Canton, Massachusetts · Saved source text
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Source page 81
MBTA commuter rail trains on the Providence/Stoughton Line pass through Canton. Some stop at Canton
Junction. This line crosses the Neponset River on the Canton Viaduct, a prominent local landmark. Route
128 Station in neighboring Westwood also carries many Canton commuters into Boston. Amtrak trains
(including the Acela Express high-speed trains) also stop at Route 128, but pass through Canton without
stopping. Another line branches into Stoughton, stopping at Canton Center.
Bus service is available to Mattapan Station in the MBTA system, and Canton’s close proximity to
Boston also places it within a reasonable distance from Logan International Airport, the largest
transportation center in New England.
The Town has a rich and varied industrial heritage, serving as the location of Paul Revere’s copper rolling
mills in post-Colonial times, and as the site of woolen manufacturing in more recent times. Present
commercial enterprises play a key role in the Town’s fiscal stability and are considered a major asset to
the community. The prime commercial areas are well located so as to allow direct highway access
without affecting the community’s small town charm.
Many of the Town’s lakes, ponds and wetlands have been protected and preserved for present enjoyment
and future generations. Among the protected areas are the Eleanor Cabot Bradley Reservation, an 82 acre
estate that blends open fields, woodlands and gardens in the shadow of Great Blue Hill and Pequitside
Farm, a town-owned 38 acre conservation and recreation area which offers playing fields, picnicking,
hiking and cross country skiing.
The Town offers a full range of traditional municipal services including police and fire protection,
ambulance and rescue services, education, maintenance of streets and infrastructure, solid waste
collection and disposal, health and human services, cultural and recreational, administrative and financial
services. The Town is a member community of the Massachusetts Water Resources Authority (MWRA)
for its water and sewer services.
Canton prides itself on its quality school system. Canton students consistently perform well on national
and state tests and over 90% of students
graduating from the high school go on to
higher education. The Town is the location
of the Blue Hills Regional Technical School
which provides expanded vocational
education opportunities for high school
students of Canton and eight other area
communities. Canton is also home to one
of the two campuses of Massasoit
Community College. The campus is a
multi-level facility with specialized labs and
art studios that support the technical and
visual arts programs of the College. The
campus also includes the Milton Art
Museum, Akillian Gallery and the College’s Professional Development Center.
An elected, five-member School Committee appoints a School Superintendent who administers the public
school system of the Town. School Committee members, like the Selectmen, are elected at-large to three-
year staggered terms.
Town of Canton, Massachusetts B-3 Comprehensive Annual Financial ReportSource page 82
Almost a decade ago, the Town reached its 10% affordable housing requirement mandated by the
Commonwealth of Massachusetts (Commonwealth), which is an important milestone as communities
under the 10% threshold are subject to an appeals process that can overturn local zoning board decisions.
This has allowed the Town to maintain its commitment to developing much needed affordable housing
units in areas of the Town that can accommodate the growth.
The Town operates under the Selectmen, Town Administrator, and Open Town Meeting form of
government. The five elected Selectmen make policy
decisions, and the Town Administrator is responsible
for carrying out the policies of the Selectmen and for
managing the day-to-day operations of the Town.
The policies and procedures of the Board of
Selectmen are detailed in the administrative code that
will continue to evolve and be created over time to
best serve the community.
An annual operating budget is approved by Town
Meeting two months prior to the start of the fiscal
year. This annual budget serves as the foundation for
the Town’s financial planning and control. The
budget is prepared by fund, function (e.g. general government) and department (e.g. finance) allowing the
department heads to allocate resources within the department as they see fit. Transfers between
departments, however, need special approval by Town Meeting unless specifically exempted by state
statute.
Factors Affecting Economic Condition
Canton continues to take a pro-active approach encouraging well planned economic development. The
Town fully appreciates the significance of commercial and industrial growth and development (and
redevelopment) especially in terms of long term fiscal stability. The Town continues its focus on future
growth, which is sustainable and “complimentary” for economic development including employment
opportunities for our residents.
Municipal officials continue to work closely with and receive valuable support from the State Office of
Business Development as well as regional planning support from the Metropolitan Area Planning Council
(MAPC). In addition business advocacy organizations, such as Canton Association of Business and
Industry (CABI) play a vital role. The Town strives to take full advantage of the latest initiatives and
incentives made available to it notably under Chapter 43D for expedited permit approvals and Tax
Incremental Financing (TIF).
The Town’s Economic Development Committee (EDC) is also a special resource. The Town regularly
takes advantage of local talent from the community who specialize in finance, banking, development and
real estate.
The Town continues to update and publish an economic development recruitment guide which includes
pertinent information sought by private company CEO’s when making siting and expansion decisions.
Recently, the Board of Selectmen published a new business and community guide and has made that
information available online as well.
As previously discussed, the Town surpassed its required 10% affordable housing goal as required by
State regulation. The Town has incorporated a continued affordable housing unit goal, within the Housing
Town of Canton, Massachusetts B-4 Comprehensive Annual Financial ReportSource page 83
Action Plan, to ensure the Town keeps pace with any new market rate unit starts. Recently the
construction by Avalon Development of additional affordable housing on Randolph Street has further
increased the Town’s 40B compliance.
The Town’s commitment to sound economic development is further demonstrated by creating
partnerships with MAPC and the Neponset Valley Chamber of Commerce to ensure that the coordination
and resource allocation on key planning issues facing the Town. The Town reactivated the Economic
Development Committee and created, with Town Meeting, the Permit Advisory Committee both of
which provide technical assistance to new businesses to Canton.
The Town has instituted a Google-based web search device, which identifies Canton as a business
friendly community. The web product highlights, via a series of videos, the Town of Canton as a solid
and desirable business and family destination. The Town’s continued status as a 43D Expedited
Permitting Community has benefitted the Town greatly and has led to the actual designation of many new
priority development sites. This 43D designation, which was granted to the Town in 2008, came with a
$150,000 grant to hire a permit specialist who has completed the administrative and organizational work
necessary to implement the issuance of permits via an integrated and automated town wide permit system
which better serves the public and the Town in terms of real time tracking of permits.
The Town has available a permit guidebook, which lays out the Town’s permitting requirements in an
easy to use format. The goal is to identify key requirements and improve communications, saving
applicants time and money. The Permit Advisory Committee has been a successful endeavor by bringing
together key permit granting agency representatives to counsel and guide any proponent of a proposed
commercial endeavor. Participation and results continue to be overwhelmingly positive. The Town has
also published a Tax Incremental Financing Evaluation Policy document designed to provide a rational
and consistent intake evaluation of TIF requests. The new approach allows the Town to quantify and
better evaluate any request to reduce taxes for a business seeking to locate or expand. Also, the Town
launched a Payment in Lieu of Taxes Program (PILOT) that encourages non-taxable property owners to
voluntarily participate in the support of public services.
The Town has completed
construction of the
downtown revitalization
project commonly referred
to as the Streetscape
Improvement Project. This
work was funded as a result
of a $2.6 million dollar
Commonwealth grant
received due to the Town’s
Smart Growth efforts and
rezoning of the Downtown.
In addition, the Town
completed safety and
efficiency improvement work on two key intersections ($2.2 million-dollar Commonwealth grant) located
in the heart of the Route 138 business district. These intersections are located at the Randolph and
Washington Street Intersections with Route 138. These projects have improved both the safety and
efficiency of this commercial roadway. The Board of Selectmen has also empanelled a multi-disciplined
group of volunteers who have completed a visioning process which has led to a variety of re-zoning
Town of Canton, Massachusetts B-5 Comprehensive Annual Financial ReportSource page 84
recommendations with a goal of improving the business climate and enhance zoning flexibility to spur
additional economic development potential along this vital commercial roadway.
The Town was also a participant in a regional planning study to evaluate the effects of new growth in
both residential and commercial construction. The study’s focus was to identify growth related problems
such as transportation, infrastructure, environmental, and economic development issues. In addition, a
build-out analysis was completed to assist and improve public policy decision-making with regard to
growth and development related to educational planning. These studies have been coordinated with other
immediate area communities.
The Town is in the process of evaluating the opportunities and or impacts of the South Coast Rail Project
which is advancing through preliminary and environmental design. The State initiative would provide rail
service from Boston to Fall River/New Bedford via a route now determined by the State, known as the
Stoughton Alternative, which will include impacts in Canton.
In 2010 the Town received a MORE grant in the amount of $850,000 and completed infrastructure
improvements along Dan Road, an important commercial area of Town. After much effort, the Town
secured the commitment of
Organogenesis, a bio tech firm, now
located on Dan Road, which was
contemplating relocation. The
Company’s commitment to stay in
Canton and expand was an important
part of the Town’s success in obtaining
this new funding.
Canton’s Master Plan Initiative
required a careful review and analysis
of existing conditions balanced with a
vision for the future. The work program
is designed to enlist public interest and
participation in shaping the Town’s
future. Workshops, neighborhood meetings, leadership interviews and community surveys were
conducted. The Town has conducted an extensive public outreach campaign to better assure good
attendance at workshops and neighborhood focus groups.
Existing planning, engineering reports and documents have been reviewed and a written report, which
summarizes their major issues and relevant recommendations were prepared and remains available. The
overall objective of the Master Plan initiative was to develop a sustainable residential and business
development strategy for the Town.
Brightview Canton recently opened its community of 160 apartment homes for seniors which includes
independent living, dedicated assisted living and a specialized program and environment for people living
with Alzheimer’s and other forms of dementia.
This added to existing residential developments such as Windsor Woods, Indian Woods, Pequit View and
Blue Hill Commons; and provide a nice compliment to commercial developments such as Dunkin Brands
with their worldwide corporate headquarters along with other top Canton companies such as Meditech,
Boston Mutual, Computershare, LoJack and Pepsi.
Town of Canton, Massachusetts B-6 Comprehensive Annual Financial ReportSource page 85
There has been increased activity on the development side in the last twelve months. This includes the
sale and redevelopment of the old Reebok site. In the fall of 2017, Reebok moved to Boston from its
decades old home in Canton. Spear Street Capital, an
owner and operator of distinctive office properties,
became the new owner.
The world-class campus includes a 518,000 square foot
main building along with three support buildings, two
parking structures, a childcare center and a host of fitness
amenities, including an Olympic track, basketball courts,
tennis courts and a softball field.
In addition, the following private developments were completed during fiscal year 2018 or nearing
completion:
Development projects recently completed or near completion
Name Description Completion Amount
Reiser Corporation Food equipment manufacturer Fall 2017 $ 5,134,000
Grimes Crossing Residential development Winter 2017 2,726,000
Royall Development Hotel/restaurant Fall 2019 19,200,000
Plymouth Rubber Residential development On-going 5,400,000
$ 32,460,000
In 2012 Town entered into a long-term lease of its capped landfill to be used by a private entity to install
solar panels on fifteen acres of the site at no cost to Canton. The lease provides the Town with guaranteed
payments of $20,000 per acre, per year, increasing annually by 2.5%, while allowing the Town the ability
to purchase all the electricity generated by this 5.6-megawatt facility at a substantial savings.
The Pine Street Solar Facility went online August 15, 2012 (one of the largest in the Northeast) and has
produced the following financial benefits:
• The 37 million kwh of solar electricity produced by this facility since its inception have resulted
in $7.1 million of net metering credits which exceeded the $6.2 million paid for generating this
solar power.
• The Town has received lease payments totaling $1.9 million over the last 6 years.
• Overall, the Town has received an annual financial benefit from this solar facility which has
helped in balancing the Town’s budget along with increasing free cash reserves as follows:
Fiscal Year 2013 - $303,519
Fiscal Year 2014 - $413,585
Fiscal Year 2015 - $498,069
Fiscal Year 2016 - $556,205
Fiscal Year 2017 - $461,428
Fiscal Year 2018 - $507,845
Town of Canton, Massachusetts B-7 Comprehensive Annual Financial ReportSource page 86
In summary, Town leaders recognize the importance of maintaining a stable tax situation for its residents.
Development on the commercial side helps accomplish this goal and the Town continues to seek out the
means to maintain vigilance in this area.
Property Taxes The growth of the Town’s main source of revenues, property taxes, is capped by
Proposition 2 ½ and can only be overridden through a ballot by the voters. While revenue increases have
been limited in recent years, fixed costs, including health insurance and pension costs, have increased
more proportionally. As a result, balancing the annual budget is a challenge without an appropriation
from free cash. The Town attempts to mitigate this impact by conservatively forecasting revenues thus
creating free cash in the subsequent year.
Several years ago, the Town’s management made the difficult choice to cut services and raise fees in
order to balance the budget. With more cuts looming in future years, the Town’s voters approved a $4.5
million Proposition 2 ½ tax override for fiscal year 2009 that allowed for the restoration of most of the
budget cuts from the prior years. The tax override was planned to be phased in over a three year period
with an annual cost to the average residential homeowner of $450.
In addition, effective fiscal year 2013, the Town negotiated changes to its health insurance plans that
required higher out of pocket costs from its employees and retirees but stabilized rates. These initiatives
have allowed the Town to maintain a consistent level of reserves from year to year and continue to make
contributions to its OPEB Trust Fund.
The Town’s available reserves
on a GAAP basis represent the
amount in unassigned fund
balance. As discussed
previously, the Town’s
reserves have been increasing
on an annual basis since the
stabilization of the recession in
2011. This has been a direct
result of the initiatives
implemented by management
as discussed in the previous
paragraph.
These strong reserve levels,
when combined with the Town’s strong management practices, desirable location in a strong metropolitan
statistical area, assessed valuations and strong wealth factors directly contributed to an upgrade in the
Town’s bond rating to ‘AAA’. This is the highest investment grade possible. The override and the
resulting revenue flexibility to restore lost services and stabilize budgets in future fiscal years were cited
as prominent factors in the upgrade. The Town is committed to maintaining its reserves at a level
expected from communities that engender the highest bond rating.
Long-term Financial Planning
Several years ago, the Town implemented a policy of preparing rolling projections. The Town believes
this will provide better insight when preparing annual budgets and will also alert the Town to any
potential budgeting issues far ahead of when these situations become real issues.
Town of Canton, Massachusetts B-8 Comprehensive Annual Financial ReportSource page 87
The following represents the Town’s summarized budgets for each of the next five years:
2019 2020 2021 2022 2023
Revenues and Other Sources
Real Estate and Personal Property Taxes $ 76,404,693 $ 78,991,929 $ 81,678,565 $ 84,421,375 $ 87,104,368
State Aid 9,151,607 9,151,607 9,151,607 8,729,575 8,729,575
Local Receipts 6,944,311 6,778,804 6,785,025 6,791,400 6,797,935
Transfers and Other Sources 2,626,374 2,579,728 2,608,438 2,583,175 2,616,629
Total Revenues 95,126,985 97,502,068 100,223,635 102,525,525 105,248,507
Expenditures and Other Uses
Education Budget 42,396,405 43,658,964 45,179,915 46,837,132 48,614,414
Municipal Budget 20,876,402 21,465,259 22,213,045 23,027,829 23,901,643
Fixed Costs 28,860,936 29,689,768 30,112,895 29,812,340 29,753,022
State and County Charges 1,182,721 1,188,077 1,217,780 1,248,224 1,279,428
Capital costs 2,654,000 1,500,000 1,500,000 1,600,000 1,700,000
Total Expenditures 95,970,464 97,502,068 100,223,635 102,525,525 105,248,507
Surplus/(Deficit) $ (843,479) $ - $ - $ - $ -
Capital Improvements and Financing
The Town continues to invest in infrastructure improvements such as roads, sewers, and water supply
facilities, as well as various municipal and school facility upgrades. These include: Town Hall, Library,
Public Safety facilities, Public Works, Recreational facilities and School building improvement projects.
In addition, the Town has completed the construction of two new water filtration plants. These water
filtration plants will provide state of the art water filtration capabilities and allow for the use of local
source water to reduce operating costs, improve water availability (including redundancy) and filtrate
water for customers with the most technologically advanced system available today.
Recently the Town completed renovations of a former Knights of Columbus Hall and turned it into the
new Senior Center located at 500 Pleasant Street to address the growing, aging population in need of
expanded and updated senior services.
In addition the Town completed repairs to Shepard Pond dam which was classified by the state as being a
Significant Hazard Dam in poor condition. To help fund this repair project, the Town received a grant
award of $665,000 from the Commonwealth and a $335,000 low interest loan from the Executive Office
of Environmental Affairs.
Construction of an eight classroom addition to the Lt. Peter M. Hansen Elementary School was also
completed recently. This addition has alleviated increasing enrollment concerns while enabling more
children to attend an elementary school in their neighborhood.
As part of the annual budget process, the Capital Planning Committee (CPC) recommends the capital
budget for the upcoming year and prepares a five-year plan to address the long-term capital needs of the
Town. The capital spending plan for the five-year period from fiscal year 2019 through fiscal year 2023
has an estimated cost of $26.2 million, with $9.3 million to be funded from estimated revenues with the
remainder to be funded from the issuance of bonds. The CPC’s capital plan has allocated $6.9 million
for municipal departments, $7.1 million for the school department, $8.4 million for the water enterprise
fund, and $3.8 million for the sewer enterprise fund.
Town of Canton, Massachusetts B-9 Comprehensive Annual Financial ReportSource page 88
The Town’s target set aside to finance its capital plan is 5% to 6% of recurring revenues. A portion of its
annual capital plan funds smaller capital projects on a pay-as-you-go basis through recurring revenues
while larger capital projects are financed through borrowing.
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awards a
Certificate of Achievement for Excellence in Financial Reporting. This is a very prestigious award and
in order to be awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized comprehensive annual financial report. This report must satisfy both generally
accepted accounting principles and applicable legal requirements.
The GFOA awarded this Certificate of Achievement for Excellence in Financial Reporting to the
Town of Canton for its comprehensive annual financial report for the fiscal year ended June 30,
2017. This was the twelfth year that the Town has achieved this prestigious award.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report will meet the Certificate of Achievement Program’s requirements,
and we are submitting it to the GFOA to determine its eligibility for this certificate.
The publication of this CAFR represents an important achievement in the ability of the Town of Canton
to provide enhanced financial information and accountability to its citizens, elected and appointed
officials, and investors. The preparation of this report would not have been possible without the efficient
and dedicated services of the entire staff of the Finance Office.
Special thanks also go to the certified public accounting firm of Roselli, Clark and Associates for their
advice and assistance in the preparation of this report.
Respectfully submitted,
Charles J. Aspinwall
Town Administrator
James R. Murgia
Finance Director
Town of Canton, Massachusetts B-10 Comprehensive Annual Financial ReportSource page 89
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
Town of Canton
Text38:
Massachusetts
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2017
Executive Director/CEO
Town of Canton, Massachusetts B-11 Comprehensive Annual Financial ReportSource page 90
TOWN OF CANTON, MASSACHUSETTS ORGANIZATIONAL CHART Z Town Board Planning Cletks Board of Health Board Office of Selectmen Board of Library Trustees Board of Selectmen Appointed Multiple Member Bodies Moderator Personnel Adv. Board Building [Renovations Committee Building & Zoning Department Building Commissioner Canton Director Representative || Public Health Veteran's Office Veteran's Director Building id ; Fire Dept. of Maintenance D — ; ee Department epartment | [Department | | Public Works Town Town Town Planner Clerk Administrator Town Planner Sealer of Weights and Measures Human Resource Department Executive Assistant Administrative Secretary Secretary Resource Department Council of Finance i on Aging Register of Voters Comm. on Disability -Zoning Board.of Appeals -Water/Sewer Rate Policy Commission -Youth Commission -Historical Commission -Fair Housing Committee Cable Advisory Committee Beautification Committee -Conservation Commission Council on Aging -Industrial Develop. Financing Authority -Local Emergency Planning Committee -Traffic Study Committee -Industrial Development Commission Recreation Conservation Commission Commission Conservation Commission ae = : ; of : : Chief Chief Public Works | | Administrator Director Director Director Agent Town of Canton, Massachusetts Comprehensive Annual Financial Report [Original embedded text, retained for comparison] Town of Canton, Massachusetts B-12 Comprehensive Annual Financial Report
Source page 91
CANTON PUBLIC SCHOOLS
CANTON SCHOOL COMMITTEE
ADMINISTRATIVE ASSISTANT TO THE
SUPERINTENDENT/SCHOOL COMMITTEE
SUPERINTENDENT OF SCHOOLS
DIRECTOR .OF CURRICULUM SCHOOL BUSINESS
BUILDING PRINCIPALS DIRECTOR OF
and INSTRUCTION ADMINISTRATOR
STUDENT SERVICES
WIDE AREA EDUCATIONAL SCHOOL
NETWORK TECHNOLOGY SECRETARIES ASSISTANT
SCHOOL COUNCIL SECRETARIES
ADM. ADM.. PRINCIPALS ADMINISTRATIVE ASST.
CAPT.
SPED
K-5 READING PARENT GROUPS
PARENT
BUILDING SPECIALISTS SPECIAL EDUCATION, ADVISORY
TECHNOLOGY DISTRICT ACCOUNTS
FACULTY BUILDING 504, ALT. ED. COUNCIL PAYROLL
SPECIALISTS DEPARTMENT PAYABLE
AND STAFF DEPARTMENT STUDENT SERVICES
COORDINATORS
COORDINATORS FACULTY AND STAFF
COMPUTER PROFESSIONAL
DIRECTOR OF
TEACHERS DEVELOPMENT
CHARMSS FOOD SERVICES
COMMITTEE
CUSTODIANS COLLABORATIVE
FACILITIES
PRIVATE SCHOOLS
DIRECTOR
CAFETERIA
MANAGERS/
CUSTODIANS/ WORKERS
MAINTENANCE
TRANSPORTATION
COORDINATOR
HEALTH
SERVICES
Town of Canton, Massachusetts B-13 Comprehensive Annual Financial ReportSource page 92
PRINCIPAL TOWN OFFICIALS
Elected Officials
Board of Selectmen Mark J. Porter, Chairman
Christopher J. Connolly, Vice Chairman
Thomas W. Theodore, Clerk
John J. Connolly, Member
Vacancy, Member
School Committee Kristin Mirliani, Chairperson
Michael Loughran, Vice Chairperson
Meg Gannon, Secretary
Nichola Gallagher, Member
Reuki Schutt, Member
Principal Executive Officers
Town Administrator Charles J. Aspinwall
Finance Director James R. Murgia
Town Accountant Kathy Dooley Butters
Superintendent of Schools Jennifer Fischer-Mueller
School Business Administrator Barry Nectow
Police Chief Kenneth N. Berkowitz
Fire Chief Charles E. Doody
DPW Superintendent Michael T. Trotta
Town of Canton, Massachusetts B-14 Comprehensive Annual Financial ReportSource page 93
Financial Section Architectural rendering courtesy of Group One Partners A new hotel is being constructed on Royall Street which will provide the Town increased revenues from property taxes along with hotel and meals taxes. Town of Canton, Massachusetts B-15 Comprehensive Annual Financial Report
Source page 94
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INDEPENDENT AUDITOR’S REPORT
Honorable Board of Selectmen
Town of Canton, Massachusetts
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the Town of Canton,
Massachusetts, (the “Town”) as of and for the year ended June 30, 2018, and the related notes to the
financial statements, which collectively comprise the Town’s basic financial statements as listed in the
table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Town of Canton, Massachusetts B-17 Comprehensive Annual Financial ReportSource page 96
Town of Canton
Page Two
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund
and the aggregate remaining fund information of the Town, as of June 30, 2018, and the respective
changes in financial position and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Restatement of Prior Year Ending Balances
As more fully described in Note IV, a restatement of prior year ending net position balances was made
to the Town’s governmental activities, business-type activities and each Enterprise Fund. Our opinion
was not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis, and the schedules listed under the required supplementary information section in
the accompanying table of contents be presented to supplement the basic financial statements. Such
information, although not part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing
the basic financial statements in an appropriate operational, economic or historical context.
We have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of inquiries
of management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Town’s basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements, and statistical section are presented for purposes of additional
analysis and are not a required part of the basic financial statements. The combining and individual
nonmajor fund financial statements are the responsibility of management and were derived from and
relate directly to the underlying accounting and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the
combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in
relation to the basic financial statements as a whole. The introductory and statistical sections have not
been subjected to the auditing procedures applied in the audit of the basic financial statements and,
accordingly, we do not express an opinion or provide any assurance on them.
Town of Canton, Massachusetts B-18 Comprehensive Annual Financial ReportSource page 97
Town of Canton
Page Three
Other Reporting Required By Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued a report dated November 21,
2018, on our consideration of the Town of Canton, Massachusetts’ internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
Roselli, Clark and Associates
Certified Public Accountants
Woburn, Massachusetts 01801
November 21, 2018
Town of Canton, Massachusetts B-19 Comprehensive Annual Financial ReportSource page 98
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Management’s Discussion and Analysis Town of Canton, Massachusetts B-21 Comprehensive Annual Financial Report
Source page 100
MANAGEMENT’S DISCUSSION AND ANALYSIS
As the management of the Town, we offer readers of the accompanying financial statements this narrative
overview and analysis of the financial activities of the Town for the fiscal year ended June 30, 2018.
Financial Highlights
During the year ended June 30, 2018 The Town adopted GASB Statement No. 75, Accounting and
Financial Reporting for Postemployment Benefits Other Than Pensions. Previously, OPEB was
accounted for under GASB Statement No. 45, Accounting and Financial Reporting by Employers for
Postemployment Benefits Other Than Pensions. The result of the adoption of GASB Statement No.
75 was to record a prior period restatement to eliminate the net OPEB obligation recorded in the prior
year Town financial statements and record the net OPEB liability as of end of the prior year.
All changes in net position discussions that follow have removed the impact of these adjustments
from their analysis. The adjustments can be reviewed in more detail in Note IV to the financial
statements.
The assets and deferred outflows of the Town exceeded its liabilities and deferred inflows at the close
of the most recent fiscal year by almost $34.1 million (total net position).
The government’s total net position increased by over $4.1 million. This consisted primarily of an
increase in governmental activities’ net position by almost $2.6 million and an increase in Business -
type activities’ net position of over $1.5 million.
The Town’s Unassigned Fund Balance reported in the General Fund was over $17.2 million (17.5%
of General Fund expenditures). Total Fund Balance in the General Fund was almost $19.9 million
(20.2% of General Fund expenditures). The Town reported total fund balances of over $13.4 million
in the Combined Nonmajor Governmental Funds. Almost $12.9 million in Restricted Fund Balances,
combined with over $0.5 million in Nonspendable Fund Balances made up this amount.
The Town’s total debt decreased by almost $5.0 million during the fiscal year. Detail of this net
decrease is discussed in the debt section of this Management Discussion and Analysis.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Town’s basic financial
statements. The Town’s basic financial statements comprise three components: 1) government-wide
financial statements, 2) fund financial statements, 3) notes to the financial statements. This report also
contains other supplementary information in addition to the basic financial statements themselves.
Town of Canton, Massachusetts B-22 Comprehensive Annual Financial ReportSource page 101
The layout and relationship of the financial statements and supplementary information is visually
illustrated as follows:
Required Supplementary Management Discussion and Analysis
Information
Government-wide Financial Statements
Governmental Fund Financial Statements
Basic Proprietary Fund Financial Statements
Financial Statements
Fiduciary Fund Financial Statements
Notes to the Basic Financial Statements
Required Supplementary
Information – Budgetary Reporting with Notes, Pension and
Other than MD&A Other Postemployment Benefits
Other Supplementary
Combining Fund Financial Statements/Schedules
Information
Government-wide Financial Statements – The government-wide financial statements are designed to
provide readers with a broad overview of the Town’s finances, in a manner similar to a private-sector
business. The statement of position presents information on all of the Town’s assets, deferred outflows,
liabilities and deferred inflows, with the net result reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position of the Town is
improving or deteriorating. The statement of activities presents information showing how the
government’s net position changed during the most recent fiscal year. All changes in net position are
reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation
leave.)
The government-wide financial statements consist of two classifications; (1) those whose activities are
principally supported by taxes and intergovernmental revenue (governmental activities), and (2) those
whose activities are intended to recover all or a significant portion of their costs through user fees and
charges (business-type activities).
The governmental activities of the Town include general government, public safety, highways and streets,
sanitation, education, economic development, debt service, fringe benefits and culture and recreation.
The business-type activities of the Town are comprised of water, sewer and rink enterprise funds.
Town of Canton, Massachusetts B-23 Comprehensive Annual Financial ReportSource page 102
Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The Town, like other state
and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements. All of the funds of the Town can be divided into three categories: governmental
funds, proprietary funds, and fiduciary funds.
Accounting guidelines distinguish fund balance between amounts that are considered nonspendable, such
as fund balance associated with inventories, and other amounts that are classified based on the relative
strength of the constraints that control the purposes for which specific amounts can be spent. Beginning
with the most binding constraints, fund balance amounts will be reported in the following classifications:
• Restricted—amounts constrained by external parties, constitutional provision, or enabling
legislation
• Committed—amounts constrained by a government using its highest level of decision-making
authority
• Assigned—amounts a government intends to use for a particular purpose
• Unassigned—amounts that are not constrained at all will be reported in the general fund or in
other major funds if negative
Governmental funds – Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term
financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By doing
so, readers may better understand the long-term impact of the government’s near-term financing
decisions.
The Town maintains numerous individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the General Fund and Capital Projects Fund, which are considered to be
major funds. Data from the other governmental funds are combined into a single, aggregated
presentation. Individual fund data for each of these Nonmajor governmental funds is provided in the
form of combining statements.
The Town adopts an annual appropriated budget for its general fund and its enterprise fund. A budgetary
comparison schedule has been provided for the general fund to demonstrate compliance with this budget.
Proprietary funds – The Town maintains two types of proprietary funds. Enterprise funds are used to
report the same functions presented as business-type activities in the government-wide financial
statements. The Town uses an enterprise fund to account for its water, sewer and rink enterprise funds.
Internal service funds are used to report activities that service all other Town Departments. The Town
uses internal service funds to account for self-insured health insurance claims.
Town of Canton, Massachusetts B-24 Comprehensive Annual Financial ReportSource page 103
Fiduciary funds – Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial statement because
the resources of those funds are not available to support the Town’s own programs. The accounting used
for fiduciary funds is much like that used for proprietary funds.
Notes to the Financial Statements - The notes provide additional information that is essential to a full
understanding of the data provided in the government-wide and fund financial statements.
Other Information - In addition to the basic financial statements and accompanying notes, this report
also presents certain required supplementary information which includes the schedules of the Town’s
proportionate share of the net pension liability, contributions to the pension plan, the Commonwealth’s
share of the net pension liability of the Massachusetts Teacher’s Retirement System, the funding progress
and contribution funding of its obligation to provide other postemployment benefits to its employees as
well as the Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual –
General Fund and notes to this schedule.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. In the case of the Town, assets exceeded liabilities by almost $34.1 million at the close of the
most recent fiscal year.
Condensed net position data is presented as follows:
Governmental Activities Business-Type Activities Total
June 30, June 30, June 30, June 30, June 30, June 30,
2018 2017 2018 2017 2018 2017
Assets
Currrent and other assets $ 51,592,851 $ 48,529,907 $ 13,322,720 $ 13,275,605 $ 64,915,571 $ 61,805,512
Capital assets, net 106,723,246 106,848,112 45,556,757 46,628,168 152,280,003 153,476,280
Total assets 158,316,097 155,378,019 58,879,477 59,903,773 217,195,574 215,281,792
Deferred outflows of resources 12,068,807 4,210,154 591,772 284,992 12,660,579 4,495,146
Liabilities
Long-term liabilities 146,883,727 111,846,584 27,974,324 29,269,298 174,858,051 141,115,882
Other liabilities 11,682,048 12,899,411 3,055,097 3,059,084 14,737,145 15,958,495
Total liabilities 158,565,775 124,745,995 31,029,421 32,328,382 189,595,196 157,074,377
Deferred inflows of resources 5,800,278 2,502,961 391,682 169,430 6,191,960 2,672,391
Net Position
Net investment in capital assets 81,317,923 78,738,423 20,603,290 18,785,822 101,921,213 97,524,245
Restricted 10,880,921 10,642,548 - - 10,880,921 10,642,548
Unrestricted (86,179,993) (57,041,754) 7,446,856 8,905,131 (78,733,137) (48,136,623)
Total Net Position $ 6,018,851 $ 32,339,217 $ 28,050,146 $ 27,690,953 $ 34,068,997 $ 60,030,170
By far, the largest portion (over $101.9 million) of the Town’s net position reflects its investment in
capital assets (e.g. land, buildings, infrastructure, machinery, and equipment) less any related debt used to
acquire those assets that is still outstanding. The Town uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the Town’s
Town of Canton, Massachusetts B-25 Comprehensive Annual Financial ReportSource page 104
investment in its capital assets is reported net of related debt, the resources needed to repay this debt must
be provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
An additional portion (almost $10.9 million) of the Town’s net position represents resources that are
subject to external restrictions on how they may be used. Unrestricted net position is reported as a deficit
of over $78.7 million due to the recognition of net pension liabilities of approximately $41.4 million and
net other postemployment benefits liability of approximately $87.5 million.
Condensed changes in net position data is presented as follows:
Governmental Activities Business-Type Activities Total
June 30, June 30, June 30, June 30, June 30, June 30,
2018 2017 2018 2017 2018 2017
Revenues
Program revenues:
Charges for services $ 7,521,265 $ 6,500,012 $ 14,330,135 $ 13,489,826 $ 21,851,400 $ 19,989,838
Operating grants and contributions 19,405,225 18,253,254 - 80,960 19,405,225 18,334,214
Capital grants and contributions 2,293,126 922,822 5,625 - 2,298,751 922,822
General revenues:
Property taxes and tax liens 74,151,256 72,087,049 - - 74,151,256 72,087,049
Unrestricted grants and contributions 2,180,123 2,099,870 - - 2,180,123 2,099,870
Other 6,735,302 6,300,054 98,038 50,296 6,833,340 6,350,350
Total Revenues 112,286,297 106,163,061 14,433,798 13,621,082 126,720,095 119,784,143
Expenses
General government 5,578,489 5,965,196 - - 5,578,489 5,965,196
Public safety 19,250,042 17,532,705 - - 19,250,042 17,532,705
Education 70,396,176 68,325,037 - - 70,396,176 68,325,037
Public works 7,911,117 7,658,668 - - 7,911,117 7,658,668
Health and human services 1,635,120 1,684,833 - - 1,635,120 1,684,833
Culture and recreation 3,768,025 3,683,115 - - 3,768,025 3,683,115
Debt service 659,834 636,035 - - 659,834 636,035
Water - - 7,105,456 6,141,278 7,105,456 6,141,278
Sewer - - 6,275,549 6,191,663 6,275,549 6,191,663
Rink - - 13,498 61,792 13,498 61,792
Total Expenses 109,198,803 105,485,589 13,394,503 12,394,733 122,593,306 117,880,322
Change in net position before transfers 3,087,494 677,472 1,039,295 1,226,349 4,126,789 1,903,821
Transfers (500,000) 34,042 500,000 (34,042) - -
Change in net position 2,587,494 711,514 1,539,295 1,192,307 4,126,789 1,903,821
Net position, beginning of year 32,339,217 31,627,703 27,690,953 26,498,646 60,030,170 58,126,349
Restatement for net OPEB liability (28,907,860) - (1,180,102) - (30,087,962) -
Net position, beginning of year,
as restated 3,431,357 31,627,703 26,510,851 26,498,646 29,942,208 58,126,349
Net position, end of year $ 6,018,851 $ 32,339,217 $ 28,050,146 $ 27,690,953 $ 34,068,997 $ 60,030,170
Town of Canton, Massachusetts B-26 Comprehensive Annual Financial ReportSource page 105
Governmental Activities – The governmental activities increased net position by almost $2.6 million as
all revenue categories increased over the prior year directly contributing to over a $6.1 million increase in
revenues which more than offset the $3.7 million increase in expenses.
Fiscal Year 2018 Expenses and Program Revenues – governmental activities are graphically presented as
follows:
Major revenue sources of governmental activities consist of revenue from; (1) Operating grants and
contributions which comprised approximately 17.3% of the total governmental activity revenues and
represented an increase of almost $1.1 million over the prior year. This was mostly a result of an increase
of almost $0.8 million due to nonemployee special funding payments from the Commonwealth reported
in a manner required under GASB 68; (2) Property taxes which represented 66.0% of total revenues and
represented an increase over the prior year by $2.1 million this was comprised of the legally allowed
amount under proposition 2
1/2% after factoring in the
increase in assessment and new
growth and a reduction in the
allowance for abatements due to
cases settled favorably in favor
of the Town; and (3) Capital
Grants and other capital
contributions which although
were not a significant portion of
total revenue, about 2.0%, were
still greater than the prior year
by almost $1.4 million due to a
large insurance recovery and a
Public Works grant for dam renovation. No other revenue sources exceeded 10% of total revenues in
either fiscal 2018 or 2017.
Town of Canton, Massachusetts B-27 Comprehensive Annual Financial ReportSource page 106
Major operating expenses in total increased by approximately $3.7 million. This was primarily due to an
increase in employee benefit related costs. Direct benefits consisting primarily of other postemployment
benefit costs, health insurance and pension costs were over $1.4 million greater than the prior year. An
additional $0.8 million was due to
the expense side of the special
funding situation described above
under revenue. These costs were
spread across all functions that
included payroll with the most
modest increases in public safety and
education which are the Town’s two
most labor-intensive functions. The
remaining increases of $1.5 million
were due to additional costs spread
in minor amounts across all
functions with the largest increases
associated with depreciation.
Business-type Activities – Net position of the business-type activities increased almost $1.5 million over
the prior year. This was primarily due to a water rate increase of 4% and a sewer rate increase of 6%.
Town of Canton, Massachusetts B-28 Comprehensive Annual Financial ReportSource page 107
Fund-wide Financial Analysis of the Government’s Funds
As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.
Governmental funds – The focus of the Town’s governmental funds is to provide information on near-
term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
Town’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of
a government’s net resources available for spending at the end of the fiscal year.
As of the close of the current fiscal year, the Town’s governmental funds balance sheet reported a
combined ending fund balance of almost $34.8 million, an increase of approximately $3.3 million over
the prior year. Over $1.9 million of this increase was primarily the result of revenues exceeding
expenditures in the general fund due to higher than expected motor vehicle excise, building permit and
other local revenues. This positive situation was a direct result of the continued economic expansion; this
was positively compounded by an increase of the timing of revenues which exceeded expenditures in the
special revenue funds of $1.2 million. Since these funds are typically revenue in and expenditure out, it
was mostly a timing situation that caused this increase.
Unassigned fund balance in the general fund was approximately $17.2 million or 17.5% of general fund
expenditures. This is available for spending at the government’s discretion. Assigned fund balance, as a
result of encumbrances and amounts budgeted for next fiscal year of almost $1.6 million and committed
fund balance for carryover articles over $1.0 million bring total fund balance in the general fund to almost
$19.9 million or 20.2% of general fund expenditures.
The remainder of governmental fund balances are included as Combined Nonmajor Fund Balances and
are classified as either (1) non-spendable, due to being the corpus of an endowment in the amount of
approximately $0.5 million; (2) restricted due to constraints placed externally by third-parties over $14.5
million; (3) amounts restricted for capital projects over $1.6 million, or (4) unassigned as they reflect
negative balances due to capital deficits of over $0.1 million. These are expected to be funded in future
years from government grants.
Proprietary funds – The Town’s proprietary funds are made up of (1) the Water, Sewer and Rink
Enterprise Funds which provides the same type of information found in the government-wide financial
statements under business-type activities, and discussed in that section but in more detail; and (2) the
Town’s Internal Service Fund which accounts for the Town’s Health Claims Fund.
The Health Claims Fund has a Net Position balance over $6.3 million. This was an increase of over $1.2
million as revenues exceed claims. About $0.5 million of these revenues were stop loss reimbursements
received from insured claims.
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget included revisions to the following
line items:
▪ Approximately $0.4 million in increases allocated to public safety.
▪ Approximately $0.5 million in decreases allocated to general government.
Town of Canton, Massachusetts B-29 Comprehensive Annual Financial ReportSource page 108
▪ Approximately $0.2 million in increases allocated to public works.
▪ Approximately $0.1 million in increases to benefits.
▪ Approximately $0.1 million in increases to education
All of the amendments were between operating line items in the original budget and were for operating
purposes. The overall bottom line final budget increased $0.3 million from the original budget.
Major budget to actual differences on the revenue side included property tax and excise, which exceeded
budget by approximately $1.2 million, licenses and permits which exceeded budget by $0.4 million and
departmental revenues which exceeded budget by $0.4 million.
On the expenditure side, numerous net minor favorable variances which in total approximated $0.7
million existed.
Further detail of budget to actual comparisons may be reviewed as part of the Required Supplementary
Information following the footnotes to the report.
Capital Asset and Debt Administration
Capital Assets – The Town’s investment in capital assets for its governmental and business type
activities as of June 30, 2018 amounts to approximately $152.3 million (net of accumulated depreciation)
a decrease from the previous year’s balance of approximately $1.2 million as the annual depreciation
provision exceeded additions.
Major capital asset additions included, roadway improvements and water infrastructure.
Additional information on the Town’s capital assets can be found in Note II subsection D.
Long-term Debt – State statutes limit the amount of general obligation debt a governmental entity may
issue to 5.0 % of its total assessed valuation. The current debt limitation for the Town is approximately
$230.8 million, which is significantly in excess of the Town’s outstanding general obligation debt
classified as inside the debt limit.
At the end of the current fiscal year, the Town had total debt outstanding of almost $49.5 million. The
entire amount comprises debt backed by the full faith and credit of the government.
The Town’s total debt decreased by almost $5.0 million during the fiscal year detailed as follows:
Town of Canton, Massachusetts B-30 Comprehensive Annual Financial ReportSource page 109
The Town’s most recent credit evaluation resulted in the Town maintaining its “AAA” rating from
Standard and Poor‘s Investment Services for general obligation debt. This is the highest investment grade
given by this agency.
The Town also holds a proportionate share of debt of other governmental units that provide services
within the Town’s boundaries. The debt service from such arrangements is assessed annually to the
Town.
Additional information on the Town’s short-term and long-term debt can be found in Note II under
subsections F and G.
Economic Factors and Next Year’s Budgets and Rates
▪ Consistent with both State and National work force trends, the Town’s unemployment rates improved
dramatically and are now exceeding historical unemployment rate data dating back almost 40 years.
▪ The Town’s property tax base is made up predominantly of residential real estate taxes, which
comprise nearly 61% of the Town’s property tax base. The Town also relies heavily on its
commercial and industrial property tax base, which in aggregate comprise 39% of the Town’s
property tax base. The Town uses a split rate in assessing taxes, thus commercial, industrial and
personal property tax rates are just over double the residential rate. In addition, Chapter 580 of the
Acts of 1980, more commonly referred to as Proposition 2 ½, limits the Town’s ability to increase
taxes in any one year by more than two and one-half percent (2 ½%) of the previous year tax levy.
▪ Consistent with both State and National indices, the Town’s housing market experienced a downward
trend from 2005 – 2010. Housing prices began to stabilize during fiscal year 2011 and in recent years
are in an upward trend. During 2018, houses in the Town continued selling at greater than their
assessed values, as a result, the Town expects its housing market to continue to maintain or slightly
outpace National indices. In addition, The Town has residential developments in various stages of
completion. These are expected to be completed in the near future.
▪ The Town has responded well to the recent economic challenges. Reductions in local revenue,
primarily interest income and other reductions in revenue have caused the Town to aggressively seek
other revenue producing initiatives in order to maintain appropriations in ways that preserved local
service levels. The Town has been very successful in that regard.
All of the above items were considered when the Town developed its budget for fiscal year 2019. The
budget was adopted in May 2018 and the Town’s tax rate will be certified in December 2018.
Requests for Information
This financial report is designed to provide a general overview of the Town’s finances for all those with
an interest in the government’s finances. Questions concerning any of the information provided in this
report or request for additional financial information should be addressed to the Office of the Finance
Director, 801 Washington Street, Canton, Massachusetts 02021.
Town of Canton, Massachusetts B-31 Comprehensive Annual Financial ReportSource page 110
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Basic Financial Statements Town of Canton, Massachusetts B-33 Comprehensive Annual Financial Report
Source page 112
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
JUNE 30, 2018
Primary Government
Governmental Business-Type
Activities Activities Total
Assets
Cash and cash equivalents $ 32,953,370 $ 9,532,919 $ 42,486,289
Investments 12,864,099 - 12,864,099
Receivables, net:
Property taxes 353,772 - 353,772
Tax liens and foreclosures 1,315,092 51,377 1,366,469
User fees - 3,738,424 3,738,424
Departmental and other 1,097,650 - 1,097,650
Intergovernmental 2,889,730 - 2,889,730
Prepaid items 57,338 - 57,338
Deposit held by third party 61,800 - 61,800
Capital assets not being depreciated 11,263,835 710,787 11,974,622
Capital assets, net of accumulated depreciation 95,459,411 44,845,970 140,305,381
Total Assets 158,316,097 58,879,477 217,195,574
Deferred Outflows of Resources
Related to net pension liability 8,261,963 559,266 8,821,229
Related to net other postemployment benefits liability 3,806,844 32,506 3,839,350
Total Deferred Outflows of Resources 12,068,807 591,772 12,660,579
Liabilities Warrants
and accounts payable 1,661,186 112,353 1,773,539
Accrued payroll and withholdings 3,850,627 19,764 3,870,391
Tax refunds payable 470,796 - 470,796
Health claims incurred but not reported 878,641 - 878,641
Accrued interest 218,469 189,111 407,580
Other liabilities 44,589 8,597 53,186
Noncurrent liabilities:
Due within one year 4,557,740 2,725,272 7,283,012
Due in more than one year 146,883,727 27,974,324 174,858,051
Total Liabilities 158,565,775 31,029,421 189,595,196
Deferred Inflows of Resources
Related to net pension liability 5,769,639 390,557 6,160,196
Related to net other postemployment benefits liability 30,639 1,125 31,764
Total Deferred Inflows of Resources 5,800,278 391,682 6,191,960
Net Position
Net investment in capital assets 81,317,923 20,603,290 101,921,213
Restricted for:
Nonexpendable permanent funds 526,561 - 526,561
Expendable permanent funds 743,771 - 743,771
Debt service 1,341,647 - 1,341,647
Federal and State grants 1,424,390 - 1,424,390
Community preservation 2,420,189 - 2,420,189
Gift funds 2,347,412 - 2,347,412
Other specific purposes 2,076,951 - 2,076,951
Unrestricted (86,179,993) 7,446,856 (78,733,137)
Total Net Position $ 6,018,851 $ 28,050,146 $ 34,068,997
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts B-34 Comprehensive Annual Financial ReportSource page 113
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF ACTIVITIES
FISCAL YEAR ENDED JUNE 30, 2018
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 $ 5,578,489 $ 629,653 $ 191,369 $ - $ (4,757,467) $ (4,757,467)
Public safety 19,250,042 3,575,574 194,967 240,497 (15,239,004) (15,239,004)
Education 70,396,176 2,463,638 18,505,916 600,762 (48,825,860) (48,825,860)
Public works 7,911,117 308,449 22,000 857,196 (6,723,472) (6,723,472)
Health and human services 1,635,120 107,678 396,063 - (1,131,379) (1,131,379)
Culture and recreation 3,768,025 436,273 37,074 594,671 (2,700,007) (2,700,007)
Interest expense 659,834 - 57,836 - (601,998) (601,998)
Total governmental activities 109,198,803 7,521,265 19,405,225 2,293,126 (79,979,187) (79,979,187)
Business-type activities:
Water 7,105,456 7,186,664 - - $ 81,208 81,208
Sewer 6,275,549 7,143,471 - - 867,922 867,922
Rink 13,498 - - 5,625 (7,873) (7,873)
Total business-type activities 13,394,503 14,330,135 - 5,625 941,257 941,257
Total Primary Government $ 122,593,306 $ 21,851,400 $ 19,405,225 $ 2,298,751 (79,979,187) 941,257 (79,037,930)
General Revenues:
Property taxes 74,151,256 - 74,151,256
Tax liens 301,286 - 301,286
Motor vehicle and other excise 4,707,385 - 4,707,385
Hotel and meals taxes 603,821 - 603,821
Payments in lieu of taxes 236,816 - 236,816
Grants and contributions not restricted
to specific programs 2,180,123 - 2,180,123
Penalties and interest on taxes 364,795 - 364,795
Unrestricted investment income 521,199 98,038 619,237
Transfers (net) (500,000) 500,000 -
Total general revenues and transfers 82,566,681 598,038 83,164,719
Change in Net Position 2,587,494 1,539,295 4,126,789
Net Position:
Beginning of year, as restated (see Note IV) 3,431,357 26,510,851 29,942,208
End of year $ 6,018,851 $ 28,050,146 $ 34,068,997
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts B-35 Comprehensive Annual Financial ReportSource page 114
TOWN OF CANTON, MASSACHUSETTS
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2018
Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Assets
Cash and cash equivalents $ 17,212,144 $ 1,499,239 $ 11,424,733 $ 30,136,116
Investments 7,150,877 - 1,519,301 8,670,178
Receivables, net of allowance for uncollectibles:
Property taxes 350,494 - 3,278 353,772
Tax liens and foreclosures 1,311,710 - 3,382 1,315,092
Motor vehicle excise 379,470 - - 379,470
Intergovernmental 1,341,647 - 1,548,083 2,889,730
Departmental and other - - 490,286 490,286
Prepaid items 15,376 - - 15,376
Due from other funds 854,784 - - 854,784
Total Assets 28,616,502 1,499,239 14,989,063 45,104,804
Deferred Outflows of Resources - - - -
Total Assets and Deferred Outflows of Resources $ 28,616,502 $ 1,499,239 $ 14,989,063 $ 45,104,804
Liabilities
Warrants and accounts payable $ 1,334,850 $ - $ 178,902 $ 1,513,752
Accrued payroll and withholdings 3,709,311 - 141,316 3,850,627
Tax refunds payable 470,796 - - 470,796
Other liabilities 39,489 - 5,100 44,589
Due to other funds - - 854,784 854,784
Total Liabilities 5,554,446 - 1,180,102 6,734,548
Deferred Inflows of Resources
Unavailable revenues - property taxes 1,459,388 - 6,660 1,466,048
Unavailable revenues - excise taxes 379,470 - - 379,470
Unavailable revenues - intergovernmental 1,341,647 - - 1,341,647
Unavailable revenues - other - - 398,056 398,056
Total Deferred Inflows of Resources 3,180,505 - 404,716 3,585,221
Fund Balances
Nonspendable 15,376 - 511,185 526,561
Restricted 15,918 1,616,995 12,893,060 14,525,973
Committed 1,026,447 - - 1,026,447
Assigned 1,599,273 - - 1,599,273
Unassigned 17,224,537 (117,756) - 17,106,781
Total Fund Balances 19,881,551 1,499,239 13,404,245 34,785,035
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances $ 28,616,502 $ 1,499,239 $ 14,989,063 $ 45,104,804
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts B-36 Comprehensive Annual Financial ReportSource page 115
TOWN OF CANTON, MASSACHUSETTS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TOTAL FUND BALANCES TO THE STATEMENT OF NET POSITION
JUNE 30, 2018
Total Governmental Fund Balances $ 34,785,035
Capital assets used in governmental activities are not financial resources and therefore are
not reported in the funds. 106,723,246
Other long-term assets are unavailable to pay current-period expenditures 3,585,221
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 pensions 8,261,963
Deferred outflows related to other postemployment benefits 3,806,844
Deferred inflows related to pensions (5,769,639)
Deferred inflows related to other postemployment benefits (30,639)
Net effect of reporting deferred outflows and inflows of resources 6,268,529
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. 6,316,756
In the Statement of Activities, interest is accrued on outstanding long-term debt
whereas in the governmental funds interest is not reported until due. (218,469)
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 (25,114,243)
Unamortized premiums on bonds (1,046,816)
Capital leases payable (42,986)
Compensated absences (1,916,862)
Net pension liability (38,809,535)
Net other postemployment benefits liability (84,511,025)
Net effect of reporting long-term liabilities (151,441,467)
Net Position of Governmental Activities $ 6,018,851
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts B-37 Comprehensive Annual Financial ReportSource page 116
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FISCAL YEAR ENDED JUNE 30, 2018
Nonmajor Total
General Capital Governmental Governmental
Fund Projects Funds Funds
Revenues:
Property taxes $ 73,672,276 $ - $ 583,486 $ 74,255,762
Tax liens 297,266 - - 297,266
Intergovernmental 18,164,492 600,762 4,528,779 23,294,033
Motor vehicle and other excises 4,703,198 - - 4,703,198
Hotel and meals taxes 603,821 - - 603,821
Licenses and permits 1,235,156 - - 1,235,156
Penalties and interest on taxes 364,795 - - 364,795
Payments in lieu of taxes 236,816 - - 236,816
Fines and forfeitures 114,905 - - 114,905
Charges for services - - 2,108,925 2,108,925
Departmental and other revenue 1,086,208 - 3,337,398 4,423,606
Investment income 402,448 - 53,754 456,202
Contributions and donations - - 482,910 482,910
Total Revenues 100,881,381 600,762 11,095,252 112,577,395
Expenditures:
Current:
General government 4,080,517 6,505 208,467 4,295,489
Public safety 11,446,294 172,709 1,270,513 12,889,516
Education 42,052,042 1,536,849 6,009,765 49,598,656
Public works 5,706,081 1,212,293 841,935 7,760,309
Health and human services 967,045 - 137,999 1,105,044
Culture and recreation 2,045,345 - 596,642 2,641,987
Pension benefits 13,538,094 - - 13,538,094
Employee benefits 12,964,428 - 97,410 13,061,838
State and county assessments 1,015,303 - - 1,015,303
Debt service:
Principal 3,871,933 - - 3,871,933
Interest 995,903 - - 995,903
Total Expenditures 98,682,985 2,928,356 9,162,731 110,774,072
Excess (Deficiency) of Revenues Over (Under) Expenditures 2,198,396 (2,327,594) 1,932,521 1,803,323
Other Financing Sources (Uses):
Issuance of bonds and notes - 1,792,000 - 1,792,000
Premiums from bonds and notes 38,192 145,000 63,679 246,871
Issuance of refunding bonds 414,000 - - 414,000
Payments on refunding bonds (446,000) - - (446,000)
Transfers in 1,285,690 553,042 991,146 2,829,878
Transfers out (1,544,188) - (1,785,690) (3,329,878)
Total Other Financing Sources (Uses) (252,306) 2,490,042 (730,865) 1,506,871
Net Change in Fund Balances 1,946,090 162,448 1,201,656 3,310,194
FUND BALANCES - Beginning of year 17,935,461 1,336,791 12,202,589 31,474,841
FUND BALANCES - End of year $ 19,881,551 $ 1,499,239 $ 13,404,245 $ 34,785,035
See acompanying notes to basic financial statements.
Town of Canton, Massachusetts B-38 Comprehensive Annual Financial ReportSource page 117
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, 2018
Net Change in Fund Balances - Total Governmental Fund Balances $ 3,310,194
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 5,138,643
Disposal of capital assets (86,103)
Depreciation expense (5,177,406)
Net effect of reporting capital assets (124,866)
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. 1,203,099
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 (1,792,000)
Premiums from bonds and notes (246,871)
Issuance of refunding bonds (414,000)
Payments on refunding bonds 446,000
Amortization of premiums on bonds and notes payable 281,532
Payments on capital leases 20,841
Repayments of debt 3,871,933
Net effect of reporting long-term debt 2,167,435
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. (356,095)
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. 54,537
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:
Landfill closure 26,000
Compensated absences (212,844)
Pension benefits (616,157)
Other postemployment benefits (2,863,809)
Net effect of reporting long-term liabilities (3,666,810)
Change in Net Position of Governmental Activities $ 2,587,494
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts B-39 Comprehensive Annual Financial ReportSource page 118
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2018
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Assets
Current assets:
Cash and cash equivalents $ 3,239,375 $ 3,575,626 $ 2,717,918 $ 9,532,919 $ 2,817,254
Investments - - - - 4,193,921
Receivables (net):
User charges 1,982,920 1,755,504 - 3,738,424 -
Tax liens 25,078 26,299 - 51,377 -
Departmental and other - - - - 227,894
Prepaid items - - - - 41,962
Deposit held by third party - - - - 61,800
Total current assets 5,247,373 5,357,429 2,717,918 13,322,720 7,342,831
Noncurrent assets:
Nondepreciable capital assets 624,852 - 85,935 710,787 -
Capital assets (net of depreciation) 30,923,524 13,922,446 - 44,845,970 -
Total noncurrent assets 31,548,376 13,922,446 85,935 45,556,757 -
Total Assets 36,795,749 19,279,875 2,803,853 58,879,477 7,342,831
Deferred Outflows of Resources
Related to net pension liability 283,161 225,824 50,281 559,266 -
Related to net OPEB liability 19,921 11,035 1,550 32,506 -
Total Deferred Outflows of Resources 303,082 236,859 51,831 591,772 -
Liabilities
Current liabilities:
Warrants and accounts payable 51,978 3,985 56,390 112,353 147,434
Accrued payroll and withholdings 14,343 5,421 - 19,764 -
Health claims incurred but not reported - - - - 878,641
Accrued interest 134,967 54,144 - 189,111 -
Other liabilities 8,597 - - 8,597 -
Compensated absences 24,426 1,761 - 26,187 -
Bonds and notes payable 1,751,634 941,451 6,000 2,699,085 -
Total current liabilities 1,985,945 1,006,762 62,390 3,055,097 1,026,075
Noncurrent liabilities:
Compensated absences 73,279 5,283 - 78,562 -
Net OPEB liability 2,079,249 799,616 135,434 3,014,299 -
Net pension liability 1,330,115 1,060,777 236,189 2,627,081 -
Bonds and notes payable 17,021,246 5,233,136 - 22,254,382 -
Total noncurrent liabilities 20,503,889 7,098,812 371,623 27,974,324 -
Total Liabilities 22,489,834 8,105,574 434,013 31,029,421 1,026,075
Deferred Inflows of Resources
Related to net pension liability 197,742 157,702 35,113 390,557 -
Related to net OPEB liability 772 304 49 1,125 -
Total Deferred Outflows of Resources 198,514 158,006 35,162 391,682 -
Net Position
Net investment in capital assets 12,775,496 7,747,859 79,935 20,603,290 -
Unrestricted 1,634,987 3,505,295 2,306,574 7,446,856 6,316,756
Total Net Position $ 14,410,483 $ 11,253,154 $ 2,386,509 $ 28,050,146 $ 6,316,756
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts B-40 Comprehensive Annual Financial ReportSource page 119
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2018
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Operating Revenues:
Charges for services $ 7,186,664 $ 7,143,471 $ - $ 14,330,135 $ -
Employee contributions - - - - 4,099,038
Employer contributions - - - - 11,384,001
Stop loss reimbursements - - - - 530,671
Total Operating Revenues 7,186,664 7,143,471 - 14,330,135 16,013,710
Operating Expenses:
Operating costs 2,744,435 1,239,856 13,209 3,997,500 -
Massachusetts Water Resources Authority assessment 2,551,203 4,252,646 - 6,803,849 -
Depreciation 1,233,434 627,322 - 1,860,756 -
Employee benefits - - - - 14,875,608
Total Operating Expenses 6,529,072 6,119,824 13,209 12,662,105 14,875,608
Operating Income (Loss) 657,592 1,023,647 (13,209) 1,668,030 1,138,102
Nonoperating Revenues (Expenses):
Investment income 40,268 34,044 23,726 98,038 64,997
Interest expense (576,384) (155,725) (289) (732,398) -
Total Nonoperating Revenues (Expenses) (536,116) (121,681) 23,437 (634,360) 64,997
Income Before Capital Contributions
and Transfers 121,476 901,966 10,228 1,033,670 1,203,099
Capital contributions - - 5,625 5,625 -
Transfers in - - 500,000 500,000 -
Total Capital Contributions and Transfers - - 505,625 505,625 -
Change in Net Position 121,476 901,966 515,853 1,539,295 1,203,099
Total Net Position - Beginning of the Year,
as restated (see Note IV) 14,289,007 10,351,188 1,870,656 26,510,851 5,113,657
Total Net Position - End of the Year $ 14,410,483 $ 11,253,154 $ 2,386,509 $ 28,050,146 $ 6,316,756
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts B-41 Comprehensive Annual Financial ReportSource page 120
TOWN OF CANTON, MASSACHUSETTS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FISCAL YEAR ENDED JUNE 30, 2018
Governmental
Business-Type Activities Activities
Total Internal
Enterprise Service
Water Sewer Rink Funds Funds
Cash Flows from Operating Activities:
Receipts from users $ 7,325,539 $ 7,389,895 $ - $ 14,715,434 $ -
Receipts from interfund services provided - - - - 15,848,242
Payments to employees (884,896) (309,042) - (1,193,938) -
Payments to vendors (4,334,089) (5,174,686) (4,786) (9,513,561) -
Payments for interfund services used - - - - (15,076,191)
Net Cash Provided by (Used in) Operating
Activities 2,106,554 1,906,167 (4,786) 4,007,935 772,051
Cash Flows from Noncapital Financing Activities:
Transfers in - - 500,000 500,000 -
Net Cash Provided by Noncapital
Financing Activities - - 500,000 500,000 -
Cash Flows from Capital and Related Financing Activities:
Proceeds from capital grants - - 5,625 5,625 -
Proceeds from the issuance of refunding bonds 2,504,000 - - 2,504,000 -
Premiums from the issuance of bonds and notes 231,000 - - 231,000 -
Payments of refunded bonds (2,694,000) - - (2,694,000) -
Acquisition and construction of capital assets (355,565) (347,845) (30,608) (734,018) -
Principal payments on bonds and notes (1,704,800) (942,367) (7,000) (2,654,167) -
Interest payments on bonds and notes (647,419) (184,291) (289) (831,999) -
Net Cash Used in Capital and Related
Financing Activities (2,666,784) (1,474,503) (32,272) (4,173,559) -
Cash Flows from Investing Activities:
Investment income 40,268 34,044 23,726 98,038 64,997
Investment of operating cash - - - - (91,887)
Net Cash Provided by (Used in) Investing Activities 40,268 34,044 23,726 98,038 (26,890)
Net Change in Cash and Cash Equivalents (519,962) 465,708 486,668 432,414 745,161
Cash and Cash Equivalents:
Beginning of the year 3,759,337 3,109,918 2,231,250 9,100,505 2,072,093
End of the year $ 3,239,375 $ 3,575,626 $ 2,717,918 $ 9,532,919 $ 2,817,254
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used in) Operating Activities:
Operating Income (Loss) $ 657,592 $ 1,023,647 $ (13,209) $ 1,668,030 $ 1,138,102
Adjustments to reconcile operating income (loss) to net
cash provided by (used in) operating activities:
Depreciation 1,233,434 627,322 - 1,860,756 -
Changes in assets, deferred outflows of resources,
liabilities and deferred inflows of
resources: Receivables 138,875 246,424 - 385,299 (165,468)
Prepaid items - - - - (41,962)
Deferred outflows of resources (140,627) (114,953) (25,016) (280,596) -
Accounts payable and accrued expenses 278 (6,874) 83 (6,513) (158,621)
Other liabilities 75 - - 75 -
Net Other postemployment liability 56,171 2,707 4,899 63,777 -
Net pension liability 48,026 38,301 8,528 94,855 -
Deferred inflows of resources 112,730 89,593 19,929 222,252 -
Net Cash Provided by (Used in) Operating
Activities $ 2,106,554 $ 1,906,167 $ (4,786) $ 4,007,935 $ 772,051
Noncash capital and related financing activities:
Amortization of bond premium $ 55,641 $ 22,219 $ - $ 77,860 $ -
See accompanying notes to basic financial statements.
Town of Canton, Massachusetts B-42 Comprehensive Annual Financial Report