Canton, Massachusetts · Saved source text
FY17 Comprehensive Annual Financial Report
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TOWN OF CANTON, MASSACHUSETTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended
June 30, 2017Source page 2
On the cover and below: In October 2016 the restored Firefighters’ Memorial Bell was commemorated along with the recently renovated Ponkapoag Fire Station which was re-dedicated to retired Fire Chief Jim Fitzpatrick. Chief Fitzpatrick who served as Canton’s Fire Chief from 1978 to 2001 passed away in July 2017. Ponkapoag Fire Station #2 Re-dedicated to Chief James A. Fitzpatrick, Jr. 2016 Canton's longest serving career fire chief July 31,1978 to September 30, 2007 PREGEED BY HE CLZENS OF : THE TOWN OF CANTON AD [Original embedded text, retained for comparison] On the cover and below: In October 2016 the restored Firefighters’ Memorial Bell was commemorated along with the recently renovated Ponkapoag Fire Station which was re-dedicated to retired Fire Chief Jim Fitzpatrick. Chief Fitzpatrick who served as Canton’s Fire Chief from 1978 to 2001 passed away in July 2017.
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Town of Canton, Massachusetts
Comprehensive Annual Financial Report
For the Fiscal Year
July 1, 2016 through June 30, 2017
Prepared by the Finance DepartmentSource page 4
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TOWN OF CANTON, MASSACHUSETTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2017
TABLE OF CONTENTS
Page(s)
INTRODUCTORY SECTION
Letter of Transmittal ....................................................................................................................... 1-10
Certificate of Achievement For Excellence in Financial Reporting................................................. 11
Organizational Chart Town .............................................................................................................. 12
Organizational Chart Schools ........................................................................................................... 13
Principal Town Officials .................................................................................................................. 14
FINANCIAL SECTION
Independent Auditor’s Report ....................................................................................................... 15-17
Management’s Discussion and Analysis ....................................................................................... 19-31
Basic Financial Statements:
Statement of Net Position .......................................................................................................... 35
Statement of Activities ............................................................................................................... 36
Balance Sheet – Governmental Funds ....................................................................................... 37
Reconciliation of the Governmental Funds Balance Sheet Total Fund Balances to
the Statement of Net Position ............................................................................................ 38
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds ........................................................................................................... 39
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund
Balances of Governmental Funds to the Statement of Activities ..................................... 40
Statement of Net Position – Proprietary Funds .......................................................................... 41
Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds.............. 42
Statement of Cash Flows – Proprietary Funds ........................................................................... 43
Statement of Fiduciary Net Position .......................................................................................... 44
Statement of Changes in Fiduciary Net Position ....................................................................... 45
Notes to Basic Financial Statements ....................................................................................... 46-78
Required Supplementary Information:
Schedule of the Town’s Proportionate Share of the Net Pension Liability ............................... 80
Schedule of the Town’s Contribution to Pension Plan .............................................................. 80
Schedule of the Commonwealth’s Collective Share of Net Pension Liability –
Massachusetts Teachers’ Retirement System...................................................................... 81
Schedule of Funding Progress – OPEB ..................................................................................... 82
Schedule of Contribution Funding – OPEB............................................................................... 82
Schedule of Changes in Net OPEB Liability and Related Ratios……………………………. 83
Schedule of Contributions to OPEB Plan…………………………………………………….. 84
Schedule of Investment returns – OPEB Plan………………………………………………....84
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and
Actual – General Fund .................................................................................................. 85-87
Notes to Required Supplementary Information ....................................................................... 88
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TOWN OF CANTON, MASSACHUSETTS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED JUNE 30, 2017
TABLE OF CONTENTS
Page(s)
Combining Statements:
Nonmajor Governmental Funds ............................................................................................ 91-92
Combining Balance Sheet – Nonmajor Governmental Funds ........................................ 94-96
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances – Nonmajor Governmental Funds .......................................................... 98-100
Internal Service Funds ........................................................................................................... 101
Combining Statement of Net Position – Internal Service Funds ..................................... 102
Combining Statement of Revenues, Expenses and Changes in Net Position –
Internal Service Funds ............................................................................................ .103
Combining Statement of Cash Flows – Internal Service Funds ....................................... 104
Fiduciary Funds ..................................................................................................................... .105
Statement of Changes in Assets and Liabilities – Agency Fund ..................................... 106
STATISTICAL SECTION
Narrative ..................................................................................................................................... 107
Net Position by Component – Last Ten Fiscal Years...................................................................... 109
Changes in Net Position – Last Ten Fiscal Years ....................................................................... 110-111
Fund Balances, Governmental Funds – Last Ten Fiscal Years ....................................................... 112
Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years .................................... 113
Assessed Value and Estimated Actual Value of Taxable Property By Classification
and Tax Rates – Last Ten Fiscal Years............................................................................ 114
Principal Taxpayers – Current Year and Nine Years Ago .............................................................. 115
Property Tax Levies and Collections – Last Ten Fiscal Years........................................................ 116
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ........................................................ 117
Ratios of General Bonded Debt Outstanding .................................................................................. 118
Computation of Legal Debt Margin – Last Ten Fiscal Years ......................................................... 119
Direct and Overlapping Governmental Activities Debt .................................................................. 120
Demographic and Economic Statistics – Last Ten Fiscal Years ..................................................... 121
Principal Employers (Excluding Town) – Current Year and Nine Years Ago ............................... 122
Full-time Equivalent Town Employees by Functions – Last Ten Fiscal Years .............................. 123
Operating Indicators by Function/Program – Last Ten Fiscal Years .............................................. 124
Capital Asset Statistics by Function/Program – Last Ten Fiscal Years .......................................... 125
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Introductory Section The artificial surface at Canton High School’s Memorial Field was replaced along with the oval running track which was refurbished.
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Letter of Transmittal
November 21, 2017
Honorable Board of Selectmen and Citizens of the Town of Canton, Massachusetts:
I am pleased to acknowledge that the Town of Canton has completed its twelfth Comprehensive Annual
Financial Report (CAFR). The report is for the fiscal year ended June 30, 2017, and I am proud that we
have continued this annual tradition of preparing a report that communicates to our constituents and
investors the highest degree of transparency in financial reporting for municipalities.
The Town is responsible for the accuracy, completeness and fairness of the data presented in the CAFR.
This letter of transmittal and the management’s discussion and analysis, located in the financial section
of the CAFR, provide a comprehensive financial overview of the Town and ensure that the financial and
general operations of Town government remain open for easy viewing.
The CAFR represents a complete set of financial statements in conformity with generally accepted
accounting principles in the United States of America (GAAP), that are audited in accordance with
generally accepted auditing standards by a firm of licensed certified public accountants. This CAFR
meets and exceeds those requirements and presents itself as an informative resource for all those
interested in the financial activities of the Town.
The report is designed to be used by the elected and appointed officials of the Town and others who are
concerned with its management and progress such as bond analysts, banking institutions and rating
agencies as well as the citizens and taxpayers of the Town of Canton.
Since the report consists of management’s representations concerning the finances of the Town,
management assumes full responsibility for the completeness and reliability of all of the information
presented. In addition, management of the Town is responsible for establishing and maintaining an
internal control structure designed to ensure the assets of the Town are protected from loss, theft or
misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial
statements in conformity with GAAP. Because the cost of internal controls should not outweigh their
benefits, the Town of Canton’s comprehensive framework of internal controls has been designed to
provide reasonable rather than absolute assurance that the financial statements will be free from material
misstatement.
Town of Canton, Massachusetts Page 1 of 125 Comprehensive Annual Financial ReportSource page 10
The Town’s financial statements have been audited by Roselli, Clark and Associates, a firm of licensed
certified public accountants. The goal of the independent audit is to provide reasonable assurance on an
annual basis that the financial statements of the Town are free of material misstatement. The independent
audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; assessing the accounting principles used and significant estimates made by
management; and evaluating the overall financial statement presentation. The independent auditor
concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion
that the Town’s financial statements for the fiscal year ended June 30, 2017 are fairly presented in
conformity with GAAP. The independent auditor’s report is presented as the first component of the
financial section of this report.
The independent audit of the financial statements of the Town was part of a broader, federally mandated
“Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing
Single Audit engagements require the independent auditor to report not only on the fair presentation of
the financial statements, but also on the audited government’s internal controls and compliance with legal
requirements, with special emphasis on internal controls and legal requirements involving the
administration of federal awards. These reports are available in the Town’s separately issued Single Audit
Reports Pursuant to Title 2 of the US “Code of Federal Regulations” (CFR) Part 200, “Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany
the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter
of transmittal is designed to complement that analysis and should be read in conjunction with it. The
MD&A can be found immediately following the report of the independent auditors.
Profile of the Town
Canton was incorporated as a Town in 1797. The Town is located in eastern Massachusetts,
approximately 18 miles southwest of Boston, has a population of approximately 21,000 and a land area of
approximately 19 square miles. It is situated at the junction of Interstates 95 and 93, with access to Routes
24 and 138, providing an excellent location for residents, businesses and commuters.
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MBTA commuter rail trains on the Providence/Stoughton Line pass through Canton. Some stop at Canton
Junction. This line crosses the Neponset River on the Canton Viaduct, a prominent local landmark. Route
128 Station in neighboring Westwood also carries many Canton commuters into Boston. Amtrak trains
(including the Acela Express high-speed trains) also stop at Route 128, but pass through Canton without
stopping. Another line branches into Stoughton, stopping at Canton Center.
Bus service is available to Mattapan Station in the MBTA system, and Canton’s close proximity to
Boston also places it within a reasonable distance from Logan International Airport, the largest
transportation center in New England.
The Town has a rich and varied industrial heritage, serving as the location of Paul Revere’s copper rolling
mills in post-Colonial times, and as the site of rubber, chemical and woolen manufacturing in more recent
times. Present commercial enterprises play a key role in the Town’s fiscal stability and are considered a
major asset to the community. The prime commercial areas are well located so as to allow direct highway
access without affecting the community’s small town charm.
Many of the Town’s lakes, ponds and wetlands have been protected and preserved for present enjoyment
and future generations. Among the protected areas are the Eleanor Cabot Bradley Reservation, an 82 acre
estate that blends open fields, woodlands and gardens in the shadow of Great Blue Hill and Pequitside
Farm, a town-owned 38 acre conservation and recreation area which offers playing fields, picnicking,
hiking and cross country skiing.
The Town offers a full range of traditional municipal services including police and fire protection,
ambulance and rescue services, education, maintenance of streets and infrastructure, solid waste
collection and disposal, health and human services, cultural and recreational, administrative and financial
services. The Town is a member community of the Massachusetts Water Resources Authority (MWRA)
for its water and sewer services.
Canton prides itself on its quality school system. Canton students consistently perform well on national
and state tests and over 90% of students
graduating from the high school go on to
higher education. The Town is the location
of the Blue Hills Regional Technical School
which provides expanded vocational
education opportunities for high school
students of Canton and eight other area
communities. Canton is also home to one
of the two campuses of Massasoit
Community College. The campus is a
multi-level facility with specialized labs and
art studios that support the technical and
visual arts programs of the College. The
campus also includes the Milton Art
Museum, Akillian Gallery and the College’s Professional Development Center.
An elected, five-member School Committee appoints a School Superintendent who administers the public
school system of the Town. School Committee members, like the Selectmen, are elected at-large to three-
year staggered terms.
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Almost a decade ago, the Town reached its 10% affordable housing requirement mandated by the
Commonwealth of Massachusetts (Commonwealth), which is an important milestone as communities
under the 10% threshold are subject to an appeals process that can overturn local zoning board decisions.
This has allowed the Town to maintain its commitment to developing much needed affordable housing
units in areas of the Town that can accommodate the growth.
The Town operates under the Selectmen, Town Administrator, and Open Town Meeting form of
government. The five elected Selectmen make policy
decisions, and the Town Administrator is responsible
for carrying out the policies of the Selectmen and for
managing the day-to-day operations of the Town.
The policies and procedures of the Board of
Selectmen are detailed in the administrative code that
will continue to evolve and be created over time to
best serve the community.
An annual operating budget is approved by Town
Meeting two months prior to the start of the fiscal
year. This annual budget serves as the foundation for
the Town’s financial planning and control. The
budget is prepared by fund, function (e.g. general government) and department (e.g. finance) allowing the
department heads to allocate resources within the department as they see fit. Transfers between
departments, however, need special approval by Town Meeting unless specifically exempted by state
statute.
Factors Affecting Economic Condition
Canton continues to take a pro-active approach encouraging well planned economic development. The
Town fully appreciates the significance of commercial and industrial growth and development (and
redevelopment) especially in terms of long term fiscal stability. The Town continues its focus on future
growth, which is sustainable and “complimentary” for economic development including employment
opportunities for our residents.
Municipal officials continue to work closely with and receive valuable support from the State Office of
Business Development as well as regional planning support from the Metropolitan Area Planning Council
(MAPC). In addition business advocacy organizations, such as Canton Association of Business and
Industry (CABI) play a vital role. The Town strives to take full advantage of the latest initiatives and
incentives made available to it notably under Chapter 43D for expedited permit approvals and Tax
Incremental Financing (TIF).
The Town’s Economic Development Committee (EDC) is also a special resource. The Town regularly
takes advantage of local talent from the community who specialize in finance, banking, development and
real estate.
The Town continues to update and publish an economic development recruitment guide which includes
pertinent information sought by private company CEO’s when making siting and expansion decisions.
Recently, the Board of Selectmen published a new business and community guide and has made that
information available online as well.
As previously discussed, the Town surpassed its required 10% affordable housing goal as required by
State regulation. The Town has incorporated a continued affordable housing unit goal, within the HousingSource page 13
Action Plan, to ensure the Town keeps pace with any new market rate unit starts. Recently the
construction by Avalon Development of additional affordable housing on Randolph Street has further
increased the Town’s 40B compliance.
The Town’s commitment to sound economic development is further demonstrated by creating
partnerships with (MAPC) Metropolitan Area Planning Council and Neponset Valley Chamber of
Commerce to ensure that the coordination and resource allocation on key planning issues facing the
Town. The Town reactivated the Economic Development Committee and created, with Town Meeting,
the Permit Advisory Committee both of which provide technical assistance to new businesses to Canton.
The Town has instituted a Google-based web search device, which identifies Canton as a business
friendly community. The web product highlights, via a series of videos, the Town of Canton as a solid
and desirable business and family destination. The Town’s continued status as a 43D Expedited
Permitting Community has benefitted the Town greatly and has led to the actual designation of many new
priority development sites. This 43D designation, which was granted to the Town in 2008, came with a
$150,000 grant to hire a permit specialist who has completed the administrative and organizational work
necessary to implement the issuance of permits via an integrated and automated town wide permit system
which better serves the public and the Town in terms of real time tracking of permits.
The Town has available a
permit guidebook, which lays
out the Town’s permitting
requirements in an easy to use
format. The goal is to identify
key requirements and improve
communications, saving
applicants time and money.
The Permit Advisory
Committee has been a
successful endeavor by
bringing together key permit
granting agency representatives
to counsel and guide any
proponent of a proposed commercial endeavor. Participation and results continue to be overwhelmingly
positive. The Town has also published a Tax Incremental Financing Evaluation Policy document designed
to provide a rational and consistent intake evaluation of TIF requests. The new approach allows the Town
to quantify and better evaluate any request to reduce taxes for a business seeking to locate or expand.
Also, the Town launched a Payment in Lieu of Taxes Program (PILOT) that encourages non-taxable
property owners to voluntarily participate in the support of public services.
The Town has completed construction of the downtown revitalization project commonly referred to as the
Streetscape Improvement Project. This work was funded as a result of a $2.6 million dollar
Commonwealth grant received due to the Town’s Smart Growth efforts and rezoning of the Downtown.
The Town has also completed safety and efficiency improvement work on two key intersections ($2.2
million dollar Commonwealth grant) located in the heart of the Route 138 business district. These
intersections are located at the Randolph and Washington Street Intersections with Route 138. These
projects have improved both the safety and efficiency of this commercial roadway. In addition, the Board
of Selectmen has also empanelled a multi-disciplined group of volunteers who have completed a
visioning process which has led to a variety of re-zoning recommendations with a goal of improving the
Town of Canton, Massachusetts Page 5 of 125 Comprehensive Annual Financial ReportSource page 14
business climate and enhance zoning flexibility to spur additional economic development potential along
this vital commercial roadway.
The Town was also a participant in a
regional planning study to evaluate the
effects of new growth in both
residential and commercial
construction. The study’s focus was to
identify growth related problems such
as transportation, infrastructure,
environmental, and economic
development issues. In addition, a
build-out analysis was completed to
assist and improve public policy
decision-making with regard to growth
and development related to educational
planning. These studies have been
coordinated with other immediate area
communities.
The Town is in the process of evaluating the opportunities and or impacts of the South Coast Rail Project
which is advancing through preliminary and environmental design. The State initiative would provide rail
service from Boston to Fall River/New Bedford via a route now determined by the State, known as the
Stoughton Alternative, which will include impacts in Canton.
In 2010 the Town received a MORE grant in the
amount of $850,000 and completed infrastructure
improvements along Dan Road, an important
commercial area of Town. After much effort, the
Town secured the commitment of Organogenesis, a
bio tech firm, now located on Dan Road, which was
contemplating relocation. The Company’s
commitment to stay in Canton and expand was an
important part of the Town’s success in obtaining
this new funding.
Canton’s Master Plan Initiative required a careful review and analysis of existing conditions balanced
with a vision for the future. The work program is designed to enlist public interest and participation in
shaping the Town’s future. Workshops, neighborhood meetings, leadership interviews and community
surveys were conducted. The Town has conducted an extensive public outreach campaign to better assure
good attendance at workshops and neighborhood focus groups. Existing planning, engineering reports and
documents have been reviewed and a written report, which summarizes their major issues and relevant
recommendations were prepared and remains available. The overall objective of the Master Plan initiative
was to develop a sustainable residential and business development strategy for the Town.
Brightview Canton recently opened its community of 160 apartment homes for seniors which includes
independent living, dedicated assisted living and a specialized program and environment for people living
with Alzheimer’s and other forms of demetia.
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This added to existing residential developments such as Windsor Woods, Indian Woods, Pequit View
and Blue Hill Commons; and provide a nice compliment to commercial developments such as Dunkin
Brands with their worldwide corporate headquarters along with other top Canton companies such as
Meditech, Network Engines, One Beacon, Boston Mutual, Computershare, LoJack and Pepsi.
The Town’s planning focus also includes improvements to the highway system that serves the Town and
the region. Now underway is the Route 128 Add-a-Lane Project, which is federally funded with expected
completion in the near term.
In 2015 the Town entered into a development agreement with Canton holdings LLC to redevelop the
former Plymouth Rubber site. The project will create 272 residential units of which 19 will be townhouse
units and 253 will be garden style units. The developer will also create community open space and will
preserve two historic buildings built by Paul Revere.
Another objective of the Master Plan Initiative was to address the often-conflicting goals of economic
development and resource protection. Sustainable development providing for economic growth that is
compatible with resource protection remains an important Town focus. The Town’s approach includes
promoting economic development that is supported by adequate infrastructure. Thus, the dual objectives
of the Master Plan Initiative remain to provide for economic growth which is (1) compatible with
resource protection and (2) supported by adequate infrastructure. To ensure this, the Town embarked on a
four-town regional planning initiative, which is still ongoing. The Towns of Canton, Dedham, Norwood
and Westwood share a common watershed and an interlinked highway system. The Towns continue to
work together and meet regularly to discuss economic development on a regional basis. This regional
planning initiative encourages and reminds area towns that, despite borders, what happens in another
neighboring community may have an impact, both positive and potentially negative, on one another. The
Towns plan and communicate to shape growth, protect water resources, transportation infrastructure and
to insure support and advocacy for growth in the region - to everyone’s benefit. This group continues to
pursue State and Federal funding for the replacement of the Interstate 95 and Interstate 93 Interchange, a
source of safety concerns and traffic tie-ups.
The Town recently entered into a long-term lease of its capped landfill to be used by a private entity to
install solar panels on fifteen acres of the site at no cost to Canton. The lease provides the Town with
guaranteed payments of $20,000 per acre, per year, while allowing the Town the ability to purchase all
the electricity generated by this 5.6 megawatt facility at a substantial savings. The Pine Street Solar
Facility went online August 15, 2012 (one of the largest in the Northeast) and provided over $100,000 in
net metering credits savings to the Town, along with lease payments totaling $300,000 in new recurring
operating revenue increasing annually by 2.5%.
In summary, Town leaders recognize the importance of maintaining a stable tax situation for its residents.
Development on the commercial side helps accomplish this goal and the Town continues to seek out the
means to maintain vigilance in this area.
Property Taxes The growth of the Town’s main source of revenues, property taxes, is capped by
Proposition 2 ½ and can only be overridden through a ballot by the voters. While revenue increases have
been limited in recent years, fixed costs, including health insurance and pension costs, have increased
more proportionally. As a result, balancing the annual budget is a challenge without an appropriation
from free cash. The Town attempts to mitigate this impact by conservatively forecasting revenues thus
creating free cash in the subsequent year.
Several years ago, the Town’s management made the difficult choice to cut services and raise fees in
order to balance the budget. With more cuts looming in future years, the Town’s voters approved a $4.5
Town of Canton, Massachusetts Page 7 of 125 Comprehensive Annual Financial ReportSource page 16
million Proposition 2 ½ tax override for fiscal year 2009 that allowed for the restoration of most of the
budget cuts from the prior years. The tax override was planned to be phased in over a three year period
with an annual cost to the average residential homeowner of $450. In addition, effective fiscal year
2013, the Town negotiated changes to its health insurance plans that required higher out of pocket costs
from its employees and retirees but stabilized rates. These initiatives have allowed the Town to maintain a
consistent level of reserves from year to year and
Unassigned Fund Balances (Millions)
continue to make contributions to its OPEB Trust
Fund. 16.0
14.0
The Town’s available reserves on a GAAP basis
12.0
represent the amount in unassigned fund balance.
As discussed previously, the Town’s reserves have 10.0
been increasing on an annual basis since the 8.0
stabilization of the recession in 2011. This has 6.0
been a direct result of the initiatives implemented 4.0
by management as discussed in the previous 2011 2012 2013 2014 2015 2016 2017
paragraph.
These strong reserve levels, when combined with the Town’s strong management practices, desirable
location in a strong metropolitan statistical area, assessed valuations and strong wealth factors directly
contributed to an upgrade in the Town’s bond rating from ‘AA+’ to ‘AAA’. This is the highest
investment grade possible. The override and the resulting revenue flexibility to restore lost services and
stabilize budgets in future fiscal years were cited as prominent factors in the upgrade. The Town is
committed to maintaining its reserves at a level expected from communities that engender the highest
bond rating.
Long-term Financial Planning
Several years ago, the Town implemented a policy of preparing rolling projections. The Town believes
this will provide better insight when preparing annual budgets and will also alert the Town to any
potential budgeting issues far ahead of when these situations become real issues.
The following represents the Town’s summarized budgets for each of the next five years:
2018 2019 2020 2021 2022
Revenues and Other Sources
Real Estate and Personal Property Taxes $ 73,102,368 $ 75,418,599 $ 78,043,683 $ 80,769,113 $ 83,551,687
State Aid 8,988,466 8,988,466 8,988,466 8,988,466 8,566,434
Local Receipts 6,571,757 6,474,736 6,480,805 6,487,025 6,493,401
Transfers and Other Sources 2,354,154 2,409,821 2,431,577 2,463,207 2,494,891
Total Revenues 91,016,745 93,291,622 95,944,531 98,707,811 101,106,413
Expenditures and Other Uses
Education Budget 40,221,559 41,307,755 42,388,182 43,523,446 44,719,736
Municipal Budget 19,919,076 20,367,436 20,900,157 21,459,917 22,049,767
Fixed Costs 28,453,392 29,032,767 30,045,437 31,085,924 31,569,923
State and County Charges 1,057,233 1,083,664 1,110,755 1,138,524 1,166,987
Capital costs 1,655,000 1,500,000 1,500,000 1,500,000 1,600,000
Total Expenditures 91,306,260 93,291,622 95,944,531 98,707,811 101,106,413
Surplus/(Deficit) $ (289,515) $ - $ - $ - $ -
Town of Canton, Massachusetts Page 8 of 125 Comprehensive Annual Financial ReportSource page 17
Capital Improvements and Financing
The Town continues to invest in infrastructure improvements such as roads, sewers, and water supply
facilities, as well as various municipal and school facility upgrades. These include: Town Hall, Library,
Public Safety facilities, Public Works, Recreational facilities and School building improvement projects.
In addition, the Town has completed the construction of two new water filtration plants. These water
filtration plants will provide state of the art water filtration capabilities and allow for the use of local
source water to reduce operating costs, improve water availability (including redundancy) and filtrate
water for customers with the most technologically advanced system available today.
Recently the Town completed renovations of a former Knights of Columbus Hall and turned it into the
new Senior Center located at 500 Pleasant Street to address the growing, aging population in need of
expanded and updated senior services.
In addition the Town completed repairs to Shepard Pond dam which was classified by the state as being a
Significant Hazard Dam in poor condition. To help fund this repair project, the Town received a grant
award of $665,000 from the Commonwealth and a $335,000 low interest loan from the Executive Office
of Environmental Affairs.
Construction of an eight classroom addition to the Lt. Peter M. Hansen Elementary School was also
completed recently. This addition has alleviated increasing enrollment concerns while enabling more
children to attend an elementary school in their neighborhood.
As part of the annual budget process, the Capital Planning Committee (CPC) recommends the capital
budget for the upcoming year and prepares a five-year plan to address the long-term capital needs of the
Town. The capital spending plan for the five year period from fiscal year 2017 through fiscal year 2021
has an estimated cost of $23.6 million, with $8.1 million to be funded from estimated revenues with the
remainder to be funded from the issuance of bonds. The CPC’s capital plan has allocated $6.9 million for
municipal departments, $6.4 million for the school department, $6.3 million for the water enterprise fund,
and $4.0 million for the sewer enterprise fund.
The Town’s target set aside to finance its capital plan is 5% to 6% of recurring revenues. A portion of its
annual capital plan funds smaller capital projects on a pay-as-you-go basis through recurring revenues
while larger capital projects are financed through borrowing.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awards a
Certificate of Achievement for Excellence in Financial Reporting. This is a very prestigious award and
in order to be awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized comprehensive annual financial report. This report must satisfy both generally
accepted accounting principles and applicable legal requirements.
The GFOA awarded this Certificate of Achievement for Excellence in Financial Reporting to the Town of
Canton for its comprehensive annual financial report for the fiscal year ended June 30, 2016. This was the
eleventh year that the Town has achieved this prestigious award.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report will meet the Certificate of Achievement Program’s requirements,
and we are submitting it to the GFOA to determine its eligibility for this certificate.
Town of Canton, Massachusetts Page 9 of 125 Comprehensive Annual Financial ReportSource page 18
The publication of this CAFR represents an important achievement in the ability of the Town of Canton
to provide enhanced financial information and accountability to its citizens, elected and appointed
officials, and investors. The preparation of this report would not have been possible without the efficient
and dedicated services of the entire staff of the Finance Office.
Special thanks also go to the certified public accounting firm of Roselli, Clark and Associates for their
advice and assistance in the preparation of this report.
Respectfully submitted,
Charles J. Aspinwall
Town Administrator
James R. Murgia
Finance Director
Town of Canton, Massachusetts Page 10 of 125 Comprehensive Annual Financial ReportSource page 19
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Canton
Text38:
Massachusetts
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2016
Executive Director/CEO
Town of Canton, Massachusetts Page 11 of 125 Comprehensive Annual Financial ReportSource page 20
Board Planning of Health Board TOWN OF CANTON, MASSACHUSETTS ORGANIZATIONAL CHART Board of Selectmen Appointed Multiple Member Bodies Moderator Personnel Adv. Board Building [Renovations Committee Building & Zoning Department Building Commissioner Canton Representative Veteran's Office Veteran's Director Director Public Health -Industrial Development Commission Building Police Fire Dept. of Human Department Council Recreation Conservation Maintenance ‘ Resource of Finance ‘ ws ae Department | [Department | | Public Works Densikwank on Aging | | Commission Commission Police Fire Superintendent Human Finance CoA Recreation Conservation - _ o! Resource 2 , . Commission Chief Chief Public Works | | Administrator Director Director Director Agent Page 12 of 125 Comprehensive Annual Financial Report Town of Canton, Massachusetts an Board Board of Library Clerks y of Selectmen Trustees Office Town Town Town Planner Clerk Administrator Executive Town Counsel Assistant Town Planner Administrative Secretary Sealer of Weights and Measures Secretary Register of Voters Comm. on Disability -Zoning Board.of Appeals -Water/Sewer Rate Policy Commission -Youth Commission -Historical Commission -Fair Housing Committee Cable Advisory Committee Beautification Committee -Conservation Commission Council on Aging -Industrial Develop. Financing Authority -Local Emergency Planning Committee -Traffic Study Committee [Original embedded text, retained for comparison] Town of Canton, Massachusetts Page 12 of 125 Comprehensive Annual Financial Report
Source page 21
CANTON PUBLIC SCHOOLS
CANTON SCHOOL COMMITTEE
ADMINISTRATIVE ASSISTANT TO THE
SUPERINTENDENT/SCHOOL COMMITTEE
SUPERINTENDENT OF SCHOOLS
DIRECTOR .OF CURRICULUM SCHOOL BUSINESS
BUILDING PRINCIPALS DIRECTOR OF
and INSTRUCTION ADMINISTRATOR
STUDENT SERVICES
WIDE AREA EDUCATIONAL SCHOOL
NETWORK TECHNOLOGY SECRETARIES ASSISTANT
SCHOOL COUNCIL SECRETARIES
ADM. ADM.. PRINCIPALS ADMINISTRATIVE ASST.
CAPT.
SPED
K-5 READING PARENT GROUPS
PARENT
BUILDING SPECIALISTS SPECIAL EDUCATION, ADVISORY
TECHNOLOGY DISTRICT ACCOUNTS
FACULTY BUILDING 504, ALT. ED. COUNCIL PAYROLL
SPECIALISTS DEPARTMENT PAYABLE
AND STAFF DEPARTMENT STUDENT SERVICES
COORDINATORS
COORDINATORS FACULTY AND STAFF
COMPUTER PROFESSIONAL
DIRECTOR OF
TEACHERS DEVELOPMENT
CHARMSS FOOD SERVICES
COMMITTEE
CUSTODIANS COLLABORATIVE
FACILITIES
PRIVATE SCHOOLS
DIRECTOR
CAFETERIA
MANAGERS/
CUSTODIANS/ WORKERS
MAINTENANCE
TRANSPORTATION
COORDINATOR
HEALTH
SERVICES
Town of Canton, Massachusetts Page 13 of 125 Comprehensive Annual Financial ReportSource page 22
PRINCIPAL TOWN OFFICIALS
Elected Officials
Board of Selectmen John J. Connolly, Chairman
Mark J. Porter, Vice Chairman
Kevin T. Feeney, Clerk
Christopher J. Connolly, Member
Thomas W. Theodore, Member
School Committee Michael Loughran, Chairman
Kristin Mirliani, Vice Chairman
Meg Gannon, Secretary
Reuki Schutt, Member
John Bonnanzio, Member
Principal Executive Officers
Town Administrator Charles J. Aspinwall
Finance Director James R. Murgia
Town Accountant Kathy Dooley Butters
Superintendent of Schools Jennifer Fischer-Mueller
School Business Administrator Barry Nectow
Police Chief Kenneth N. Berkowitz
Fire Chief Charles E. Doody
DPW Superintendent Michael T. Trotta
Town of Canton, Massachusetts Page 14 of 125 Comprehensive Annual Financial ReportSource page 23
Financial Section Larry Shapiro photo courtesy of E-One Incorporated Canton’s Fire Department purchased a new fully equipped fire engine (Engine 3) which replaced a smaller engine (Engine 7) which was purchased in 1972. Engine 3 now serves as a first line piece of apparatus.
Source page 25
INDEPENDENT AUDITOR’S REPORT
Honorable Board of Selectmen
Town of Canton, Massachusetts
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the Town of Canton,
Massachusetts, (the “Town”) as of and for the year ended June 30, 2017, and the related notes to the
financial statements, which collectively comprise the Town’s basic financial statements as listed in the
table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Town of Canton, Massachusetts Page 15 of 125 Comprehensive Annual Financial ReportSource page 26
Town of Canton
Page Two
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund
and the aggregate remaining fund information of the Town, as of June 30, 2017, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, the schedules of the Town’s proportionate share of net pension liability and the
Town’s contributions to pension plan, the schedule of the Commonwealth’s share of the net pension
liability of the Massachusetts Teacher’s Retirement System, the schedule of changes in net other
postemployment benefits liability and related ratios, the schedules of contributions and investment returns
for other postemployment benefits, the schedules of funding progress and contribution funding for other
postemployment benefits, and budgetary comparison information as listed in the table of contents, be
presented to supplement the basic financial statements. Such information, although not 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. 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.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements, and statistical section are presented for purposes of additional
analysis and are not a required part of the basic financial statements. The combining and individual
nonmajor fund financial statements are the responsibility of management and were derived from and
relate directly to the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the
combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in
relation to the basic financial statements as a whole. The introductory and statistical sections have not
been subjected to the auditing procedures applied in the audit of the basic financial statements and,
accordingly, we do not express an opinion or provide any assurance on them.
Town of Canton, Massachusetts Page 16 of 125 Comprehensive Annual Financial ReportSource page 27
Town of Canton Page Three Other Reporting Required By Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated November 21, 2017, on our consideration of the Town of Canton, Massachusetts’ internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Roselli, Clark and Associates Certified Public Accountants Woburn, Massachusetts 01801 November 21, 2017
Source page 28
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Management’s Discussion and Analysis Town of Canton, Massachusetts Page 19 of 125 Comprehensive Annual Financial Report
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MANAGEMENT’S DISCUSSION AND ANALYSIS
As the management of the Town, we offer readers of the accompanying financial statements this narrative
overview and analysis of the financial activities of the Town for the fiscal year ended June 30, 2017.
Financial Highlights
The assets and deferred outflows of the Town exceeded its liabilities and deferred inflows at the close
of the most recent fiscal year by approximately $60.0 million (total net position).
The government’s total net position increased by approximately $1.9 million. This consisted
primarily of an increase in governmental activities’ net position by over $0.7 million (2.2% of total
governmental activities’ net position) and an increase in Business - type activities’ net position of
approximately $1.2 million (4.5% of Business-type activities).
The Town’s Unassigned Fund Balance reported in the General Fund was over $16.1 million (17.1%of
General Fund expenditures). Total Fund Balance in the General Fund was over $17.9 million
(19.0% of General Fund expenditures). The Town reported total fund balances of over $12.2 million
in the Combined Nonmajor Governmental Funds. Almost $11.9 million in Restricted Fund Balances,
combined with almost $0.5 million in Nonspendable Fund Balances was offset by Unassigned Fund
Deficits of almost $0.2 million.
The Town’s total debt increased by almost $1.6 million during the fiscal year. Detail of this net
increase is illustrated as follows:
Issuances of debt
Governmental Activities $ 7,051,000
Business-Type Activities 3,804,000
Debt payments:
Governmental Activities (5,440,850)
Business-Type Activities (3,834,532)
Premium from issuance debt:
Governmental Activities 305,990
Business-Type Activities 119,872
Amortization of premium:
Governmental Activities (356,493)
Business-Type Activities (76,580)
$ 1,572,407
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Town’s basic financial
statements. The Town’s basic financial statements comprise three components: 1) government-wide
financial statements, 2) fund financial statements, 3) notes to the financial statements. This report also
contains other supplementary information in addition to the basic financial statements themselves.
Town of Canton, Massachusetts Page 21 of 125 Comprehensive Annual Financial ReportSource page 32
The layout and relationship of the financial statements and supplementary information is visually
illustrated as follows:
Required Supplementary Management Discussion and Analysis
Information
Government-wide Financial Statements
Governmental Fund Financial Statements
Basic Proprietary Fund Financial Statements
Financial Statements
Fiduciary Fund Financial Statements
Notes to the Basic Financial Statements
Required Supplementary
Information – Budgetary Reporting with Notes, Pension and
Other than MD&A Other Postemployment Benefits
Other Supplementary
Combining Fund Financial Statements/Schedules
Information
Government-wide Financial Statements – The government-wide financial statements are designed to
provide readers with a broad overview of the Town’s finances, in a manner similar to a private-sector
business. The statement of position presents information on all of the Town’s assets, deferred outflows,
liabilities and deferred inflows, with the net result reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position of the Town is
improving or deteriorating. The statement of activities presents information showing how the
government’s net position changed during the most recent fiscal year. All changes in net position are
reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation
leave.)
The government-wide financial statements consist of two classifications; (1) those whose activities are
principally supported by taxes and intergovernmental revenue (governmental activities), and (2) those
whose activities are intended to recover all or a significant portion of their costs through user fees and
charges (business-type activities).
The governmental activities of the Town include general government, public safety, highways and streets,
sanitation, education, economic development, debt service, fringe benefits and culture and recreation.
The business-type activities of the Town are comprised of water, sewer and rink enterprise funds.
Town of Canton, Massachusetts Page 22 of 125 Comprehensive Annual Financial ReportSource page 33
Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The Town, like other state
and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements. All of the funds of the Town can be divided into three categories: governmental
funds, proprietary funds, and fiduciary funds.
Accounting guidelines distinguish fund balance between amounts that are considered nonspendable, such
as fund balance associated with inventories, and other amounts that are classified based on the relative
strength of the constraints that control the purposes for which specific amounts can be spent. Beginning
with the most binding constraints, fund balance amounts will be reported in the following classifications:
• Restricted—amounts constrained by external parties, constitutional provision, or enabling
legislation
• Committed—amounts constrained by a government using its highest level of decision-making
authority
• Assigned—amounts a government intends to use for a particular purpose
• Unassigned—amounts that are not constrained at all will be reported in the general fund or in
other major funds if negative
Governmental funds – Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By doing
so, readers may better understand the long-term impact of the government’s near-term financing
decisions.
The Town maintains 16 individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the General Fund and Capital Projects Fund, which are considered to be
major funds. Data from the other 14 governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these Nonmajor governmental funds is provided in the
form of combining statements.
The Town adopts an annual appropriated budget for its general fund and its enterprise fund. A budgetary
comparison schedule has been provided for the general fund to demonstrate compliance with this budget.
Proprietary funds – The Town maintains two types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements. The Town uses an enterprise fund to account for its water, sewer and rink enterprise funds.
Town of Canton, Massachusetts Page 23 of 125 Comprehensive Annual Financial ReportSource page 34
Internal service funds are used to report activities that service all other Town Departments. The Town
uses internal service funds to account for self-insured health insurance claims.
Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial statement because
the resources of those funds are not available to support the Town’s own programs. The accounting used
for fiduciary funds is much like that used for proprietary funds.
Notes to the Financial Statements - The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Other Information - In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information which includes the schedules of the Town’s
proportionate share of the net pension liability, contributions to the pension plan, the Commonwealth’s
share of the net pension liability of the Massachusetts Teacher’s Retirement System, the funding progress
and contribution funding of its obligation to provide other postemployment benefits to its employees as
well as the Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual –
General Fund and notes to this schedule.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. In the case of the Town, assets exceeded liabilities by over $60.0 million at the close of the
most recent fiscal year.
Condensed net position data is presented as follows:
Governmental Activities Business-Type Activities Total
June 30, June 30, June 30, June 30, June 30, June 30,
2017 2016 2017 2016 2017 2016
Assets
Currrent and other assets $ 48,529,907 $ 45,653,102 $ 13,275,605 $ 13,703,899 $ 61,805,512 $ 59,357,001
Capital assets, net 106,848,112 106,518,180 46,628,168 46,585,494 153,476,280 153,103,674
Total assets 155,378,019 152,171,282 59,903,773 60,289,393 215,281,792 212,460,675
Deferred outflows of resources 4,210,154 6,285,161 284,992 425,452 4,495,146 6,710,613
Liabilities
Long-term liabilities 111,846,584 106,918,110 29,269,298 29,212,130 141,115,882 136,130,240
Other liabilities 12,899,411 16,630,012 3,059,084 4,781,999 15,958,495 21,412,011
Total liabilities 124,745,995 123,548,122 32,328,382 33,994,129 157,074,377 157,542,251
Deferred inflows of resources 2,502,961 3,280,618 169,430 222,070 2,672,391 3,502,688
Net Position
Net investment in capital assets 78,738,423 78,591,436 18,785,822 17,457,708 97,524,245 96,049,144
Restricted 10,642,548 9,006,548 - - 10,642,548 9,006,548
Unrestricted (57,041,754) (55,970,281) 8,905,131 9,040,938 (48,136,623) (46,929,343)
Total Net Position $ 32,339,217 $ 31,627,703 $ 27,690,953 $ 26,498,646 $ 60,030,170 $ 58,126,349
Town of Canton, Massachusetts Page 24 of 125 Comprehensive Annual Financial ReportSource page 35
By far, the largest portion (over $97.5 million) of the Town’s net position reflects its investment in capital
assets (e.g. land, buildings, infrastructure, machinery, and equipment) less any related debt used to
acquire those assets that is still outstanding. The Town uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the Town’s
investment in its capital assets is reported net of related debt, the resources needed to repay this debt must
be provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
An additional portion (over $10.6 million) of the Town’s net position represents resources that are subject
to external restrictions on how they may be used. Unrestricted net position is reported as a deficit of over
$48.1 million due to the recognition of net pension liabilities of approximately $39.9 million and other
postemployment benefits of approximately $50.7 million.
Condensed changes in net position data is presented as follows:
Governmental Activities Business-Type Activities Total
June 30, June 30, June 30, June 30, June 30, June 30,
2017 2016 2017 2016 2017 2016
Revenues
Program revenues:
Charges for services $ 6,500,012 $ 7,571,242 $ 13,489,826 $ 13,601,983 $ 19,989,838 $ 21,173,225
Operating grants and contributions 18,253,254 15,841,950 80,960 2,093 18,334,214 15,844,043
Capital grants and contributions 922,822 1,562,827 - - 922,822 1,562,827
General revenues:
Property taxes and tax liens 72,087,049 67,168,983 - - 72,087,049 67,168,983
Unrestricted grants and contributions 2,099,870 2,013,767 - - 2,099,870 2,013,767
Other 6,300,054 8,099,043 50,296 38,296 6,350,350 8,137,339
Total Revenues 106,163,061 102,257,812 13,621,082 13,642,372 119,784,143 115,900,184
Expenses
General government 5,965,196 5,764,062 - - 5,965,196 5,764,062
Public safety 17,532,705 16,584,359 - - 17,532,705 16,584,359
Education 68,325,037 60,963,021 - - 68,325,037 60,963,021
Public works 7,658,668 7,581,355 - - 7,658,668 7,581,355
Health and human services 1,684,833 1,536,513 - - 1,684,833 1,536,513
Culture and recreation 3,683,115 3,698,331 - - 3,683,115 3,698,331
Debt service 636,035 672,768 - - 636,035 672,768
Water - - 6,141,278 5,692,320 6,141,278 5,692,320
Sewer - - 6,191,663 5,925,780 6,191,663 5,925,780
Rink - - 61,792 79,670 61,792 79,670
Total Expenses 105,485,589 96,800,409 12,394,733 11,697,770 117,880,322 108,498,179
Change in net position before transfers 677,472 5,457,403 1,226,349 1,944,602 1,903,821 7,402,005
Transfers 34,042 (1,824,747) (34,042) 1,824,747 - -
Change in net position 711,514 3,632,656 1,192,307 3,769,349 1,903,821 7,402,005
Net position, beginning of year 31,627,703 27,995,047 26,498,646 22,729,297 58,126,349 50,724,344
Net position, end of year $ 32,339,217 $ 31,627,703 $ 27,690,953 $ 26,498,646 $ 60,030,170 $ 58,126,349
Town of Canton, Massachusetts Page 25 of 125 Comprehensive Annual Financial ReportSource page 36
Governmental Activities – The governmental activities increased net position by over $0.7 million
(2.2% of governmental activities’ net position) as operating results were in line with expectations.
Fiscal Year 2017 Expenses and Program Revenues – governmental activities are graphically presented as
follows:
$70,000,000
$60,000,000
$50,000,000
$40,000,000
$30,000,000
Functional expenses
$20,000,000
Program Revenues
$10,000,000
$0
Major revenue sources of governmental activities consist of revenue from; (1) Operating grants and
contributions which comprised approximately 17.2% of the total governmental activity revenues
represented an increase of $2.4 million over the prior year. This was directly a result of an increase of
over $2.2 million due to nonemployee special funding payments from the Commonwealth reported in a
manner required under GASB
68; (2) Property taxes which Revenues
represented 67.9% of total
revenues represented an increase
2%
over the prior year by $4.9 6%
1% 6%
million this was comprised of
the legally allowed amount Property taxes
17% Operating grants and contributions
under proposition 2 1/2% after
Capital grants and contributions
factoring in the increase in 68% Charges for services
assessment and new growth and Other
a reduction in the allowance for Intergovernmental (unrestricted)
abatements due to cases settled
favorably in favor of the Town;
and (3) Other revenues which
consists mainly of motor vehicle
excise and other local receipts decreased by almost $1.7 million due to the prior year including a one-time
insurance recovery in the amount of about $2.0 million. No other revenue sources exceeded 10% of total
revenues in either fiscal 2017 or 2016.
Town of Canton, Massachusetts Page 26 of 125 Comprehensive Annual Financial ReportSource page 37
Major operating expenses in total increased by approximately $8.7 million. This was primarily due to an
increase in employee benefit related costs. Direct benefits consisting primarily of other postemployment
benefit costs represented health
insurance and pension costs
Expenses
were over $4.8 million greater
than the prior year. An 1%
3%
1%
6%
7%
additional $2.2 million was due 17%
General government
to the expense side of the Public safety
special funding situation Education
described above under revenue. Public works
These costs were spread across Health and human services
all functions that included 65% Culture and recreation
payroll with the most modest Interest expense
increases in public safety and
education which are the
Town’s two most labor
intensive functions. The remaining increases of $1.7 million were due to additional costs spread in minor
amounts across all functions with the largest increases associated with depreciation.
Business-type Activities – Net position of the business-type activities increased almost $1.2 million over
the prior year. The prior year increase was larger due to transfers from governmental funds into the rink
for construction due to a collapsed roof.
Business – type activities
20
15
10
5
User charges Expenses and indirect
charges
Town of Canton, Massachusetts Page 27 of 125 Comprehensive Annual Financial ReportSource page 38
Fund-wide Financial Analysis of the Government’s Funds
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Governmental funds – The focus of the Town’s governmental funds is to provide information on near-
term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
Town’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of
a government’s net resources available for spending at the end of the fiscal year.
As of the close of the current fiscal year, the Town’s governmental funds balance sheet reported a
combined ending fund balance of almost $31.5 million, an increase of approximately $7.4 million over
the prior year. The increase was primarily the result of revenues exceeding expenditures in the general
fund due to higher than expected motor vehicle excise, building permit and other local revenues. This
positive situation was a direct result of the continued economic expansion; this was compounded by the
timing of bond proceeds which exceeded capital expenditures in the capital project funds.
Unassigned fund balance in the general fund was approximately $16.1 million or 17.1% of general fund
expenditures. This is available for spending at the government’s discretion. Assigned fund balance, as a
result of encumbrances and amounts budgeted for next fiscal year of almost $0.9 million, and committed
fund balance for carryover articles over $0.9 million bring total fund balance in the general fund to
approximately $17.9 million or 19.0% of general fund expenditures.
The remainder of governmental fund balances are included as Combined Nonmajor Fund Balances and
are classified as either (1) non-spendable, due to being the corpus of an endowment in the amount of
approximately $0.5 million; (2) restricted due to constraints placed externally by third-parties in the
amount of approximately $11.9 million; (3) amounts restricted for capital projects of approximately $1.3
million, or (4) unassigned as they reflect negative balances due to grant deficits of almost $0.2 million.
These are expected to be funded in future years through grant reimbursements.
Proprietary funds – The Town’s proprietary funds are made up of (1) the Water, Sewer and Rink
Enterprise Funds which provides the same type of information found in the government-wide financial
statements under business-type activities, and discussed in that section but in more detail; and (2) the
Town’s Internal Service Fund which accounts for the Town’s Health Claims Fund.
The Health Claims Fund has a Net Position balance of approximately $5.1 million. This was flat with
respect to the prior year as revenues and expenses were approximately the same amount.
Health Claims Fund
15
14
13
12
11
10
Revenues Expenses
Town of Canton, Massachusetts Page 28 of 125 Comprehensive Annual Financial ReportSource page 39
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget included revisions to the following
line items:
Approximately $0.1 million in increases allocated to public safety.
Approximately $0.3 million in decreases allocated to general government.
Approximately $0.2 million in increases allocated to public works.
Approximately $0.1 million in increases to benefits.
All of the amendments were between operating line items in the original budget and were for operating
purposes. The overall bottom line final budget increased $0.2 million from the original budget.
Major budget to actual differences on the revenue side included property tax and excise, which exceeded
budget by approximately $1.8 million, licenses and permits which exceeded budget by $0.3 million and
departmental revenues which exceeded budget by $0.2 million.
On the expenditure side, numerous net minor favorable variances which in total approximated $0.5
million existed.
Further detail of budget to actual comparisons may be reviewed as part of the Required Supplementary
Information following the footnotes to the report.
Capital Asset and Debt Administration
Capital Assets – The Town’s investment in capital assets for its governmental and business type
activities as of June 30, 2017 amounts to approximately $153.5 million (net of accumulated depreciation)
an increase from the previous year’s balance of approximately $0.4 million as additions exceeded the
annual deprecation provision.
Major capital asset additions included, roadway improvements and water infrastructure.
Additional information on the Town’s capital assets can be found in Note II subsection D.
Long-term Debt – State statutes limit the amount of general obligation debt a governmental entity may
issue to 5.0 % of its total assessed valuation. The current debt limitation for the Town is approximately
$230.8 million, which is significantly in excess of the Town’s outstanding general obligation debt
classified as inside the debt limit.
At the end of the current fiscal year, the Town had total debt outstanding of almost $56.0 million. The
entire amount comprises debt backed by the full faith and credit of the government.
The Town’s most recent credit evaluation resulted in the Town maintaining its “AAA” rating from
Standard and Poor‘s Investment Services for general obligation debt. This is the highest investment grade
possible.
The Town’s total debt increased by approximately $1.6 million during the fiscal year as previously
detailed.
Town of Canton, Massachusetts Page 29 of 125 Comprehensive Annual Financial ReportSource page 40
The Town also holds a proportionate share of debt of other governmental units that provide services
within the Town’s boundaries. The debt service from such arrangements is assessed annually to the
Town.
Additional information on the Town’s short-term and long-term debt can be found in Note II under
subsections F and G.
Economic Factors and Next Year’s Budgets and Rates
Consistent with both State and National work force trends, the Town’s unemployment rates improved
dramatically and are now exceeding historical unemployment rate data dating back almost 40 years.
The Town’s property tax base is made up predominantly of residential real estate taxes, which
comprise nearly 63.2% of the Town’s property tax base. The Town also relies heavily on its
commercial and industrial property tax base, which in aggregate comprise 36.8% of the Town’s
property tax base. The Town uses a split rate in assessing taxes, thus commercial, industrial and
personal property tax rates are just over double the residential rate. In addition, Chapter 580 of the
Acts of 1980, more commonly referred to as Proposition 2 ½, limits the Town’s ability to increase
taxes in any one year by more than two and one-half percent (2 ½%) of the previous year tax levy.
Consistent with both State and National indices, the Town’s housing market experienced a downward
trend from 2005 – 2010. Housing prices began to stabilize during fiscal year 2011 and recently are
beginning to see an upward trend. During 2017, houses in the Town continued selling at greater than
their assessed values, as a result, the Town expects its housing market to continue to maintain or
slightly outpace National indices. In addition, The Town has residential developments in various
stages of completion. These are expected to be completed in the near future.
The Town has responded well to the recent economic challenges. Reductions in local revenue,
primarily interest income and other reductions in revenue have caused the Town to aggressively seek
other revenue producing initiatives in order to maintain appropriations in ways that preserved local
service levels. The Town has been very successful in that regard.
All of the above items were considered when the Town developed its budget for fiscal year 2018. The
budget was adopted in May 2017 and the Town’s tax rate will be certified in December 2017.
Requests for Information
This financial report is designed to provide a general overview of the Town’s finances for all those with
an interest in the government’s finances. Questions concerning any of the information provided in this
report or request for additional financial information should be addressed to the Office of the Finance
Director, 801 Washington Street, Canton, Massachusetts 02021.
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Basic Financial Statements Town of Canton, Massachusetts Page 31 of 125 Comprehensive Annual Financial Report
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