
Total debt service 958,390 958,390 958,390 - 969,801
Capital outlay - - - - 91,040
Total expenditures 10,334,219 10,334,219 10,181,724 152,495 9,775,231
9,775,231
Excess (deficiency) of revenues
over (under) expenditures (130,000) (130,000) 344,937 474,937 505,898
Other financing sources (uses):
Transfers to other funds (110,000) (110,000) (1,096,630) (986,630) -
Total other financing sources (uses) (110,000) (110,000) (1,096,630) (986,630) -
Net change in fund balance -budgetary basis (240,000) (240,000) (751,693) (511,693) 505,898
Reconciliation to GAAP:
Activity in commited reserves - (25,324)
Activity in restricted reserves - (4)
Net change in fund balance - GAAP basis (751,693) 480,570
Fund balance, beginning of year 4,435,161 3,954,591
Fund balance, end of year $ 3,683,468 4,435,1613
OTHER GOVERNMENTAL FUNDS
Exhibit B-1
TOWN OF DURHAM, MAINE
All Other Governmental Funds
Combining Balance Sheet
December 31, 2023
Special Permanent Total Other
Revenue Capital Funds Governmental
Funds Projects (Cemetery) Funds
ASSETS
Cash and cash equivalents $ 22,818 21,632 7,733 52,183
Interfund loans receivable 225,889 389,410 - 615,299
Total assets 248,707 411,042 7,733 667,482
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable - (14,073) - (14,073)
Interfund loans payable 2,000 - - 2,000
Total liabilities 2,000 (14,073) - (12,073)
Fund balances:
Nonspendable - - 3,450 3,450
Restricted 40,111 - 4,283 44,394
Committed 206,596 396,969 - 603,565
Total fund balances 246,707 396,969 7,733 651,409
Total liabilities and fund balances $ 248,707 382,896 7,733 639,33641
Exhibit B-2
TOWN OF DURHAM, MAINE
All Other Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
For the year ended December 31, 2023
Special Permanent Total Other
Revenue Capital Funds Governmental
Funds Projects (Cemetery) Funds
Revenues:
Intergovernmental $ 5,000 144,330 - 149,330
Donations 1,540 1,000 - 2,540
Interest 185 175 62 422
Total revenues 6,725 145,505 62 152,292
Expenditures:
Current:
Education 2,000 - - 2,000
Health and public assistance 489 - - 489
Capital outlay - 602,695 - 602,695
Total expenditures 2,489 602,695 - 605,184
Excess (deficiency) of revenues
over (under) expenditures 4,236 (457,190) 62 (452,892)
Other financing sources (uses):
Transfers to other funds (47,754) - - (47,754)
Transfers from other funds 290,225 854,159 - 1,144,384
Total other financing sources (uses) 242,471 854,159 - 1,096,630
Net change in fund balances 246,707 396,969 62 643,738
Fund balances, beginning of year - - 7,671 7,671
Fund balances, end of year $ 246,707 396,969 7,733 651,40942
NONMAJOR SPECIAL REVENUE FUNDS
Exhibit C-1
TOWN OF DURHAM, MAINE
Nonmajor Special Revenue Funds Combining Balance Sheet For the year ended December 31, 2023
Historic Jackson-
Zoning River Park School Heating Giving District Tupper Emergency Grants
Compliance Donations Scholarships Assistance Tree Commission Memorial Reserve Matching Recreation Telecoms Revaluation Totals
ASSETS
Cash and cash equivalents $ - 8,021 14,797 - - - - - - - - - 22,818
Interfund loans receivable 5,000 - - 10,956 1,884 1,330 123 16,953 27,077 23,742 78,824 60,000 225,889
Total assets 5,000 8,021 14,797 10,956 1,884 1,330 123 16,953 27,077 23,742 78,824 60,000 248,707
LIABILITIES AND FUND BALANCES
Liabilities:
Interfund loans payable - - (2,000) - - - - - - - - - (2,000)
Total expenditures - - (2,000) - - - - - - - - - (2,000)
Fund balances:
Restricted 5,000 8,021 12,797 10,956 1,884 1,330 123 - - - - - 40,111
Committed - - - - - - - 16,953 27,077 23,742 78,824 60,000 206,596
Total fund balances 5,000 8,021 12,797 10,956 1,884 1,330 123 16,953 27,077 23,742 78,824 60,000 246,707
Total liabilities and fund balances $ 5,000 8,021 10,797 10,956 1,884 1,330 123 16,953 27,077 23,742 78,824 60,000 244,70745
Exhibit C-2
TOWN OF DURHAM, MAINE
Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the year ended December 31, 2023
Historic Jackson-
Zoning River Park School Heating Giving District Tupper Emergency Grants
Compliance Donations Scholarships Assistance Tree Commission Memorial Reserve Matching Recreation Telecoms Revaluation Totals
Revenues:
Intergovernmental $ 5,000 - - - - - - - - - - - 5,000
Donations and local grants - - - 200 1,340 - - - - - - - 1,540
Investment income - 65 120 - - - - - - - - - 185
Total revenues 5,000 65 120 200 1,340 - - - - - - - 6,725
Expenditures:
Current:
Education - - 2,000 - - - - - - - - - 2,000
Health and public assistance - - - 489 - - - - - - - - 489
Total expenditures - - 2,000 489 - - - - - - - - 2,489
Excess (deficiency) of revenues over
(under) expenditures 5,000 65 (1,880) (289) 1,340 - - - - - - - 4,236
Other financing sources (uses):
Transfers to other funds - - - - - - - - - - (47,754) - (47,754)
Transfers from other funds - 7,956 14,677 11,245 544 1,330 123 16,953 27,077 23,742 126,578 60,000 290,225
Total other financing sources (uses) - 7,956 14,677 11,245 544 1,330 123 16,953 27,077 23,742 78,824 60,000 242,471
Net change in fund balances 5,000 8,021 12,797 10,956 1,884 1,330 123 16,953 27,077 23,742 78,824 60,000 246,707
Fund balances, beginning of year - - - - - - - - - - - - -
Fund balances, end of year $ 5,000 8,021 12,797 10,956 1,884 1,330 123 16,953 27,077 23,742 78,824 60,000 246,70746
NONMAJOR CAPITAL PROJECT FUNDS
Exhibit D-1
TOWN OF DURHAM, MAINE
Nonmajor Capital Project Funds Combining Balance Sheet For the year ended December 31, 2023
Eureka Fire and Public Church Center Rescue Buildings Works Restoration Totals
ASSETS
Cash and cash equivalents $ - - - - 21,632 21,632
Interfund loans receivable 3,719 142,091 90,512 153,088 - 389,410
Total assets 3,719 142,091 90,512 153,088 21,632 411,042
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable - - - (14,073) - (14,073)
Total expenditures - - - (14,073) - (14,073)
Fund balances:
Committed 3,719 142,091 90,512 139,015 21,632 396,969
Total fund balances 3,719 142,091 90,512 139,015 21,632 396,969
Total liabilities and fund balances $ 3,719 142,091 90,512 124,942 21,632 382,89649
Exhibit D-2
TOWN OF DURHAM, MAINE
Nonmajor Capital Project Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances For the year ended December 31, 2023 Eureka Fire and Public Church Center Rescue Buildings Works Restoration Totals
Revenues:
Intergovernmental $ - - - 144,330 - 144,330
Other revenues 1,000 - - - - 1,000
Interest income - - - - 175 175
Total revenues 1,000 - - 144,330 175 145,505
Expenditures:
Capital outlay - 79,310 7,120 516,265 - 602,695
Total expenditures - 79,310 7,120 516,265 - 602,695
Excess (deficiency) of revenues over
(under) expenditures 1,000 (79,310) (7,120) (371,935) 175 (457,190)
Other financing sources (uses):
Transfers from other funds 2,719 221,401 97,632 510,950 21,457 854,159
Total other financing sources (uses) 2,719 221,401 97,632 510,950 21,457 854,159
Net change in fund balances 3,719 142,091 90,512 139,015 21,632 396,969
Fund balances, beginning of year - - - - - -
Fund balances, end of year $ 3,719 142,091 90,512 139,015 21,632 396,96950
Town of Durham
FINANCIAL OVERVIEW
Presented By: Jennifer Conners RUNYON KERSTEEN OUELLETTE
INSIDE
2. Summary of Audit Results
3. General Fund Fund Balance
4. General Fund Revenues
5. General Fund Expenditures
6. General Fund Expenditures Pie Chart 2024
7. General Fund Expenditures Pie Chart 2023
8. Committed Fund Balances – Other Funds
9. Operating Cash Analysis
About this presentation
This presentation is intended as a tool to assist the Town Board of Selectboard and management in understanding its financial operating results. The information contained in this publication should be read in conjunction with the audited financial statements and related disclosures and should not be used for any other purposes without the expressed consent of RUNYON KERSTEEN OUELLETTE.
Please contact us at 207-773-2986 or 1-800-486-1784 20 Long Creek Drive, South Portland, ME 04106
Town of Durham
SUMMARY OF AUDIT RESULTS
• Timing of Audit
– Audit performed the week of March 25, 2024
– Reports issued September 9, 2024
– Financial Statement Opinion – Unmodified
• Report on Internal Controls and Compliance
– No material weaknesses
– Significant deficiency related to purchase card disbursements
2
Town of Durham
General Fund – Fund Balance • General Fund - Fund Balance
changed significantly in 2023 as
amounts that were restricted or
$5,000,000 committed were moved to new
funds.
$4,500,000
• Restricted fund balance in prior
$4,000,000 years included unspent grant,
donation, and scholarship funds
$3,500,000 These amounts are now reported in
special revenue or permanent funds.
$3,000,000
• Committed fund balance included
$2,500,000 balances that were set aside for
specific uses and are non-lapsing per
$2,000,000 town vote. These amounts are now
reported in either special revenue or
$1,500,000 capital projects funds.
$1,000,000 • Assigned fund balance includes
approved budgeted use of fund
$500,000 balance.
• Unassigned fund balance represents
$- the remaining fund balance not
2023 2022 2021 2020 2019
restricted or assigned for specific
Restricted - 35,875 35,879 35,659 35,416 purposes.
Committed - 955,912 842,023 1,047,814 1,654,606 • Total fund balance - before transfers
Assigned 668,000 2,518,574 1,498,991 1,362,264 1,300,941 to other funds increased by
Unassigned 3,015,468 924,800 1,557,698 1,292,080 1,285,202 $334,937. After transfers of balances
to other funds, total fund balance
decreased by 751,693.00 from 2022
to 2023.3
Town of Durham
GENERAL FUND - REVENUES
• Taxes were higher than budgeted due
Budget Actual Variance
to higher than anticipated vehicle
Taxes $9,061,710 9,084,053 22,343 excise taxes.
State Revenue Sharing 551,052 740,214 189,162 • State Revenue Sharing was higher
than anticipated as the budgeted
Homestead Exemption 305,116 221,886 (83,230)
amount was based on 2022 revenues.
Other Intergovernmental 80,006 160,170 80,164 • Charges for Services were higher than
Charges for Services 182,535 258,811 76,276 anticipated due to unbudgeted cable
franchise fees and higher than
Investment income 20,955 45,053 24,098 expected rescue billing revenues.
Other revenues 2,845 16,474 13,629 • Total revenues were higher than the
Total revenues 10,204,219 10,526,661 322,442 budget by 3%.4
Town of Durham
GENERAL FUND - EXPENDITURES
Budget Actual Variance
• General government expenditures were under
General government $683,944 635,952 47,992 budget as consulting services were budgeted for
Public safety 522,470 522,286 184 the entire year but only started in May. In
addition, there were changes in staffing and
Public works 1,338,920 1,275,799 63,121 related benefits.
Solid waste disposal 384,540 374,150 10,390 • Public works expenditures were under budget
due to lower than anticipated paving and fuel
Community services 16,965 13,018 3,947
costs.
Education 5,716,356 5,716,355 1 • Unclassified expenditures were under budget as
County tax 677,388 677,388 - the budget includes the amount raised in overlay
that was only used to offset $8,386 in
Unclassified 35,246 8,386 26,860 abatements.
Debt service 958,390 958,390 - • Total expenditures before transfers out were 1%
under budget.
Total expenditures 10,334,219 10,181,724 152,495
Transfers to other funds 110,000 1,096,630 (986,630)
Total expenditures and $10,444,219 $11,278,354 $(834,135)
transfers out5
Town of Durham
General Fund – 2023 Expenditure Distribution
General government Public safety
6% 5% Public works
13%
Solid waste disposal
Debt service 4%
Unclassified
0% 9%
Community services
County tax 0%
7%Education 56%
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Town of Durham
General Fund – 2022 Expenditure Distribution
General government
6% Public works
Debt service Public safety 12%
Capital outlay Solid waste disposal
10% 5%
1% 3%
Unclassified
0% Community services
0%County tax 6%
Education 57%
7
Town of Durham
Committed Fund Balances – Other Funds
Balance Transfer Disbursements/ Balance
Funds 1/1/2023 Receipts Transfers Out 12/31/2023
Emergency fund $ 16,953 - - 16,953
Grant match 27,077 - - 27,077
Recreation 23,742 - - 23,742
Telecommunication 126,578 - 47,754 78,824
Revaluation 60,000 - - 60,000
Subtotal Special Revenue Funds 254,350 - 47,754 206,596
Eureka capital 2,719 1,000 - 3,719
Fire rescue capital 221,401 - 79,310 142,091
Buildings capital 97,632 7,120 90,512
Public works capital 510,950 144,330 516,265 139,015
Union church restoration 21,457 175 - 21,632
Subtotal Capital Projects Funds $ 854,159 145,505 602,695 396,9698
Town of Durham
Operating Cash Analysis
Available Funds 12/31/2023 12/31/2022 Change Total operating cash 12/31 4,391,696.04 4,765,522.00 (373,825.96) Estimated non-tax revenues (first 7 1/4 months) 1,523,152.50 ** 1,466,986.60 56,165.90 Excludes grants Estimated expenditures (until next taxes are raised) (6,151,458.25) (5,850,865.40) (300,592.85) Net available funds (236,609.71) 381,643.20 (618,252.91) Operating cash balance 12/31 4,391,696.04 4,765,522.00 Restricted balances held in operating cash (1) (19,293.00) (13,242.00) (6,051.00) Restricted in purpose Committed balances held in operating cash (2) (596,006.00) (955,912.00) 359,906.00 Can only be used for capital/other Available for expenditures 3,776,397.04 4 3,796,368.00 5 353,855.00 Actual expenditures through 12/31 10,181,724.00 * 9,684,191.00 497,533.00 One month's worth of expenditures 848,477.00 807,015.92 41,461.08
Note: 7 and 1/4 months used as taxes are committed in August *Excludes capital expenditures **Excludes property and supplemental taxes
*-See Exhibits C-1 and D-1 for amounts held in separate cash accounts.
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Source: durham-2023-audit.pdf on durhammaine.gov. Text extracted with pdftotext; no wording has been corrected.