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Fiscal Year 2022 Annual Comprehensive Financial Report pdf file
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Basic Financial Statements Town of Canton, Massachusetts Page 33 of 127 Annual Comprehensive Financial Report
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TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2022
Primary Government
Governmental Business-Type
Activities Activities Total
Assets
Cash and cash equivalents $ 56,743,801 $ 14,799,790 $ 71,543,591
Investments 17,262,742 - 17,262,742
Receivables, net:
Property taxes 652,826 - 652,826
Tax liens 1,652,697 110,900 1,763,597
User fees - 4,543,977 4,543,977
Departmental and other 1,773,163 - 1,773,163
Leases 4,290,283 - 4,290,283
Intergovernmental 1,559,876 - 1,559,876
Prepaid items 707,181 - 707,181
Deposit held by third party 61,800 - 61,800
Capital assets not being depreciated 15,357,580 6,537,297 21,894,877
Capital assets, net of accumulated depreciation 97,087,120 51,381,032 148,468,152
Total Assets 197,149,069 77,372,996 274,522,065
Deferred Outflows of Resources
Related to net pension liability 2,723,423 184,353 2,907,776
Related to net other postemployment benefits liability 10,882,364 388,148 11,270,512
Total Deferred Outflows of Resources 13,605,787 572,501 14,178,288
Liabilities
Warrants and accounts payable 2,649,340 141,451 2,790,791
Accrued payroll and withholdings 7,508,508 50,544 7,559,052
Tax refunds payable 2,984,763 - 2,984,763
Health claims incurred but not reported 993,078 - 993,078
Accrued interest 182,231 178,515 360,746
Unearned revenue 1,176,243 - 1,176,243
Other liabilities 1,258,141 10,597 1,268,738
Noncurrent liabilities:
Due within one year 4,960,305 3,573,553 8,533,858
Due in more than one year 146,322,196 33,853,236 180,175,432
Total Liabilities 168,034,805 37,807,896 205,842,701
Deferred Inflows of Resources
Related to leased assets 4,290,283 - 4,290,283
Related to net pension liability 9,629,945 651,866 10,281,811
Related to net other postemployment benfits liability 7,148,776 254,979 7,403,755
Total Deferred Inflows of Resources 21,069,004 906,845 21,975,849
Net Position
Net investment in capital assets 86,070,110 31,934,615 118,004,725
Restricted for:
Nonexpendable permanent funds 592,385 - 592,385
Expendable permanent funds 843,035 - 843,035
Federal and State grants 2,106,686 - 2,106,686
Community preservation 2,605,425 - 2,605,425
Gift funds 3,215,272 - 3,215,272
Other specific purposes 620,501 - 620,501
Unrestricted (74,402,367) 7,296,141 (67,106,226)
Total Net Position $ 21,651,047 $ 39,230,756 $ 60,881,803
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 35 of 127 Annual Comprehensive Financial ReportSource page 44
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2022
Program Revenues Net (Expenses) Revenues and Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-Type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total
Primary government:
Governmental activities:
General government $ 6,554,007 $ 583,866 $ 734,471 $ - $ (5,235,670) $ (5,235,670)
Public safety 19,436,666 4,168,858 529,122 101,182 (14,637,504) (14,637,504)
Education 78,799,564 1,745,173 20,522,123 - (56,532,268) (56,532,268)
Public works 8,388,727 305,621 34,115 789,076 (7,259,915) (7,259,915)
Health and human services 1,775,067 122,012 527,573 - (1,125,482) (1,125,482)
Culture and recreation 4,212,611 582,852 148,623 544,222 (2,936,914) (2,936,914)
Interest expense 582,509 - 2,243 - (580,266) (580,266)
Total governmental activities 119,749,151 7,508,382 22,498,270 1,434,480 (88,308,019) (88,308,019)
Business-type activities:
Water 6,361,192 7,712,653 - - $ 1,351,461 1,351,461
Sewer 6,782,774 7,105,979 - 483,763 806,968 806,968
Rink 561,725 364,818 - 752,044 555,137 555,137
Total business-type activities 13,705,691 15,183,450 - 1,235,807 2,713,566 2,713,566
Total Primary Government $ 133,454,842 $ 22,691,832 $ 22,498,270 $ 2,670,287 (88,308,019) 2,713,566 (85,594,453)
General Revenues:
Property taxes 85,661,392 - 85,661,392
Tax liens 264,810 - 264,810
Motor vehicle and other excise 4,935,611 - 4,935,611
Hotel and meals taxes 718,256 - 718,256
Payments in lieu of taxes 1,882,844 - 1,882,844
Grants and contributions not restricted
to specific programs 2,401,522 - 2,401,522
Penalties and interest on taxes 284,510 - 284,510
Unrestricted investment income 327,074 42,565 369,639
Transfers (net) 413,838 (413,838) -
Total general revenues and transfers 96,889,857 (371,273) 96,518,584
Change in Net Position 8,581,838 2,342,293 10,924,131
Net Position:
Beginning of year 13,069,209 36,888,463 49,957,672
End of year $ 21,651,047 $ 39,230,756 $ 60,881,803
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 36 of 127 Annual Comprehensive Financial ReportSource page 45
TOWN OF CANTON, MASSACHUSETTS
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2022
Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Assets
Cash and cash equivalents $ 32,328,672 $ 3,766,129 $ 15,638,534 $ 51,733,335
Investments 9,940,112 - 1,442,414 11,382,526
Receivables, net of allowance for uncollectibles:
Property taxes 645,984 - 6,842 652,826
Tax liens 1,645,968 - 6,729 1,652,697
Motor vehicle excise 530,998 - - 530,998
Intergovernmental 33,089 - 1,526,787 1,559,876
Departmental and other - - 1,117,823 1,117,823
Leases 4,290,283 - - 4,290,283
Due from other funds 976,550 - - 976,550
Total Assets 50,391,656 3,766,129 19,739,129 73,896,914
Deferred Outflows of Resources - - - -
Total Assets and Deferred Outflows of Resources $ 50,391,656 $ 3,766,129 $ 19,739,129 $ 73,896,914
Liabilities
Warrants and accounts payable $ 1,638,317 $ 278,728 $ 528,178 $ 2,445,223
Accrued payroll and withholdings 7,386,764 2,503 119,241 7,508,508
Tax refunds payable 2,984,763 - - 2,984,763
Unearned revenue - - 1,176,243 1,176,243
Other liabilities 1,257,816 - 325 1,258,141
Due to other funds - - 976,550 976,550
Total Liabilities 13,267,660 281,231 2,800,537 16,349,428
Deferred Inflows of Resources
Unavailable revenues - property taxes 2,172,332 - 13,571 2,185,903
Unavailable revenues - excise taxes 530,998 - - 530,998
Unavailable revenues - intergovernmental 33,089 - - 33,089
Unavailable revenues - other - - 753,574 753,574
Unavailable revenues - leases 4,290,283 - - 4,290,283
Total Deferred Inflows of Resources 7,026,702 - 767,145 7,793,847
Fund Balances
Nonspendable - - 592,385 592,385
Restricted - 3,484,898 16,304,328 19,789,226
Committed 3,628,842 - - 3,628,842
Assigned 3,688,869 - - 3,688,869
Unassigned 22,779,583 - (725,266) 22,054,317
Total Fund Balances 30,097,294 3,484,898 16,171,447 49,753,639
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances $ 50,391,656 $ 3,766,129 $ 19,739,129 $ 73,896,914
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 37 of 127 Annual Comprehensive Financial ReportSource page 46
TOWN OF CANTON, MASSACHUSETTS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION
JUNE 30, 2022
Total Governmental Fund Balances $ 49,753,639
Capital assets used in governmental activities are not financial resources and therefore are
not reported in the funds. 112,444,700
Other long-term assets that are unavailable to pay current-period expenditures 3,503,564
Deferred outflows and inflows of resources to be recognized in future fiscal years
are not available resources and, therefore, are not reported in the funds:
Deferred outflows related to net pension liability 2,723,423
Deferred outflows related to net other postemployment benefits liability 10,882,364
Deferred inflows related to net pension liability (9,629,945)
Deferred inflows related to other net postemployment benefits liability (7,148,776)
Net effect of reporting deferred outflows and inflows of resources (3,172,934)
Assets, deferred outflows of resources and liabilities and deferred inflows of resources of the
Town's internal service funds are included in the Statement of Net Position, but are not
reported in the governmental funds. 10,586,810
In the Statement of Activities, interest is accrued on outstanding long-term debt
whereas in the governmental funds interest is not reported until due. (182,231)
Long-term liabilities are not due and payable in the current period and therefore are not
reported in the government funds:
Bonds and notes payable (27,546,569)
Unamortized premiums on bonds (2,104,152)
Compensated absences (2,283,931)
Net pension liability (26,026,726)
Net other postemployment benefits liability (93,321,123)
Net effect of reporting long-term liabilities (151,282,501)
Net Position of Governmental Activities $ 21,651,047
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 38 of 127 Annual Comprehensive Financial ReportSource page 47
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED JUNE 30, 2022
Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Revenues:
Property taxes $ 84,527,456 $ - $ 712,977 $ 85,240,433
Tax liens 148,855 - - 148,855
Intergovernmental 16,884,799 - 8,694,467 25,579,266
Motor vehicle and other excises 5,014,394 - - 5,014,394
Hotel and meals taxes 718,256 - - 718,256
Licenses and permits 1,609,982 - - 1,609,982
Penalties and interest on taxes 284,510 - - 284,510
Payments in lieu of taxes 1,882,844 - - 1,882,844
Fines and forfeitures 39,461 - - 39,461
Charges for services - - 1,606,246 1,606,246
Departmental and other revenue 1,008,914 - 3,321,048 4,329,962
Investment income 214,221 - 22,094 236,315
Contributions and donations - - 541,992 541,992
Total Revenues 112,333,692 - 14,898,824 127,232,516
Expenditures:
Current:
General government 4,149,307 3,433,844 718,037 8,301,188
Public safety 13,611,024 94,714 1,347,939 15,053,677
Education 50,499,937 403,702 7,970,323 58,873,962
Public works 6,402,156 629,025 867,503 7,898,684
Health and human services 1,089,876 - 445,070 1,534,946
Culture and recreation 2,558,165 103,959 990,928 3,653,052
Pension benefits 13,094,149 - - 13,094,149
Employee benefits 13,729,535 - 243,240 13,972,775
State and county assessments 1,461,597 - - 1,461,597
Debt service:
Principal 3,707,822 - 185,000 3,892,822
Interest 860,510 - 66,490 927,000
Total Expenditures 111,164,078 4,665,244 12,834,530 128,663,852
Excess (Deficiency) of Revenues Over (Under) Expenditures 1,169,614 (4,665,244) 2,064,294 (1,431,336)
Other Financing Sources (Uses):
Issuance of bonds and notes - 6,265,500 - 6,265,500
Premiums from bonds and notes - 529,915 54,856 584,771
Transfers in 1,878,161 760,026 858,562 3,496,749
Transfers out (1,010,954) (504,000) (1,567,957) (3,082,911)
Total Other Financing Sources (Uses) 867,207 7,051,441 (654,539) 7,264,109
Net Change in Fund Balances 2,036,821 2,386,197 1,409,755 5,832,773
FUND BALANCES - Beginning of year 28,060,473 1,098,701 14,761,692 43,920,866
FUND BALANCES - End of year $ 30,097,294 $ 3,484,898 $ 16,171,447 $ 49,753,639
See acompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 39 of 127 Annual Comprehensive Financial ReportSource page 48
TOWN OF CANTON, MASSACHUSETTS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2022
Net Change in Fund Balances - Total Governmental Fund Balances $ 5,832,773
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 and
reported as depreciation expense. The net amounts are reflected here as reconciling items:
Capital outlays 6,478,828
Depreciation expense (5,778,026)
Net effect of reporting capital assets 700,802
In the Statement of Activities, Internal Service Funds established to administer the Town's
health insurance and worker's compensation activities are included within the Statement of
activities whereas these activities are not presented in the Statement of Revenues,
Expenditures and Changes in Fund Balances. 1,499,928
The issuance of long-term debt provides current financial resources to governmental funds,
while the repayment of the principal of long-term debt consumes the financial resources of
governmental funds. Neither has any effect on net position. Also governmental funds report
the effect of issuance costs, premiums, discounts, and similar items when debt is first issued,
whereas these amounts are amortized in the Statement of Activities. The net amounts are
reflected here as reconciling items:
Issuance of general obligation bonds and notes (6,265,500)
Premiums from bonds and notes (584,771)
Amortization of premiums on bonds and notes payable 381,749
Repayments of debt 3,892,822
Net effect of reporting long-term debt (2,575,700)
Revenues in the Statement of Activities that do not provide current financial resources are
unavailable in the Statement of Revenues, Expenditures and Changes in Fund Balances.
Therefore, the recognition of revenue for various types of accounts receivable differ between
the two statements. The amount presented represents the difference in unavailable revenue. 593,876
In the Statement of Activities, interest is accrued on outstanding long-term debt;
whereas in governmental funds interest is not reported until due. The net
amount presented here as a reconciling item represents the difference in
accruals between this year and the prior year. (37,258)
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:
Compensated absences 34,409
Pension benefits 4,195,906
Other postemployment benefits (1,662,898)
Net effect of reporting long-term liabilities 2,567,417
Change in Net Position of Governmental Activities $ 8,581,838
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 40 of 127 Annual Comprehensive Financial ReportSource page 49
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2022
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Assets
Current assets:
Cash and cash equivalents $ 8,412,400 $ 5,324,381 $ 1,063,009 $ 14,799,790 $ 5,010,466
Investments - - - - 5,880,216
Receivables (net):
User charges 2,527,583 2,016,394 - 4,543,977 -
Tax liens 54,219 56,681 - 110,900 -
Departmental and other - - - - 124,342
Prepaid items - - - - 707,181
Deposit held by third party - - - - 61,800
Total current assets 10,994,202 7,397,456 1,063,009 19,454,667 11,784,005
Noncurrent assets:
Capital assets not being depreciated 6,537,297 - - 6,537,297 -
Capital assets, net of accumulated depreciation 29,115,301 11,914,418 10,351,313 51,381,032 -
Total noncurrent assets 35,652,598 11,914,418 10,351,313 57,918,329 -
Total Assets 46,646,800 19,311,874 11,414,322 77,372,996 11,784,005
Deferred Outflows of Resources
Related to net pension liability 93,340 74,439 16,574 184,353 -
Related to net other postemployment benefit liability 267,743 102,965 17,440 388,148 -
Total Deferred Outflows of Resources 361,083 177,404 34,014 572,501 -
Liabilities
Current liabilities:
Warrants and accounts payable 109,446 30,750 1,255 141,451 204,117
Accrued payroll and withholdings 32,961 17,271 312 50,544 -
Health claims incurred but not reported - - - - 993,078
Accrued interest 151,544 26,971 - 178,515 -
Other liabilities 10,597 - - 10,597 -
Compensated absences 35,050 7,884 - 42,934 -
Bonds and notes payable 2,966,069 505,501 59,049 3,530,619 -
Total current liabilities 3,305,667 588,377 60,616 3,954,660 1,197,195
Noncurrent liabilities:
Compensated absences 105,151 23,652 - 128,803 -
Net other postemployment benefit liability 2,296,006 882,974 149,553 3,328,533 -
Net pension liability 892,011 711,386 158,396 1,761,793 -
Bonds and notes payable 23,748,275 3,033,044 1,852,788 28,634,107 -
Total noncurrent liabilities 27,041,443 4,651,056 2,160,737 33,853,236 -
Total Liabilities 30,347,110 5,239,433 2,221,353 37,807,896 1,197,195
Deferred Inflows of Resources
Related to net pension liability 330,046 263,215 58,605 651,866 -
Related to net other postemployment benefit liability 175,884 67,639 11,456 254,979 -
Total Deferred Inflows of Resources 505,930 330,854 70,061 906,845 -
Net Position
Net investment in capital assets 15,119,266 8,375,873 8,439,476 31,934,615 -
Unrestricted 1,035,577 5,543,118 717,446 7,296,141 10,586,810
Total Net Position $ 16,154,843 $ 13,918,991 $ 9,156,922 $ 39,230,756 $ 10,586,810
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 41 of 127 Annual Comprehensive Financial ReportSource page 50
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2022
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Operating Revenues:
Charges for services $ 7,712,653 $ 7,105,979 $ 364,818 $ 15,183,450 $ -
Employee contributions - - - - 4,053,927
Employer contributions - - - - 11,875,693
Stop loss reimbursements - - - - 192,694
Total Operating Revenues 7,712,653 7,105,979 364,818 15,183,450 16,122,314
Operating Expenses:
Operating costs 3,212,179 1,321,271 230,122 4,763,572 -
Massachusetts Water Resources Authority assessment 1,518,359 4,804,153 - 6,322,512 -
Depreciation 1,189,461 593,495 282,202 2,065,158 -
Employee benefits - - - - 14,713,145
Total Operating Expenses 5,919,999 6,718,919 512,324 13,151,242 14,713,145
Operating Income (Loss) 1,792,654 387,060 (147,506) 2,032,208 1,409,169
Nonoperating Revenues (Expenses):
Intergovernmental - - - - -
Investment income 21,852 19,172 1,541 42,565 90,759
Interest expense (441,193) (63,855) (49,401) (554,449) -
Total Nonoperating Revenues (Expenses) (419,341) (44,683) (47,860) (511,884) 90,759
Income Before Capital Contributions
and Transfers 1,373,313 342,377 (195,366) 1,520,324 1,499,928
Capital contributions - 483,763 752,044 1,235,807 -
Transfers in 1,035 1,356 204,000 206,391 -
Transfers out (610,025) (10,204) - (620,229) -
Total Capital Contributions and Transfers (608,990) 474,915 956,044 821,969 -
Change in Net Position 764,323 817,292 760,678 2,342,293 1,499,928
Total Net Position - Beginning of the Year 15,390,520 13,101,699 8,396,244 36,888,463 9,086,882
Total Net Position - End of the Year $ 16,154,843 $ 13,918,991 $ 9,156,922 $ 39,230,756 $ 10,586,810
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 42 of 127 Annual Comprehensive Financial ReportSource page 51
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2022
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Cash Flows from Operating Activities:
Receipts from users $ 7,127,792 $ 6,834,749 $ 364,818 $ 14,327,359 $ -
Receipts from interfund services provided - - - - 16,190,919
Payments to employees (1,054,069) (478,192) (35,946) (1,568,207) -
Payments to vendors (3,880,613) (5,722,659) (301,149) (9,904,421) -
Payments for interfund services used - - - - (15,296,310)
Net Cash Provided by (Used in) Operating
Activities 2,193,110 633,898 27,723 2,854,731 894,609
Cash Flows from Noncapital Financing Activities:
Intergovernmental operating grants - - - - -
Transfers in 1,035 1,356 204,000 206,391 -
Transfers out (610,025) (10,204) - (620,229) -
Net Cash Provided by (Used in) Noncapital
Financing Activities (608,990) (8,848) 204,000 (413,838) -
Cash Flows from Capital and Related Financing Activities:
Proceeds from capital contributions - 483,763 752,044 1,235,807 -
Proceeds from the issuance of bonds and notes 9,195,500 44,588 - 9,240,088 -
Premiums from the issuance of bonds and notes 846,294 - - 846,294 -
Acquisition and construction of capital assets (4,895,760) (270,638) - (5,166,398) -
Principal payments on bonds and notes (2,044,900) (488,730) (50,000) (2,583,630) -
Interest payments on bonds and notes (606,191) (99,216) (58,851) (764,258) -
Net Cash Provided by (Used in) Capital and Related
Financing Activities 2,494,943 (330,233) 643,193 2,807,903 -
Cash Flows from Investing Activities:
Investment income 21,852 19,172 1,541 42,565 90,759
Investment of operating cash - - - - (1,090,315)
Net Cash Provided by (Used in) Investing Activities 21,852 19,172 1,541 42,565 (999,556)
Net Change in Cash and Cash Equivalents 4,100,915 313,989 876,457 5,291,361 (104,947)
Cash and Cash Equivalents:
Beginning of the year 4,311,485 5,010,392 186,552 9,508,429 5,115,413
End of the year $ 8,412,400 $ 5,324,381 $ 1,063,009 $ 14,799,790 $ 5,010,466
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used in) Operating Activities:
Operating Income (Loss) $ 1,792,654 $ 387,060 $ (147,506) $ 2,032,208 $ 1,409,169
Adjustments to reconcile operating income (loss) to net
cash provided by (used in) operating activities:
Depreciation 1,189,461 593,495 282,202 2,065,158 -
Changes in assets, deferred outflows of resources,
liabilities and deferred inflows of resources:
Receivables (584,861) (271,230) - (856,091) 68,605
Prepaid items - - - - (523,261)
Deferred outflows of resources (115,322) (53,347) (9,961) (178,630) -
Accounts payable and accrued expenses (101,251) 23,525 (84,103) (161,829) 74,881
Health claims incurred but not reported - - - - (134,785)
Net other postemployment liability 232,352 89,355 15,135 336,842 -
Net pension liability (342,762) (273,355) (60,864) (676,981) -
Deferred inflows of resources 122,839 138,395 32,820 294,054 -
Net Cash Provided by (Used in) Operating
Activities $ 2,193,110 $ 633,898 $ 27,723 $ 2,854,731 $ 894,609
Noncash capital and related financing activities:
Amortization of bond premium $ 246,043 $ 31,065 $ 9,450 $ 286,558 $ -
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 43 of 127 Annual Comprehensive Financial ReportSource page 52
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF FIDUCIARY NET POSITION
JUNE 30, 2022
Other Private
Postemployment Purpose
Benefits Trust Fund Trust Funds
Assets
Cash and cash equivalents $ 45,512 $ 58,077
Investments:
Equity mutual funds 6,031,168 -
Bond mutual funds 2,543,568 -
Total Assets 8,620,248 58,077
Liabilities
Warrants payable - -
Total Liabilities - -
Net Position
Restricted for other postemployment benefits 8,620,248 -
Held in trust for private purposes - 58,077
Total Net Position $ 8,620,248 $ 58,077
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 44 of 127 Annual Comprehensive Financial ReportSource page 53
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FISCAL YEAR ENDED JUNE 30, 2022
Other Private
Postemployment Purpose
Benefits Trust Fund Trust Funds
Additions
Contributions:
Employer $ 5,108,281 $ -
Other - 2,500
Total contributions 5,108,281 2,500
Investment income:
Interest and dividends 721,614 203
Realized gain (loss) on investments (11,434) -
Net appreciation/depreciation in fair value of investments (2,196,660) -
Less - investment management fees (9,644) -
Net investment earnings (losses) (1,496,124) 203
Total Additions 3,612,157 2,703
Deductions
Education - scholarships - 5,850
Retiree benefits 4,058,281 -
Total Deductions 4,058,281 5,850
CHANGE IN NET POSITION (446,124) (3,147)
NET POSITION AT BEGINNING OF YEAR 9,066,372 61,224
NET POSITION AT END OF YEAR $ 8,620,248 $ 58,077
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts Page 45 of 127 Annual Comprehensive Financial ReportSource page 54
TOWN OF CANTON, MASSACHUSETTS
NOTES TO BASIC FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2022
I. Summary of Significant Accounting Policies
The accompanying basic financial statements of the Town have been prepared in conformity with
generally accepted accounting principles (GAAP) as applied to state and local governments. GAAP
is prescribed by the Governmental Accounting Standards Board (GASB), which is the primary
standard-setting body for state and local government entities. The following is a summary of the more
significant policies and practices used by the Town:
A. Reporting Entity
The Town is located in Norfolk County, fifteen miles southwest of Boston and was incorporated
as a Town in 1797. An elected five-member Select Board (“the Board”) governs the Town and
an appointed Town Administrator oversees the Town’s daily executive and administrative duties.
The Town follows the open town meeting form of government. The Town provides
governmental services for the territory within its boundaries, including police and fire protection,
disposal of garbage and rubbish, public education in grades K-12, water and sewer services, street
maintenance, parks and recreational facilities.
Component units, while separate entities, are in substance part of the governmental operations if
the significance of their operations and/or financial relationship with the Town meet certain
criteria. Pursuant to these criteria there are no component units required to be included in the
financial statements.
The Town is a member community of the Blue Hills Regional Technical School that provides
educational services to nine area communities. This joint venture assesses each community its
share of operational and debt service costs based on student population and other factors. In
fiscal year 2022, the Town’s share of the operating and debt service expenses was $1,472,906.
There is no equity interest reported in these financial statements. Complete audited financial
statements can be obtained directly from the District’s administrative office located at 800
Randolph Street, Canton, Massachusetts 02021.
B. Government-Wide and Fund 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 non-fiduciary activities of the primary government and
its component units. For the most part, the effect of interfund activity has been removed from
these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely
primarily on fees and charges for support.
Separate financial statements are provided for governmental funds, proprietary funds and
fiduciary funds, even though the fiduciary funds are excluded from the government-wide
financial statements. Major individual government funds and major individual enterprise funds
are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated
and presented in a single column.
Town of Canton, Massachusetts Page 46 of 127 Annual Comprehensive Financial ReportSource page 55
Major Fund Criteria – Major funds must be reported if both of the following criteria are met:
1) The total assets and deferred outflows, liabilities and deferred inflows, revenues, or
expenditures/expenses of an individual governmental or enterprise fund are at least ten
percent of the corresponding element (assets and deferred outflows, liabilities and
deferred inflows, etc.) for all funds of that category or type (total governmental or total
enterprise funds), and
2) The total assets and deferred outflows, liabilities and deferred inflows, revenues, or
expenditures/expenses of the individual governmental fund or enterprise fund are at least
five percent of the corresponding element for all governmental and enterprise funds
combined.
Additionally, any other governmental or enterprise fund that management believes is particularly
significant to the basic financial statements may be reported as a major fund.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Under this method, revenues are
recorded when earned and expenses are recorded when a liability is incurred. Property taxes are
recognized as revenues in the fiscal year for which they are levied. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the provider are met.
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. 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 instead as general
revenues.
The governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized when
susceptible to accrual (i.e. 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. Expenditures are recorded when the related fund liability is incurred, except
for unmatured interest on general long-term debt which is recognized when due, certain
compensated absences, claims and judgments which are recognized when the obligations are
expected to be liquidated with current expendable available resources.
The Town considers property tax revenues to be available if they are material and collected
within 60 days after the end of the fiscal year. Investment income associated with the current
fiscal period is susceptible to accrual and has been recognized as revenue of the current fiscal
period. All other revenue items are considered to be measurable and available only when the
cash is received and are recognized as revenue at that time.
Town of Canton, Massachusetts Page 47 of 127 Annual Comprehensive Financial ReportSource page 56
The government reports the following major Governmental Funds:
General Fund – is the government’s primary operating fund. It accounts for all financial
resources of the general government except those required to be accounted for in another
fund.
Capital Projects Fund – is used to account for financial resources that are restricted,
committed or assigned to expenditures for capital outlays.
Nonmajor Governmental Funds – consist of special revenue, capital projects and permanent
funds that are aggregated and presented in the Nonmajor Governmental Funds column on the
Governmental Funds financial statements. The following describes the general use of these
fund types:
The Special Revenue Funds are used to account for the proceeds of specific revenue sources
that are restricted or committed to expenditures for specified purposes other than debt service
or capital projects.
The Permanent Funds are used to account for financial resources that are restricted to the
extent that only earnings, not principal, may be used for purposes that support the
governmental programs.
The proprietary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Under this method, revenues are
recognized when earned and expenses are recorded when the liabilities are incurred.
Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund’s principal ongoing operations. The
principal operating revenues are user charges and fees, while operating expenses consist of
salaries, ordinary maintenance, assessments, indirect costs and depreciation. All revenues and
expenses not meeting this definition are reported as non-operating revenues and expenses.
The government reports the following major proprietary funds:
Water Enterprise Fund – is used to account for the operation of the Town’s water activities.
Costs associated with maintaining the related infrastructure and providing services to the
general public on a continuing basis, including depreciation, are financed or recovered
primarily through user charges.
Sewer Enterprise Fund – is used to account for the operation of the Town’s sewer activities.
Costs associated with maintaining the related infrastructure and providing services to the
general public on a continuing basis, including depreciation, are financed or recovered
primarily through user charges.
Rink Enterprise Fund – is used to account for the operation of the Town’s ice skating rink
activities.
Town of Canton, Massachusetts Page 48 of 127 Annual Comprehensive Financial ReportSource page 57
Additionally, the following proprietary fund type is reported:
Internal Service Fund – is used to account for the Town’s self-insured health insurance,
workers’ compensation, unemployment claims and building insurance activities. Because
these services primarily benefit governmental rather than business-type activities, they have
been included within governmental activities in the government-wide financial statements.
Fiduciary fund financial statements are reported using the economic resources measurement focus
and use the accrual basis of accounting. Fiduciary funds are used to account for assets held in a
trustee capacity and cannot be used to support the governmental programs.
The government reports the following fiduciary funds:
Other Postemployment Benefits Trust Fund – is used to accumulate funds for future payments
of other post-employment benefits for retirees such as health and life insurance.
Private-Purpose Trust Fund – is used to account for trust arrangements under which principal
and income benefit individuals, private organizations or other governments. This fund is
used for educational scholarships.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Equity
Deposits and Investments – The Town’s cash and cash equivalents are considered to be cash on
hand, demand deposits, and short-term investments with original maturities of three months or
less from the date of acquisition.
Investments of the Town are recorded at fair value in accordance with GASB Statement No. 72,
Fair Value Measurement and Application. Accordingly, the change in fair value of investments
is recognized as an increase or decrease to investment assets and investment income.
Receivables – Real estate and personal property taxes are assessed on January 1 every year. Bills
are sent quarterly and are due on August 1, November 1, February 1, and May 1, or thirty days
subsequent to the mailing date. Interest accrues on delinquent taxes at the rate of 14% per
annum. Motor vehicle excise are billed annually for each vehicle registered in the Town based on
vehicles reported to the Town by the Commonwealth of Massachusetts. Water and sewer user
fees are billed quarterly based on individual meter readings and are subject to interest and
penalties if not paid by the respective due dates. Property taxes, motor vehicle excise taxes and
water and sewer user fees are recorded as receivables in the fiscal year of the levy.
Real estate taxes and water and sewer user fees are secured through a lien process within 60 days
after the due date and are considered 100% collectible. Accordingly, an allowance for
uncollectible balances for these receivables is not reported. All personal property tax and excise
tax receivables are shown net of an allowance for uncollectible balances comprised of those
outstanding amounts greater than five years old. Other departmental receivables are shown net of
an allowance for uncollectible balances based on historical trends and specific account analysis.
The Town’s lease receivable is measured at the present value of lease payments expected to be
received during the lease terms. The payments are recorded as an inflow of resources in the
period the payments are received. Deferred inflows are recorded at the initiation of the leases in
an amount equal to the initial recording of the lease receivable. The deferred inflow of resources
is amortized using the effective interest method over the terms of the leases.
Town of Canton, Massachusetts Page 49 of 127 Annual Comprehensive Financial ReportSource page 58
Inventories – Inventories, which are not material to the basic financial statements, are considered
to be expenditures at the time of purchase.
Capital Assets – Capital assets, which include land, land improvements, buildings and
improvements, machinery and equipment, vehicles and infrastructure (e.g. roads, water and sewer
mains, and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Capital assets are recorded at historical
cost or estimated historical cost if purchased or constructed. Donated capital assets, donated
works of art and similar items, and capital assets received in a service concession arrangement are
reported at acquisition value rather than fair value. Interest incurred during the construction
phase of capital assets of business-type activities is included as part of the capitalized value of the
assets constructed.
All purchases and construction costs in excess of $25,000 are capitalized at the date of acquisition
or construction, respectively, with expected lives of greater than one year. The costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend assets lives
are not capitalized.
Capital assets (excluding land and construction-in-process) are depreciated by the Town on a
straight-line-basis over the following estimated useful lives:
Land improvements 20-50 years
Buildings and improvements 20-50 years
Machinery and equipment 3-20 years
Vehicles 5 years
Infrastructure 40-50 years
Interfund Balances – Activity between funds that are representative of lending arrangements
outstanding at the end of the fiscal year are referred to as either due to/from other funds or
advances to/from other funds. All other outstanding balances between funds are reported as due
to/from other funds.
Any residual balances outstanding between the governmental activities and business-type
activities are reported in the government-wide financial statements as internal balances.
Interfund Transfers – During the course of its operations, resources are permanently reallocated
between and within funds. These transactions are reported as transfers in and transfers out in the
individual fund statements. Transfers between and within governmental and fiduciary funds are
eliminated from the governmental activities in the statement of activities. Any residual balances
outstanding between the governmental activities and the business–type activities are reported in
the statement of activities as transfers, net.
Investment Income – Excluding the permanent endowment funds, investment income derived
from major and nonmajor governmental funds is legally assigned to the general fund unless
otherwise directed by state law. Investment income of the proprietary funds is voluntarily
assigned to the general fund. Net appreciation on permanent endowment funds is reported in
expendable permanent funds in the governmental activities.
Compensated Absences – It is the Town’s policy to permit employees to accumulate earned but
unused vacation and sick-pay benefits. Compensated absence liabilities related to both
Town of Canton, Massachusetts Page 50 of 127 Annual Comprehensive Financial ReportSource page 59
governmental and business-type activities are normally paid from the funds reporting payroll and
related expenditures. Amounts related to these benefits are accrued when incurred in the
government-wide and proprietary fund financial statements. A liability for these amounts is
reported in Governmental Funds only if they have matured.
Long-term Obligations – Long-term debt is reported as liabilities in the government-wide and
proprietary fund statement of net position. Bond premiums and discounts are amortized over the
life of the bonds using the effective interest method. Bond anticipation notes payable are reported
net of the applicable bond premium or discount.
In the governmental fund financial statements, the face amount of long-term debt issued is
reported as other financing sources. Premiums received on a debt issuance are reported as other
financing sources while discounts are reported as other financing uses. Issuance costs are
exclusively reported as general government expenditures regardless of whether they are withheld
from the actual proceeds.
Deferred Outflows/Inflows of Resources – In addition to assets, the statement of financial position
will sometimes report a separate section for deferred outflows of resources. This separate
financial statement element, deferred outflows of resources, represent a consumption of net assets
that applies to future periods and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The Town has two types of items that are reported on the
government-wide statement of net position which relate to outflows from changes in the net
pension liability and the other postemployment benefit liability. The deferred pensions will be
recognized in pension expense in future years as more fully described in Note III, subsection A.
The deferred other postemployment benefits will be recognized in employee benefits expense in
future years as more fully described in Note III, subsection C.
In addition to liabilities, the statement of financial position will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element, deferred
inflows of resources, represent an acquisition of net assets that applies to future periods and so
will not be recognized as an inflow of resources (revenue) until that time. The Town has four
items that are reported as deferred inflows of resources. The first arises under a modified accrual
basis of accounting and, accordingly, the item unavailable revenue is reported in the
governmental funds balance sheet. The governmental funds report unavailable revenues from
five sources: property taxes, excise taxes, intergovernmental, leases and other. These amounts
are deferred and recognized as an inflow of resources in the period that the amounts become
available. The other items are reported on the government-wide statement of net position and
relate to inflows from leases, changes in the net pension liability and changes in the other
postemployment benefit liability. The deferred lease revenues will be recognized in charges for
services and investment income in future years as more fully described in Note II, subsection B.
The deferred pensions will be recognized in pension expense in future years as more fully
described in Note III, subsection A. The deferred other postemployment benefits will be
recognized in employee benefits expense in future years as more fully described in Note III,
subsection C.
Net Position – In the government-wide financial statements, net position reported as “net
investment in capital assets” includes capital assets, net of accumulated depreciation, less the
principal balance of outstanding debt used to acquire capital assets. Unspent proceeds of capital
related debt are not considered to be capital related debt.
Town of Canton, Massachusetts Page 51 of 127 Annual Comprehensive Financial ReportSource page 60
Net position is reported as restricted when amounts are not available for appropriation or are
legally restricted by outside parties for a specific use. Net position has been restricted for the
following:
Nonexpendable permanent funds represent the endowment portion of donor restricted trusts
that support governmental programs.
Expendable permanent funds represent the spendable portion of donor restricted trusts that
support governmental programs.
Debt service represents a grant to fund a portion of the debt service on outstanding school
construction debt that will be amortized over the life of the bonds in accordance with state
law.
Federal and State grants represent assets that have restrictions placed on them from federal
and state granting agencies.
Community preservation represents assets that are restricted by state law for the purposes of
acquiring or developing open space and recreational facilities, historic resources and
affordable housing.
Gift funds represent assets that are restricted by donors for specific governmental programs
and uses.
Other specific purposes represent assets that are restricted by third parties for specific
governmental programs and uses.
Fund Equity – In the fund financial statements, fund balance for governmental funds is reported
in classifications that comprise a hierarchy based primarily to the extent in which the Town is
required to honor constraints on the specific purpose for which amounts in the funds can be spent.
Fund balance is reported in five components – nonspendable, restricted, committed, assigned, and
unassigned as described below:
Nonspendable represents amounts that cannot be spent because they are either (a) not in
spendable form (i.e. inventory or prepaid) or (b) legally or contractually required to be
maintained intact such as the corpus of an endowment.
Restricted represents amounts that have constraints placed either externally by third-parties
(creditors, grantors, contributors, or laws or regulations of other governments) or by law
through constitutional provisions or enabling legislation. Enabling legislation authorizes the
Town to assess, levy, charge or otherwise mandate payment of resources (from external
resource providers) and includes a legally enforceable requirement (compelled by external
parties) that those resources be used only for the specific purposes stipulated in the
legislation.
Committed represents amounts that can only be used for specific purposes pursuant to
formal action of the Town Meeting through Town Meeting Articles, which represent the
most binding constraint that give rise to committed fund balance. Those committed amounts
cannot be used for any other purpose unless the Town Meeting removes or changes the
Town of Canton, Massachusetts Page 52 of 127 Annual Comprehensive Financial ReportSource page 61
specified use by taking the same type of action (through Town Meeting Articles) it
employed previously to commit those amounts.
Assigned represents amounts that are constrained by the Town’s intent to be used for
specific purposes but are neither restricted nor committed. The Select Board has by
ordinance authorized the Finance Director to assign fund balance. The Town Meeting may
also assign fund balance as it does when appropriating fund balance to cover a gap between
estimated revenue and appropriations in the subsequent year’s appropriated budget.
Unassigned represents amounts that have not been restricted, committed or assigned to
specific purposes within the general fund. The general fund is the only fund that reports a
positive unassigned fund balance amount. Other governmental funds besides the general
fund can only report a negative unassigned fund balance amount.
When both restricted and unrestricted resources are available for use, it is the Town’s policy to
use restricted resources first, then unrestricted resources (committed, assigned and unassigned) as
they are needed. When unrestricted resources (committed, assigned and unassigned) are available
for use it is the Town’s policy to use committed resources first, then assigned, and then
unassigned as they are needed.
The Town has not established financial policies with respect to maintaining minimum fund
balance amounts.
Stabilization Funds – The Town maintains a general stabilization fund, in accordance with
Massachusetts General Law Chapter 40, Section 5B. The fund may be used for any municipal
purpose upon the condition of a two-thirds vote of the Town Meeting. The balance of the fund
totals $10,026,967 at June 30, 2022 and is reported as unassigned fund balance in the General
Fund. Amounts are appropriated into the fund by a majority vote of the Town Meeting. There are
no requirements to make annual contributions to this fund.
Encumbrances – The Town’s encumbrance policy regarding the general fund is to (1) classify
encumbrances that arise from the issuance of purchase orders resulting from normal purchasing
activity approved by the Finance Department as assigned, and (2) classify encumbrances that
result from an action of the Town Meeting as committed. Encumbrances of funds already
restricted, or committed are included within the classification of those fund balances and not
reported separately. The Town reports $904,552 of encumbrances from normal purchasing
activity in the general fund as assigned and $3,628,842 of encumbrances from Town Meeting
Articles in the general fund as committed. There are no encumbrances reported in any other fund.
Endowment Funds - The Town's endowment funds consist primarily of the Town's Cemetery
Trust Funds. The Select Board, acting as the Town's Cemetery Commissioners, make all
decisions as allowed under Massachusetts General Laws regarding the spending authority of
investment income. These amounts are reflected as restricted balances in the statement of net
position.
Town of Canton, Massachusetts Page 53 of 127 Annual Comprehensive Financial ReportSource page 62
The following table reflects the Town’s fund equity categorizations:
Capital Nonmajor
General Projects Governmental Total
Nonspendable:
Nonexpendable trust funds $ - $ - $ 592,385 $ 592,385
Restricted:
Recreation revolving - - 478,732 478,732
Human services revolving - - 355,039 355,039
Library revolving - - 151,297 151,297
Other Town revolving - - 373,163 373,163
School revolving - - 3,110,508 3,110,508
General municipal private grants - - 444,710 444,710
Ambulance receipts reserved - - 2,013,531 2,013,531
Community preservation - - 2,591,854 2,591,854
Police grants - - 297,639 297,639
Other Town grants - - 300,960 300,960
School grants - - 1,480,761 1,480,761
General municipal donations - - 2,528,985 2,528,985
School donations - - 177,668 177,668
Roadway improvements - 689,766 - 689,766
Building improvements - 2,446,885 - 2,446,885
Other capital outlay - 348,247 640,301 988,548
Library trust funds - - 593,829 593,829
Conservation trust funds - - 162,612 162,612
Other trust funds - - 86,594 86,594
Other purposes - - 516,145 516,145
Committed:
Police 237,711 - - 237,711
Education 810,653 - - 810,653
Infrastructure 695,975 - - 695,975
Public buildings 1,650,394 - - 1,650,394
Culture and recreation 97,710 - - 97,710
Other purposes 136,399 - - 136,399
Assigned:
Purchase orders 904,552 - - 904,552
Subsequent years' budget 2,784,317 - - 2,784,317
Unassigned 22,779,583 - (725,266) 22,054,317
$30,097,294 $ 3,484,898 $16,171,447 $49,753,639
E. Excess of Expenditures Over Appropriations and Deficits
The Town incurred individual fund deficits totaling $725,266 in nonmajor governmental funds.
These deficits will be funded through grants and other available funds in future fiscal years.
Town of Canton, Massachusetts Page 54 of 127 Annual Comprehensive Financial ReportSource page 63
F. Use of Estimates
The preparation of basic financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure for contingent assets and liabilities at the date of the basic financial statements and the
reported amounts of the revenues and expenditures/expenses during the fiscal year. Actual results
could vary from estimates that were used.
II. Detailed Notes to All Funds
A. Deposits and Investments
A cash and investment pool is maintained that is available for use by all funds. Each fund type’s
portion of this pool is displayed on the balance sheet as “cash and cash equivalents”. The
deposits and investments of trust funds are held separately from those of other funds.
State laws and regulations require the Town to invest funds only in pre-approved investment
instruments which include but are not necessarily limited to bank deposits, money markets,
certificates of deposit, U.S. obligations, repurchase agreements, and the State Treasurer’s
investment pool (the Pool). In addition, the statutes impose various limitations on the amount and
length of investments and deposits. Repurchase agreements cannot be for a period of over ninety
days, and the underlying security must be a United States obligation.
The Pool meets the criteria of an external investment pool. The Pool is administered by the
Massachusetts Municipal Depository Trust (the MMDT), which was established by the Treasurer
of the Commonwealth who serves as Trustee. The fair value of the position in the Pool is the
same as the value of the Pool shares.
Custodial Credit Risk: Deposits - In the case of deposits, this is the risk that in the event of a bank
failure, the government’s deposits may not be returned to it. The Town has adopted a policy that
no more than 25% of the Town’s cash may be comprised of unsecured bank deposits, except for a
30 day reprieve during times of heavy collections. The credit worthiness of banks will be tracked
by Veribanc, or other bank credit worthiness reporting systems, and the Treasurer will move or
collateralize deposits as a result of negative reports. At year-end, the carrying amount of the
Town's deposits was $40,580,832 and the bank balance was $41,310,804. Of the Town's bank
balance, $37,563,333 was covered by federal depository insurance or the Depositor’s Insurance
Fund; $3,617,535 was collateralized and the remainder was exposed to custodial credit risk
because it was uninsured and uncollateralized.
Custodial Credit Risk: Investments – In the case of investments, this is the risk that in the event of
the invested party not being able to provide required payments to investors, ceasing to exist, or
filing of bankruptcy, the Town may not be able to recover the full amount of its principal
investment and/or investment earnings. The Town has adopted a policy to review the financial
institutions financial statements and the background of each advisor. All securities not held
directly by the Town will be held in the Town’s name and tax identification number by a third
party custodian and evidenced by safekeeping receipts showing individual CUSIP numbers for
each security. The investments in the MMDT are not exposed to custodial credit risk as their
existence is not evidenced by securities that exist in physical or book form. The Town’s
investment in a repurchase agreement is held by a counterparty, but not in the Town’s name. The
Town of Canton, Massachusetts Page 55 of 127 Annual Comprehensive Financial ReportSource page 64
repurchase agreement is fully collateralized with U.S. government securities. The Town’s
investments in negotiable certificates of deposit are fully covered by federal depository insurance.
Fair Value of Investments – The Town reports its investments at fair value. The Town
categorizes its fair value measurements within the fair value hierarchy established by GAAP.
This hierarchy is based on valuation inputs used to measure the fair value of the asset or liability.
The three levels of the hierarchy are as follows:
• Level 1 – Inputs are quoted prices in active markets for identical investments at the
measurement date.
• Level 2 – Inputs (other than quoted prices included in Level 1) are either directly or
indirectly observable for the investment through correlation with market data at the
measurement date and for the duration of the instrument’s anticipated life.
• Level 3 – Inputs reflect the Town’s best estimate of what market participants would use
in pricing the investment at the measurement date.
The following table presents the Town’s investments carried at fair value on a recurring basis in
the statement of net position at June 30, 2022:
Fair Value Measurements Using
6/30/22 Level 1 Level 2 Level 3
Investments by fair value level
Debt securities:
U.S. government obligations $ 5,147,283 $ 3,681,747 $ 1,465,536 $ -
Corporate fixed income securities 4,062,884 - 4,062,884 -
Negotiable certificates of deposit 498,258 - 498,258 -
Bond mutual funds 4,155,460 - 4,155,460 -
Repurchase agreements 1,500,000 - 1,500,000 -
Total debt securities 15,363,885 3,681,747 11,682,138 -
Equity securities:
Common stock 5,942,425 5,942,425 - -
Equity mutual funds 6,031,168 - 6,031,168 -
Total equity securities 11,973,593 5,942,425 6,031,168 -
Total investments by fair value level 27,337,478 $ 9,624,172 $ 17,713,306 $ -
Investments measured at amortized cost
State investment pool 29,566,347
Total investments measured at fair value $ 56,903,825
Debt and equity securities classified in Level 1 are valued using prices quoted in active markets
for those securities. Corporate fixed income securities, U.S. governmental obligations, negotiable
certificates of deposit, bond and equity mutual funds and repurchase agreements classified in
Level 2 are valued using matrix pricing based on the securities’ relationship to benchmark quoted
prices. The State Treasurer’s investment pool (MMDT) is valued at amortized cost. The
MMDT’s investment advisor may value the pool using an alternative valuation method that more
Town of Canton, Massachusetts Page 56 of 127 Annual Comprehensive Financial ReportSource page 65
accurately reflects the fair value in accordance with the pools fair value pricing policies should
amortized cost not approximate the fair value of the pool. There are no restrictions or limits on
withdrawals from the pool and no direct fees are charged to participants.
Interest Rate Risk – The Town limits investment maturities as a means of managing its exposure
to fair value losses arising from increasing interest rates. The Town’s policy limits investments
of operating funds to one year or less.
At June 30, 2022, the Town had the following investments with maturities:
Maturities in Years
Investments 6/30/22 Less than 1 1-5 6 - 10
Corp. Fixed Income Securities $ 4,062,884 $ 509,923 $ 3,396,512 $ 156,449
U.S. government obligations 5,147,283 1,017,517 3,562,466 567,300
Negotiable certificates of deposit 498,258 498,258 - -
Bond mutual funds 4,155,460 4,155,460 - -
Repurchase agreements 1,500,000 1,500,000 - -
State investment pool 29,566,347 29,566,347 - -
Total investments with maturities $ 44,930,232 $ 37,247,505 $ 6,958,978 $ 723,749
Concentration of Credit Risk – The Town has adopted a policy to limit the amount of investments
that may be invested in a single issuer to 10% of the Town’s investments, except for U.S
government obligations, investments fully collateralized with U.S. government obligations and
the Pool (MMDT). At June 30, 2022, Town has 52% of its investments in the MMDT.
Credit Risk – The Town has adopted a policy to only purchase investment grade securities with a
high concentration in securities rated ‘A’ or better.
At June 30, 2022, the credit quality ratings of investments were as follows:
Corporate U.S. Government
Quality Ratings Fixed Agency
(Moody's) Income Obligations Totals
AAA $ - $ 5,147,283 $ 5,147,283
A1 734,554 - 734,554
A2 851,421 - 851,421
A3 610,982 - 610,982
BAA1 853,272 - 853,272
BAA2 1,012,655 - 1,012,655
Totals - All $ 4,062,884 $ 5,147,283 $ 9,210,167
The Town’s investments in bond mutual funds, negotiable certificates of deposit, repurchase
agreements and the MMDT are unrated.
Town of Canton, Massachusetts Page 57 of 127 Annual Comprehensive Financial ReportSource page 66
B. Receivables
Receivables as of year-end for the Town's individual major and non-major governmental funds
in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Gross Allowance for Net
Amount Uncollectibles Amount
Receivables:
Real estate and personal property taxes $ 645,984 $ - $ 645,984
Tax liens and foreclosures 1,652,697 - 1,652,697
Community preservation surcharges 6,842 - 6,842
Motor vehicle and other excise taxes 870,851 (339,853) 530,998
Ambulance fees 1,810,961 (1,135,545) 675,416
Public safety details 364,249 - 364,249
Street betterments 78,158 - 78,158
Leases 4,290,283 - 4,290,283
Intergovernmental 1,559,876 - 1,559,876
Total $ 11,279,901 $ (1,475,398) $ 9,804,503
Receivables as of year-end for Town's proprietary funds are as follows:
Gross Allowance for Net
Amount Uncollectibles Amount
Receivables:
Water user charges $ 2,527,583 $ - $ 2,527,583
Water liens 54,219 - 54,219
Sewer user charges 2,016,394 - 2,016,394
Sewer liens 56,681 - 56,681
Stop loss receivables 124,342 - 124,342
Total $ 4,779,219 $ - $ 4,779,219
Governmental funds report deferred inflows of resources in connection with receivables for revenues
that are not considered to be available to liquidate liabilities of the current period. The following
identifies the components of deferred inflows of resources in the governmental funds:
Other
General Governmental
Fund Funds Total
Receivable type:
Real estate and personal property taxes $ 519,635 $ - $ 519,635
Tax liens and foreclosures 1,652,697 - 1,652,697
Motor vehicle and other excise taxes 530,998 - 530,998
Community preservation surcharges - 13,571 13,571
Ambulance fees - 675,416 675,416
Street betterments - 78,158 78,158
Leases 4,290,283 - 4,290,283
Intergovernmental 33,089 - 33,089
Total $ 7,026,702 $ 767,145 $ 7,793,847
Town of Canton, Massachusetts Page 58 of 127 Annual Comprehensive Financial ReportSource page 67
Leases Receivable
In fiscal year 2013, the Town entered into a lease for a photovoltaic electricity generating facility
on Town land. Under the lease, the tenant pays the Town an annual base rent of $300,000 which
increases annually by 2.5% for the initial term of twenty years. The tenant has the right to extend
the initial term for one five-year period. The lease receivable is measured as the present value of
the future minimum rent payments expected to be received during the lease term at a discount rate
of 2.11%. In fiscal year 2022, the Town recognized $288,632 of lease revenue and $85,265 of
interest revenue under the lease.
In fiscal year 2022, the Town entered into two leases for wireless communications equipment on
Town land. Under the leases, the tenants pay the Town annual base rents of $45,000 and $49,220
which increases annually by 2.5% and 2.0%, respectively, for the initial terms of five years. The
tenants have the right to extend the initial terms for three additional five-year periods. The lease
receivable is measured as the present value of the future minimum rent payments expected to be
received during the lease terms at a discount rate of 2.52%. In fiscal year 2022, the Town
recognized $56,429 of lease revenue and $29,495 of interest revenue under these leases.
C. Interfund Receivables, Payables and Transfers
The composition of interfund balances at June 30, 2022 is as follows:
Receivable Fund Payable Fund Amount
General Fund Nonmajor Governmental Funds - $ 756,550
Roadway Improvements
General Fund Nonmajor Governmental Funds -
Other Municipal Trust Funds 220,000
$ 976,550
The outstanding balances between funds result mainly from the timing difference between the
dates that (1) reimburseable expenditures occur, (2) the intergovernmental reimbursements are
received and (3) the payments to the general fund are made.
The composition of interfund transfers for the fiscal year ended June 30, 2022 is as follows:
Transfers In
Capital Nonmajor Water Sewer Rink
General Projects Governmental Enterprise Enterprise Enterprise
Transfers Out Fund Fund Funds Fund Fund Fund Total
General Fund $ - $ 150,001 $ 858,562 $ 1,035 $ 1,356 $ - $ 1,010,954 (1)
Capital Projects Fund 300,000 - - - - 204,000 504,000 (2)
Nonmajor Governmental Funds 1,567,957 - - - - - 1,567,957 (3)
Water Enterprise Fund - 610,025 - - - - 610,025 (4)
Sewer Enterprise Fund 10,204 - - - - - 10,204 (5)
Total $ 1,878,161 $ 760,026 $ 858,562 $ 1,035 $ 1,356 $ 204,000 $ 3,703,140
(1) Transfers to capital projects for roadway capital, transfers to nonmajor governmental funds for retirement buyback reserves, special
education and other purposes, transfers to water and sewer enterprise funds for salary increases.
(2) Transfers to general fund and rink enterprise fund to supplement building capital.
(3) Transfers to general fund to supplement operating budgets.
(4) Transfers to capital project funds for roadway capital.
(5) Transfers to general fund for debt service.
Town of Canton, Massachusetts Page 59 of 127 Annual Comprehensive Financial ReportSource page 68
D. Capital Assets
Capital asset activity for the year ended June 30, 2022, was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital assets not being depreciated:
Land $ 13,224,368 $ 1,086,575 $ - $ 14,310,943
Construction in process 110,267 1,046,637 (110,267) 1,046,637
Total capital assets not being depreciated 13,334,635 2,133,212 (110,267) 15,357,580
Capital assets being depreciated:
Land improvements 3,815,636 241,282 - 4,056,918
Buildings 87,995,131 2,138,291 - 90,133,422
Building improvements 33,797,961 - - 33,797,961
Machinery and equipment 12,642,194 442,082 - 13,084,276
Vehicles 8,118,550 166,109 - 8,284,659
Infrastructure 33,956,550 1,468,119 - 35,424,669
Total capital assets being depreciated 180,326,022 4,455,883 - 184,781,905
Less accumulated depreciation for:
Land improvements (2,501,001) (137,759) - (2,638,760)
Buildings (35,710,348) (2,038,270) - (37,748,618)
Building improvements (19,447,720) (1,254,377) - (20,702,097)
Machinery and equipment (8,287,514) (795,944) - (9,083,458)
Vehicles (6,310,669) (661,010) - (6,971,679)
Infrastructure (9,659,507) (890,666) - (10,550,173)
Total accumulated depreciation (81,916,759) (5,778,026) - (87,694,785)
Total capital assets being depreciated, net 98,409,263 (1,322,143) - 97,087,120
Total governmental activities capital assets, net $ 111,743,898 $ 811,069 $ (110,267) $ 112,444,700
Beginning Ending
Balance Increases Decreases Balance
Business-Type Activities:
Capital assets not being depreciated:
Land $ 624,852 $ - $ - $ 624,852
Construction in process 3,581,373 2,331,072 - 5,912,445
Total capital assets not being depreciated 4,206,225 2,331,072 - 6,537,297
Capital assets being depreciated:
Buildings 18,758,743 - - 18,758,743
Building improvements 10,944,884 - - 10,944,884
Machinery and equipment 3,231,985 520,638 - 3,752,623
Vehicles 1,204,120 - - 1,204,120
Infrastructure 59,752,427 2,314,688 - 62,067,115
Total capital assets being depreciated 93,892,159 2,835,326 - 96,727,485
Less accumulated depreciation for:
Buildings (6,512,953) (439,601) - (6,952,554)
Building improvements (218,381) (282,157) - (500,538)
Machinery and equipment (2,382,060) (241,444) - (2,623,504)
Vehicles (1,139,106) (34,914) - (1,174,020)
Infrastructure (33,028,795) (1,067,042) - (34,095,837)
Total accumulated depreciation (43,281,295) (2,065,158) - (45,346,453)
Total capital assets being depreciated, net 50,610,864 770,168 - 51,381,032
Total business-type activities capital assets, net $ 54,817,089 $ 3,101,240 $ - $ 57,918,329
Town of Canton, Massachusetts Page 60 of 127 Annual Comprehensive Financial ReportSource page 69
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities: Water
Capital assets not being depreciated:
Land $ 624,852 $ - $ - $ 624,852
Construction in process 3,581,373 2,331,072 - 5,912,445
Total capital assets not being depreciated 4,206,225 2,331,072 - 6,537,297
Capital assets being depreciated:
Buildings 17,495,139 - - 17,495,139
Building improvements 241,742 - - 241,742
Machinery and equipment 2,334,335 250,000 - 2,584,335
Vehicles 847,504 - - 847,504
Infrastructure 29,188,122 2,314,688 - 31,502,810
Total capital assets being depreciated 50,106,842 2,564,688 - 52,671,530
Less accumulated depreciation for:
Buildings (5,987,538) (408,011) - (6,395,549)
Building improvements (68,393) (12,087) - (80,480)
Machinery and equipment (1,795,859) (158,817) - (1,954,676)
Vehicles (782,490) (34,914) - (817,404)
Infrastructure (13,732,488) (575,632) - (14,308,120)
Total accumulated depreciation (22,366,768) (1,189,461) - (23,556,229)
Total capital assets being depreciated, net 27,740,074 1,375,227 - 29,115,301
Total Water capital assets, net $ 31,946,299 $ 3,706,299 $ - $ 35,652,598
Business-type Activities: Sewer
Capital assets being depreciated:
Buildings $ 1,263,604 $ - $ - $ 1,263,604
Buildings and improvements 99,685 - - 99,685
Machinery and equipment 726,491 270,638 - 997,129
Vehicles 356,616 - - 356,616
Infrastructure 30,564,305 - - 30,564,305
Total capital assets being depreciated 33,010,701 270,638 - 33,281,339
Less accumulated depreciation for:
Buildings (525,415) (31,590) - (557,005)
Buildings and improvements (17,445) (4,984) - (22,429)
Machinery and equipment (577,643) (65,511) - (643,154)
Vehicles (356,616) - - (356,616)
Infrastructure (19,296,307) (491,410) - (19,787,717)
Total accumulated depreciation (20,773,426) (593,495) - (21,366,921)
Total capital assets being depreciated, net 12,237,275 (322,857) - 11,914,418
Total Sewer capital assets, net $ 12,237,275 $ (322,857) $ - $ 11,914,418
Town of Canton, Massachusetts Page 61 of 127 Annual Comprehensive Financial ReportSource page 70
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities: Rink
Capital assets being depreciated:
Buildings $ 10,603,457 $ - $ - $ 10,603,457
Machinery and equipment 171,159 - - 171,159
Total capital assets being depreciated 10,774,616 - - 10,774,616
Less accumulated depreciation for:
Buildings (132,543) (265,086) - (397,629)
Machinery and equipment (8,558) (17,116) - (25,674)
Total accumulated depreciation (141,101) (282,202) - (423,303)
Total capital assets being depreciated, net 10,633,515 (282,202) - 10,351,313
Total Rink capital assets, net $ 10,633,515 $ (282,202) $ - $ 10,351,313
Depreciation expense was charged to functions/programs as follows:
Governmental Activities: Business-Type Activities:
General government $ 246,426 Water $ 1,189,461
Public safety 933,622 Sewer 593,495
Education 2,815,698 Rink 282,202
Public works 1,188,188 $ 2,065,158
Health and human services 85,423
Culture and recreation 508,669
$ 5,778,026
E. Temporary Debt
The Town is authorized to borrow on a temporary basis to fund the following:
Current Operating Costs – Prior to collection of revenues, expenditures may be financed through
the issuance of revenue or tax anticipation notes (RANS or TANS).
Capital Projects and Other Approved Costs – Projects may be temporarily funded through the
issuance of bond anticipation notes (BANS) or grant anticipation notes (GANS). In certain cases,
prior to the issuance of these temporary notes, the governing body must take the necessary legal
steps to authorize the issuance of the general obligation bonds. Temporary notes may not exceed
the aggregate amount of bonds authorized or the grant award amount.
Temporary notes are general obligations of the Town and carry maturity dates that are limited by
state law. Interest expenditures and expenses for temporary borrowings are accounted for in the
general fund and enterprise funds, respectively.
There was no temporary note activity during the fiscal year.
Town of Canton, Massachusetts Page 62 of 127 Annual Comprehensive Financial ReportSource page 71
F. Long–Term Obligations and Debt
The Town issues general obligation bonds and notes to provide funds for the acquisition and
construction of major capital facilities. General obligation bonds and notes have been issued for
both governmental and business-type activities. Additionally, the Town incurs various other
long-term obligations relative to associated personnel costs.
State law permits the Town, under the provisions of Chapter 44, Section 10, to authorize
indebtedness up to a limit of 5.0 percent of its equalized valuation. Debt issued in accordance
with this section of the law is designated as being “inside the debt limit.” In addition, the Town
may authorize debt in excess of that limit for specific purposes. Such debt, when issued, is
designated as being “outside the debt limit”.
The following reflects the current year activity in the long-term liability accounts:
Beginning Ending Due within
Balance Additions Deletions Balance one year
Governmental Activities:
General obligation bonds $ 24,925,800 $ 6,265,500 $ (3,885,100) $ 27,306,200 $ 3,984,900
Unamortized bond premium 1,901,130 584,771 (381,749) 2,104,152 388,746
Notes from direct borrowings and placements 248,091 - (7,722) 240,369 15,676
Compensated absences 2,318,340 545,176 (579,585) 2,283,931 570,983
Net pension liability 36,027,685 7,753,149 (17,754,108) 26,026,726 -
Net other postemployment benefits liability 83,877,180 21,525,075 (12,081,132) 93,321,123 -
Total Governmental Activities $ 149,298,226 $ 36,673,671 $ (34,689,396) $ 151,282,501 $ 4,960,305
Business-Type Activities - Water:
General obligation bonds $ 14,717,800 $ 8,079,500 $ (1,625,900) $ 21,171,400 $ 2,156,600
Unamortized bond premium 1,268,693 846,294 (246,043) 1,868,944 328,869
Notes from direct borrowings and placements 2,977,000 1,116,000 (419,000) 3,674,000 480,600
Compensated absences 129,726 53,717 (43,242) 140,201 35,050
Net pension liability 1,234,773 265,723 (608,485) 892,011 -
Net other postemployment benefits liability 2,063,654 529,589 (297,237) 2,296,006 -
Total Water 22,391,646 10,890,823 (3,239,907) 30,042,562 3,001,119
Business-Type Activities - Sewer:
General obligation bonds 1,734,400 - (294,000) 1,440,400 275,500
Unamortized bond premium 151,687 - (31,065) 120,622 27,016
Notes from direct borrowings and placements 2,127,665 44,588 (194,730) 1,977,523 202,985
Compensated absences 30,215 11,393 (10,072) 31,536 7,884
Net pension liability 984,741 211,917 (485,272) 711,386 -
Net other postemployment benefits liability 793,619 203,663 (114,308) 882,974 -
Total Sewer 5,822,327 471,561 (1,129,447) 5,164,441 513,385
Business-Type Activities - Rink:
General obligation bonds 1,857,000 - (50,000) 1,807,000 50,000
Unamortized bond premium 114,287 - (9,450) 104,837 9,049
Net pension liability 219,260 47,184 (108,048) 158,396 -
Net other postemployment benefits liability 134,418 34,495 (19,360) 149,553 -
Total Rink 2,324,965 81,679 (186,858) 2,219,786 59,049
Total Business-Type Activities $ 30,538,938 $ 11,444,063 $ (4,556,212) $ 37,426,789 $ 3,573,553
The governmental activities liabilities will be liquidated by the general fund. The business-type
liabilities will be liquidated by the enterprise fund reporting the liabilities.
Town of Canton, Massachusetts Page 63 of 127 Annual Comprehensive Financial ReportSource page 72
The following is a summary of outstanding long-term debt obligations as of June 30, 2022:
Interest Beginning Ending
Description of Issue Rate Balance Additions Maturities Balance
Governmental Activities:
General Obligation Bonds 2.00 - 5.00% $ 17,886,000 $ 6,265,500 $ (1,964,000) $ 22,187,500
General Obligation Refunding Bonds 2.00 - 4.00% 7,039,800 - (1,921,100) 5,118,700
Total General Obligation Bonds 24,925,800 6,265,500 (3,885,100) 27,306,200
Add: Unamortized bond premium 1,901,130 584,771 (381,749) 2,104,152
Total General Obligation Bonds, net 26,826,930 6,850,271 (4,266,849) 29,410,352
Massachusetts Clean Water Trust 2.00% 248,091 - (7,722) 240,369
Total notes from direct borrowings and placements 248,091 - (7,722) 240,369
Total Governmental Activities debt $ 27,075,021 $ 6,850,271 $ (4,274,571) $ 29,650,721
Business-Type Activities - Water:
General Obligation Bonds 2.00 - 5.00% $ 5,615,000 $ 8,079,500 $ (623,000) $ 13,071,500
General Obligation Refunding Bonds 3.25 - 4.00% 9,102,800 - (1,002,900) 8,099,900
Total General Obligation Bonds 14,717,800 8,079,500 (1,625,900) 21,171,400
Add: Unamortized bond premium 1,268,693 846,294 (246,043) 1,868,944
Total General Obligation Bonds, net 15,986,493 8,925,794 (1,871,943) 23,040,344
Massachusetts Water Resource Authority 0.00% 2,977,000 1,116,000 (419,000) 3,674,000
Total notes from direct borrowings and placements 2,977,000 1,116,000 (419,000) 3,674,000
Total Water debt $ 18,963,493 $ 10,041,794 $ (2,290,943) $ 26,714,344
Business-Type Activities - Sewer:
General Obligation Bonds 2.00 - 5.00% $ 493,000 $ - $ (127,000) $ 366,000
General Obligation Refunding Bonds 3.25 - 4.00% 1,241,400 - (167,000) 1,074,400
Total General Obligation Bonds 1,734,400 - (294,000) 1,440,400
Add: Unamortized bond premium 151,687 - (31,065) 120,622
Total General Obligation Bonds, net 1,886,087 - (325,065) 1,561,022
Massachusetts Water Resource Authority 0.00% 68,150 44,588 (6,815) 105,923
Massachusetts Clean Water Trust 2.00% 2,059,515 - (187,915) 1,871,600
Total notes from direct borrowings and placements 2,127,665 44,588 (194,730) 1,977,523
Total Sewer debt $ 4,013,752 $ 44,588 $ (519,795) $ 3,538,545
Business-Type Activities - Rink:
General Obligation Bonds 2.5 - 5.0% $ 1,857,000 $ - $ (50,000) $ 1,807,000
Total General Obligation Bonds 1,857,000 - (50,000) 1,807,000
Add: Unamortized bond premium 114,287 - (9,450) 104,837
Total Rink Debt $ 1,971,287 $ - $ (59,450) $ 1,911,837
Total Business-Type Activities, net $ 24,948,532 $ 10,086,382 $ (2,870,188) $ 32,164,726
Town of Canton, Massachusetts Page 64 of 127 Annual Comprehensive Financial ReportSource page 73
Payments on outstanding bond balances due in future years consist of the following:
Direct Borrowings
Year Ending General Obligation Bonds and Placements
June 30 Principal Interest Principal Interest
Governmental Activities
2023 $ 3,984,900 $ 1,004,704 $ 15,676 $ 4,730
2024 3,326,900 839,732 15,991 4,414
2025 2,724,400 710,340 16,311 4,093
2026 2,473,000 597,160 16,641 3,765
2027 2,232,000 496,955 16,974 3,431
2028-2032 6,647,000 1,390,226 90,130 11,897
2033-2037 3,905,000 562,865 68,646 2,773
2038-2042 2,013,000 135,711 - -
Total $ 27,306,200 $ 5,737,692 $ 240,369 $ 35,103
Business-Type Activities - Water
2023 $ 2,156,600 $ 789,333 $ 480,600 $ -
2024 2,207,900 701,169 480,600 -
2025 2,070,900 608,749 371,600 -
2026 1,852,000 519,233 371,600 -
2027 1,796,000 444,940 371,600 -
2028-2032 7,388,000 1,181,019 1,598,000 -
2033-2037 2,310,000 353,941 - -
2038-2042 1,390,000 110,349 - -
Total $ 21,171,400 $ 4,708,732 $ 3,674,000 $ -
Business-Type Activities - Sewer
2023 $ 275,500 $ 47,385 $ 202,985 $ 35,515
2024 275,200 37,996 206,858 31,642
2025 199,700 29,881 210,809 27,691
2026 147,000 23,630 214,840 23,660
2027 88,000 18,930 218,953 19,547
2028-2032 455,000 35,460 923,078 35,378
Total $ 1,440,400 $ 193,282 $ 1,977,523 $ 173,433
Business-Type Activities: Rink
2023 $ 50,000 $ 56,351 $ - $ -
2024 53,000 53,701 - -
2025 55,000 51,201 - -
2026 58,000 48,451 - -
2027 64,000 45,551 - -
2028-2032 355,000 181,026 - -
2033-2037 410,000 125,386 - -
2038-2042 462,000 75,433 - -
2043-2045 300,000 15,750 - -
Total $ 1,807,000 $ 652,851 $ - $ -
Town of Canton, Massachusetts Page 65 of 127 Annual Comprehensive Financial ReportSource page 74
Massachusetts Water Resource Authority (MWRA)
The Town’s has five outstanding notes from direct borrowings and placements issued to the
MWRA on August 19, 2013, August 24, 2020, January 25, 2021, August 15, 2021 and April 15,
2022 for $1,090,000, $2,600,000, $68,150, $1,116,000 and $44,588, respectively. The notes are
payable without interest in ten equal installments. Any imputed interest is immaterial to the water
and sewer enterprise funds.
Massachusetts Clean Water Trust (MCWT)
The Town’s has an outstanding note from direct borrowings and placements issued to the MCWT
under the Commonwealth’s Dam and Seawall Repair and Removal Fund. The note was issued on
February 24, 2015, payable at a 2% interest rate with payments through March 6, 2035.
The Town’s has an outstanding note from direct borrowings and placements issued to the MCWT
under its State Revolving Loan Fund for $3,745,695 with interest payable at 2% and payments
through July 15, 2030. The financing agreement with the MCWT contain a provision that in the
event of default, outstanding amounts due and payable shall be paid from any undisbursed
proceeds on account or be deducted from any state local aid distributions owed to the Town. This
provision also allows the MCWT to declare the entire outstanding principal amount due
immediately.
The following represents authorized and unissued debt as of June 30, 2022:
Project Amount
Governmental:
Building improvements $ 570,000
Departmental equipment 581,000
District improvements 8,847,000
Other capital projects 315,000
Business-type:
Water projects 6,049,000
Sewer projects 547,603
Total Authorized and Unissued $ 16,909,603
III. Other Information
A. Retirement System
Retirement System Description – The Town contributes to the Norfolk County Retirement System
(the “System”), a cost-sharing multiple-employer defined benefit pension plan. The System was
established under Chapter 32 of the Commonwealth of Massachusetts General Laws (MGL) and
is administered by Norfolk County Retirement Board (the “Board”). Standalone audited financial
statements for the year ended December 31, 2021 were issued and are available at the Norfolk
County Retirement System, 480 Neponset Street, Canton, MA 02021.
The System provides retirement, disability and death benefits to plan members and beneficiaries.
Chapter 32 of the MGL assigns authority to establish and amend benefit provisions of the plan.
Town of Canton, Massachusetts Page 66 of 127 Annual Comprehensive Financial ReportSource page 75
Cost-of-living adjustments granted between 1981 and 1997 and any increase in other benefits
imposed by the Commonwealth’s state law during those years are borne by the Commonwealth
and are deposited into the pension fund directly. Cost-of-living adjustments granted after 1997
must be approved by the Board and are borne by the System.
Contributions Requirements – The System has elected provisions of Chapter 32, Section 22D (as
amended) of Massachusetts General Laws, which require that a funding schedule be established
to fully fund the pension plan by June 30, 2040. Under provisions of this law, participating
employers are assessed their share of the total retirement cost based on the entry age, normal
actuarial cost method. The Town contributed $6,460,105 to the System in fiscal year 2022,
which equaled the actuarially-determined contribution requirement for the fiscal year.
Net Pension Liability – At June 30, 2022, the Town reported a liability of $27,788,518 for its
proportionate share of the net pension liability. The net pension liability was measured as of
December 31, 2021 and the total pension liability used to calculate the net pension liability was
determined by an actuarial valuation as of January 1, 2022. There were no material changes to
the System’s benefit terms since the previous actuarial valuation.
The Town’s proportion of the net pension liability is based on a projection of the Town’s long-
term share of contributions to the System relative to the projected contributions of all employers.
The Town’s proportion was approximately 7.54% at December 31, 2021, which was consistent
with the prior valuation.
Fiduciary Net Position –The System’s fiduciary net position was determined using the accrual
basis of accounting. The System’s accounting records are maintained on a calendar-year basis in
accordance with the standards and procedures established by PERAC. Contributions from
employers and employees are recognized in the period in which they become due pursuant to
formal commitments, statutory or contractual requirements. Benefit payments (including refunds
of employee contributions) are recorded when incurred, regardless of the timing of payment.
Investments are reported at fair value; fair value is determined as the price one would receive in
an orderly transaction between market participants at a measurement date.
Pension Expense – The Town recognized $1,980,172 in pension expense in the statement of
activities in fiscal year 2022; which was allocated to all functional expenses that applied.
Deferred Outflows of Resources and Deferred Inflows of Resources – At June 30, 2022, the
Town reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Town of Canton, Massachusetts Page 67 of 127 Annual Comprehensive Financial ReportSource page 76
Deferred Outflows Deferred Inflows
of Resources of Resources
Net differences between projected and
actual earnings on pension plan investments $ - $ 10,281,812
Differences between expected and
actual experience 2,810,782 -
Changes in proportion and differences
between Town contributions and
proportionate share of contributions 96,994 -
Total $ 2,907,776 $ 10,281,812
The deferred outflows of resources and deferred inflows of resources are expected to be
recognized in the Town’s pension expense as follows:
Year ended June 30,
2022 $ (491,508)
2023 (3,057,234)
2024 (1,929,212)
2025 (1,896,082)
Total $ (7,374,036)
Actuarial Valuation – The measurement of the System’s total pension liability is developed by an
independent actuary. The latest actuarial valuation was performed as of January 1, 2022. The
significant actuarial assumptions used in the actuarial valuation included:
Actuarial cost method Individual entry age normal
Investment rate of return 7.75%
Projected salary increases 3.5% - 5.5%
Inflation 3.00%
Cost of living adjustments 3.0% of the first $18,000 of retirement income
Asset valuation method Market value
Mortality rates: The RP-2014 Blue Collar Mortality with Scale
MP-2014, fully generational
The investment rate of return assumption is a long-term assumption and is based on capital
market expectations by asset class, historical returns and professional judgment. The market
expectations analysis used a building-block approach, which included expected returns by asset
class and the target asset allocation. The target allocation and best estimates of arithmetic real
returns for each major asset class are summarized in the following table:
Town of Canton, Massachusetts Page 68 of 127 Annual Comprehensive Financial ReportSource page 77
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Domestic equity 30.5% 7.0%
International equity 15.5% 7.7%
Fixed income 20.5% 4.3%
Real estate 9.5% 6.9%
Private equity 10.0% 9.4%
Hedge funds 11.5% 8.6%
Real assets 2.5% 8.9%
The System’s investment policy’s total, blended expected rate of return seeks to meet or exceed
the assumed actuarial rate of return.
Discount Rate – The discount rate used to measure the total pension liability in the January 1,
2022 actuarial valuation report was 7.75%, which was consistent with the previous actuarial
valuation. The projection of cash flows used to determine the discount rate assumed plan
member contributions were made at the current contribution rate and that employer contributions
will be made at rates equal to the actuarially-determined contribution rates and the member rate.
Based on those assumptions, the System’s fiduciary net position was projected to be available to
make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
Sensitivity Analysis – The following presents the Town’s proportionate share of the net pension
liability calculated using the discount rate of 7.75% as well as the Town’s proportionate share of
the net pension liability using a discount rate that is one percentage point lower or one percentage
point higher than the current rate:
Current
1% Decrease Discount 1% Increase
(6.75%) (7.75%) (8.75%)
Town's proportionate share
of net pension liability $ 41,894,482 $ 27,788,518 $ 15,800,656
B. Massachusetts Teachers’ Retirement System
Teachers and certain administrative employees of the School Department participate in the
Massachusetts Teachers’ Retirement System (“MTRS”), a cost-sharing multiple employer
defined benefit pension plan. The MTRS is managed by the Commonwealth on behalf of
municipal teachers and municipal teacher retirees. Like the System, MTRS was established
under Chapter 32 of Massachusetts General Laws. The Commonwealth’s legislature has the
authority to amend or modify the MTRS’s funding policies.
The Commonwealth is a nonemployer contributor to the MTRS and is legally responsible by
statute for all actuarially determined employer contributions and future benefit requirements of
Town of Canton, Massachusetts Page 69 of 127 Annual Comprehensive Financial ReportSource page 78
the MTRS. Therefore, the Town is considered to be in a special funding situation as defined by
GASB Statement No. 68, Accounting and Financial Reporting for Pensions.
For the year ended June 30, 2022, the Commonwealth contributed $6,686,109 to the MTRS on
behalf of the Town. The Town’s proportionate share of the collective MTRS net pension liability
at this reporting date was 0.382395%, which was based on the actual, actuarially determined
contribution made by the Commonwealth on behalf of the Town as a percentage of the total
annual contribution made by the Commonwealth on behalf of all employers.
The table below presents the Town’s proportionate share of the following:
Paid (or assumed)
Commonwealth On Behalf Town
Portion of the Town Portion
Net pension liability $ 86,829,924 $ (86,829,924) $ -
Pension expense 6,967,740 (6,967,740) -
In addition to pension expense reported as previously discussed, the Town has recognized
intergovernmental revenue and pension expense of $6,967,740 associated with this arrangement.
C. Other Postemployment Benefits (OPEB)
The Town administers a single employer defined benefit healthcare plan (the “OPEB Plan”). The
OPEB Plan provides health, dental and life insurance benefits (other postemployment benefits) to
current and future retirees, their dependents and beneficiaries in accordance with Section 20 of
Massachusetts General Law Chapter 32B.
Specific benefit provisions and contribution rates are established by collective bargaining
agreements, state law and Town ordinance. All benefits are provided through the Town’s
premium-based insurance program. The OPEB Plan does not issue a stand-alone financial report
and is presented as a fiduciary fund in the Town’s financial statements.
With respect to OPEB plan reporting, GASB issued GASB Statement No.’s 74, Financial
Reporting for Postemployment Benefit Plans Other Than Pensions, and Statement No, 75,
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.
Reporting requirements for governments who administer an OPEB plan as defined under the
accounting standard are required to present disclosures under both GASB 74 and GASB 75.
GASB 74 requires specific disclosures and required supplementary information that relate
directly to the fiduciary fund in which the OPEB Plan is recorded. GASB 75 address disclosures
related to the net OPEB liability required to be recorded by the government in its applicable
financial statements. A number of these disclosures are identical, especially if the measurement
date under GASB 75 is the same as the plan year-end date. When a different measurement date is
used different assumptions and calculations will result.
For the year ended June 30, 2022, the Town elected to use a measurement date that was the same
as the plan year-end date thus the majority of the same disclosures are used and will not be
repeated.
Town of Canton, Massachusetts Page 70 of 127 Annual Comprehensive Financial ReportSource page 79
GASB Statement No. 75
OPEB Plan disclosures that impact the Town’s net OPEB liability using a measurement date of
June 30, 2022 are summarized as follows:
Employees Covered by Benefit Terms – The following employees were covered by the benefit
terms as of June 30, 2022:
Active employees 679
Inactive employees 617
Total 1,296
Contributions – The contribution requirements of OPEB Plan members and the Town are
established and may be amended by the Town. Retirees contribute 25% of the set premium for
medical, dental and life insurance plans. The remainder of the cost is funded by general revenues
of the Town. The Town currently contributes enough money to the Plan to satisfy current
obligations on a pay-as-you-go basis. The costs of administering the OPEB Plan are paid by the
Town. For the year ended June 30, 2022, the Town’s average contribution rate was 9.9% of
covered payroll.
Net OPEB Liability – The Town’s net OPEB liability was measured as of June 30, 2022 using an
actuarial valuation as of July 1, 2020. The components of the net OPEB liability of the Town as
of June 30, 2022 were as follows:
Total OPEB liability $ 105,269,904
Plan fiduciary net position (8,620,248)
Net OPEB liability $ 96,649,656
Plan fiduciary net position as
a percentage of the total
OPEB liability 8.2%
The total OPEB liability in the most recent actuarial valuation was determined using the
following key actuarial assumptions applied to all periods included in the measurement, unless
otherwise specified:
Town of Canton, Massachusetts Page 71 of 127 Annual Comprehensive Financial ReportSource page 80
Investment rate of return 5.88%, net of OPEB plan investment expense,
including inflation.
Muncipal bond rate 4.09% as of June 30, 2022
Discount Rate 5.83%, net of OPEB plan investment expense
including inflation.
Inflation 2.50% annually as of June 30, 2022 and for future periods
Health Care Trend Rate 4.5%
Salary Increases 3.00% annually as of June 30, 2022 and for future periods
Cost of Living Adjustment Not applicable.
Pre-Retirement Mortality RP-2014 Mortality Table for Blue Collar Employees projected
generationally with scale MP-2016, set forward one year
for females
Post-Retirement Mortality RP-2014 Mortality Table for Blue Collar Healthy Annuitants
projected generationally with scale MP-2016, set forward one
year for females
Disabled Mortality RP-2014 Mortality Table for Blue Collar Healthy Annuitants
projected generationally with scale MP-2016, set forward one
year
Actuarial Cost Method Individual entry age normal
Key assumption changes effective Fiscal Year ending June 30, 2022
Single Equivalent Discount Rate 5.83% previously 6.25%
Long Term Expected Rate of Return – The long-term expected rate of return on OPEB 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 OPEB 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.
The target allocation and best estimates of arithmetic real rates of return were as reflected in the
following table:
Town of Canton, Massachusetts Page 72 of 127 Annual Comprehensive Financial Report