borough of madison county of morris report of audit …

BOROUGH OF MADISON

COUNTY OF MORRIS

REPORT OF AUDIT

2018

NISIVOCCIA LLP CERTIFIED PUBLIC ACCOUNTANTS

BOROUGH OF MADISON

COUNTY OF MORRIS

REPORT OF AUDIT

2018

BOROUGH OF MADISON TABLE OF CONTENTS

YEAR ENDED DECEMBER 31, 2018

PART I- FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA Independent Auditors' Report

Financial Statements Current Fund

Comparative Balance Sheet - Regulatory Basis Comparative Statement of Operations and Change in Fund Balance - Regulatory Basis Statement of Revenue - Regulatory Basis Statement of Expenditures - Regulatory Basis

Trust Funds Comparative Balance Sheet - Regulatory Basis Statement of Fund Balance- Regulatory Basis - Assessment Trust Fund (Not Applicable) Statement of Revenue- Regulatory Basis - Assessment Trust Fund (Not Applicable) Statement of Expenditures- Regulatory Basis - Assessment Trust Fund (Not Applicable)

General Capital Fund Comparative Balance Sheet - Regulatory Basis Statement of Fund Balance - Regulatory Basis

Water Utility Fund Comparative Balance Sheet - Regulatory Basis Comparative Statement of Operations and Change in Utility Fund Balance

- Regulatory Basis - Water Utility Operating Fund Statement of Revenue - Regulatory Basis - Water Utility Operating Fund Statement of Expenditures- Regulatory Basis - Water Utility Operating Fund

Electric Utility Fund Comparative Balance Sheet - Regulatory Basis Comparative Statement of Operations and Change in Utility Fund Balance

- Regulatory Basis - Electric Utility Operating Fund Statement of Fund Balance- Regulatory Basis - Electric Utility Capital Fund (Not Applicable) Statement of Revenue - Regulatory Basis - Electric Utility Operating Fund Statement of Expenditures - Regulatory Basis - Electric Utility Operating Fund

Public Assistance Fund (Not Applicable) General Fixed Assets Account Group

Comparative Balance Sheet - Regulatory Basis

Notes to Financial Statements

Supplementary Data Officials in Office and Surety Bonds Current Fund

Schedule of Cash - Treasurer Schedule of Cash - Collector (Not Applicable) Schedule of Taxes Receivable and Analysis of Property Tax Levy Schedule of Tax Title Liens Schedule of Revenue Accounts Receivable Schedule of 201 7 Appropriation Reserves

1-3

Exhibit

A A-1 A-2 A-3

B B-1 B-2 B-3

c C-1

D

D-1 D-2 D-3

E

E-1 E-2 E-3 E-4

G

1-30

Schedule 1

Exhibit A-4 A-5 A-6 A-7 A-8 A-9

PART I (Cont'd) Supplementary Data (Cont'd)

Current Fund (Cont'd)


YEAR ENDED DECEMBER 31, 2018 (Continued)

Schedule of Local School District Taxes Payable Schedule of State and Federal Grants Receivable - Federal and State Grant Fund Schedule of Appropriated Reserves - Federal and State Grant Fund Schedule of Unappropriated Reserves - Federal and State Grant Fund

Trust Funds Schedule of Cash - Treasurer Schedule of Assessments Receivable -Assessment Trust Fund (Not Applicable) Schedule of Reserve for Assessments Receivable -Assessment Trust Fund (Not Applicable) Schedule of Reserve for Animal Control Fund Expenditures - Animal Control Fund

General Capital Fund Schedule of Cash Analysis of Cash Schedule of Deferred Charges to Future Taxation- Unfunded Schedule of Improvement Authorizations Schedule of Capital Improvement Fund Schedule of Bond Anticipation Notes Payable (Not Applicable) Schedule of Serial Bonds Payable Schedule of Loans Payable Schedule of Bonds and Notes Authorized but not Issued

Water Utility Fund Schedule of Cash - Treasurer - Water Utility Fund Analysis of Cash - Water Utility Capital Fund Schedule of Consumer Accounts Receivable - Water Utility Operating Fund Schedule of Fixed Capital - Water Utility Capital Fund Schedule of Fixed Capital Authorized and Uncompleted - Water Utility Capital Fund Schedule of 201 7 Appropriation Reserves - Water Utility Operating Fund Schedule of Improvement Authorizations - Water Utility Capital Fund Schedule of Capital Improvement Fund - Water Utility Capital Fund Schedule of Deferred Reserve for Amortization - Water Utility Capital Fund Schedule of Bond Anticipation Notes Payable - Water Utility Capital Fund (Not Applicable) Schedule of Water Serial Bonds Payable - Water Utility Capital Fund (Not Applicable) Schedule of Bonds and Notes Authorized But Not Issued - Water Utility Capital Fund

(Not Applicable) Electric Utility Fund

Schedule of Cash - Treasurer - Electric Utility Fund Schedule of Cash- Collector - Electric Utility Operating Fund (Not Applicable) Analysis of Electric Capital Cash and Investments - Electric Utility Capital Fund Schedule of Consumer Accounts Receivable - Electric Utility Operating Fund Schedule of Fixed Capital - Electric Utility Capital Fund Schedule of Fixed Capital Authorized and Uncompleted - Electric Utility Capital Fund Schedule of 2017 Appropriation Reserves - Electric Utility Operating Fund Schedule of Improvement Authorizations - Electric Utility Capital Fund Schedule of Capital Improvement Fund - Electric Utility Capital Fund Schedule of Deferred Reserve for Amortization - Electric Utility Capital Fund

Exhibit A-10 A-11 A-12 A-13

B-4

B-5

C-2 C-3 C-4 C-5 C-6 C-7 C-8 C-9

C-10

D-4 D-5 D-6 D-7 D-8 D-9

D-10 D-11 D-12

E-5 E-6 E-7 E-8 E-9

E-10 E-11 E-12 E-13 E-14

Supplementary Data (Cont'd) Electric Utility Fund (Cont'd)



Schedule of Bond Anticipation Notes Payable - Electric Utility Capital Fund (Not Applicable) Schedule of Serial Bonds Payable - Electric Utility Capital Fund (Not Applicable) Schedule of Bonds and Notes Authorized But Not Issued - Electric Utility Capital Fund (Not Applicable)

PART II - SINGLE AUDIT Schedule of Expenditures of Federal Awards Schedule of Expenditures of State Awards Notes to Schedules of Expenditures of Federal and State Awards Independent Auditors' Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

Schedule of Findings and Responses Summary Schedule of Prior Audit Findings

PART III - COMMENTS AND RECOMMENDATIONS Comments and Recommendations Summary of Recommendations

Exhibit

Page 1

2-3 4

5-6 7-8

9

1-4 5

BOROUGH OF MADISON

PART I

REPORT ON AUDIT OF

FINANCIAL STATEMENTS AND

SUPPLEMENT ARY SCHEDULES


NI SI V 0 CC I A u.P Certified Public Accountants & Advisors

The Honorable Mayor and Members of the Borough Council

Borough of Madison Madison, New Jersey

Report on the Financial Statements

fudependent Auditors' Report

Mount Arlington Co1-porate Center 200 Valley Road, Suite 300

Mt Arlington, NJ 07856 973-298-8500 i 973-298-8501 Fax

Lawrence Business Center 11 Lawrence Road Newton, NJ 07860

973-383-6699 I 973-383-6555 Fax

We have audited the financial statements - regulatory basis - of the various funds of the Borough of Madison, in the County of Morris (the "Borough") as of and for the years ended December 31, 2018 and 2017, and the related notes to the 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 practices prescribed or permitted by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (the "Division") to demonstrate compliance with the Division's regulatory basis of accounting, and the budget laws of New Jersey; 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.

Auditors' Responsibility

Our responsibility is to express opinions on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America, audit requirements prescribed by the Division, 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 audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves 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. fu making those risk assessments, the auditor considers internal control relevant to the Borough'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 Borough'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 op1mons.

wvvw_nisivoccia.corn independent Mernber o'f f.JKR lnte;nat'onal

1


Borough of Madison Page2

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1, the financial statements are prepared by the Borough on the basis of accounting practices prescribed or permitted by the Division to demonstrate compliance with the Division's regulatory basis of accounting and the budget laws of New Jersey, which is a basis of accounting other than accounting principles generally accepted in the United States of America. The effects on the financial statements of the variances between the regulatory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the Basis for the Adverse Opinion on US. Generally Accepted Accounting Principles paragraph, the financial statements referred to above do not present fairly in accordance with accounting principles generally accepted in the United States of America the financial position of each fund and account group of the Borough as of December 31, 2018 and 2017, or the changes in financial position or where applicable, cash flows thereof for the years then ended.

Opinion on Regulatory Basis of Accounting

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the various funds and account group of the Borough as of December 31, 2018 and 201 7, and the results of operations and changes in fund balance, where applicable, of such funds, thereof for the years then ended on the basis of accounting practices prescribed or permitted by the Division to demonstrate compliance with the Division's regulatory basis of accounting and the budget laws of New Jersey, as described in Note 1.

Emphasis of Matter

As discussed in Note 18 to the financial statements, the Borough implemented Governmental Accounting Standards Board ("GASE") Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions, during the year ended December 31, 2018. Our opinions are not modified with respect to this matter.

Other Matters

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements of the various funds that collectively comprise the Borough's financial statements. The supplementary data schedules listed in the table of contents and the schedules of expenditures of federal 'and state awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance") and New Jersey's OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid, are presented for purposes of additional analysis and are not a required part of the financial statements.

2


Borough of Madison Page 3

The supplementary data schedules and the schedules of expenditures of federal and state awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the various fund financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the various fund financial statements or to the various fund financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary data schedules and the schedules of expenditures of federal and state awards are fairly stated, in all material respects, in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated May 22, 2019 on our consideration of the Borough's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Borough's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Borough's internal control over financial reporting and compliance.

May22, 2019 Mount Arlington, New Jersey NISNOCCIA LLP

Valerie A. Dolan Certified Public Accountant Registered Municipal Accountant No. 548

3

BOROUGH OF MADISON COUNTY OF MORRIS

2018 CURRENT FUND

BOROUGH OF MADISON CURRENT FUND

A 1 of2

COMPARATIVE BALANCE SHEET- REGULATORY BASIS

December 31, Ref. 2018 2017

ASSETS

Regular Fund: Cash and Cash Equivalents:

Treasurer A-4 $ 15,129,411.60 $ 22,287 ,318.81 Change Fund 600.00 600.00

15,130,011.60 22,287,918.81

Receivables and Other Assets With

Full Reserves: Delinquent Property Taxes Receivable A-6 242,596.68 261,286.24 Tax Title Liens Receivable A-7 44,205.03 40,180.08 Property Acquired for Taxes at Assessed Valuation 15,300.00 15,300.00 Revenue Accounts Receivable A-8 11,030.96 7,885.79 Prepaid Local School Taxes A-10 3.13 Interfund Accounts Receivable:

Animal Control Fund B 19,103.41 22,045.04 Other Trust Fund B 22,130.75 Water Utility Operating Fund D 0.03 1,134.35 Payroll Agency Account 26,041.39 6,041.39

Total Receivables and Other Assets With Full Reserves 358,280.63 376,003.64

Total Regular Fund 15,488,292.23 22,663,922.45

Federal and State Grant Fund: State and Federal Grants Receivable A-11 326,277.58 240,387.12 Due from Current Fund A 175,377.15 223,874.00

Total Federal and State Grant Fund 501,654.73 464,261.12

TOT AL ASSETS $ 15,989,946.96 $ 23,128,183.57

BOROUGH OF MADISON

CURRENT FUND

COMPARATIVE BALANCE SHEET - REGULATORY BASIS

(Continued)

A

2 of2

December 31,

Ref. 2018

LIABILITIES, RESERVES AND FUND BALANCE

Regular Fund:

Appropriation Reserves:

Unencumbered A-3;A-9 $ 2,163,192.92

Encumbered A-3;A-9 1,224,356.60

Total Appropriation Reserves 3,387,549.52

Prepaid Taxes 522,181.85

Tax Overpayments

County Taxes Payable 52,960.64

Due State of New Jersey:

Senior Citizens' and Veterans' Deductions 15,404.29

Construction Code Fees 11,634.00

Interfund Accounts Payable:

Federal and State Grant Fund A 175,377.15

Open Space Trust Fund B 3,218.14

Other Trust Fund B 123.00

General Capital Fund c 66,490.67

Reserve for Tax Appeals Pending 491,473.09

Reserve for Revaluation 32,080.11

4,758,492.46

Reserve for Receivables and Other Assets 358,280.63

Fund Balance A-1 10,371,519.14

Total Regular Fund 15,488,292.23

Federal and State Grant Fund:

Appropriated Reserves A-12 501,654.73

Unappropriated Reserves A-13

Total Federal and State Grant Fund 501,654.73

TOTAL LIABILITIES, RESERVES AND FUND BALANCE $ 15,989,946.96

THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

ARE AN INTEGRAL PART OF THIS STATEMENT

2017

$ 2,249,713.30

1,185,533.97

3,435,247.27

8,732,200.11

250.00

14,949.29

14,845.00

223,874.00

4,358.21

124,455.99

429,366.40

32,080.11

13,011,626.38

376,003.64

9,276,292.43

22,663,922.45

443,282.85

20,978.27

464,261.12

$ 23,128,183.57

BOROUGH OF MADISON

CURRENT FUND

A-1

COMPARATIVE STATEMENT OF OPERATIONS AND CHANGE IN FUND BALANCE -REGULATORY BASIS

Year Ended December 31,

Ref. 2018 2017 Revenue and Other Income Realized

Fund Balance Utilized $ 4,827,009.25 $ 4,587,200.00

Miscellaneous Revenue Anticipated 12,269,953.17 13,050,348.93

Receipts from:

Delinquent Taxes 261,341.93 255,365.77 Current Taxes 68,172,237.75 67' 154,434.05 Nonbudget Revenue 1,091,856.06 398,052.08

Other Credits to Income:

Accounts Payable Cancelled 47,832.05 Unexpended Balance of Appropriation Reserves 2,570,697.49 2,049,774.90 Cancellation of Appropriated Grant Reserves 3,711.42 13,486.20 Tax Overpayments Cancelled 249.96 Interfunds and Other Receivables Returned 51,351.53 92,674.28

Total Income 89,248,408.56 87,649,168.26

Expenditures

Budget Appropriations:

Municipal Purposes 29,826,202.51 29,543,974.36 County Taxes 10,483,701.64 10,537 ,685.36 Amount Due County for Added and Omitted Taxes 52,960.64 72,775.62 Local School District Taxes 42,274,722.00 41,390,945.00 Prepaid Local School Tax 3.13 Municipal Open Space Taxes 640,850.68 636,553.54 Cancellation of Federal and State Grant Fund Receivables 2,337.17 22,536.88 Prior Year Senior Citizens' Deduction Disallowed 250.00 250.00 Interfunds Advanced 45,144.83 51,351.53

Total Expenditures 83,326,172.60 82,256,072.29

Excess in Revenue 5,922,235.96 5,393,095.97

Fund Balance

Balance January 1 9,276,292.43 8,470,396.46

15,198,528.39 13,863,492.43 Decreased by:

Utilized as Anticipated Revenue 4,827,009.25 4,587,200.00

Balance December 31 A $ 10,371,519.14 $ 9,276,292.43




STATEMENT OF REVENUE - REGULATORY BASIS YEAR ENDED DECEMBER 31, 2018

Added by Budget NJSA 40A:4-87

Fund Balance Anticipated $ 4,827,009.25

Miscellaneous Revenue: Licenses:

Alcoholic Beverages 30,000.00 Other Licenses 20,000.00

Fees and Permits 350,000.00

Fines and Costs: Municipal Court 150,000.00

Interest and Costs on Taxes 50,000.00 Parking Meters 55,000.00 Interest on Investments and Deposits 80,000.00 Police Burglar Alarm Fees 15,000.00

Cablevision Franchise Fees 200,000.00 Sewer Fees on Tax Exempt Property 260,000.00 Consolidated Municipal Property Tax Relief Aid 41,565.00 Energy Receipts Tax (P .L. 1997, Chapters 162 & 16 7) 766,964.00 Uniform Construction Code Fees 841,000.00 Inter-Municipal Health Contracts for Local Community

Health Services 285,000.00 Inter-Municipal Contract for Tax Assessor Services 88,000.00 Inter-Municipal Contract for Joint Court Agreement 585,000.00 Reserve for Recycling Tonnage Grant

2017 0.37 2018 20,977.90

Clean Communities Program - 2018 $ 27,796.41 Alcohol and Drug Abuse Grant (M.A.A.S.A.)

2018 12,419.00 Supplemental- 2018 2,000.00

Madison Main Street Foundation Grant 140,000.00 Other Special Items:

Utility Operating Surplus of Prior Years - Electric Utility 7,045,153.00 Life Hazard Use Fees 26,000.00 Payment in Lieu of Taxes on Exempt Property- FDU 20,000.00 Madison Cell Tower Leases 280,000.00 Utility Operating Surplus of Prior Years - Water Utility 200,000.00

Rosene! User Fees 30,000.00 Sewer Connection Fees 30,000.00 Recreation Fees 20,000.00

Technology Services 120,000.00

Total Miscellaneous Revenue 11,762,079.27 29,796.41

Realized

$ 4,827,009.25

31,823.80 $ 36,813.00

362,235.35

126,535.25 82,220.27 80,240.30

307,119.37 15,690.00

234,453.57 268,194.95

41,565.00 766,964.00 763,925.79

328,280.00 93,999.00

630,714.93

0.37 20,977.90 27,796.41

12,419.00 2,000.00

140,000.00

7,045,153.00 29,589.00 42,090.38

329,063.32 200,000.00 63,032.64 23,678.00

135.00 163,243.57

12,269,953.17

A-2 I of3

Excess or Deficit*

1,823.80 16,813.00 12,235.35

23,464.75 * 32,220.27 25,240.30

227,119.37 690.00

34,453.57 8,194.95

77,074.21 *

43,280.00 5,999.00

45,714.93

3,589.00 22,090.38 49,063.32

33,032.64 6,322.00 *

19,865.00 * 43,243.57

478,077.49

Receipts from Delinquent Taxes

Amount to be Raised by Taxes for Support of

Municipal Budget: Local Tax for Municipal Purposes Minimum Library Tax

Budget Totals

Nonbudget Revenue


STATEMENT OF REVENUE - REGULATORY BASIS

YEAR ENDED DECEMBER 31. 2018 (Continued)

$

Budget

225,000.00

13,388,531.95 1,330,981.05

14,719,513.00

Added by NJSA 40A:4-87

31,533,601.52 $ 29,796.41

$ 31,533,601.52 $ 29,796.41 ========

Realized Excess or Deficit*

A-2

2 of3

$ 261,341.93 _$ ___ 36~,3_4_1._93_

15,122,021.74 1,733,489.79

1,330,981.05

16,453,002. 79 1,733,489.79

33,811,307.14 2,247,909.21

1,091,856.06 1,091,856.06

$ 34,903,163.20 $ 3,339,765.27


STATEMENT OF REVENUE - REGULATORY BASIS YEAR ENDED DECEMBER 31, 2018

(Continued)

Allocation of Current Tax Collections

Collections Allocated to:

School, County, and Open Space Taxes

Add: Appropriation - Reserve for Uncollected Taxes

Amount for Support of Municipal Budget

Analysis oflnterest Earned

Cash Received - Treasurer Interest Due from:

General Capital Fund Other Trust Fund

Analysis ofNonbudget Revenue: Treasurer:

Morris County Municipal Joint Insurance Fund Refunds State of New Jersey- Senior Citizens and Veterans

Deductions Administrative Fee Department Collections:

Municipal Court - Public Defender Fees Recycling

FEMA Reimbursements - Superstorm Sandy Miscellaneous Refunds

Insurance Refunds Redeveloper's Agreement Payment in Lieu of Taxes on Exempt Property:

Housing Authority Elks Lodge Madison Place and Rose Hall

Sale of Property Joint Meeting Adjustment - Chatham Borough Payroll Processing Refunds Other Miscellaneous

Due from Animal Control Fund: Statutory Excess in Reserve for Animal Control Fund Expenditures

$ 59,615.04

1,415.48

9,4,28.50 25,502.22

9,160.87 11,001.14

21,284.61 44,200.00

136,550.10 9,667.40

453,885.95 90,000.00 64,034.17 46,776.81 90,230.36

$

$

$

A-2 3 of3

68,172,237.75

53,452,234.96 14,720,002.79

1,733,000.00

16,453,002.79

304,638.50

1,796.40 684.47

$ 307,119.37

$ 1,072,752.65

19,103.41

$ 1,091,856.06

THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT

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(N

.J.S

.A ..

40:5

6A:l

et s

eq.)

: O

ther

Exp

ense

s

Com

mun

ity

Bus

ines

s D

evel

opm

ent:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

His

tori

c P

rese

rvat

ion:

O

ther

Exp

ense

s

LA

ND

US

E A

DM

INIS

TR

AT

ION

: P

lann

ing

Boa

rd:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

Zon

ing

Boa

rd o

f Adj

ustm

ent:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

PUB

LIC

SA

FE

TY

FU

NC

TIO

NS

: P

olic

e an

d F

ire

Bui

ldin

g:

Oth

er E

xpen

ses

Pol

ice:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

BO

RO

UG

H O

F M

AD

ISO

N

CU

RR

EN

T F

UN

D

ST

AT

EM

EN

T O

F E

XP

EN

DIT

UR

ES

-R

EG

UL

AT

OR

Y B

AS

IS

YE

AR

EN

DE

D D

EC

EM

BE

R 3

1. 2

018

(Con

tinu

ed)

App

ropr

iati

ons Bud

get A

fter

P

aid

or

Exp

ende

d B

y

Bud

get

Mod

ific

atio

n C

harg

ed

Res

erve

d

$ 17

,471

.00

$ 17

,471

.00

$ 17

,471

.00

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0 37

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40.6

0 $

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00

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303.

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202,

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80

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43,9

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A-3

2 o

f9

Une

xpen

ded

Bal

ance

C

ance

lled

A-3 2 of 9

Ope

rati

ons

Wit

hin

"CA

PS

" (c

onti

nued

):

PU

BL

IC S

AF

ET

Y F

UN

CT

ION

S (

Con

tinu

ed):

Pro

ject

Com

mun

ity

Pri

de:

Oth

er E

xpen

ses

Em

erge

ncy

Man

agem

ent

Ser

vice

s:

Oth

er E

xpen

ses

Fir

st A

id O

rgan

izat

ion

Con

trib

utio

n

Fire

: Sal

arie

s &

Wag

es

Oth

er E

xpen

ses:

Mis

cell

aneo

us O

ther

Exp

ense

s

Uni

form

Fir

e S

afet

y A

ct:

Fir

e O

ffic

ial

Saf

ety

Cod

e:

Sal

arie

s &

Wag

es

PU

BL

IC W

OR

KS

FU

NC

TIO

NS

:

Pub

lic

Wor

ks:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

Sew

er D

epar

tmen

t:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

Sha

de T

ree:

Oth

er E

xpen

ses

Gar

bage

Rem

oval

:

Oth

er E

xpen

ses

Pub

lic

Bui

ldin

g an

d G

roun

ds:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

BO

RO

UG

H O

F M

AD

ISO

N

CU

RR

EN

T F

UN

D

ST

A T

EM

EN

T O

F E

XP

EN

DIT

UR

ES

-R

EG

UL

AT

OR

Y B

AS

IS

YE

AR

EN

DE

D D

EC

EM

BE

R 3

1, 2

018

(Con

tinu

ed)

App

ropr

iati

ons

Bud

get

Aft

er

Pai

d or

Exp

ende

d B

y

Bud

get

Mod

ific

atio

n C

harg

ed

Res

erve

d

$ 97

,420

.00

$ 97

,420

.00

$ 96

,462

.00

$ 95

8.00

12,5

00.0

0 12

,500

.00

10,1

76.2

2 2,

323.

78

60,0

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,000

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6,62

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446,

621.

00

1,39

4,91

7.79

51

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70,3

50.0

0 70

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61,6

10.3

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739.

64

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314.

00

126,

314.

00

126,

210.

70

103.

30

1,55

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555,

082.

00

1,34

8,67

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20

6,40

3.00

332,

600.

00

332,

600.

00

242,

850.

13

89,7

49.8

7

280,

007.

00

280,

007.

00

262,

001.

89

18,0

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115,

300.

00

115,

300.

00

112,

107.

01

3,19

2.99

118,

150.

00

118,

150.

00

114,

118.

41

4,03

1.59

1,65

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657,

300.

00

1,41

4,29

3.64

24

3,00

6.36

100,

205.

00

100,

205.

00

95,9

83.1

2 4,

221.

88

110,

850.

00

110,

850.

00

87,2

12.4

9 23

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A-3

3 o

f9

Une

xpen

ded

Bal

ance

Can

cell

ed

A-3 3 of 9

Ope

rati

ons

Wit

hin

"CA

PS

" (c

onti

nued

):

PU

BL

IC W

OR

KS

FU

NC

TIO

NS

(co

ntin

ued)

:

Veh

icle

Mai

nten

ance

:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

HE

AL

TH

AN

D H

UM

AN

SE

RV

ICE

S F

UN

CT

ION

S:

Boa

rd o

f H

ealt

h:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

Ani

mal

Con

trol

Ser

vice

s:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

Civ

ic C

ente

r:

Oth

er E

xpen

ses

PA

RK

AN

D R

EC

RE

AT

ION

FU

NC

TIO

NS

:

Rec

reat

ion

and

Pla

ygro

unds

:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

Sen

ior

Cit

izen

s' P

rogr

ams:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

Tee

n C

ente

r:

Oth

er E

xpen

ses

Par

ks C

omm

itte

e:

Oth

er E

xpen

ses

OT

HE

R C

OM

MO

N O

PE

RA

TIN

G F

UN

CT

ION

S:

Cel

ebra

tion

of

Pub

lic

Eve

nts,

Ann

iver

sary

or

Hol

iday

:

Oth

er E

xpen

ses

Mun

icip

al C

ourt

:

Oth

er E

xpen

ses

BO

RO

UG

H O

F M

AD

ISO

N

CU

RR

EN

T F

UN

D

ST

AT

EM

EN

T O

F E

XP

EN

DIT

UR

ES

-R

EG

UL

AT

OR

Y B

AS

IS

YE

AR

EN

DE

D D

EC

EM

BE

R 3

1, 2

018

(Con

tinu

ed)

App

ropr

iati

ons Bud

get

Aft

er

Pai

d or

Exp

ende

d B

y

Bud

get

Mod

ific

atio

n C

harg

ed

Res

erve

d

$ 35

2,83

8.00

$

352,

838.

00

$ 33

7,26

2.21

$

15,5

75.7

9

251,

000.

00

251,

000.

00

228,

369.

88

22,6

30.1

2

52,9

09.0

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.00

52,9

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0

235,

125.

00

235,

125.

00

145,

799

.44

89,3

25.5

6

2,00

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000.

00

2,00

0.00

10,0

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,000

.00

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500.

00

35,0

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,000

.00

31,3

55.3

2 3,

644.

68

51,6

50.0

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51,3

25.4

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4.57

131,

250.

00

131,

250.

00

125,

207.

18

6,04

2.82

105,

496.

00

105,

496.

00

99,9

72.9

9 5,

523.

01

16,2

00.0

0 16

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.00

15,6

19.2

2 58

0.78

20,0

00.0

0 20

,000

.00

19,9

98.0

0 2.

00

18,4

60.0

0 18

,460

.00

13,7

25.0

0 4,

735.

00

15,9

00.0

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,900

.00

10,2

05.1

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694.

89

17,6

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0

A-3

4 o

f9

Une

xpen

ded

Bal

ance

Can

cell

ed

A-3 4 of 9

BO

RO

UG

H O

F M

AD

ISO

N

CU

RR

EN

T F

UN

D

ST

AT

EM

EN

T O

F E

XP

EN

DIT

UR

ES

-R

EG

UL

AT

OR

Y B

AS

IS

YE

AR

EN

DE

D D

EC

EM

BE

R 3

1, 2

018

(Con

tinu

ed)

App

ropr

iati

ons Bud

get

Aft

er

Pai

d or

Exp

ende

d B

y

Bud

get

Mod

ific

atio

n C

harg

ed

Res

erve

d

Ope

rati

ons

Wit

hin

"CA

PS

" (C

onti

nued

):

OT

HE

R C

OM

MO

N O

PE

RA

TIN

G F

UN

CT

ION

S (

cont

inue

d):

Insu

ranc

e:

Gen

eral

Lia

bili

ty

Wor

kers

Com

pens

atio

n

Em

ploy

ee G

roup

Hea

lth

Hea

lth

Ben

efit

Wai

ver

ST A

TE

UN

IFO

RM

CO

NS

TR

UC

TIO

N C

OD

E:

Sta

te U

nifo

rm C

onst

ruct

ion

Cod

e:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

UN

CL

AS

SIF

IED

:

Sal

arie

s &

Wag

es A

djus

tmen

t P

rogr

am

UT

ILIT

Y E

XP

EN

SE

S A

ND

BU

LK

PU

RC

HA

SE

S:

Ele

ctri

city

Tel

epho

ne

Gas

Sew

erag

e P

roce

ssin

g an

d D

ispo

sal

Gas

olin

e

Tot

al -

Ope

rati

ons

Wit

hin

"CA

PS

"

Con

ting

ent

Tot

al -

Ope

rati

ons

Wit

hin

"CA

PS

" In

clud

ing

Con

ting

ent

Det

ail:

Sal

arie

s an

d W

ages

Oth

er E

xpen

ses

Incl

udin

g C

onti

ngen

t

$ 39

5,85

0.00

250,

000.

00

1, 7

54,0

00.0

0

60,0

00.0

0

811,

703.

00

129,

050.

00

20,0

00.0

0

365,

000.

00

54,0

00.0

0

88,0

00.0

0

15,0

00.0

0

226,

600.

00

17,7

94,1

19.0

0

50,0

00.0

0

17,8

44,1

19.0

0

9,83

4,48

2.00

8,00

9,63

7.00

$ 33

0,85

0.00

250,

000.

00

1, 7

54,0

00.0

0

60,0

00.0

0

811,

703.

00

194,

050.

00

20,0

00.0

0

365,

000.

00

54,0

00.0

0

88,0

00.0

0

15,0

00.0

0

226,

600.

00

17,7

94,1

19.0

0

50,0

00.0

0

17,8

44,1

19.0

0

9,83

4,48

2.00

8,00

9,63

7.00

$ 30

6,99

5.09

250,

000.

00

1,65

8,20

2. 73

59,8

42.1

3

781,

148.

14

161,

134.

82

264,

440.

63

22,5

54.9

6

62,7

19.4

7

11,3

00.0

0

171,

052.

78

16,1

02,1

42.9

2

2.00

16,1

02,1

44.9

2

9,32

2,52

5.57

6,77

9,61

9.35

$ 23

,854

.91

95,7

97.2

7

157.

87

30,5

54.8

6

32,9

15.1

8

20,0

00.0

0

100,

559.

37

31,4

45.0

4

25,2

80.5

3

3,70

0.00

55,5

47.2

2

1,69

1,97

6.08

49,9

98.0

0

1,74

1,97

4.08

511,

956.

43

1,23

0,01

7.65

A-3

5 o

f9

Une

xpen

ded

Bal

ance

Can

cell

ed

A-3 5 of 9

ST

AT

UT

OR

Y E

XP

EN

DIT

UR

ES

:

Pub

lic

Em

ploy

ees'

Ret

irem

ent

Sys

tem

Soc

ial

Sec

urit

y S

yste

m (

O.A

.S.I

.)

Pol

ice

and

Fir

eman

's R

etir

emen

t S

yste

m o

f New

Jer

sey

Une

mpl

oym

ent

Insu

ranc

e

Def

ined

Con

trib

utio

n R

etir

emen

t P

rogr

am

Tot

al S

tatu

tory

Exp

endi

ture

s -

Mun

icip

al

Wit

hin

"CA

PS

"

Tot

al G

ener

al A

ppro

pria

tion

s fo

r M

unic

ipal

Pur

pose

s W

ithi

n "C

AP

S"

Ope

rati

ons

Exc

lude

d fr

om "

CA

PS

":

San

itat

ion:

Mad

ison

-Cha

tham

Joi

nt M

eeti

ng

Mai

nten

ance

of

Fre

e P

ubli

c L

ibra

ry (

c. 8

2, P

.L.

1985

):

Oth

er E

xpen

ses

Oth

er E

xpen

ses

-T

echn

olog

y

Tax

App

eal

Res

erve

Inte

r-M

unic

ipal

Hea

lth

Con

trac

ts f

or L

ocal

Com

mun

ity

Hea

lth

Ser

vice

s:

Boa

rd o

f H

ealt

h:

Sal

arie

s &

Wag

es

Inte

r-M

unic

ipal

Con

trac

t fo

r T

ax A

sses

sor

Ser

vice

s:

Sal

arie

s &

Wag

es

Inte

r-M

unic

ipal

Con

trac

t fo

r Jo

int

Cou

rt:

Sal

arie

s &

Wag

es

Oth

er E

xpen

ses

BO

RO

UG

H O

F M

AD

ISO

N

CU

RR

EN

T F

UN

D

ST

AT

EM

EN

T O

F E

XP

EN

DIT

UR

ES

-R

EG

UL

AT

OR

Y B

AS

IS

YE

AR

EN

DE

D D

EC

EM

BE

R 3

1, 2

018

(Con

tinu

ed)

App

ropr

iati

ons

Exp

ende

d B

y

$

Bud

get

380,

000.

00

490,

000.

00

1,02

0,00

0.00

50,0

00.0

0

18,0

00.0

0

1,95

8,00

0.00

19,8

02,1

19.0

0

1, 1

30,0

00.0

0

1,43

0,98

1.00

110,

000.

00

75,0

00.0

0

285,

000.

00

88,0

00.0

0

469,

007.

00

115,

993.

00

$

Bud

get

Aft

er

Mod

ific

atio

n

375,

000.

00

490,

000.

00

1,02

0,00

0.00

50,0

00.0

0

23,0

00.0

0

1,95

8,00

0.00

19,8

02, 1

19.0

0

1,13

0,00

0.00

1,43

0,98

1.00

110,

000.

00

75,0

00.0

0

285,

000.

00

88,0

00.0

0

469,

007.

00

115,

993.

00

$

Pai

d or

Cha

rged

364,

549.

65

456,

674.

33

1,01

7,50

5.53

20, 1

17.2

5

1,85

8,84

6.76

17,9

60,9

91.6

8

896,

174.

51

1,43

0,98

1.00

110,

000.

00

75,0

00.0

0

252,

621.

72

87,9

14.7

1

429,

724.

30

99,4

99.1

6

$

Res

erve

d

10,4

50.3

5

33,3

25.6

7

2,49

4.47

50,0

00.0

0

2,88

2.75

99,1

53.2

4

1,84

1,12

7.32

233,

825.

49

32,3

78.2

8

85.2

9

39,2

82.7

0

16,4

93.8

4

A-3

6 o

f9

Une

xpen

ded

Bal

ance

Can

cell

ed

A-3 6 of 9

Ope

rati

ons

Exc

lude

d fr

om "

CA

PS

" (C

onti

nued

):

Pub

lic

and

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A-3 8 of 9


STATEMENT OF EXPENDITURES - REGULATORY BASIS YEAR ENDED DECEMBER 31, 2018

(Continued)

Analysis of

Adopted Budget Added by N.J.S.A. 40A:4-87

Cash Disbursed

Encumbrances Due to Federal and State Grant Fund Reserve for Tax Appeals

Reserve for Uncollected Taxes

Less: Appropriation Refunds

A

Budget After

Modification

$ 31,533,601.52

29,796.41

$ 31,563,397.93



$

$

A-3

9 of9

Paid or

Charged

26,258,930.66

1,224,356.60 206,297.93

75,000.00 1, 733,000.00

29,497,585.19

101,575.60

29,396,009.59


2018 TRUST FUNDS

B 1 of2

BOROUGH OF MADISON

TRUST FUNDS COMPARATIVE BALANCE SHEET- REGULATORY BASIS

ASSETS

Animal Control Fund: Cash and Cash Equivalents

Open Space Trust Fund: Cash and Cash Equivalents

Due from Current Fund Due from General Capital Fund

Affordable Housing Development Trust Fund:

Cash and Cash Equivalents

Other Trust Funds: Cash and Cash Equivalents

Due from Current Fund Due from General Capital Fund

TOT AL ASSETS


Animal Control Fund:

Due to State of New Jersey Due to Current Fund

Prepaid Licenses

Reserve for Animal Control Fund Expenditures

Open Space Trust Fund: Reserve for Open Space Trust

Ref.

B-4 $

B-4

A

c

B-4

B-4

A

c

$

$

A

B-5

December 31, 2018 2017

66,684.61 $ 68,551.48

66,684.61 68,551.48

1,617 ,520.68 999,057.98 3,218.14 4,358.21

15,485.71 95,034.19 1,636,224.53 1,098,450.38

3,270,224.01 2,077,076.22 3,270,224.01 2,077,076.22

1,208,564.07 1,539,935.43 123.00

199.44 199.44 1,208,886.51 1,540, 134.87

6,182,019.66 $ 4,784,212.95

472.40 $ 543.80

19,103.41 22,045.04

4,995.60 5,713.20

42,113.20 40,249.44

66,684.61 68,551.48

1,636,224.53 1,098,450.38 1,636,224.53 1,098,450.38

BOROUGH OF MADISON

TRUST FUNDS COMPARATIVE BALANCE SHEET - REGULATORY BASIS

B 2 of2

December 31,


Affordable Housing Development Trust Fund:

Due to General Capital Fund Reserve for Affordable Housing Development

Other Trust Funds: Due to Current Fund Due to State of New Jersey:

Marriage License Fees

Unallocated Receipts Reserve for:

State Unemployment Insurance

Developers' Escrows

Recycling Chapter 14 P.O.A.A. Community Development

Atlantic Healthcare Dodge Foundation for Police

Tax Sale Premium Community Relations

Jacob Henry Perkins Police Outside Duty

State Law Enforcement

MAASA Trust Playground Fund

Fire Department Community Gardens Project

Station Area Fund

Recreation

TOTAL LIABILITIES, RESERVES AND FUND BALANCE

A

2018

$ 55,000.00

3,215,224.01 3,270,224.01

300.00

139,040.96

516,934.68

3,889.40 9,047.69 5,483.21

500.00

937.63 74,000.00

126.00

21,229.54 225,564.67

7,599.69 832.45

12,654.44

2,773.02 28,098.50

126,047.40

33,827.23 1,208,886.51

$ 6,182,019.66


2017

$ 2,077,076.22

2,077,076.22

22,130.75

425.00

1.00

177,287.22

803,005.44 3,889.40

9,250.69 5,483.21

500.00 937.63

74,000.00

126.00 21,459.25

200,832.54 19,314.51

1,787.45

12,654.44 7,785.66

24,982.13 148,642.52

5,640.03

1,540, 134.87

$ 4,784,212.95

BOROUGH OF MADISON ASSESSMENT TRUST FUND

STATEMENT OF FUND BALANCE - REGULATORY BASIS YEAR ENDED DECEMBER 31, 2018

NOT APPLICABLE



B-1

BOROUGH OF MADISON

ASSESSMENT TRUST FUND



NOT APPLICABLE

ASSESSMENT TRUST FUND

STATEMENT OF EXPENDITURES - REGULATORY BASIS


NOT APPLICABLE



B-2

B-3


2018 GENERAL CAPITAL FUND

BOROUGH OF MADISON

GENERAL CAPITAL FUND COMPARATIVE BALANCE SHEET - REGULATORY

c

December 31, Ref. 2018

ASSETS

Cash and Cash Equivalents C-2 $ 4,619,222.98 Due from Current Fund A 66,490.67 Due from Affordable Housing Trust Fund B 55,000.00

Deferred Charges to Future Taxation:

Funded 19,576,259.98 Unfunded C-4 8,283,481.00

TOT AL ASSETS $ 32,600,454.63


Serial Bonds Payable C-8 $ 17,556,000.00 NJ Environmental Infrastructure Loans Payable:

Trust Loan C-9 686,770.34

Fund Loan C-9 1,333,489.64 Improvement Authorizations:

Funded C-5 2,633,451.62 Unfunded C-5 8,273,781.00

Due to Open Space Trust Fund B 15,485.71 Due to Other Trust Fund - Fire Department Trust B 199.44 Capital Improvement Fund C-6 2,006,03 7 .27 Due to Museum of Early Trades and Crafts 19,086.26 Reserve for MCJM Expansion and Operations 66,663.00 Fund Balance C-1 9,490.35

TOTAL LIABILITIES, RESERVES AND FUND BALANCE $ 32,600,454.63

THE ACCOMPANYING NOTES TO FINANCIAL ST A TEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT

2017

$ 3,819,141.31 124,455.99

21,306,373.35 3,513,481.00

$ 28,763,451.65

$ 19,156,000.00

725,842.50

1,424,530.85

2,171,766.99 3,503,781.00

95,034.19 199.44

1,657,720.07 19,086.26

9,490.35

$ 28,763,451.65

BOROUGH OF MADISON GENERAL CAPITAL FUND

STATEMENT OF FUND BALANCE - REGULATORY BASIS

Balance December 31, 201 7 c

Balance December 31, 2018 c


C-1

$ 9,490.35

$ 9,490.35


2018 WATER UTILITY FUND

BOROUGH OF MADISON

WATER UTILITY FUND

D 1 of2

COMPARATIVE BALANCE SHEET -REGULATORY BASIS


ASSETS

Operating Fund: Cash and Cash Equivalents D-4 $ 2,012,672.24 $ 1, 784,352.66 Change Fund 25.00 25.00

2,012,697.24 1,784,377.66 Due From Water Utility Capital Fund D 1,451.06 651.70

2,014,148.30 1,785,029.36

Receivables with Full Reserves:

Consumer Accounts Receivable D-6 171,509.93 180,385.69

171,509.93 180,385.69

Total Operating Fund 2, 185,658.23 1,965,415.05

Capital Fund: Cash and Cash Equivalents D-4 2,505,896.07 2,673,429.27 Fixed Capital D-7 14,937,757.83 13,987,757.83 Fixed Capital Authorized and Uncompleted D-8 2,285,326.24 2,055,326.24

Total Capital Fund 19,728,980.14 18,716,513.34

TOTAL ASSETS $ 21,914,638.37 $ 20,681,928.39

BOROUGH OF MADISON

WATER UTILITY FUND COMPARATIVE BALANCE SHEET-REGULATORY BASIS

(Continued)

D

2 of2

December 31,


Operating Fund:


Unencumbered Encumbered

Due to Current Fund Reserve for Receivables

Reserve for Security Deposits Fund Balance

Total Operating Fund

Capital Fund: Improvement Authorizations - Funded Capital Improvement Fund Due to Water Utility Operating Fund

Reserve for: Amortization Automated Meter Reading

Deferred Reserve for Amortization

Total Capital Fund

TOT AL LIABILITIES, RESERVES AND FUND BALANCE

D-3;D-9

D-3;D-9

A D

D-1

D-10 D-11

D

D-12

2018

$ 412,930.75

98,792.75 511,723.50

0.03 171,509.93

100.00 1,502,324.77

2,185,658.23

1,408,278.13

296,166.88

1,451.06

14,937,757.83

800,000.00 2,285,326.24

19,728,980.14

$ 21,914,638.37


2017

$ 375,585.08 110,101.29

485,686.37

1,134.35 180,385.69

100.00 1,298,108.64

1,965,415.05

1,296,610.69 376,166.88

651.70

13,987,757.83 1,000,000.00

2,055,326.24

18,716,513.34

$ 20,681,928.39

BOROUGH OF MADISON WATER UTILITY OPERA TING FUND

D-1

COMPARATIVE STATEMENT OF OPERA TIO NS AND CHANGE IN FUND BALANCE -REGULATORY BASIS

Year Ended December 31, Ref. 2018

Revenue and Other Income Realized

Fund Balance Utilized $ 122,132.00 Rents 2,494,872.60 Miscellaneous Revenue 215,120.22 Other Credits to Income:

Unexpended Balance of Appropriation Reserves 398,355.31

Total Income 3,230,480.13

Expenditures

Budget Expenditures: Operating 1,600,132.00 Capital Improvements 900,000.00 Deferred Charges and Statutory Expenditures 204,000.00

Total Expenditures 2,704,132.00

Excess in Revenue 526,348.13

Fund Balance

Balance January 1 1,298, 108.64 1,824,456.77

Decreased by: Utilized as Anticipated Revenue 122,132.00 Anticipated as Current Fund Budget Revenue 200,000.00

Balance December 31 D $ 1,502,324. 77


2017

$ 700,000.00 2,522,228.14

63,118.76

500,276.30

3,785,623.20

1,621,598.00 1,500,000.00

194,500.00

3,316,098.00

469,525.20

1,928,5 83 .44 2,398, 108.64

700,000.00 400,000.00

$ 1,298, 108.64

WATER UTILITY OPERA TING FUND


Operating Fund Balance Anticipated

Water Rents Miscellaneous Revenue

Analysis of Realized Revenue

Miscellaneous Revenue:

Interest on Investments: Water Utility Operating Fund

Other Miscellaneous Revenue

Connection Fees Water Line Protection Program

Interest on Investments:


Anticipated

$ 122,132.00 2,522,000.00

60,000.00

$ 2,704,132.00

$

$

$

Realized

122,132.00 2,494,872.60

215,120.22

2,832, 124.82

36,977.73 5,654.01

159,142.00 11,152.90

D-2

Excess or Deficit*

$ 27,127.40 *

155,120.22

$ 127,992.82

$ 212,926.64

Due from Water Utility Capital Fund 2,193.58


$ 215,120.22

BOROUGH OF MADISON WATER UTILITY OPERATING FUND


D-3

Appropriations Expended by

Operating: Salaries and Wages

Other Expenses

Capital Improvements: Capital Improvement Fund

Statutory Expenditures: Contribution to:

Public Employees' Retirement System

Social Security System (0.A.S.1.)

$

Budget

587,932.00

1,012,200.00

900,000.00

149,000.00 55,000.00

$ 2,704,132.00

Cash Disbursed Encumbrances Payable

$

Budget After Modi-

fication

587,932.00 1,012,200.00

900,000.00

149,000.00

55,000.00

$ 2,704,132.00

D

$

Paid or

Charged

537,953.16

663,094.67

900,000.00

149,000.00 41,153.42

$ 2,291,201.25

$ 2,192,408.50

98,792.75

$ 2,291,201.25



Reserved

$ 49,978.84

349,105.33

13,846.58

$ 412,930.75

D


2018 ELECTRIC UTILITY FUND

BOROUGH OF MADISON

ELECTRIC UTILITY FUND

COMPARATIVE BALANCE SHEET- REGULATORY BASIS

E 1of2


ASSETS

Operating Fund:

Cash and Cash Equivalents E-5 $ 12,032,386.18 $ 11,702,473.88

Change Fund 25.00 25.00

12,032,411.18 11,702,498.88

Due from Payroll Agency Account 5,567.76 5,567.76 Due from Electric Utility Capital Fund E 1,984.04 632.52

12,039,962.98 11,708,699.16

Receivables and Other Assets With Full Reserves:

Consumer Accounts Receivable E-8 976,529.27 947,116.76

Total Receivables and Other Assets

With Full Reserves 976,529.27 947,116.76

Total Operating Fund 13,016,492.25 12,655,815.92

Capital Fund: Cash and Cash Equivalents E-5 2,791,610.63 2,456,125.66

Fixed Capital E-9 12,991,083.51 12,684,971.61

Fixed Capital Authorized and Uncompleted E-10 1,670,000.00 1,440,000.00

Total Capital Fund 17,452,694.14 16,581,097.27

TOTAL ASSETS $ 30,469,186.39 $ 29,236,913.19

BOROUGH OF MADISON

ELECTRIC UTILITY FUND COMPARATIVE BALANCE SHEET - REGULATORY BASIS

(Continued)

E 2 of2

December 31,


Operating Fund:


Encumbered Unencumbered

Reserve for Receivables Reserve for Security Deposit

Fund Balance

Total Operating Fund

Capital Fund: Improvement Authorizations:

Funded Due to Electric Utility Operating Fund

Capital Improvement Fund

Reserve for: Amortization Deferred Amortization Electric Utility Substation

Total Capital Fund

E-4;E-11

E-4;E-11

E

E-1

E-12

E E-13

E-14

TOTAL LIABILITIES, RESERVES AND FUND BALANCE

2018

$ 665,860.25 1,541,067.15 2,206,927.40

976,529.27 1,260.00

9,831,775.58

13,016,492.25

931,481.03 1,984.04

958,145.56

12,991,083.51 1,670,000.00

900,000.00

17,452,694.14

$ 30,469' 186.39


2017

$ 744,899.40 1,569,445.55

2,314,344.95

947,116.76 1,260.00

9,393,094.21

12,655,815.92

j

956,235.68 632.52

899,257.46

12,684,971.61 1,440,000.00

600,000.00

16,581,097.27

$ 29,236,913.19

BOROUGH OF MADISON

ELECTRIC UTILITY OPERA TING FUND COMPARATNE STATEMENT OF OPERATIONS AND CHANGE IN

FUND BALANCE - REGULATORY BASIS

E-1

Year Ended December 31 Ref. 2018

Revenue and Other Income Realized

Metered Service $ 21,706,561.55

Miscellaneous Revenue 209,797.77

Other Credits to Incomes: Unexpended Balance of Appropriation Reserves 1,501,065.05

Total Income 23,417,424.37

Expenditures

Operating 14,553,090.00

Capital Improvements 895,000.00 Deferred Charges and Statutory Expenditures 485,500.00

Total Expenditures 15,933,590.00

Excess in Revenue 7,483,834.37

Fund Balance

Balance January 1 9,393,094.21 16,876,928.58

Decreased by:

Anticipated as Current Fund Budget Revenue 7,045,153.00

Balance December 31 E $ 9,831, 775.58


2017

$ 21,053,483.68

81,255.13

842,152.40

21,976,891.21

14,108,037.00

895,000.00 459,825.00

15,462,862.00

6,514,029.21

10,013,515.00

16,527,544.21

7,134,450.00

$ 9,393,094.21

BOROUGH OF MADISON

ELECTRIC UTILITY CAPITAL FUND

STATEMENT OF CAPITAL FUND BALANCE - REGULATORY BASIS


NOT APPLICABLE

ELECTRIC UTILITY OPERATING FUND



Metered Service

Miscellaneous Revenue

Analysis of Realized Revenue

Miscellaneous Revenue:

Miscellaneous Receipts

Interest Earned:

Electric Utility Operating Fund

Interest Earned:

$

$

$

Anticipated Realized

15,903,590.00 $ 21,706,561.55

30,000.00 209,797.77

15,933,590.00 $ 21,916,359.32

62,861.60

144,328.56

$ 207,190.16

Due from Electric Utility Capital Fund 2,607.61

Metered Services:

Consumer Accounts Receivable

State Aid - Life Line Credits

$ 209,797.77

$ 21,690,249.05

16,312.50

$ 21,706,561.55



E-2

E-3

Excess or

Deficit*

$ 5,802,971.55

179,797.77

$ 5,982,769.32

BOROUGH OF MADISON ELECTRIC UTILITY OPERATING FUND


E-4

Appropriations Expended by Budget

After Modi- Paid or Budget fication Charged

Operating: Salaries and Wages $ 1,802,115.00 $ 1,802,115.00 $ 1,712,679.42

Other Expenses 12,750,975.00 12,750,975.00 11,304,863.20

Capital Improvements: Capital Improvement Fund 595,000.00 595,000.00 595,000.00

Reserve for Substation Replacement 300,000.00 300,000.00 300,000.00


Public Employees' Retirement System 345,500.00 345,500.00 345,500.00

Social Security System 140,000.00 140,000.00 134,480.23

$ 15,933,590.00 $ 15,933,590.00 $ 14,392,522.85

Ref.

Ref.

Cash Disbursed $ 13,959,915.01

Reserve for Encumbrances E 665,860.25

14,625,775.26

Less: Refunds 233,252.41

$ 14,392,522.85

THE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS


Reserved

$ 89,435.58 1,446,111.80

5,519.77

$ 1,541,067.15

E


2018 PUBLIC ASSISTANCE FUND

(NOT APPLICABLE)


2018 GENERAL FIXED ASSETS ACCOUNT GROUP

BOROUGH OF MADISON

GENERAL FIXED ASSETS ACCOUNT GROUP COMPARATIVE BALANCE SHEET- REGULATORY BASIS

G

December 31, 2018

ASSETS

Land $ 33,249,900.00

Buildings 25,053,725.73

Improvements Other than Buildings 3,999,484.72 Machinery and Equipment 12,517,964.00

TOT AL ASSETS $ 74,821,074.45

RESERVES

Reserve for General Fixed Assets $ 74,821,074.45



2017

$ 37,472,600.00

25,053,725.73 3,999,484.72

11,227,142.00

$ 77,752,952.45

$ 77,752,952.45

BOROUGH OF MADISON NOTES TO FINANCIAL STATEMENTS


Note 1: Summary of Significant Accounting Policies

A. Reporting Entity

Except as noted below, the financial statements of the Borough of Madison include every board, body, officer or commission supported and maintained wholly or in part by funds appropriated by the Borough of Madison, as required by N.J.S. 40A:5-5. Accordingly, the financial statements of the Borough of Madison do not include the operations of the municipal library, fire company or first aid squad.

Governmental Accounting Standards Board ("GASB") Codification Section 2100, "Defining the Financial Reporting Entity" establishes standards to determine whether a governmental component unit should be included in the financial reporting entity. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the nature and significance of their relationship with a primary government are such that exclusion would cause the reporting entity's financial statements to be misleading. The primary government is financially accountable if it appoints a voting majority of the organization's governing body and (1) it is able to itnpose its will on that organization or (2) there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. A legally separate, tax-exempt organization should be reported as a component unit of a reporting entity if all of the following criteria are met: (1) The economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the primary government, its component units, or its constituents. (2) The primary government, or its component units, is entitled to, or has the ability to otherwise access, a majority of the economic resources received or held by the separate organization. (3). The economic resources received or held by an individual organization that the specific primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to that primary government. As the financial reporting entity was established in accordance with New Jersey statutes, the requirements of GASB Codification Section 2100 were not followed and, accordingly, the reporting entity could be different from accounting p'rinciples generally accepted in the United States of America.

B. Description of Funds

The accounting policies of the Borough conform to the accounting practices applicable to municipalities which have been prescribed or permitted by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (the "Division"). Such practices are designed primarily for determining compliance with legal provisions and budgetary restrictions and as a means of reporting on the stewardship of public officials with respect to public funds. Under this method of accounting, the Borough of Madison accounts for its financial transactions through the following separate funds:

Current Fund - Resources and expenditures for governmental operations of a general nature, including federal and state grant funds.

Trust Funds - Receipts, custodianship and disbursement of funds in accordance with the purpose for which each reserve was created.

General Capital Fund - Receipt and disbursement of funds for the acquisition of general capital facilities, other than those acquired in the Current Fund.

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Note 1: Summary of Significant Accounting Policies (Cont'd)

B. Description of Funds (Cont'd)

Water Utility Operating and Capital Funds - Account for the operations and acquisition of capital facilities of the municipally owned Water Utility.

Electric Utility Operating and Capital Funds - Account for the operations and acquisition of capital facilities of the municipally owned Electric Utility.

General Fixed Assets Account Group - Estimated values of land, buildings and certain fixed assets of the Borough as discussed in Note lE "General Fixed Assets".

C. Basis of Accounting

Basis of accounting refers to when revenue and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied.

The more significant accounting policies in New Jersey follow.

Revenue is recorded when received in cash except for certain amounts which may be due from the State of New Jersey and for the prepayment of future years' revenue. Grant revenue is realized in the Operating Funds when it is budgeted and in the Capital Funds when improvements are authorized. The amounts recorded as property taxes and consumer accounts receivable have not been included in revenue. Amounts that are due to the municipality, which are susceptible of accrual, are recorded as receivables with offsetting reserves in the Current Fund.

Expenditures are charged to operations based on budgeted amounts. Exceptions to this general rule include:

1. Accumulated unpaid vacation, sick pay and other employee amounts are not accrued.

2. Prepaid expenses, such as insurance premiums applicable to subsequent periods, are charged to current budget appropriations in total.

3. Principal and interest on long-term debt are recognized when due.

Expenditures, if any, in excess of appropriations, appropriation reserves or ordinances become deferred charges which must be raised by future taxes. Outstanding encumbrances at December 31 are reported as a cash liability in the financial statements and constitute part of the statutory appropriation reserve balance. Appropriation reserves covering unexpended appropriation balances are automatically created at December 31 of each year and recorded as liabilities, except for amounts which may be cancelled by the governing body. Appropriation reserves are available, until lapsed at the close of the succeeding year, to meet specific claims, commitments or contracts incurred during the preceding fiscal year. Lapsed appropriation reserves are recorded as income.

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C. Basis of Accounting (Cont'd)

Had the Borough's financial statements been prepared under accounting principles generally accepted in the United States of America, encumbrances would not be considered as expenditures; appropriation reserves would not be recorded; revenue susceptible to accrual would have been reflected without offsetting reserves; Federal and State grants and assistance would be recognized when earned, not when budgeted; inventories would not be reflected as expenditures at the time of purchase; investments would generally be stated at fair value; fixed assets purchased by the Water and Electric Utility Capital Funds would be depreciated and the Borough's net OPEB liability and net pension liability and related deferred inflows and outflows, where applicable, would be recorded.

The cash basis of accounting is followed in the Trust and Capital Funds.

D. Deferred Charges to Future Taxation - The General Capital Fund balance sheet includes both funded and unfunded deferred charges. Funded means that bonds have been issued and are being paid off on a serial basis. Unfunded means that debt has been authorized but not permanently financed. A municipality can eliminate an unfunded deferred charge by raising it in the budget, by collecting a grant, or by issuing bonds, loans or capital lease purchase agreements.

E. Other Significant Accounting Policies

Management Estimates - The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents - Amounts include petty cash, change funds, amounts on deposit, and short-term investments with original maturities of three months or less.

Investments - Investments are stated at cost.

Allowance for Uncollectible Accounts - No allowance for uncollectible accounts has been recorded as all amounts are considered collectible.

Compensated Absences - Expenditures relating to unused vested accumulated vacation and sick pay are not recorded until paid.

Foreclosed Property - Foreclosed Property is recorded in the Current Fund at the assessed valuation when such property was acquired and is fully reserved.

Interfunds - Interfund receivables in the Current Fund are recorded with offsetting reserves which are created by charges to operations. Income is recognized in the year the receivables are liquidated. Interfund receivables in the other funds are not offset by reserves.

Inventories of Supplies - The cost of inventories of supplies for all funds is recorded as expenditures at the time individual items are purchased. The cost of inventories is not included on the various balance sheets.

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E. Other Significant Accounting Policies (Cont'd)

Grants Receivable - Grants receivable represent the total grant awards less amounts collected to date. Because the amount of grant funds to be collected are dependent on the total costs eligible for reimbursement, the actual amount collected may be less than the total amount awarded.

General Fixed Assets - In accordance with New Jersey Administrative Code Accounting Requirements, as promulgated by Division of Local Government Services, General fixed assets are recorded at cost except for land and buildings, which are recorded at estimated historical cost as estimated by the independent appraisal company which conducted the inventory of the Borough's assets. Infrastructure assets are not included in general fixed assets; maintenance and minor repairs and replacements, which do not improve or extend the lives of the respective assets, are expensed currently. Donated fixed assets are valued at their fair market value on the date donated. No depreciation has been provided on general fixed assets. The total value recorded for general fixed assets is offset by a "Reserve for General Fixed Assets". When properties are retired or otherwise disposed of, the asset and the reserve are adjusted accordingly.

Assets recorded in the General Fixed Assets Account Group may also be recorded in the Current Fund, General Capital Fund and Utility Funds. The values recorded in the General Fixed Asset Account Group and the Current and Capital Funds may not always agree due to differences in valuation methods, timing or recognition of assets and the recognition of infrastructures. Fixed assets are reviewed for impairment.

Property and equipment purchased by the Utility Funds are recorded in the Utility Capital accounts at cost and are not adjusted for dispositions and abandonments. The amounts shown do not purport to represent replacement costs or current value. Contributions in aid of construction are not capitalized. The balances in the Reserve for Amortization and Deferred Reserve for Amortization accounts in the Utility Capital Funds represent charges to operations for the costs of the acquisition of property, equipment and improvements. The Utility Funds do not record depreciation on fixed assets.

F. Budget/Budgetary Control - Annual appropriated budgets are usually prepared in the first quarter for Current Operating, Utility Operating and Open Space Trust Funds. The budgets are submitted to the governing body and the Division of Local Government Services. Budgets are prepared using the cash basis of accounting. The legal level of budgetary control is established at the line item accounts within each fund. Line item accounts are defined as the lowest (most specific) level of detail as established pursuant to the flexible chart of accounts referenced in N.J.S.A. 40A. All budget amendments/transfers must be approved by the Borough during the year.

Note 2: Long-Term Debt

The Local Bond Law governs the issuance of bond to finance general Borough capital expenditures. All bonds are retired in serial installments within the statutory period of usefulness. All bonds issued by the Borough are general obligation bonds. The Borough's full faith and credit and taxing power has been pledged to the payment of the general obligation debt principal and interest.

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Note 2: Long-Term Debt (Cont'd)



Summary of Municipal Debt

December 31, 2018 2017

Issued: General:

2016

Bonds and Notes $ 17,556,000.00 $ 19,156,000.00 $ 20,696,000.00 NJ Environmental Infrastructure

Loans Payable 2,020,259.98 2,150,373.35 2,280,386.24 Total Issued 19,576,259.98 21,306,373.35 22,976,386.24

Authorized but not Issued: General:

Bonds and Notes 8,283,481.00 3,513,481.00 3,544,378.00 Total Authorized but not Issued 8,283,481.00 3,513,481.00 3,544,378.00

Net Bonds, Notes and Loans Issued and Authorized but not Issued $ 27,859,740.98 $ 24,819,854.35 $ 26,520,764.24

Summary of Municipal Debt Issued and Outstanding - Current Year

Balance Balance 12/31/2017 Additions Retirements 12/3112018

Serial Bonds: General Capital Fund $19,156,000.00 $1,600,000.00 $17 ,556,000.00

Loans Payable: General Capital Fund:

NJ Environmental Infrastructure Loans 2,150,373.35 130,113.37 2,020,259.98

Total $21,306,373.35 $ -0- $1,730,113.37 $19,576,259.98

Summary of Municipal Debt Issued and Outstanding - Prior Year

Balance Balance 12/31/2016 Additions Retirements 12/31/2017

Serial Bonds: General Capital Fund $20,696,000.00 $ 1,540,000.00 $19,156,000.00

Loans Payable: General Capital Fund:

NJ Environmental Infrastructure Loans 2,280,386.24 130,012.89 2,150,373.35

Total $22,976,386.24 $ -0- $1,670,012.89 $21,306,373.35

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Summary of Statutory Debt Condition - Annual Debt Statement

The summarized statement of debt condition, which follows, is prepared in accordance with the required method of setting up the Annual Debt Statement and indicates a statutory net debt of 0.680%.

Gross Debt Deductions NetDebt

Local School District Debt $ 34,050,000.00 $ 34,050,000.00 General Debt 27,859, 740.98 $ 27,859,740.98

$ 61,909,740.98 $ 34,050,000.00 $ 27,859,740.98

Net Debt $27,859,740.98 divided by Equalized Valuation Basis per N.J.S. 40A:2-2 as amended, $4,097,936,786.33 = 0.680%.

Borrowing Power Under N.J.S. 40A:2-6 As Amended

3-1/2% Average Equalized Valuation of Real Property

NetDebt

Remaining Borrowing Power

$ 143,427,787.52

27,859,740.98

$ 115,568,046.54

The foregoing debt information is in agreement with the Annual Debt Statement filed by the Chief Financial Officer.

Analysis of Debt Issued and Outstanding at December 31, 2018

General Capital Serial Bonds Payable

Final Interest Balance Description Maturity Rate Dec. 31, 2018

General Improvement Bonds of 2013 08/15/33 3.00%-4.00% $ 3,001,000.00 Refunding Bonds of 2014 10/15/28 4.50%-5.00% 14,555,000.00

$ 17,556,000.00

General Capital NJ Environmental Infrastructure Loan Payable (Trust Loan)

Final Interest Balance Description Maturity Rate Dec. 31, 2018

Trust Loan 1 08/01/29 3.00%-5.00% $ 270,000.00 Trust Loan 2 08/01/30 2.830%-4.510% 61,770.34 Trust Loan 3 08/01/34 4.00%-5.00% 355,000.00

$ 686,770.34

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General Capital NJ Environmental Infrastructure Loan Payable (Fund Loan)

Description

Fund Loan 1 Fund Loan 2 Trust Loan 3

Total Debt Issued and Outstanding

N.J. Environmental Infrastructure Loans

Final Maturity

08/01/29 08/01/30 08/01/34

$

$

$

Balance Dec. 31, 2018

228,203.50 53,606.14

1,051,680.00

1,333,489.64

19,576,259.98

The Borough of Madison/Madison-Chatham Joint Meeting entered into six loan agreements with the State of New Jersey, acting by and through the NJ Department of Environmental Protection Fund (the "Fund"), and the NJ Environmental Infrastructure Trust (the "Trust") which are recorded in the General Capital Fund. The loan agreements were obtained to finance a portion of the cost of improvements to the MadisonChatham Joint Meeting's Molitor Water Pollution Control Facility. A portion of the Fund loan portion of Fund Loan 1 was funded through the American Recovery and Reinvestment Act. Even though the Borough is responsible for the repayment of the loans, the Borough does not receive or expend any of the loan funds. The Madison-Chatham Joint Meeting is responsible for the draw downs and expenditures of loan funds.

At December 31, 2017, the Madison-Chatham Joint Meeting has borrowed or "drawn down" all of the $2,677,906 Loan funds necessary to complete the improvements to the Madison-Chatham Joint Meeting's Molitor Water Pollution Control Facility partially funded with the Loan funds. Principal payments to the Fund for the loan will continue on a semiannual basis until August 1, 2034 at zero interest. Principal payments to the Trust for the loan will continue on an annual basis until August 1, 2034.

Also, an annual administrative fee of fifteen one hundredths of one percent (.15%) of the initial principal amount of the loan or such lesser amount, if any, as the Trust may approve from time to time is payable on these loans.

Schedule of Annual Debt Service for Principal and Interest for the Next Five Years and Thereafter for Bonds and Loans Issued and Outstanding:

General Year Principal Interest Total

2019 $ 1,740,228.62 $ 838,848.44 $ 2,579 ,077 .06 2020 1,810,355.91 761,271.14 2,571,627.05 2021 1,835,497.43 679,979.62 2,515,477.05 2022 1,845,653.85 597,823.22 2,443,477.07 2023 1,840,822.21 515,004.84 2,355,827.05

2024-2028 9,165,157.34 1,344, 702.98 10,509,860.32 2029-2033 1,242,814.62 106,107.10 1,348,921.72

2034 95,730.00 1,200.00 96,930.00

$ 19,576,259.98 $ 4,844,937.34 $ 24,421,197.32

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Net Pension Liability



The Borough's share of the State of New Jersey Public Employees' Retirement System's (PERS) net pension liability was calculated to be $19,901,368 at June 30, 2018. The Borough's share of the State of New Jersey Police and Firemen's Retirement System's (PFRS) net pension liability was calculated to be $16,075,058 at June 30, 2018. See Note 4 for further information on the PERS and PFRS.

Net OPEB Liability

The State's proportionate share of the net OPEB liability attributable to the Borough at June 30, 2017 was $19,055,911. See Note 18 for further information on these net OPEB liabilities.

Note 3: Fund Balance Appropriated

Fund balances at December 31, 2018, which are appropriated and included in the Current, Water Utility Operating, and Electric Utility Operating Fund adopted budgets for the year ending December 31, 2019, are as follows:

Current Fund Water Utility Fund Electric Utility Fund

Note 4: Pension Plans

$ 5,090,000.25 261,796.00

6,673, 184.00

Borough employees participate in one of the two contributory, defined benefit public employee retirement systems: the State of New Jersey Public Employee's Retirement System (PERS) or the State of New Jersey Police and Firemen's Retirement System (PFRS); or the Defined Contribution Retirement Program (DCRP), a tax-qualified defined contribution money purchase pension plan under Internal Revenue Code (IRC) 401(a).

A. Public Employees' Retirement System (PERS)

Plan Description

The State of New Jersey, Public Employees' Retirement System (PERS) is a cost-sharing multipleemployer defined benefit pension plan administered by the State of New Jersey, Division of Pensions and Benefits (the Division). For additional information about the PERS, please refer to the Division's Comprehensive Annual Financial Report (CAFR) which can be found at www.state.nj.us/treasury/pensions/ financial-reports.shtml.

Benefits Provided

The vesting and benefit provisions are set by N.J.S.A. 43:15A. PERS provides retirement, death and disability benefits. All benefits vest after ten years of service, except for medical benefits, which vest after 25 years of service or under the disability provisions of PERS. The following represents the membership tiers for PERS:

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Note 4: Pension Plans (Cont'd)



A. Public Employees' Retirement System (PERS) (Cont'd)

Benefits Provided (Cont'd)

Tier Definition

1 Members who were enrolled prior to July 1, 2007 2 Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008 3 Members who were eligible to enroll on or after November 2, 2008 and prior to May 22, 2010 4 Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011 5 Members who were eligible to enroll on or after June 28, 2011

Service retirement benefits of 1/55th of final average salary for each year of service credit is available to Tiers 1 and 2 members upon reaching age 60 and to Tier 3 members upon reaching age 62. Service retirement benefits of 1/601h of final average salary for each year of service credit is available to Tier 4 members upon reaching age 62 and to Tier 5 members upon reaching age 65. Early retirement benefits are available to Tiers 1 and 2 members before reaching age 60, to Tiers 3 and 4 with 25 or more years of service credit before age 62 and Tier 5 with 30 or more years of service credit before age 65. Benefits are reduced by a fraction of a percent for each month that a member retires prior to the age at which a member can receive full early retirement benefits in accordance with their respective tier. Tier 1 members can receive an unreduced benefit from age 55 to age 60 if they have at least 25 years of service. Deferred retirement is available to members who have at least 10 years of service credit and have not reached the service retirement age for the respective tier.

Contributions

The contribution policy for PERS is set by N.J.S.A. 43:15A and requires contributions by active members and contributing members. The local employers' contribution amounts are based on an actuarially determined rate which includes the normal cost and unfunded accrued liability. Chapter 19, P.L. 2009 provided an option for local employers of PERS to contribute 50% of the normal and accrued liability contribution amounts certified for payments due in State fiscal year 2009. Such employers will be credited with the full payment and any such amounts will not be included in their unfunded liability. The actuaries will determine the unfunded liability of those retirement systems, by employer, for the reduced normal and accrued liability contributions provided under this law. This unfunded liability is being paid by the employer in level annual payments over a period of 15 years, which began with the payments due in the fiscal year ended June 30, 2012 and are adjusted by the rate of return on the actuarial value of assets. Borough contributions to PERS amounted to $973,239.65 for 2018.

The employee contribution rate was 7.34% effective July 1, 2017 and increased to 7.50% effective July 1, 2018. Subsequent increases after October 1, 2011 were being phased in over 7 years effective on each July 1st to bring the total pension contribution rate to 7 .5% of base salary as of July 1, 2018.

Pension Liabilities and Pension Expense

At June 30, 2018, the Borough's liability was $19,901,368 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2017 which was rolled forward to June 30, 2018.

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Pension Liabilities and Pension Expense (Cont'd)

The Borough's proportion of the net pension liability was based on a projection of the Borough's long-term share of contributions to the pension plan relative to the projected contributions of all participating members, actuarially determined. At June 30, 2018, the Borough's proportion was 0.101 %, which was a decrease of 0.003% from its proportion measured as of June 30, 2017.

For the year ended December 31, 2018, the Borough recognized actual pension expense in the amount of $973,239.65.

Actuarial Assumptions

The total pension liability for the June 30, 2018 measurement date was determined by an actuarial valuation as of July 1, 2017 which was rolled forward to June 30, 2018. This actuarial valuation used the following actuarial assumptions:

Inflation Rate Salary Increases:

Through 2026 Thereafter

Investment Rate of Return

2.25%

1.65 - 4.15% based on age 2.65 - 5.15% based on age 7.00%

Pre-retirement mortality rates were based on the RP-2000 Employee Pre-retirement Mortality Table for male and female active participants. For local employees, mortality tables are set back 2 years for males and 7 years for females. In addition, the tables provide for future improvements in mortality from the base year of 2013 using a generational approach based on the Conduent modified 2014 projection scale. Postretirement mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables (set back 1 year for males and females) for service retirements and beneficiaries of former members. In addition, the tables for service retirements and beneficiaries of former members provide for future improvements in mortality from 2012 to 2013 using Projection Scale AA and using a generational approach based on the Conduent 2014 projection scale thereafter. Disability retirement rates used to value disabled retirees were based on the RP-2000 Disabled Mortality Table (set back 3 years for males and set forward one year for females).

The actuarial assumptions used in the July 1, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2011 to June 30, 2014. It is likely that future experience will not exactly conform to these assumptions. To the extent that actual experience deviates from these assumptions, the emerging liabilities may be higher or lower than anticipated. The more the experience deviates, the larger the impact on future financial statements.

Long Term Expected Rate of Return

In accordance with State statute, the long-term expected rate of return on pension plan investments (7 .00% at June 30, 2018) is determined by the State Treasurer, after consultation with the Directors of the Division oflnvestments and Division of Pensions and Benefits, the Board of Trustees and the actuaries.

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Long Term Expected Rate of Return (Cont'd)

The long-term expected rate of return was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in PERS' target asset allocation as of June 30, 2018 are summarized in the following table:

Discount Rate

Asset Class

Risk Management Strategies Cash Equivalents U.S. Treasuries Investment Grade Credit High Yield Global Diversified Credit Credit Oriented Hedge Funds Debt Related Private Equity Debt Related Real Estate Private Real Asset Equity Related Real Estate U.S. Equity Non-U.S. Developed Market Equity Emerging Markets Equity BuyoutsNenture Capital

Target Allocation

5.00% 5.50% 3.00%

10.00% 2.50% 5.00% 1.00% 2.00% 1.00% 2.50% 6.25%

30.00% 11.50% 6.50% 8.25%

Long-Term Expected Real Rate of Return

5.51% 1.00% 1.87% 3.78% 6.82% 7.10% 6.60%

10.63% 6.61%

11.83% 9.23% 8.19% 9.00%

11.64% 13.08%

The discount rate used to measure the total pension liability was 5.66% as of June 30, 2018. This single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.00% and a municipal bond rate of 3.87% as of June 30, 2018 based on the Bond Buyer Go 20 Bond Municipal Bond Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/ Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made based upon the contribution rate in the most recent fiscal year. The local employers contributed 100% of their actuarially determined contributions. Based on those assumptions, the plan's fiduciary net position was projected to be available to make projected future benefit payments of current plan members through June 30, 2046. Therefore, the long-term expected rate of return on plan investments was applied to projected benefit payments through June 30, 2046, and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

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Sensitivity of the Borough's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate

The following presents the Borough's proportionate share of the collective net pension liability as of June 30, 2018 calculated using the discount rate as disclosed below, as well as what the Borough's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentagepoint lower or I-percentage-point higher than the current rate:

Borough's proportionate share of the Net Pension Liability

Pension Plan Fiduciary Net Position

$

June 30, 2018 1%

Decrease (4.66%)

25,023,678 $

Current 1% Discount Rate Increase

(5.66%) (6.66%)

19,901,368 $ 15,604,079

Detailed information about the pension plan's fiduciary net position is available in the separately issued PERS financial statements.

B. Police and Firemen's Retirement System (PFRS)

Plan Description

The State of New Jersey, State of New Jersey Police and Firemen's Retirement System (PFRS), is a costsharing multiple-employer defined benefit pension plan administered by the State of New Jersey Division of Pensions and Benefits (the Division). For additional information about the PFRS, please refer to the Division's Comprehensive Annual Financial Report (CAFR) which can be found at www.state.nj.us/treasury/ pensions/financial-reports.shtml.

Benefits Provided

The vesting and benefit provisions are set by N.J.S.A. 43:16A. The PFRS provides retirement as well as death and disability benefits. All benefits vest after ten years of service, except disability benefits which vest after 4 years of service. The following represents the membership tiers for PFRS:

Tier Definition

1 Members who were enrolled prior to May 22, 2010 2 Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011 3 Members who were eligible to enroll on or after June 28, 2011

Service retirement benefits are available at age 55 and are generally determined to be 2% of final compensation for each year of creditable service, as defined, up to 30 years plus 1 % for each year of service in excess of 30 years.

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B. Police and Firemen's Retirement System (PFRS) (Cont'd)

Benefits Provided (Cont'd)

Members may seek special retirement after achieving 25 years of creditable service, in which benefits would equal 65% (tiers 1 and 2 members) and 60% (tier 3 members) of final compensation plus 1 % for each year of creditable service over 25 years but not to exceed 30 years. Members may elect deferred retirement benefits after achieving ten years of service, in which case benefits would begin at age 55 equal to 2% of final compensation for each year of service.

Contributions

The contribution policy for PFRS is set by N.J.S.A. 43:16A and requires contributions by active members and contributing members. The Local employers' contribution amounts are based on an actuarially determined rate which includes the normal cost and unfunded accrued liability. Chapter 19, P.L. 2009 provided an option for local employers of PFRS to contribute 50% of the normal and accrued liability contribution amounts certified for payments due in State fiscal year 2009. Such employers will be credited with the full payment and any such amounts will not be included in their unfunded liability. The actuaries will determine the unfunded liability of the retirement system, by employer, for the reduced normal and accrued liability contributions provided under this law. This unfunded liability is being paid by the employer in level annual amounts over a period of 15 years, which began with the payments due in the fiscal year ended June 30, 2012 and are adjusted by the rate ofretum on the actuarial value of the assets.

Special Funding Situation

Under N.J.S.A. 43:16A-15, local participating employers are responsible for their own contributions based on actuarially determined amounts, except where legislation was passed which legally obligated the State if certain circumstances occurred. The legislation which legally obligates the State is as follows: Chapter 8, P.L. 2000, Chapter 318, P.L. 2001, Chapter 86, P.L. 2001, Chapter 511, P.L. 1991, Chapter 109, P.L. 1979, Chapter 247, P.L. 1993 and Chapter 201, P.L. 2001. The amounts contributed on behalf of the local participating employers under this legislation is considered to be a special funding situation as defined by GASB Statement No. 68 and the State is treated as a nonemployer contributing entity. Since the local participating employers do not contribute under this legislation directly to the plan (except for employer specified financed amounts), there is no net pension liability or deferred outflows or inflows to report in the financial statements of the local participating employers related to this legislation. However, the notes to the financial statements of the local participating employers must disclose the portion of the nonemployer contributing entities' total proportionate share of the collective net pension liability that is associated with the local participating employer. The June 30, 2018 State special funding situation net pension liability amount is the accumulated difference between the annual actuarially determined State obligation under the special funding situation and the actual State contribution through the valuation date. The State special funding situation pension expense for the fiscal year ended June 30, 2018 is the actuarially determined contribution amount that the State owes for the fiscal year ending June 30, 2018. The pension expense is deemed to be a State administrative expense due to the special funding situation.

Borough contributions to PFRS amounted to $1,017,505.53 for the year ended December 31, 2018. During the fiscal year ended June 30, 2018, the State of New Jersey contributed $129,318 to the PFRS for normal pension benefits on behalf of the Borough, which is less than the contractually required contribution of $258,636.

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Special Funding Situation (Cont'd)

The employee contributions for PFRS are 10.00% of employees' annual compensation, as defined.

Pension Liabilities and Pension Expense

At June 30, 2018, the Borough's liability for its proportionate share of the net pension liability was $16,075,058. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2017 which was rolled forward to June 30, 2018. The Borough's proportion of the net pension liability was based on a projection of the Borough's long-term share of contributions to the pension plan relative to the projected contributions of all participating members, actuarially determined. At June 30, 2018, the Borough's proportion was 0.119%, which was an increase of 0.004% from its proportion measured as of June 30, 2017.

Additionally, the State's proportionate share of the net pension liability attributable to the Borough is $2,183,531 as of June 30, 2018. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2017 which was rolled forward to June 30, 2018. The State's proportionate share of the net pension liability associated with the Borough was based on a projection of the Borough's long-term share of contributions to the pension plan relative to the projected contributions of all participating members, actuarially determined. At June 30, 2018, the State's proportion was 0.119%, which was an increase of 0.004% from its proportion measured as of June 30, 2017, which is the same proportion as the Borough's.

Borough's Proportionate Share of the Net Pension Liability

State's Proportionate Share of the Net Pension Liability Associated with the Borough

Total Net Pension Liability

$ 16,075,058

2,183,531

$ 18,258,589

For the year ended December 31, 2018, the Borough recognized total pension expense of $1,017,505.53.

Actuarial Assumptions

The total pension liability for the June 30, 2018 measurement date was determined by an actuarial valuation as of July 1, 2017 which was rolled forward to June 30, 2018. This actuarial valuation used the following actuarial assumptions:

Inflation Rate Salary Increases:

Through 2026 Thereafter

Investment Rate of Return

2.25%

2.10% - 8.98% based on age 3.10% - 9.98% based on age 7.00%

Pre-retirement mortality rates were based on the RP-2000 Combined Healthy mortality tables projected on a generational basis from the base year of 2000 to 2013 using Projection Scale BB and the Conduent modified 2014 projection scale thereafter.

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Actuarial Assumptions (Cont'd)

For pre-retirement accidental mortality, a custom table with representative rates was used and there is no mortality improvement assumed. Post-retirement mortality rates for male service retirements are based on the RP-2000 Combined Healthy Mortality Tables projected on a generational basis using Projection Scale AA from base year of 2012 to 2013 and the Conduent modified 2014 projection scale thereafter. Postretirement mortality rates for female service retirements and beneficiaries were based on the RP-2000 Combined Healthy Mortality Tables projected on a generational basis from the base year of 2000 to 2013 using Projection Scale BB and the Conduent modified 2014 projection scales thereafter. Disability retirement rates were based on a custom table with representative rates and no mortality improvement assumed.

The actuarial assumptions used in the July 1, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2010 to June 30, 2013.

Long Term Expected Rate of Return

In accordance with State statute, the long-term expected rate of return on pension plan investments (7.00% at June 30, 2018) is determined by the State Treasurer, after consultation with the Directors of the Division of Investments and Division of Pensions and Benefits, the Board of Trustees and the actuaries. The longterm expected rate of return was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in PFRS' target asset allocation as of June 30, 2018 are summarized in the following table:

Long-Term Target Expected Real

Asset Class Allocation Rate of Return

Risk Management Strategies 5.00% 5.51% Cash Equivalents 5.50% 1.00% U.S. Treasuries 3.00% 1.87% Investment Grade Credit 10.00% 3.78% High Yield 2.50% 6.82% Global Diversified Credit 5.00% 7.10% Credit Oriented Hedge Funds 1.00% 6.60% Debt Related Private Equity 2.00% 10.63% Debt Related Real Estate 1.00% 6.61% Private Real Asset 2.50% 11.83% Equity Related Real Estate 6.25% 9.23% U.S. Equity 30.00% 8.19% Non-U.S. Developed Market Equity 11.50% 9.00% Emerging Markets Equity 6.50% 11.64% BuyoutsN enture Capital 8.25% 13.08%

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YEAR ENDED DECEMBER 31, 20I8 (Continued)


Discount Rate - PFRS

The discount rate used to measure the total pension liability was 6.51% as of June 30, 20I8. This single blended discount rate was based on the long-term expected rate of return on pension plan investments of 7.00% and a municipal bond rate of 3.87% as of June 30, 20I8 based on the Bond Buyer Go 20 Bond Municipal Bond Index which includes tax-exempt general obligation municipal bonds with an average rating of AA/ Aa or higher. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers and the nonemployer contributing entity will be made based on the contribution rate in the most recent fiscal year. The State employer contributed 50% of the actuarially determined contributions and the local employers contributed I 00% of their actuarially determined contributions. Based on those assumptions, the plan's fiduciary net position was projected to be available to make projected future benefit payments of current plan members through June 30, 2062. Therefore, the long-term expected rate of return on pension plan investments was applied to projected benefit payments through June 30, 2062, and the municipal bond rate was applied to projected benefit payments after that date in determining the total pension liability.

Sensitivity of the Total Net Pension Liability (including the State's proportionate share of the net pension liability attributable to the Borough) to Changes in the Discount Rate

The following presents the total net pension liability (including the State's proportionate share of the net pension liability attributable to the Borough) as of June 30, 20 I 8 calculated using the discount rate as disclosed above, as well as what the collective net pension liability would be if it were calculated using a discount rate that is I -percentage-point lower or I -percentage-point higher than the current rate:

June 30, 20I8

Borough's proportionate share of the NPL and the State's proportionate share of the Net Pension Liability associated with the Borough

Plan Fiduciary Net Position - PFRS

I% Decrease (5.5I %)

$ 24,436,856

Current Discount Rate

(6.5I%)

$ I 8,258,589

I% Increase (7.5I%)

$ 13,I62,645

Detailed information about the PFRS's fiduciary net position is available in the separately issued PFRS financial statements.

C. Defined Contribution Retirement Program (DCRP)

Prudential Financial jointly administers the DCRP investments with the NJ Division of Pensions and Benefits. If an employee is ineligible to enroll in the PERS or PFRS, the employee may be eligible to enroll in the DCRP. DCRP provides eligible members with a tax-sheltered, defined contribution retirement benefit, along with life insurance and disability coverage. Vesting is immediate upon enrollment for members of the DCRP.

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C. Defined Contribution Retirement Program (DCRP) (Cont'd)

The State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, issues publicly available financial reports that include the financial statements and required supplementary information of the DCRP. The financial reports may be obtained by writing to the State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, PO Box 295, Trenton, New Jersey, 08625-0295.

Employers are required to contribute at an actuarially determined rate. Employee contributions are based on percentages of 5.50% for DCRP of employees' annual compensation, as defined. The DCRP was established July 1, 2007, under the provisions of Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007 and expanded under the provisions of Chapter 89, P.L. 2008. Employee contributions for DCRP are matched by a 3% employer contribution.

For DCRP, the Borough recognized pension expense of $20,117.25 for the year ended December 31, 2018. Employee contributions to DCRP amounted to $27,173.11 for the year ended December 31, 2018.

Note 5: Local School District Taxes

Regulations provide for the deferral of not more than 50% of the annual levy when school taxes are raised for a school year and have not been requisitioned by the school district.

The Borough of Madison has elected not to defer school taxes.

Note 6: Accrued Sick and Vacation Benefits

The Borough permits employees to accrue a limited amount of unused vacation and sick pay, which may be taken as time off or paid at a later date at an agreed-upon rate. It is estimated that the current cost of such unpaid compensation would approximate $2,513,659.24 at December 31, 2018. This amount is not reported either as an expenditure or a liability. The Borough has a written policy that establishes the maximum amount of sick days to be paid out at retirement to be 100 days and that vacation days must be used during the year in which it is earned or by March 31st of the following year. It is expected that the cost of such unpaid compensation would be included in the Borough's budget operating expenditures in the year in which it is used.

Note 7: Selected Tax Information

Property taxes are levied as of January 1 on property values assessed as of the previous calendar year. The tax levy is divided into two billings. The first billing is an estimate of the current year's levy based on the prior year's taxes. The second billing reflects adjustments to the current year's actual levy. The final tax bill is usually mailed on or before June 14th along with the first half estimated tax bills for the subsequent year. The first half estimated taxes are divided into two due dates, February 1 and May 1. The final tax bills are also divided into two due dates, August 1 and November 1. A ten-day grace period is usually granted before the taxes are considered delinquent and the imposition of interest charges. A penalty may be assessed for any unpaid taxes in excess of $10,000 at December 31 of the current year. Unpaid taxes of the prior year may be placed in lien at a tax sale held after April 1 and through December.

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Note 7: Selected Tax Information (Cont'd)

Comparative Schedule of Tax Rate Information

Tax Rate

Apportionment of Tax Rate Municipal County - Regular County Open Space Local School

Assessed Valuations 2018

2018

$ 1.923

.433

.286

.010 1.194

$ 3,542,403,000.00

$

2017

1.908

.429

.290

.011 1.178

2017 $ 3,512,196,300.00 2016

Comparison of Tax Levies and Collection Currently

A study of this tabulation could indicate a possible trend in future tax levies.

2016

$ 1.875

.421

.275

.010 1.169

$ 3,482,257,100.00

Currently Cash Percentage of

Year Tax Levy Collections Collection

2018 $ 68,464,097. 72 $ 68,172,237.75 99.57% 2017 67,474,457.43 67' 154,434.05 99.52% 2016 65,901,333.96 65,572,250.30 99.50%

Also, increases in future tax levies can also be warranted if revenue sources outside of those directly generated by the municipality, such as federal or state aid, should decline without corresponding decreases in budgeted expenditures.

Note 8: Cash and Cash Equivalents and Investments

Cash and cash equivalents include petty cash, change funds, amounts in deposits, money market accounts, and short-term investments with original maturities of three months or less.

Investments are stated at cost. The Borough classifies certificates of deposit which have original maturity dates of more than three months but less than twelve months from the date of purchase, as investments.

GASB requires disclosure of the level of custodial credit risk assumed by the Borough in its cash, cash equivalents and investments, if those items are uninsured or unregistered. Custodial credit risk is the risk that in the event of a bank failure, the government's deposits may not be returned.

Interest Rate Risk - In accordance with its cash management plan, the Borough ensures that any deposit or investment matures within the time period that approximates the prospective need for the funds, deposited or invested, so that there is not a risk to the market value of such deposits or investments.

Credit Risk - The Borough limits its investments to those authorized in its cash management plan which are those permitted under state statute as detailed on the following page.

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Note 8: Cash and Cash Equivalents and Investments (Cont'd)

Custodial Credit Risk-The Borough's policy with respect to custodial credit risk requires that the Borough ensures that Borough funds are only deposited in financial institutions in which NJ municipalities are permitted to invest their funds.

Deposits:

New Jersey statutes require that municipalities deposit public funds in public depositories located in New Jersey which are insured by the Federal Deposit Insurance Corporation, or by any other agency of the United States that insures deposits made in public depositories. Municipalities are also permitted to deposit public funds in the State of New Jersey Cash Management Fund.

New Jersey statutes require public depositories to maintain collateral for deposits of public funds that exceed insurance limits as follows:

The market value of the collateral must equal 5% of the average daily balance of collected public funds on deposit, and

In addition to the above collateral requirement, if the public funds deposited exceed 75% of the capital funds of the depository, the depository must provide collateral having a market value at least equal to 100% of the amount exceeding 75%.

All collateral must be deposited with the Federal Reserve Bank, the Federal Home Loan Bank Board or a banking institution that is a member of the Federal Reserve System and has capital funds of not less than $25,000,000.

Investments:

New Jersey statutes permit the Borough to purchase the following types of securities:

(1) Bonds or other obligations of the United States of America or obligations guaranteed by the United States of America;

(2) Government money market mutual funds;

(3) Any obligation that a federal agency or a federal instrumentality has issued in accordance with an act of Congress, which security has a maturity date not greater than 397 days from the date of purchase, provided that such obligation bears a fixed rate of interest not dependent on any index or other external factor;

( 4) Bonds or other obligations of the local unit or bonds or other obligations of school districts of which the local unit is a part or within which the school district is located;

(5) Bonds or other obligations, having a maturity date not more than 397 days from the date of purchase, issued by New Jersey school districts, municipalities, counties, and entities subject to the "Local Authorities Fiscal Control Law" P.L. 1983, c. 313 (C.40A:5A-1 et seq.) Other bonds or obligations having a maturity date not more than 397 days from the date of purchase may be approved by the Division of Local Government Services in the Department of Community Affairs for investment by local units;

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YEARENDEDDECEMBER31, 2018 (Continued)

Note 8: Cash and Cash Equivalents and Investments: (Cont'd)

Investments: (Cont'd)

( 6) Local government investment pools;

(7) Deposits with the State of New Jersey Cash Management Fund established pursuant to section 1 of P.L. 1977, c.281 (C.52:18A-90.4); or

(8) Agreements for the repurchase of fully collateralized securities if:

(a) the underlying securities are permitted investments pursuant to paragraphs (1) and (3) of this subsection a. or are bonds or other obligations, having a maturity date not more than 397 days from the date of purchase, issued by New Jersey school districts, municipalities, counties and entities subject to the "Local Authorities Fiscal Control Law", P.L. 1983 c.313 (C.40A:5A-1 et seq.);

(b) the custody of collateral is transferred to a third party;

(c) the maturity of the agreement is not more than 30 days;

( d) the underlying securities are purchased through a public depository as defined in section 1 of P.L. 1970, c.236 (C.17:9-41); and

( e) a master repurchase agreement providing for the custody and security of collateral is executed.

As of December 31, 2018, cash and cash equivalents of the Borough of Madison consisted of the following:

New Jersey Cash on Checking Cash Manage-

Fund Hand Accounts mentFund Totals

Current $ 600.00 $ 5,031,116.74 $10,098,294.86 $ 15,130,011.60 Animal Control 66,684.61 66,684.61 Open Space Trust 1,617,520.68 1,617,520.68 Affordable Housing Development Trust 3,270,224.01 3,270,224.01 Other Trust 1,208,564.07 1,208,564.07 General Capital 4,619,222.98 4,619,222.98 Water Utility Operating 25.00 2,012,672.24 2,012,697.24 Water Utility Capital 2,505,896.07 2,505,896.07 Electric Utility Operating 25.00 12,032,386.18 12,032,411.18 Electric Utility Capial 2,791,610.63 2,791,610.63

$ 650.00 $ 35,155,898.21 $10,098,294.86 $ 45,254,843.07

The Borough did not hold any investments during the year ended December 31, 2018. The carrying amount of the Borough of Madison's cash and cash equivalents at December 31, 2018 was $45,254,843.07 and the bank balance was $44,871,621.27. The $10,098,294.86 in the New Jersey Cash Management Fund is uninsured and unregistered.

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Note 9: Risk Management



The Borough is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

The Borough of Madison is a member of both the Morris County Municipal Joint Insurance Fund ("MCMJIF") and the North Jersey Municipal Employee Benefits Fund ("NJMEBF"). These funds are both an insured and self-administered group of municipalities established for the purpose of providing certain low-cost insurance coverage for member municipalities in order to keep local property taxes at a minimum.

The following coverages are offered by the MCMJIF to its members:

a.) Workers' Compensation and Employers' Liability b.) Liability Other Than Motor Vehicles c.) Property Damage Other Than Motor Vehicles d.) Motor Vehicle e.) Public Officials' Liability/Employment Practices Coverage f.) Environmental Coverage

The following health benefit coverages are offered by the NJMEBF to its members:

a.) Medical b.) Prescription c.) Dental

As a member of these Funds, the Borough could be subject to supplemental assessments in the event of deficiencies. If the assets of the Funds were to be exhausted, members would become responsible for their respective shares of the Fund's liabilities. There is a very narrow possibility that the MCMJIF will impose supplemental assessments. In the twenty-six year history of the MCMJIF, a supplemental assessment has never been declared.

The Funds can declare and distribute dividends to members upon approval of the State of New Jersey Department of Banking and Insurance. These distributions are divided amongst the members in the same ratio as their individual assessment relates to the total assessment of the membership body. In accordance with Statement No. 10 of the Governmental Auditing Standards Board, these distributions are used to reduce the amount recorded for membership expense in the year in which the distribution was declared. The MCMJIF has not declared dividends in the last six years and currently has no intention to reinstate the dividends. The Finance Committee of the MCMJIF has made this recommendation, which is embraced by the full membership.

The December 31, 2018 audit report for the NJMEBF was not available as of the date of this report. Selected summarized financial information for the MCMJIF as of December 31, 2018 and the NJMEBF as of December 31, 201 7 are as follows.

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Note 9: Risk Management (Cont'd)

Note 10:

Morris County North Jersey Municipal Joint Municipal Employee Insurance Fund Benefits Fund

Total Assets $ 33,810,987 $ 24,792,222

Net Position $ 13,583,877 $ 18,577,048

Total Revenue $ 19,078,609 $ 42,868,531

Total Expenses $ 20,655,181 $ 38,584,808

Change in Net Position $ (1,576,572) $ 4,283,723

Members Dividends $ -0- $ 3,713,966

Financial statements for these funds are available at the Office of the Executive Director.

Morris County Municipal Joint Insurance Fund 9 Campus Drive, Suite 216 Parsippany, New Jersey 07054 (201) 881-7632

North Jersey Municipal Employee Benefits Fund 9 Campus Drive, Suite 216 Parsippany, New Jersey 07054 (201) 881-7632

New Jersey Unemployment Compensation Insurance

The Borough has elected to fund its New Jersey Unemployment Compensation Insurance under the "Benefit Reimbursement Method". Under this plan, the Borough is required to reimburse the New Jersey Unemployment Trust Fund for benefits paid to its former employees and charged to its account with the State. The Borough is billed quarterly for amounts due to the State.

The following is a summary of the interest earned and the ending balance of the Borough's expendable trust fund for the current and prior years:

Fiscal Borough Employee Interest Amount Ending Year Contributions Contributions Earned Reimbursed Balance

2018 $ -0- $ 18,875.40 $ 1,882.07 $ 59,003.73 $ 139,040.96 2017 50,000.00 17,451.28 981.55 49,088.08 177,287.22 2016 50,000.00 16,638.40 930.92 40,950.33 157,942.47

Contingent Liabilities

The Borough is also periodically involved in various other lawsuits arising in the normal course of business, which often include claims for property damage, personal injury, and various contract disputes. In the opinion of management, the ultimate outcome of these lawsuits will not have a material adverse effect on the Borough financial position as of December 31, 2018.

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Note 10: Contingent Liabilities (Cont'd)

Note 11:

Amounts received or receivable from grantors, principally federal and state governments are subject to regulatory requirements and adjustments by the agencies. Any disallowed claims, including amounts previously recognized by the Borough as revenue would constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantors cannot be determined at this time, although Borough officials expect such amounts, if any, to be immaterial.

Various tax appeals on assessed valuations have been filed against the Borough and are awaiting tax court decisions. The ultimate outcome and effect of such appeals have not been determined; however, the Borough's Tax Assessor will aggressively defend the Borough's assessments. The Borough has established a reserve in the amount of $491,473.09 so as to provide for the full amount of this contingency.

Interfund Receivables and Payables

The following interfund balances remained on the balance sheet at December 31, 2018:

Interfund Interfund Fund Receivable Payable

Current Fund $ 19,103.44 $ 245,208.96 Federal and State Grant Fund 175,377.15 Animal Control Fund 19,103.41 Open Space Trust Fund 18,703.85 Affordable Housing Development Trust Fund 55,000.00 Other Trust Fund 322.44 General Capital Fund 121,490.67 15,685.15 Water Utility Operating Fund 1,451.06 0.03 Water Utility Capital Fund 1,451.06 Electric Utility Operating Fund 1,984.04 Electric Utility Capital Fund 1,984.04

$ 338,432.65 $ 338,432.65

The interfund receivable in the Current Fund is comprised of the statutory excess in the Reserve for the Animal Control Fund Expenditures due from the Animal Control Fund and anticipated revenue due from the Water Operating Fund. The interfund receivable in the Federal and State Grant Fund due from the Current Fund is for the receipt of grant funds directly deposited into the Current Fund. The interfund receivable in the Open Space Trust Fund is comprised of the 2018 added/omitted open space tax levy collected in the Current Fund and a prior year interfund not fully turned over from the General Capital Fund. The interfund receivable in the Other Trust Fund is a prior year interfund not turned over for improvement authorizations balance cancelled in the General Capital Fund which was funded by the Other Trust Funds and an interfund advanced to the Current Fund; net of interest earned. The interfund receivable in the General Capital Fund is a reserve for expansion, operation and maintenance of the Madison Chatham Joint Meeting collected in the Current Fund, net of interest earned in the General Capital Fund and improvement authorizations funded by the Affordable Housing Development Trust Fund. The interfund receivable in the Water Utility Operating Fund represents interest earned in the Water Utility Capital Fund, net of a prior year interfund advanced from the Water Utility Capital Fund. The interfund receivable in the Electric Utility Operating Fund represents interest earned in the Electric Utility Capital Fund, net of a prior year interfund advanced from the Electric Utility Capital Fund.

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Note 12: Related Party Transactions



The Mayor and Borough Council members also serve as members of the Madison-Chatham Joint Meeting. The Borough of Madison appropriated $1,130,000.00 and paid to the Joint Meeting $896,174.51in2018 for operating expenses. In addition, the Borough of Madison, together with the Borough of Chatham, has funded the improvement of the Joint Meeting wastewater treatment plant.

Note 13: Deferred Compensation

The Borough offers its employees a def erred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, which is administered by Lincoln Financial, permits participants to def er a portion of their salary until future years. Amounts def erred under the plan are not available to employees until termination, retirement, death or unforeseeable emergency.

Note 14: Economic Dependency

The Borough of Madison receives a substantial amount of support from federal and state governments. A significant reduction in the level of support, if this were to occur, may have an effect on the Borough's programs and activities.

Note 15: Open Space Trust Reserve

The Borough adopted an ordinance in 2003 to establish a "Municipal Open Space, Recreation, and Farmland and Historic Preservation Trust Fund," permitting the Borough to collect a tax of two cents (2 cents) per $100.00 of assessed valuation for the Open Space Trust Fund. The 2018 Open Space tax levy is $640,850.68 and the 2018 Open Space tax rate is $0.018. The balance in the Reserve for Open Space at December 31, 2018 is $1,636,224.53.

Note 16: Tax Abatements

As of December 31, 2018, the Borough provides a tax abatement to an educational institution in the Borough of Madison pursuant to a resolution of the governing body dated January 13, 2014 and agreement dated February 7, 2014. In consideration of the full abatement of taxes, the educational institution is required to make payments in lieu of taxes to the Borough in the aggregate initial 2014 annual amount of $38,500, which shall be increased by 2% each year thereafter. The tax abatement provided under the agreement shall remain in full force and effect for a period of twenty years, commencing on January 1, 2014 and concluding on December 31, 2033.

If the Borough's ability to collect the payments in lieu of taxes is challenged by the institution of legal action in Superior Court on or prior to February 28, 2014, then each of the parties shall have the right, on five days written notice to the other, to declare this agreement null and void. If either party declares this agreement to be null and void, then all parties shall have all rights and remedies available to them at law or equity, including the right of the educational institution to file a tax appeal in the New Jersey Tax Court.

The Borough recognized revenue in the amount of $42,090 ($20,837 received for 2018 and $21,254 received in advance in 2018 for 2019) from this annual service charge or payment in lieu of taxes which is recorded as an anticipated miscellaneous revenue in the Current Fund. The taxes which would have been paid on this property for 2018 without the abatement would have been $30,768 of which $6,928 would have been for the local municipal tax, minimum library tax and municipal open space tax.

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Note 16: Tax Abatements (Cont'd)



As of December 31, 2018, the Borough provides a tax abatement to a charitable organization of longstanding in the Borough of Madison pursuant to a resolution of the governing body dated February 22, 2016 and agreement dated February 23, 2016. In consideration of the full abatement of taxes, the charitable organization is required to make payments in lieu of taxes to the Borough in the aggregate initial 2016 annual amount of $9,200, which shall be increased by 2% each year thereafter. The tax abatement provided under the agreement shall remain in full force and effect for a period of twenty years, commencing on January 1, 2016 and concluding on December 31, 2036. If the Borough's ability to collect the payments in lieu of taxes is challenged by the institution of legal action in Superior Court, then each of the parties shall have the right, on five days written notice to the other, to declare this agreement null and void. If either party declares this agreement to be null and void, then all parties shall have all rights and remedies available to them at law or equity, including the right of the charitable organization to file a tax appeal in the New Jersey Tax Court.

The Borough recognized revenue in the amount of $9,667 ($4,786 received for 2018 and $4,882 received in advance in 2018 for 2019) from this annual service charge or payment in lieu of taxes which is recorded as a miscellaneous revenue not anticipated in the Current Fund. The taxes which would have been paid on this property for 2018 without the abatement would have been $45,525 of which $10,251 would have been for the local municipal tax, minimum library tax and municipal open space tax.

As of December 31, 2018, The Borough provides a tax abatement to a public nonprofit housing organization for its senior citizen and low income housing developments in the Borough pursuant to the authority contained in the Redevelopment and Housing Law (N.J.S.A. 40A:12A-l) (the "Law") and agreements dated September 28, 1972, July 14, 1980, May 12, 1981 and December 8, 1997. In consideration of the full abatement of taxes, the public nonprofit housing organization is required to pay to the Borough an annual service charge. The annual service charge made by the public nonprofit housing organization will be equal to 5% of the annual shelter rent derived from such housing project as detailed in the tax abatement agreement.

The Borough recognized revenue in the amount of $136,550 ($74,072 for 2017 and $62,478 for 2018) from this annual service charge or payment in lieu of taxes which is recorded as a miscellaneous revenue not anticipated in the Current Fund. The taxes which would have been paid on this property for 2018 without the abatement would have been $432,577 of which $97,403 would have been for the local municipal tax, minimum library tax and municipal open space tax.

As of December 31, 2018, the Borough provides a tax abatement to a property in the Borough pursuant to NJSA 40A:12A-7 and Ordinance 37-2014 "An Ordinance authorizing the Borough of Madison, in the County of Morris, New Jersey to enter into a financial agreement with KRE Madison NJ Urban Renewal, LLC for property at 33 Green Village Road designated as Block 3001, Lot 8." The development includes 100 rental units and 35 condominium units. The Financial Agreement executed on May 28, 2014 details the Payment in Lieu of Taxes (PILOT). The agreement sets the PILOT payment at the greater of the Minimum Base Service Charge .of approximately $524,600, and the Annual Service Charge which is calculated based on gross shelter rent for the Rental Component and 25% of all condominium service fees and 25% of an implied mortgage payment based on the actual sale price of each condominium unit. The Minimum Base Service Charge shall be increased by 2% per year thereafter. In no event, shall the property pay more than ad valorem taxes.

25

Note 16: Tax Abatements (Cont'd)



The Borough anticipates PILOT payments to be approximately $592,000 in 2019. Once all of the units in the rental component are fully rented for an entire year and once all the condominium units are sold, the PILOT payment will exceed the Minimum Base Service Charge. As of June 1, 2019, twenty of the thirtyfive condominium units have sold.

The Borough of Madison governing body agreed to share 32.5 percent of all net PILOT revenue with the Board of Education. The PILOT payments provided under the Financial Agreement shall remain in full force and effect for a period of thirty years, commencing on March 1, 2018 and concluding on February 28, 2048.

Because the project was not fully completed when the Borough adopted the 2018 annual budget, the Borough recognized the PILOT revenue in 2018 as Miscellaneous Revenue Not Anticipated. The Borough anticipated $370,000 in PILOT revenue in the 2019 budget which is 62.5% of the total estimated PILOT. As per statute, the County will receive 5% of the PILOT. As previously mentioned, the Board of Education will receive 32.5% of the PILOT revenue.

The PILOT payments are for the buildings and improvements on the property. The property owners will continue to pay ad valorem land taxes on the assessed value of the land. In 2018, the property paid 'land taxes' of $185,531.04.

The Borough recognized revenue in the amount of $453,886 from this annual service charge or payment in lieu of taxes which is recorded as a miscellaneous revenue not anticipated in the Current Fund. The taxes which would have been paid on this property for 2018 without the abatement would have been $599,476 of which $134,983 would have been for the local municipal tax, minimum library tax and municipal open space tax.

Note 17: Fixed Assets

The following is a summarization of general fixed assets for the year ended December 31, 2018:

Balance Balance Dec. 31, 2017 Additions Deletions Dec. 31, 2018

Land $37,472,600.00 $4,222, 700.00 $33,249,900.00 Buildings 25,053,725.73 25,053,725.73 Improvements Other than Buildings 3,999,484.72 3,999,484.72 Machinery and Equipment 11,227,142.00 $1,311,483.00 20,661.00 12,517,964.00

$77,752,952.45 $1,311,483.00 $4,243,361.00 $74,821,074.45

26



Note 18: Postemployment Benefits Other Than Pensions (OPEB)

A. State Health Benefit Local Government Retired Employees Plan

General Information about the OPEB Plan

Plan Description

The State Health Benefit Local Government Retired Employees Plan (the Plan) is a cost sharing multiple employer defined benefit other postemployment benefit (OPEB) plan with a special funding situation. It covers employees of local government employers that have adopted a resolution to participate in the Plan. The plan meets the definition of an equivalent arrangement as defined in paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for the Postemployment Benefits Other Than Pensions; therefore, assets are accumulated to pay associated benefits. For additional information about the Plan, please refer to the State of New Jersey (the State), Division of Pensions and Benefits' (the Division) Comprehensive Annual Financial Report (CAFR), which can be found at https://www.state.nj.us./treasury/pensions/financial-reports.shtml.

Benefits Provided

The Plan provides medical and prescription drug coverage to retirees and their dependents of the employers. Under the provisions of Chapter 88, P.L. 1974 and Chapter 48, P.L. 1999, local government employers electing to provide postretirement medical coverage to their employees must file a resolution with the Division. Under Chapter 88, local employers elect to provide benefit coverage based on the eligibility rules and regulations promulgated by the State Health Benefits Commission. Chapter 48 allows local employers to establish their own age and service eligibility for employer paid health benefits coverage for retired employees.

Under Chapter 48, the employer may assume the cost of postretirement medical coverage for employees and their dependents who: 1) retired on a disability pension; or 2) retired with 25 or more years of service credit in a State or locally administered retirement system and a period of service of up to 25 years with the employer at the time of retirement as established by the employer; or 3) retired and reached the age of 65 with 25 or more years of service credit in a State or locally administered retirement system and a period of service of up to 25 years with the employer at the time of retirement as established by the employer; or 4) retired and reached age 62 with at least 15 years of service with the employer. Further, the law provides that the employer paid obligations for retiree coverage may be determined by means of a collective negotiations agreement.

In accordance with Chapter 330, P.L. 1997, which is codified in N.J.S.A. 52:14-17.32i, the State provides medical and prescription coverage to local police officers and firefighters, who retire with 25 years of service or on a disability from an employer who does not provide postretirement medical coverage. Local employers were required to file a resolution with the Division in order for their employees to qualify for State-paid retiree health benefits coverage under Chapter 330. The State also provides funding for retiree health benefits to survivors of local police officers and firefighters who die in the line of duty under Chapter 271, P.L. 1989.

27



Note 18: Postemployment Benefits Other Than Pensions (OPEB) (Cont'd)

A. State Health Benefit Local Government Retired Employees Plan (Cont'd)

Contributions

Pursuant to Chapter 78, P.L. 2011, future retirees eligible for postretirement medical coverage who have less than 20 years of creditable service on June 28, 2011 will be required to pay a percentage of the cost of their health care coverage in retirement provided they retire with 25 or more years of pension service credit. The percentage of the premium for which the retiree will be responsible will be determined based on the retiree's annual retirement benefit and level of coverage.

Special Funding Situation

Under Chapter 330, P.L. 1997, the State shall pay the premium or periodic charges for the qualified local police and firefighter retirees and dependents equal to 80 percent of the premium or periodic charge for the category of coverage elected by the qualified retiree under the State managed care plan or a health maintenance organization participating in the program providing the lowest premium or periodic charge. The State also provides funding for retiree health benefits to survivors of local police officers and firefighters who die in the line of duty under Chapter 271, P.L. 1989.

Therefore, these employers are considered to be in a special funding situation as defined by GASB Statement No. 75 and the State is treated as a nonemployer contributing entity. For New Jersey local governments who report under the regulatory basis of accounting, the net OPEB liability and related deferred inflows are not recorded in the financial statements and there is only note disclosure of this information. Since the local participating employers do not contribute under this legislation directly to the plan, there is no net OPEB liability, deferred outflows of resources, or deferred inflows of resources to report in the financial statements of the local participating employers related to this legislation.

However, the notes to the financial statements of the local participating employers must disclose the portion of the nonemployer contributing entities' total proportionate share of the collective net OPEB liability that is associated with the local participating employer.

Allocation Methodology

GASB Statement No. 75 requires participating employers in the Plan to recognize their proportionate share of the collective net OPEB liability, collective deferred outflows of resources, collective inflows of resources, and collective OPEB expense. The special funding situation's and nonspecial funding situation's net OPEB liability, deferred outflows of resources, deferred inflows of resources, and OPEB expense are based on separately calculated total OPEB liabilities. The nonspecial funding situation's net OPEB liability, deferred outflows of resources, deferred inflows of resources, and OPEB expense are further allocated to employers based on the ratio of the plan members of an individual employer to the total members of the Plan's nonspecial funding situation during the measurement period July 1, 2016 through June 30, 2017. Employer and nonemployer allocation percentages were rounded for presentation purposes.

28





OPEB Expense

The total OPEB liability as of June 30, 2018 was not available from the State of New Jersey Division of Pensions and Benefits as of the date of this report. The total OPEB liability as of June 30, 2017 was determined by an actuarial valuation as of June 30, 2016, which was rolled forward to June 30, 2017.

The State's proportionate share of the net OPEB liability attributable to the Borough at June 30, 2017 was $19,055,911. At June 30, 2017, the State's proportion related to the Borough was 0.219149%. This is the percentage of the total State Share of the net OPEB liability of the Plan.

During the year ended June 30, 2017, the State of New Jersey's OPEB expense related to the Borough was $1,363,757.

Actuarial Assumptions and Other Inputs

The actuarial assumptions vary for each plan member depending on the pension plan the member is enrolled in. This actuarial valuation used the following actuarial assumptions, applied to all periods in the measurement.

Inflation Rate

Salary Increases*: Through 2026 Thereafter

2.50%

1.65% - 8.98% 2.65% to 9.98%

* - Salary increases are based on the defined benefit plan that the member is enrolled in and his or her age.

Preretirement mortality rates were based on the RP-2006 Headcount-Weighted Healthy Employee Male/Female Mortality Table with fully generational mortality improvement projections from the central year using MP-2017 scale. Postretirement mortality rates were based on the RP-2006 Headcount-Weighted Health Annuitant Male/Female mortality table with fully generational improvement projections from the central year using the MP-2017 scale. Disability mortality was based on the RP-2006 Headcount-Weighted Disabled Male/Female mortality table with fully generational improvement projections from the central year using the MP-2017 scale.

Certain actuarial assumptions used in the June 30, 2016 valuation were based on the results of the pension plans' experience studies for which the members are eligible for coverage under this Plan - the Police and Firemen Retirement System (PFRS) and the Public Employees' Retirement System (PERS). The PFRS and PERS experience studies were prepared for the periods July 1, 2010 to June 30, 2013 and July 1, 2011 -June 30, 2014, respectively.

29





Health Care Trend Assumptions

For pre-Medicare preferred provider organization (PPO) medical benefits, this amount initially is 5.9% and decreases to a 5.0% long term trend rate after nine years. For self-insured post 65 PPO medical benefits and HMO medical benefits, the trend rate is 4.5%. For prescription drug benefits, the initial trend rate is 10.5% decreasing to a 5.0% long term rate after eight years. For the Medicare Part B reimbursement, the trend rate is 5.0%. The Medicare Advantage trend rate is 4.5% and will continue in all future years.

Discount Rate

The discount rate for June 30, 2017 was 3.58%. The discount rate for June 30, 2016 was 2.85%. This represents the municipal bond rate as chosen by the State. The source is the Bond Buyer Go 20-Bond Municipal Bond Index, which includes tax-exempt general obligation municipal bonds with an average rating of AA/ Aa or higher. As the long-term rate of return is less than the municipal bond rate, it is not considered in the calculation of the discount rate, rather the discount rate is set at the municipal bond rate.

B. Life Insurance Coverage

The Borough offers life insurance coverage for eligible retired firefighters through Standard Life Insurance. To be eligible for this benefit, the employee must have been employed by the Borough at the time of retirement with at least 25 or more years of good service with the Borough. The annual costs of providing such benefits amount to approximately $10,000.00 in premiums. The Borough is only responsible for the payment of the annual premiums.

30

BOROUGH OF MADISON

SUPPLEMENTARY DATA

Name

Robert H. Conley

Patrick W. Rowe

Astri J. Baillie

Maureen Byrne

John F. Hoover

Carmela Vitale

Benjamin Wolkowitz

Raymond M. Codey

Elizabeth Osborne

James Burnet

Ashley Marrone

Donna Carey

Lisa Baratto

Russell Brown

Louie DeRosa, III

Matthew J. Giacobbe, Esq.

Darren Dachisen

Michael Fitzpatrick

Joanne Grillo

Gary F. Troxell

Frank Ciampi

Dawn Allgeier

Briana Diamond

Linda Sawyer

BOROUGH OF MADISON

OFFICIALS IN OFFICE AND SURETY BONDS


Mayor

Council President

Council Member

Council Member

Council Member

Council Member

Council Member

Administrator

Clerk

Title

Chief Financial Officer/ Assistant

Administrator

Tax Collector

Utility Rent Collector

Tax Assessor

Building Subcode Construction Official

Fire Chief

Borough Attorney

Police Chief

Health Officer

Secretary, Board of Health

Registrar, Vital Statistics

Magistrate

Court Administrator

Deputy Court Administrator

Deputy Court Administrator

Purchasing/Personnel Officer

$

Amount of

Bond

**

**

**

**

200,000 **

**

**

**

**

**

**

**

**

**

**

Schedule 1

Name of Corporate Surety

**

**

**

**

Travelers Insurance Co.

**

**

**

**

**

**

**

**

**

**

**

**There is a Public Employee Blanket Bond for $1,000,000 covering all municipal employees not separately bonded:

Morris County Municipal Joint Insurance Fund

Municipal Excess Liability Joint Insurance Fund

$ 50,000

950,000 $ 1,000,000

* There is a separate Statutory Position Bond for $1,000,000 covering the Tax Collector:

Morris County Municipal Joint Insurance Fund

Municipal Excess Liability Joint Insurance Fund

All bonds were examined and were properly executed.

$ 50,000

950,000 $ 1,000,000


2018 CURRENT FUND

A-4

BOROUGH OF MADISON

CURRENT FUND

SCHEDULE OF CASH - TREASURER

Ref.

Balance December 31, 2017 A $ 22,287,318.81

Increased by Receipts:

Taxes Receivable $ 59,631,560.55

Revenue Accounts Receivable 12,064,278.59

Miscellaneous Revenue Not Anticipated 1,072,752.65

Prepaid Taxes 522,181.85

Tax Overpayments 452,257.93

Appropriation Refunds 101,575.60

Appropriation Reserve Refunds 16,231.27

Due to Federal and State Grant Fund:

Grants Receivable 93,987.78

Due from/to State of New Jersey:

Veterans' and Senior Citizens' Deductions 70,024.02

Construction Code Fees 63,008.00

Due from/to General Capital Fund:

Interfund Advanced 1,624.07

Reserve for MCJM Expansion and Operations 66,663.00

Due from Water Utility Operating Fund:

Prior Year Interfund Returned 1,134.35

Due from/to Other Trust Fund:


Interfund Advanced 16.75

Due from Animal Control Fund:


74,202,262.92

96,489,581.73

Decreased by Disbursements:

2018 Appropriation Expenditures 26,258,930.66

2017 Appropriation Reserve Expenditures 880,781.05

Local School District Taxes 42,274,722.00

Prepaid Local School District Taxes 3.13

County Taxes 10,483,701.64

Tax Overpayments Refunded 452,257.97

Due State of New Jersey - Construction Code Fees 66,219.00

Due from Federal and State Grant Fund:

Appropriated Reserves 144,214.63

Due from General Capital Fund:


Due Open Space Trust Fund:

Open Space Tax Levy 637,632.54


Due Payroll Agency:

Interfund Advanced 20,000.00

Reserve for Tax Appeals Pending 12,893.31 81,360, 170.13

Balance December 31, 2018 A $ 15,129,411.60


SCHEDULE OF CASH - COLLECTOR YEAR ENDED DECEMBER 31, 2018

NOT APPLICABLE

A-5

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$

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$ 24

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A

A-6

Balance December 31, 201 7

Increased by:

BOROUGH OF MADISON

CURRENT FUND SCHEDULE OFT AX TITLE LIENS

Ref.

A

Transferred From Taxes Receivable $ Interest and Costs on Tax Sale

Balance December 31, 2018 A

A-7

$ 40,180.08

3,993.95

31.00 4,024.95

$ 44,205.03

A-8

BOROUGH OF MADISON

CURRENT FUND

SCHEDULE OF REVENUE ACCOUNTS RECEIVABLE

Balance Accrued Collected by Balance

Dec. 31, 2017 in 2018 Treasurer Dec. 31, 2018

Borough Clerk:

ABC Licenses $ 31,823.80 $ 31,823.80

Other 36,813.00 36,813.00

Fees and Permits 362,235.35 362,235.35

Municipal Court $ 7,885.79 129,680.42 126,535.25 $ 11,030.96

Interest and Costs on Taxes 82,220.27 82,220.27

Parking Meters 80,240.30 80,240.30

Interest on Investments and Deposits 304,638.50 304,638.50

Police Burglar Alarms 15,690.00 15,690.00

Cablevision Franchise Fee 234,453.57 234,453.57

Sewer Fees on Tax Exempt Properties 268,194.95 268,194.95

Consolidated Municipal Property Tax Relief Aid 41,565.00 41,565.00

Energy Receipts Tax 766,964.00 766,964.00

Uniform Construction Code Fees 763,925.79 763,925.79

lntermunicipal Health Contracts for Local Community

Health Services 328,280.00 328,280.00

Inter-Municipal Contract for Tax Assessor Services 93,999.00 93,999.00

Inter-Municipal Contract for Joint Court Agreement 630,714.93 630,714.93

Utility Operating Surplus of Prior Years - Electric 7,045,153.00 7,045,153.00

Life Hazard User Fees 29,589.00 29,589.00

Payment in Lieu of Taxes on Exempt Property - FDU 42,090.38 42,090.38

Madison Cell Tower Lease 329,063.32 329,063.32

Utility Operating Surplus of Prior Years - Water Utility 200,000.00 200,000.00

Rosenet User Fees 63,032.64 63,032.64

Sewer Connection Fees 23,678.00 23,678.00

Recreation Fees 135.00 135.00

Technology Services 163,243.57 163,243.57

$ 7,885.79 $ 12,067,423.79 $ 12,064,278.62 $ 11,030.96

Ref A A

Cash Receipt $ 12,064,278.59

Due from Water Utility Operating Fund:

Sewer Fees on Tax Exempt Properties 0.03

$ 12,064,278.62

A-9

I of3


SCHEDULE OF 2017 APPROPRIATION RESERVES YEAR ENDED DECEMBER 31, 2018

Balance

Balance After Modi- Paid or Balance

Dec. 31, 2017 fication Charged Lapsed

General Administration:

Salaries and Wages $ 783.99 $ 783.99 $ 783.99

Other Expenses 7,708.45 7,708.45 $ 904.60 6,803.85

Municipal Support: Salaries and Wages 1,521.81 1,521.81 1,521.81

Other Expenses 10,050.74 10,050.74 1,519.39 8,531.35

Human Resources: Salaries and Wages 1,840.51 1,840.51 1,840.51

Other Expenses 16,576.69 16,576.69 10,160.29 6,416.40

Mayor and Council:

Salaries and Wages 1,334.53 1,334.53 1,334.53

Other Expenses 6,658.79 6,658.79 1,220.45 5,438.34

Borough Clerk:


Other Expenses 16,544.29 16,544.29 1,933.27 14,611.02

Financial Administration (Treasury):


Other Expenses 10,198.79 10,198.79 4,603.50 5,595.29

Elections:

Other Expenses 3,710.97 3,710.97 3,710.97

Audit Services:

Other Expenses 42,150.00 42,150.00 37,100.00 5,050.00

Revenue Administration (Tax Collection): Salaries and Wages 9,579.36 9,579.36 9,579.36

Other Expenses 5,964.02 5,964.02 894.67 5,069.35

Tax Assessment Administration:

Salaries and Wages 83.96 83.96 83.96

Other Expenses 24,766.00 24,766.00 12,749.32 12,016.68

Legal Services and Costs:

Other Expenses 135,990.51 135,990.51 9,243.75 126,746.76

Engineering Services:


Other Expenses 19,760.82 19,760.82 3,725.95 16,034.87

Environmental Commission:

Other Expenses 575.00 575.00 575.00

Community Business Development:

Salaries & Wages 101,394.45 101,394.45 101,394.45

Other Expenses 8,130.01 8,130.01 898.45 7,231.56

Historic Preservation:

Other Expenses 3,950.00 3,950.00 85.00 3,865.00

Planning Board:


Other Expenses 92,897.59 92,897.59 3,342.04 89,555.55

Zoning Board of Adjustment: Salaries and Wages 365.44 365.44 365.44

Other Expenses 27,428.89 27,428.89 7,277.66 20,151.23

Police and Fire Building: Other Expenses 22,216.77 22,216.77 15,019.34 7,197.43

A-9

2 of3



(Continued)

Balance


Dec. 31, 2017 fication Charged Lapsed

Police: Salaries & Wages $ 58,605.59 $ 58,605.59 $ 58,605.59

Other Expenses 38,005.92 38,005.92 $ 24,988.32 13,017.60

Project Community Pride:

Other Expenses 937.00 937.00 937.00

Emergency Management:

Other Expenses 7,867.72 7,867.72 6,286.50 1,581.22

Fire Department: Salaries & Wages 22,552.58 22,552.58 22,552.58

Other Expenses 17,903.78 17,903.78 11,563.92 6,339.86

Uniform Fire Safety Act:

Salaries & Wages 101.53 101.53 101.53

Public Works:


Other Expenses 182,332.58 182,332.58 81,591.97 100,740.61

Sewer Department: Salaries and Wages 38,390.18 38,390.18 38,390.18

Other Expenses 89,044.31 89,044.31 25,107.86 63,936.45

Shade Tree Authority:

Other Expenses 32,903.39 32,903.39 12,740.00 20,163.39

Garbage Removal:

Other Expense 658,763.69 658,763.69 384,093.38 274,670.31

Public Building & Grounds:

Salaries & Wages 6,951.59 6,951.59 6,951.59

Other Expenses 41,525.55 41,525.55 18,737.49 22,788.06

Vehicle Maintenance:


Other Expenses 106,067.59 106,067.59 43,224.81 62,842.78

Board of Health:

Salaries & Wages 1,039.00 1,039.00 1,039.00

Other Expenses 151,504.28 151,504.28 34,233.37 117,270.91

Animal Control Services: Salaries and Wages 2,000.00 2,000.00 2,000.00

Other Expenses 3,405.00 3,405.00 426.93 2,978.07

Civic Center:

Other Expenses 7,980.71 7,980.71 5,213.06 2,767.65

Recreation & Playgrounds:

Salaries & Wages 3,307.74 3,307.74 3,307.74

Other Expenses 26,029.97 26,029.97 8,250.00 17,779.97

Senior Citizens Programs:

Salaries & Wages 3,172.63 3,172.63 3,172.63

Other Expenses 3,724.33 3,724.33 1,841.95 1,882.38

Teen Center: Other Expenses 2.00 2.00 2.00

Parks Commission:

Other Expenses 3,871.94 3,871.94 3,871.94

Celebration of Public Events, Anniversary or Holiday:

Other Expenses 12,054.73 12,054.73 662.00 11,392.73

A-9

3 of3

BOROUGH OF MADISON

CURRENT FUND

SCHEDULE OF 2017 APPROPRlATION RESERVES


(Continued)

Balance


Dec.31,2017 fication Charged Lapsed

Municipal Court:

Salaries and Wages $ 29,677.00 $ 29,677.00 $ 29,677.00

Other Expenses 20,100.00 20,100.00 $ 14,519.41 5,580.59

Insurance:

General Liability 81,473.59 81,473.59 1,154.82 80,318.77

Workers Compensation Insurance 3,000.00 3,000.00 3,000.00

Employee Group Health 206,053.37 206,053.37 9,799.22 196,254.15

Health Benefit Waiver 14,509.49 14,509.49 14,509.49

State Uniform Construction Code:


Other Expenses 68,818.82 68,818.82 7,406.45 61,412.37

Salary & Wage Adjustment Program 20,000.00 20,000.00 20,000.00

Utility Expenses:

Electricity 91,327.65 91,327.65 40,161.87 51,165.78

Telephone 33,569.75 33,569.75 6,035.57 27,534.18

Natural Gas 29, 181.25 29, 181.25 10,066.10 19,115.15

Sewerage Processing and Disposal 3,700.00 3,700.00 3,700.00

Gasoline 114,624.59 114,624.59 5,599.08 109,025.51

Contingent 49,998.00 49,998.00 49,998.00

Public Employees' Retirement System 6,000.57 6,000.57 6,000.57

Social Security 58,541.02 58,541.02 58,541.02

Police and Fireman's Retirement System of New Jersey 17,052.94 17,052.94 17,052.94

Defined Contribution Retirement Program 2,669.30 2,669.30 168.02 2,501.28

Sanitation:

Madison-Chatham Joint Meeting 50,423.28 50,423.28 50,423.28

Maintenance of Free Public Library (c. 82, P.L. 1985):

Other Expenses 24,211.77 24,211.77 24,211.77

Inter-Municipal Health Contracts for Local Conununity

Board of Health:

Salaries and Wages 27, 191.06 27,191.06 27,191.06

Inter-Municipal Services for Joint Court:


Other Expenses 35,962.83 35,962.83 35,962.83

$ 3,435,247.27 $ 3,435,247.27 $ 864,549.78 $ 2,570,697.49

Ref.

Unencumbered A $ 2,249,713.30

Encumbered A 1, 185,533.97

$ 3,435,247.27

Cash Disbursed $ 880,781.05

Less: Appropriation Refunds ( 16,231.27)

$ 864,549.78

BOROUGH OF MADISON

CURRENT FUND SCHEDULE OF LOCAL SCHOOL DISTRICT TAXES PAY ABLE

Balance December 31, 2017

Increased by: Levy - Calendar Year 2018

Decreased by: Payments to Local School District

Balance/(Prepaid) December 31, 2018

A-10

$ -0-

42,274, 722.00

42,274,725.13

$ (3.13)

Mun

icip

al A

llia

nce

Prog

ram

: 20

16

2017

20

18

MA

AS

A S

uppl

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A

A-11

BOROUGH OF MADISON FEDERAL AND ST A TE GRANT FUND

SCHEDULE OF APPROPRIATED RESERVES

Transferred

Balance from Cash Dec. 31, 2017 2018 Budget Disbursed

Clean Communities Program:

2015 $ 1,484.67 $ 1,484.67

2016 34,202.81 34,202.81

2017 29,057.43 12,717.28

2018 $ 27,796.41

Recycling Tonnage Grant: 2014 37,247.19

2016 40,905.27

2017 17,920.00 0.37

2018 20,977.90 12,750.00

Drunk Driving Enforcement Fund - 2016 1,895.08

Alcoholism Education and Rehabilitation Fund:

2007 934.20 934.20

2008 2,098.55 2,098.55

2009 872.82 872.82

2012 1,241.15 594.43

2013 422.20

2014 1,181.60

2015 58.93

2016 1,510.79

2017 128.68

Municipal Alliance on Alcoholism and Drug Abuse: State Share - 201 7 739.63

State Share - 2018 12,419.00 11,358.93

Borough Share - 2016 1,415.83

Borough Share - 2017 3,104.75 1,669.99

Borough Share - 2018 3,104.25 2,839.73

MAASA Supplemental - County: Supplemental - 2014 456.76

Supplemental - 2015 2,000.00

Supplemental - 2017 2,000.00 600.00

Supplemental - 2018 2,000.00

Body Annor Grant: 2014 0.03

2015 2,857.44 2,531.10

2016 2,745.56

2017 2,749.66

Distracted Driving Crackdown Grant 1,320.00

Pedestrian Safety Enforcement & Education Fund 7,600.00

Click It or Ticket - 2015 3,925.00

Over the Limit Grant - 2014 3,400.00

Unexpended

Balance Cancelled

$ 739.63

456.76 2,000.00

0.03

A-12 1 of 2


$ 16,340.15

27,796.41

37,247.19 40,905.27 17,920.37 8,227.90 1,895.08

646.72 422.20

1,181.60 58.93

1,510.79 128.68

1,060.07 1,415.83 1,434.76

264.52

1,400.00

2,000.00

326.34 2,745.56 2,749.66 1,320.00

7,600.00 3,925.00 3,400.00

Drive Sober or Get Pulled Over:

2016 - Year End Holiday Crackdown

Sustainable Jersey Grant - 2015

Madison Main Street Foundation Grant:

2016

2017

2018 Drug Free Community Mentoring Grant

Grotta Grant for Seniors

Ref.

BOROUGH OF MADISON FEDERAL AND ST A TE GRANT FUND

SCHEDULE OF APPROPRIATED RESERVES

Transferred

Balance from Cash

Dec. 31, 2017 2018 Budget Disbursed

$ 1,065.00 $ 550.00

2,009.37

79,313.10

140,000.00 5,965.00

$ 140,000.00 53,045.12

15,070.00

349.35

$ 443,282.85 $ 206,297.93 $ 144,214.63

A

Federal Grants $ 550.00 State Grants $ 63,193.68 79,544.79

Local Grants 140,000.00 59,610.12

Local Matching Funds 3,104.25 4,509.72

$ 206,297.93 $ 144,214.63

Unexpended

Balance

Cancelled

$ 515.00

$ 3,711.42

A-12

2 of2

Balance

Dec. 31, 2018

$ 2,009.37

79,313.10

134,035.00

86,954.88

15,070.00

349.35

$ 501,654.73

A

Recycling Tonnage Grant:

2017

2018

BOROUGH OF MADISON

FEDERAL AND STATE GRANT FUND

SCHEDULE OF UNAPPROPRIATED RESERVES

Balance

Dec. 31, 2017

$ 0.37

20,977.90

$ 20,978.27

Ref. A

$

$

A-13

Transferred

to Budget

Revenue

0.37

20,977.90

20,978.27


2018 TRUST FUNDS



Borough Dog License Fees Prepaid Borough Dog License Fees

State Dog License Fees

Other Dog/Cat License Fees

Open Space Tax Levy

Open Space Receipts:

NJEDAGrant

Field Rental

Interest Earned

Due from Current Fund:

Prior Year Interfund Returned


State Board of Health

BOROUGH OF MADISON

TRUST FUNDS

SCHEDULE OF CASH - TREASURER

Ref. Animal Control Fund

B $ 68,551.48

$ 13,984.60

4,995.60

1,567.80

3,089.00

820.82

24,457.82

93,009.30

1,639.20

Expenditures UnderR.S. 4:19-15.11 2,640.45

Due to Current Fund:


Open Space Expenditures

Open Space Debt Service

Due to General Capital Fund:

Improvement Authorizations

26,324.69

Balance December 31, 2018 B $ 66,684.61

B-4

1 of2

Open Space Trust Fund

$ 999,057.98

$ 637,632.54

409,312.51

88,747.00

13,402.17

4,358.21 1, 153,452.43

2,152,510.41

227,389.73

230,000.00

77,600.00

534,989.73

$ 1,617 ,520.68

B-4 2 of2

BOROUGH OF MADISON TRUST FUNDS

SCHEDULE OF CASH - TREASURER (Continued)

Affordable Housing Development Ref. Trust Fund Other Trust Funds

Balance December 3 I, 2017 B $ 2,077,076.22 $ I ,539,935.43

Increased by Receipts: Due Current Fund:

Interest $ 684.47

Due to State of New Jersey: Marriage License Fees 1,625.00

Reserve for: Affordable Housing Development:

COAHFees $ 1,345,961.25

Interest Earned 29,906.96

Developers' Escrows 140,280.44

Chapter 14 P.O.A.A. I ,I 92.00

Jacob Henry Perkins 9,770.29

Police Outside Duty 1,016,618.80

State Law Enforcement 5,331.82

MAASA Trust 120.00

Fire Department 4,794.80

Community Gardens Project 6,929.47

Station Area Fund 90,746.88

State Unemployment Insurance 20,757.47

Recreation 48,865.34 1,375,868.21 1,347,716.78 3,452,944.43 2,887,652.21

Decreased by Disbursements: Due to Current Fund:


Interfund Advanced 16.75

Due to State of New Jersey: Marriage License Fees 1,750.00

Reserve for: Affordable Housing Development 182,720.42

Chapter 14 P.0.A.A. 1,395.00

Developers' Escrow 426,351.20

Jacob Henry Perkins 10,000.00

Police Outside Duty 991,886.67

State Law Enforcement 17,046.64

MAASA Trust 1,075.00

Fire Department 9,807.44

Community Gardens Project 3,813.10

Station Area Fund I 13,342.00

Unallocated Receipt 1.00 State Unemployment Insurance 59,003.73

Recreation 20,678.14 182,720.42 1,679,088.14

Balance December 31, 2018 B $ 3,270,224.01 $ 1,208,564.07

BOROUGH OF MADISON ANIMAL CONTROL FUND

SCHEDULE OF RESERVE FOR ANIMAL CONTROL FUND EXPENDITURES


Increased by:

Dog License Fees

Other Dog/Cat License Fees

Interest Earned Prior Year Prepaid Licenses

Decreased by: Statutory Excess - Due to Current Fund

Animal Control Fund Expenditures


License Fees Collected

2016

2017

Maximum Allowable Reserve

Ref.

B

$ 13,984.60

3,089.00

820.82 5,713.20

19,103.41

2,640.45

B

Amount

$ 20,162.40

21,950.80

$ 42,113.20

B-5

$ 40,249.44

23,607.62

63,857.06

21,743.86

$ 42,113.20


2018 GENERAL CAP IT AL FUND

BOROUGH OF MADISON

GENERAL CAPITAL FUND

SCHEDULE OF CASH

Ref.

Balance December 31, 201 7 c


Due from Current Fund:

Current Fund Appropriations: Capital Improvement Fund

Prior Year Interfund Returned

Due From Other Trust Funds:

Police Outside Duty Trust Fund:

Improvement Authorization

Due from Open Space Trust Fund:

Improvement Authorization

Grant Funds Received on Fully Funded

Improvement Authorizations:

Morris County Historic Preservation Trust Fund

New Jersey Department of Transportation Grants

Edward Bryne Memorial Justice Assistance Program

Community Development Block Grant

Private Contribution - Improvement Authorization

Interest on Investments Due to Current Fund


Due to Current Fund:

Interfund Advanced

Improvement Authorization Expenditures


C-2

$ 3,819,141.31

$ 3,800,000.00

124,455.99

30,000.00

77,600.00

21,360.00

226,875.00

15,000.00

62,150.00

8,000.00

1,796.40

4,367,237.39

8,186,378.70

1,624.07

3,565,531.65

3,567,155.72

$ 4,619,222.98

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C-5 3 of 3

BOROUGH OF MADISON

GENERAL CAPITAL FUND SCHEDULE OF CAPITAL IMPROVEMENT FUND

Ref.


Increased By:

Improvement Authorizations Cancelled $ 495,832.20 Current Fund Budget Appropriation 3,800,000.00 Grant Funds Received on Fully Funded

Improvement Authorizations 325,385.00

Decreased By:

Appropriation to Finance



C-6

$ 1,657,720.07

4,621,217.20

6,278,93 7 .27

4,272,900.00

$ 2,006,03 7 .27

BOROUGH OF MADISON


SCHEDULE OF BOND ANTICIPATION NOTES PAY ABLE


NOT APPLICABLE

C-7

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C-8

Bal

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c c

C-8

BOROUGH OF MADISON


C-9 1 of6

SCHEDULE OF NJ ENVIRONMENT AL INFRASTRUCTURE TRUST LOANS PAY ABLE

I

Trust Loan Fund Loan

Balance December 31, 2017 c $ 725,842.50 $ 1,424,530.85

Decreased by: Loans Paid by Operating Budget 39,072.16 91,041.21

Balance December 31, 2018 c $ 686,770.34 $ 1,333,489.64

SCHEDULE OF PRINCIPAL AND INTEREST PAYMENTS - SERIES 2010A LOAN #S340715-04B TRUST LOAN OUTSTANDING DECEMBER 31, 2018

Payment Maturity Balance

Number Date Interest Principal of Loan

$ 270,000.00

18 211119 $ 5,337.50 270,000.00

19 8/1/19 5,337.50 $ 20,000.00 250,000.00

20 2/1/20 4,937.50 250,000.00

21 8/1/20 4,937.50 20,000.00 230,000.00

22 2/1/21 4,437.50 230,000.00

23 8/1/21 4,437.50 20,000.00 210,000.00

24 211122 4,137.50 210,000.00

25 811122 4,137.50 25,000.00 185,000.00

26 211123 3,637.50 185,000.00

27 8/1123 3,637.50 25,000.00 160,000.00

28 211124 3,137.50 160,000.00

29 8/1/24 3,137.50 25,000.00 135,000.00

30 211125 2,637.50 135,000.00

31 811125 2,637.50 25,000.00 110,000.00

32 211126 2,137.50 110,000.00

33 8/1/26 2,137.50 25,000.00 85,000.00

34 2/1/27 1,700.00 85,000.00

35 8/1/27 1,700.00 25,000.00 60,000.00

36 2/1/28 1,200.00 60,000.00

37 8/1/28 1,200.00 30,000.00 30,000.00

38 211129 600.00 30,000.00

39 8/1/29 600.00 30,000.00 -0-

$ 67,800.00 $ 270,000.00


SCHEDULE OF NJ ENVIRONMENTAL INFRASTRUCTURE TRUST LOANS PAY ABLE

C-9 2 of6

SCHEDULE OF PRINCIPAL AND INTEREST PAYMENTS - 2011 DIRECT LOAN #S3407 l 5-04B-1 TRUST LOAN OUTSTANDING DECEMBER 31, 2018

Payment Maturity Balance

Number Date Interest Principal of Loan

$ 61,770.34

16 2/1/19 $ 1,234.22 61,770.34

17 8/1119 1,234.22 $ 4,187.41 57,582.93

18 211120 1,170.57 57,582.93

19 8/1/20 1,170.57 4,314.70 53,268.23

20 2/1/21 1,099.81 53,268.23

21 8/1/21 1,099.81 4,456.22 48,812.01

22 2/1/22 1,021.61 48,812.01

23 8/1/22 1,021.61 4,612.64 44,199.37

24 2/1/23 937.42 44,199.37

25 8/1/23 937.42 4,781.00 39,418.37

26 2/1/24 845.87 39,418.37

27 8/1/24 845.87 4,964.11 34,454.26

28 211/25 746.59 34,454.26

29 8/1/25 746.59 5,162.68 29,291.58

30 2/1/26 639.98 29,291.58

31 8/1/26 639.98 5,375.89 23,915.69

32 2/1/27 525.74 23,915.69

33 8/1/27 525.74 5,604.37 18,311.32

34 2/1/28 405.81 18,311.32

35 8/1/28 405.81 5,844.24 12,467.08

36 211129 278.69 12,467.08

37 8/1/29 278.69 6,098.46 6,368.62

38 211/30 143.61 6,368.62

39 8/1/30 143.61 6,368.62 -0-

$ 18,099.84 $ 61,770.34



C-9 3 of6

SCHEDULE OF PRINCIPAL AND INTEREST PAYMENTS - SERIES 20 I SA LOAN #S340715-05B-1 TRUST LOAN OUTSTANDING DECEMBER 31, 2018

Payment Maturity Balance Number Date Interest Principal of Loan

$ 355,000.00 8 2/1/19 $ 7,825.00 355,000.00 9 8/1/19 7,825.00 $ 15,000.00 340,000.00 10 211120 7,450.00 340,000.00 11 8/1/20 7,450.00 15,000.00 325,000.00 12 2/1/21 7,075.00 325,000.00 13 8/1/21 7,075.00 15,000.00 310,000.00 14 211122 6,700.00 310,000.00 15 8/1/22 6,700.00 20,000.00 290,000.00 16 2/1/23 6,200.00 290,000.00 17 8/1/23 6,200.00 20,000.00 270,000.00 18 211124 5,700.00 270,000.00 19 8/1/24 5,700.00 20,000.00 250,000.00 20 211125 5,200.00 250,000.00 21 8/1/25 5,200.00 20,000.00 230,000.00 22 211126 4,700.00 230,000.00 23 8/1/26 4,700.00 20,000.00 210,000.00 24 2/1/27 4,200.00 210,000.00 25 8/1/27 4,200.00 25,000.00 185,000.00 26 2/1/28 3,700.00 185,000.00 27 8/1/28 3,700.00 25,000.00 160,000.00 28 2/1/29 3,200.00 160,000.00 29 8/1/29 3,200.00 25,000.00 135,000.00 30 2/1/30 2,700.00 135,000.00 31 811/30 2,700.00 25,000.00 110,000.00 32 2/1/31 2,200.00 110,000.00 33 8/1/31 2,200.00 25,000.00 85,000.00 34 2/1/32 1,700.00 85,000.00 35 8/1/32 1,700.00 25,000.00 60,000.00 36 2/1/33 1,200.00 60,000.00 37 8/1/33 1,200.00 30,000.00 30,000.00 38 2/1/34 600.00 30,000.00 39 8/1/34 600.00 30,000.00 -0-

$ 140,700.00 $ 355,000.00



C-9 4 of6

SCHEDULE OF PRINCIPAL AND INTEREST PAYMENTS - SERIES 2010 LOAN #S340715-04B FUND LOAN OUTSTANDING DECEMBER 31. 2018

Payment Maturity Balance Number Date Principal of Loan

$ 228,203.50 18 2/1119 $ 6,915.25 221,288.25 19 8/1119 13,830.50 207,457.75 20 2/1/20 6,915.25 200,542.50 21 8/1120 13,830.50 186,712.00 22 2/1/21 6,915.25 179,796.75 23 8/1121 13,830.50 165,966.25 24 2/1/22 6,915.25 159,051.00 25 8/1/22 13,830.50 145,220.50 26 2/1123 6,915.25 138,305.25 27 8/1123 13,830.50 124,474.75 28 2/1/24 6,915.25 117,559.50 29 8/1124 13,830.50 103,729.00 30 2/1125 6,915.25 96,813.75 31 8/1125 13,830.50 82,983.25 32 2/1/26 6,915.25 76,068.00 33 8/1126 13,830.50 62,237.50 34 2/1127 6,915.25 55,322.25 35 8/1/27 13,830.50 41,491.75 36 2/1/28 6,915.25 34,576.50 37 8/1128 13,830.50 20,746.00 38 2/1/29 6,915.25 13,830.75 39 811/29 13,830.75 -0-

$ 228,203.50



C-9 5 of6

SCHEDULE OF PRINCIPAL AND INTEREST PAYMENTS - 2011 DIRECT LOAN #S340715-04B-1 FUND LOAN OUTSTANDING DECEMBER 31, 2018


$ 53,606.14 16 2/1/19 $ 1,521.82 52,084.32 17 8/1/19 3,043.64 49,040.68 18 2/1/20 1,521.82 47,518.86 19 8/1/20 3,043.64 44,475.22 20 2/1/21 1,521.82 42,953.40 21 8/1/21 3,043.64 39,909.76 22 2/1/22 1,521.82 38,387.94 23 8/1/22 3,043.64 35,344.30 24 2/1/23 1,521.82 33,822.48 25 8/1/23 3,043.64 30,778.84 26 2/1/24 1,521.82 29,257.02 27 8/1/24 3,043.64 26,213.38 28 2/1/25 1,521.82 24,691.56 29 8/1/25 3,043.64 21,647.92

30 2/1/26 1,521.82 20,126.10 31 8/1/26 3,043.64 17,082.46 32 2/1/27 1,521.82 15,560.64 33 8/1/27 3,043.64 12,517.00 34 2/1/28 1,521.82 10,995.18 35 8/1/28 3,043.64 7,951.54

36 2/1/29 1,521.82 6,429.72 37 8/1/29 3,043.64 3,386.08 38 2/1/30 1,521.82 1,864.26

39 8/1/30 1,864.26 (0.00)

$ 53,606.14



C-9

6 of6

SCHEDULE OF PRINCIPAL AND INTEREST PAYMENTS - SERIES 2015A LOAN #S3407 l 5-05B-l FUND LOAN OUTSTANDING DECEMBER 31, 2018


$ 1,051,680.00

9 2/1119 $ 21,910.00 1,029,770.00

10 8/1119 43,820.00 985,950.00 11 211120 21,910.00 964,040.00 12 8/1/20 43,820.00 920,220.00

13 2/1121 21,910.00 898,310.00 14 8/1121 43,820.00 854,490.00 15 2/1122 21,910.00 832,580.00 16 8/1122 43,820.00 788,760.00 17 2/1123 21,910.00 766,850.00 18 8/1123 43,820.00 723,030.00 19 2/1124 21,910.00 701,120.00 20 8/1124 43,820.00 657,300.00 21 2/1125 21,910.00 635,390.00 22 8/1125 43,820.00 591,570.00 23 2/1126 21,910.00 569,660.00 24 8/1126 43,820.00 525,840.00 25 211/27 21,910.00 503,930.00 26 8/1127 43,820.00 460,110.00 27 2/1/28 21,910.00 438,200.00 28 8/1/28 43,820.00 394,380.00 29 2/1/29 21,910.00 372,470.00 30 8/1129 43,820.00 328,650.00

31 2/1130 21,910.00 306,740.00 32 8/1130 43,820.00 262,920.00 33 2/1131 21,910.00 241,010.00

34 8/1/31 43,820.00 197,190.00 35 2/1/32 21,910.00 175,280.00

36 8/1/32 43,820.00 131,460.00 37 2/1133 21,910.00 109,550.00

38 8/1/33 43,820.00 65,730.00 39 2/1134 21,910.00 43,820.00 40 8/1/34 43,820.00 -0-

$ 1,051,680.00

Ord

inan

ce

No.

D

ate

28-0

9 07

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09

47-1

4 09

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14

53-1

4 11

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14

50-1

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18

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2018 WATER UTILITY FUND

D-4

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I, 1

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00.0

0 $

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5,89

6.07

D-5

BOROUGH OF MADISON WATER UTILITY OPERATING FUND

SCHEDULE OF CONSUMER ACCOUNTS RECEIVABLE

Ref.

Balance December 31, 2017 D

Increased by: Water Rents Levied

Decreased by: Water Collections


D-6

$ 180,385.69

2,485,996.84 2,666,382.53

2,494,872.60

$ 1712509.93

Land Reservations Land Pump Station Land Storage Reservoir Springs and Wells Supply Mains Pump Station Structure Electric Pumping Equipment Other Pumping Equipment Standpipe Tanks Distribution Mains Service Pipes and Stops Meters Fire Hydrants Foundations General Structure General Equipment Engineering and Superintendence Office Equipment Ford Pickup Buildings and Renovations New Services Bursting Machine Utility Truck and Mailing Equipment hnprovement to Well "B" Utility Trucks Removal of Underground Storage Tanks Engineering Utility Truck Pipe and Road Repair Water Mains Madison Avenue Water Tank Green Village Road Water Main Midwood Terrace Water Tank Improvements on Morris Place Backhoe Repair of Well Leaks Construction of Air Stripping Facility Water Utility Truck Water Main Replacement - Greenwood Avenue

BOROUGH OF MADISON WATER UTILITY CAPITAL FUND SCHEDULE OF FIXED CAPITAL


$ 10,957.98 10,020.00 3,515.80

249,427.04 3,727.00

103,777.04 173,571.25

13,282.28 267,878.60

2,289,647.42 209,906.91 199,478.71 100,316.90

328.40 27,605.56 31,112.46

1,570.18 6,651.24

611.00 75,712.19

35.00 1,423.25

21,925.72 3,932.08

37,042.00 27,810.40

130,000.00 23,052.00

150,000.00 14,015.69

113,012.50 191,014.67 159,671.00 50,000.00 35,000.00

6,827.57 1,255,712.10

30,552.07 299,805.22

Additions by

Ordinance

$

Balance

D-7 1 of3

Dec. 31, 2018

10,957.98 10,020.00 3,515.80

249,427.04 3,727.00

103,777.04 173,571.25

13,282.28 267,878.60

2,289,647.42 209,906.91 199,478.71 100,316.90

328.40 27,605.56 31,112.46

1,570.18 6,651.24

611.00 75,712.19

35.00 1,423.25

21,925.72 3,932.08

37,042.00 27,810.40

130,000.00 23,052.00

150,000.00 14,015.69

113,012.50 191,014.67 159,671.00 50,000.00 35,000.00 6,827.57

1,255,712.10 30,552.07

299,805.22


(Continued)

Water Main Improvements on Edgewood Road, Greenhill Road and Highway Terrace

Utility Billing System Water System - Improvement - Kings Road Replace Generator Engine and Drive - Well C Improvements on Elm Street and West End Avenue Tower Aeration System Improvement on Elmer, West and Elm Streets VOC Contamination - Well D One Ton Truck with Tailgate Lift Water Main - Dehart Place and Cedar Street Waterline Replacement - Walnut Street Professional Engineering Services for

Modifications and Update of Contract Plans and Specifications for the Borough's Well D VOC Treatment Facility

2003 Water Utility Program Improvements Upgrades to Kings Road - Water Main 2004 Water Utility Program Arbitration Award to Van Wingerden General

Contracting Co. 2004 Water Main Replacement Purchase of Utility Truck Purchase Portable Lighting Award of the Project Title "Water System

Improvements - Well D VOC Removal Facility" 2005 Water Main Replacement Program Purchase of Water Meters and Transmitters Update Well E New Chlorine Vacuum for the Water Wells Purchase of a Car for the Water Meter Reader Asbestos Abatement for the Water & Light Plant Purchase of 20 Cubic Yard Locking Dumpster

for the Water Department Paint Madison Avenue Water Tank Various Repairs at Five Water Wells Water Main Replacements on Municipal Roads Computer Upgrades and Replacements in the

Water System Water Wells

$


173,974.59 39,698.50 41,566.80 18,000.00 8,977.96

87,146.56 3,277.98 7,500.00

32,065.00 71,892.90 81,049.15

124,500.00 318,238.37 167,967.78 390,000.00

69,000.00 10,567.00 34,800.08

7,295.00

1,374,178.67 524,741.05

74,943.00 20,502.00 10,920.00 10,546.00 19,725.00

4,953.85 233,429.68

14,795.00 699,490.05

20,990.41

Additions by

Ordinance

$

D-7 2 of3


173,974.59 39,698.50 41,566.80 18,000.00 8,977.96

87,146.56 3,277.98 7,500.00

32,065.00 71,892.90 81,049.15

124,500.00 318,238.37 167,967.78 390,000.00

69,000.00 10,567.00 34,800.08

7,295.00

1,374,178.67 524,741.05

74,943.00 20,502.00 10,920.00 10,546.00 19,725.00

4,953.85 233,429.68

14,795.00 699,490.05

20,990.41

D-7 3 of3


(Continued)

Additions Balance by Balance

Dec. 31, 2017 Ordinance Dec. 31, 2018

Purchase of a Water Leak Detector for the Water Department $ 13,494.65 $ 13,494.65

Purchase and Installation of a New Steam Boiler for the Water & Light Plant on an Emergency Basis 10,299.00 10,299.00

Water Main Replacement Projects Covering the Fletcher and a Portion of Niles Avenue 865,444.34 865,444.34

Water Main Replacement on Green Avenue (Shunpike Rd to Midwood Terr) 233,821.71 233,821.71

Improvements to Lincoln Place 125,000.00 125,000.00 Upgrades to Water System Water Wells 10,000.00 10,000.00 Construction of Water Main Replacement on Vinton

Road and Belmont A venue 232,858.71 232,858.71 Installation of Fire Alarm System at Water and Light Plant 4,950.00 4,950.00 Construction of Water Main Replacement on Academy

Road and Division A venue 305,512.68 305,512.68 Water Main Replacement of Municipal Roads 671,894.59 671,894.59 Purchase of Utility Truck and Accessories 62,465.14 62,465.14 Resurfacing a Section of State Highway 124 24,977.00 24,977.00 Purchase of Back Hoe for DPW 100,631.28 100,631.28 Purchase of Skid Steer with Attachments for the Water Department 75,938.07 75,938.07 Well Upgrades 14,596.42 14,596.42 Purchase of New Generator at Well E 139,830.56 139,830.56 Purchase of a Mini Excavator with Accessories 69,382.07 69,382.07 Central Avenue Water Main Replacement Project $ 950,000.00 950,000.00

$ 13,987,757.83 $ 950,000.00 $ 14,937,757.83

D D

BO

RO

UG

H O

F M

AD

ISO

N

WA

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TIL

ITY

CA

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AL

FU

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Ord

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alan

ce

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Im

prov

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t Des

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o.

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2010

Wat

er W

ell

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p S

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ol R

epai

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ater

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er M

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16

Rel

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oads

26

0,35

6.24

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6 10

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.00

2016

Wat

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mpr

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ents

Pro

gram

35

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190,

000.

00

Pur

chas

e o

f Uti

lity

Met

ers,

Han

dhel

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ng

47-1

6 D

evic

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ater

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and

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urch

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of U

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8 $

200,

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00

2018

Wat

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tili

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ents

18

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00

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tili

ty W

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ell

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$ 2,

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24

$ 1,

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000.

00

Ref

. D

D-8

Tra

nsfe

rred

to

Fix

ed

Bal

ance

C

apit

al

Dec

. 31

, 20

18

$ 54

,970

.00

150,

000.

00

260,

356.

24

10,0

00.0

0

190,

000.

00

40,0

00.0

0

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00

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0,00

0.00

200,

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00

680,

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00

300,

000.

00

$ 95

0,00

0.00

$

2,28

5,32

6.24

D

D-8

Operating: Salaries and Wages Other Expenses


BOROUGH OF MADISON WATER UTILITY OPERA TING FUND

SCHEDULE OF 2017 APPROPRIATION RESERVES YEAR ENDED DECEMBER 31. 2018

Balance Balance After Dec. 31, 2017 Modification

$ 57,084.61 $ 57,084.61 412,922.95 412,922.95 $

Public Employees Retirement System 3,198.53 3,198.53 Social Security System 12,480.28 12,480.28

$ 485,686.37 $ 485,686.37 $

Analysis of Balance December 31, 2017 Ref.

Encumbered D $ 110,101.29 Unencumbered D 375,585.08

$ 485,686.37

D-9

Paid or Balance Charged Lapsed

$ 57,084.61 87,331.06 325,591.89

3,198.53 12,480.28

87,331.06 $ 398,355.31

Ord

.

No.

Im

prov

emen

t D

escr

ipti

on

07-1

0 20

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ater

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l P

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26

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er M

ain

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Wat

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mpr

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ents

Pro

gram

47

-16

Pur

chas

e o

f Uti

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Met

ers,

Han

dhel

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Dev

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and

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03

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ain

Rep

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Mai

n R

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chas

e o

f U

tility

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and

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ries

18

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2018

Wat

er U

tili

ty P

rogr

am I

mpr

ovem

ents

35

-18

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CH

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OR

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2018

Aut

hori

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ons

Bal

ance

C

apit

al

Res

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O

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ance

D

ec.3

1,2

01

7

Impr

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ent

for

Aut

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e A

mou

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Fun

ded

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d M

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ding

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$

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0 $

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09

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12

150,

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00

50.8

5

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5116

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.00

6,97

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04

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16

190,

000.

00

80,2

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0

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3116

40

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.00

35,9

00.0

0

01/2

3/17

40

0,00

0.00

21

1,26

7.27

09

/25/

17

950,

000.

00

949,

261.

35

03/1

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20

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$

200,

000.

00

04/0

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68

0,00

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$

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00

06/2

5/18

30

0,00

0.00

30

0,00

0.00

$ 1,

296,

610.

69

$ 98

0,00

0.00

$

200,

000.

00

Ref

. D

D-1

0

Bal

ance

P

aid

or

Dec

. 31

, 201

8

Cha

rged

F

unde

d

$ 2,

700.

00

50.8

5

10,1

76.2

2 6,

975.

00

$ 55

,618

.54

24,6

61.4

6

17,3

75.0

0 18

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.00

44,3

37.6

7 16

6,92

9.60

94

9,26

1.35

20

0,00

0.00

1,

740.

00

678,

260.

00

300,

000.

00

$ 1,

068,

332.

56

$ 1,

408,

278.

13

D

D-10

BOROUGH OF MADISON WATER UTILITY FUND

SCHEDULE OF CAPITAL IMPROVEMENT FUND

Ref.

Balance December 31, 201 7 D

Increased by: Water Operating Fund Budget Appropriation

Decreased by: Appropriated to Finance



D-11

$ 376,166.88

900,000.00 1,276,166.88

980,000.00

$ 296,166.88

Ord

. N

o.

07-1

0

26-1

2

7-16

27-1

6 35

-16

47-1

6

03-1

7

38-1

7

11-1

8

18-1

8

35-1

8

BO

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Dat

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2018

Im

prov

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t D

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ipti

on

Ord

inan

ce

Dec

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, 20

1 7

Aut

hori

zati

ons

2010

Wat

er W

ell

Pum

p S

tati

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ontr

ol R

epai

rs

02/2

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$

54,9

70.0

0

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12

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000.

00

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stru

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ain

Rep

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16

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18

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Ref

. D

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2

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to

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B

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Dec

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$ 54

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00

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00

300,

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$ 95

0,00

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6.24

D

D-12


2018 ELECTRIC UTILITY FUND

Bal

ance

Dec

embe

r 31

, 20

17

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ease

d by

Rec

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s:

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c U

tili

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cell

aneo

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e A

id -

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App

ropr

iati

on R

efun

ds

App

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on R

eser

ves

Ref

unds

Due

to/

from

Ele

ctri

c U

tili

ty O

pera

ting

Fun

d:

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rest

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ned

on I

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tmen

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Bud

get

App

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Cap

ital

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prov

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Bal

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Dec

embe

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8 E

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Cap

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300,

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55

21,8

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1 56

2,12

2.64

12,0

32,3

86.1

8 $

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1,61

0.63

E-5

BOROUGH OF MADISON

ELECTRIC UTILITY OPERA TING FUND

SCHEDULE OF CASH - COLLECTOR


NOT APPLICABLE

E-6

E-7

BO

RO

UG

H O

F M

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fers

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chas

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and

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0.00

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0.00

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to

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tili

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and

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300,

000.

00

284,

175.

00

$ 2,

456,

125.

66

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5,00

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2,60

7.61

$

560,

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55

$ 1,

256.

09

$ 84

3,88

8.10

$

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888.

10

$ 2,

791,

610.

63

E-7

BOROUGH OF MADISON

ELECTRIC UTILITY FUND SCHEDULE OF CONSUMER ACCOUNTS RECEIVABLE

Ref.

Balance December 31, 201 7 E

Increased by: 2018 Charges *

Decreased by:

Cash Received

Balance December 31, 2018 E

*Net of $1,538,739 utility dividend rate credits.

E-8

$ 947,116.76

21,719,661.56 22,666, 778.32

21,690,249.05

$ 976,529.27

Land and Land Rights

Station Structure and Improvements

Station Equipment

Poles, Towers and Fixtures

Overhead Conductors and Devices

Underground Conduits

Underground Conductors and Devices

Electric Cable and Equipment

Line Transformers

Services

Meters

Street Lighting and Signal System

Office Furniture and Equipment

Plant Structure and Improvements

1961 Chevrolet Ladder Truck

Ford Pick-up

G.M.C. Truck with Pettman Body

G.M.C. Dump Truck

G.M.C. Bucket Truck

Cable Trailer

Line Truck

Pole Trailer

Transformer Trailer

Portable Lift Truck

Transportation Equipment

Shop Equipment

Laboratory Equipment

Tools and Work Equipment

Communication Equipment

General Equipment

Power Operated Lift Mechanism

General Equipment

Miscellaneous Equipment

Bucket Truck, Mailing Equipment and Hole Digger

Kings Road Substation Conversion

Utility Building Repairs

BOROUGH OF MADISON


SCHEDULE OF FIXED CAPITAL


$ 48,113.12

2,183,502.21

196,242.41

48,489.60

247,446.57

129,411.16

91,422.26

261,785.71

576,344.16

70,578.16

256,744.65

272,923.39

41,719.56

11,654.57

3,729.50

1,260.36

24,218.02

5,048.60

28,080.29

786.03 24,459.65

918.64

1,114.26

402.00

713.16

3,646.32

417.73

6,127.07

3,577.41

391.00 13,537.51

1,459.82

4,750.73

92,191.00

43,000.00

115,000.00

Removal and Disposal of Underground Storage Tanks

James Park Circuit Breakers

13,949.72

62,400.00

Computerized Utility Billing Equipment 13,567.20

Distribution Lines 425,001.50

Meters and Fixtures 54,729.74

Transformers 50,795.25

Transfonner - James Park 404,530.31

Transfonner Equipment 4,028.51

Line Truck 119,742.53

Circuits - Loantaka and Samson 114,515.48

Additions by

Ordinance

$

Balance

E-9

I of3

Dec. 31, 2018

48,113.12

2, 183,502.21

196,242.41

48,489.60

247,446.57

129,411.16

91,422.26

261,785.71

576,344.16

70,578.16

256,744.65

272,923.39

41,719.56

11,654.57

3,729.50

1,260.36

24,218.02

5,048.60

28,080.29

786.03 24,459.65

918.64

1,114.26

402.00

713.16

3,646.32

417.73

6,127.07

3,577.41

391.00

13,537.51

1,459.82

4,750.73

92,191.00

43,000.00

115,000.00

13,949.72

62,400.00

13,567.20

425,001.50

54,729.74

50,795.25

404,530.31

4,028.51

119,742.53

114,515.48

BOROUGH OF MADISON ELECTRIC UTILITY CAPITAL FUND

SCHEDULE OF FIXED CAP IT AL (Continued)

Underground Line Conduit

Utility Truck James Park Substation Transmission Line Duct Bank Power Cables Diesel Electric Utility Bucket Truck Upgrade Kings Road Substation Pickup Truck Reconditioning Circuit Breakers Rebuilding Distribution System - Noroling Lane Twenty Electronic Sectionalizers

Four Wheel Drive Vehicle Purchase of New Switchgear for Kings Road Purchase of Single Bucket Truck/Pole Trailer

Purchase of Conduit and Cable Purchase of Pickup Truck Purchase ofHazmat Storage Locker

Medium Voltage Feeder Cable Purchase Parts/Labor for Repair of Transformer - James Park Electric Utility Billing System

Installation of Fiber Repair and Replacement of Transformer Vaults and Covers Emergency Repairs to James Park Substation Construction of New Vehicle Storage Building

at Water & Light Plant Relocation ofUnderground Vault, Conduits & Cable

at Prospect St. in Preparation for the Construction of the New Fire & Police Building

Purchase Pickup Truck with a Lift Tail Gate Purchase A New Vehicle for the Electric Meter Reader Asbestos Abatement from Water and Light Plant

Purchase of a New Cable Trailer Purchase Two 20 Yard Lockable Dumpsters Purchase Two Bucket Trucks Purchase of Pad-Mount Transformer and Metering/

Switch Cabinet for the HDM Building Reconstruction Preparation and Painting of the Kings Road and

James Park Substations Purchase of New Style Pennglobe Victorian Fixtures

for the Commercial District Reconstruction of the Underground Electric Distribution

System at the Madison Commons Purchase and Installation of a New Steam Boiler for

the Water & Light Plant on an Emergency Basis

$


126,660.09 99,634.00 85,000.00 83,189.00 4,957.62

109,750.22 1,798,767.02

24,953.00 60,000.00 73,863.00

8,975.00 22,075.00

234,900.00 107,760.00 64,152.26 24,490.00 10,891.00

199,497.50 42,820.21 98,421.00

249,266.66 117,450.00 24,802.44

405,752.92

270,914.71

130.00 12,346.00 19,725.00 18,086.00 9,905.70

326,445.94

42,469.75

134,400.00

59,400.00

157,664.97

10,299.00

Additions by Ordinance

$

E-9

2 of3


126,660.09

99,634.00 85,000.00 83,189.00 4,957.62

109,750.22 1,798,767.02

24,953.00 60,000.00

73,863.00 8,975.00

22,075.00

234,900.00 107,760.00 64,152.26 24,490.00 10,891.00

199,497.50 42,820.21 98,421.00

249,266.66 117,450.00 24,802.44

405,752.92

270,914.71

130.00 12,346.00

19,725.00 18,086.00 9,905.70

326,445.94

42,469.75

134,400.00

59,400.00

157,664.97

10,299.00

E-9

3 of3 BOROUGH OF MADISON


SCHEDULE OF FIXED CAPITAL

(Continued)

Balance Additions by Balance Dec. 31, 2017 Ordinance Dec. 31, 2018

Excavation and Installation of Underground

Conduit for the New Feeder Circuit to the

Reckson Building at Giralda Farms $ 43,027.50 $ 43,027.50 Purchase of a Covered Trailer and Accessories to be

used for All Underground Distribution Equipment 8,079.89 8,079.89 Purchase and Installation of Two New Tap Changers and

Two Nitrogen Systems on Transformers Banks 1 & 2

at Kings Road Substation 74,896.04 74,896.04 Purchase of Two Hydraulic Lift Tailgates for Pick-up

Trucks 136 & 137 4,990.00 4,990.00 Purchase of New Replacement Single Bucket Truck 133,317.00 133,317.00 Improvements to Lincoln Place 216,600.26 216,600.26 Purchase of New Style Pennglobe Victorian Fixtures 64,285.00 64,285.00 Installation of Fire Alarm System at Water & Light Plant 4,950.00 4,950.00 Emergency Purchase of Materials, Equipment and Services 22,694.58 22,694.58 Energy Conservation Installations in Borough Buildings 40,675.00 40,675.00 Purchase of LED Light Fixtures for the Cook Avenue

Parking Lot 17,344.00 17,344.00 Signal Improvements 35,000.00 35,000.00 Purchase of 4-wheel Drive Utility Vehicle 27,927.96 27,927.96 Purchase of Three-Quarter Ton Pick-Up Truck 30,000.00 30,000.00 Purchase of New Battery Banks at Kings Road and

James Park Substations 17,825.00 17,825.00 Purchase of Two Pad Mount Transformers 14,727.00 14,727.00 Purchase of Materials for Improvements to

Underground Electric Distribution System 248,988.83 248,988.83 Purchase of Digger/Derrick Truck 224,077.68 224,077.68 Purchase of New Pick-up Truck and Related Equipment 39,914.99 39,914.99 Basketball Court Lighting Replacement at Dodge Field 56,571.00 56,571.00 Purchase of Three Historic Lampposts 12,759.00 12,759.00 Pad-Mount Transformer for the E-Well Water

Pumping Station 10,039.00 10,039.00 Submersible Underground Transformers 122,000.00 122,000.00 Signalization Improvements $ 11,734.40 11,734.40 New Historic Lampposts on Kings Road 210,000.00 210,000.00 Purchase of New Security Fence at the Kings Road and

James Park Substations 8,573.00 8,573.00 Replacement of Existing Outdoor Stairway at

Kings Road Substation 7,900.00 7,900.00 Traffic Signal and Call Box Improvements 67,904.50 67,904.50

$ 12,684,971.61 $ 306,111.90 $ 12,991,083.51

Ref. E E


SCHEDULE OF FIXED CAP IT AL AUTHORIZED AND UNCOMPLETED

Ord. Balance 2018 Transfen-ed to

Improvement Description No. Dec. 31, 20I7 Authorizations Fixed Capital

Purchase and Installation of Desiccant Breather Systems and Oil Filtration Systems 10-13 $ 45,000.00

Repairs to Water and Light Building 43-13 125,000.00

Purchase of Fiber Optic Pilot Wire Relay System Between Kings Road and James Park Substations 15-14 30,000.00

Purchase of Pole Barn for Storage 30-15 120,000.00

Signalization Improvements 37-15 25,000.00 $ 11,734.40

Automated Meter Pilot Program 56-15 35,000.00

New Historic Lampposts on Kings Road 17-16 210,000.00 210,000.00

Purchase of New Security Fence at the Kings Road and James Park Substations 19-16 120,000.00 8,573.00

Replacement of Existing Outdoor Stairway at Kings Road Substation 20-16 30,000.00 7,900.00

Purchase and Installation of Security Cameras at the Kings Road and James Park Substations 21-16 20,000.00

Purchase of Automated Meters and a Handheld Meter

Reading Device 36-16 35,000.00

Purchase of Utility Meters, Handheld Reading Devices

and Accessories 48-16 40,000.00

Traffic Signal and Call Box Improvements 55-16 75,000.00 67,904.50

Purchase of Two Double Bucket Trucks 09-17 440,000.00

Purchase ofa Pad-Mount Transformer for the B-Well Water Pumping Station 19-17 30,000.00

Purchase of Meters with Radio Read Technology 41-17 60,000.00

Purchase of LED Light Fixtures 03-18 $ 35,000.00

Purchase of Two Utility Truck Bodies and Accessories 09-18 30,000.00

Purchase of Utility Meters and Accessories 10-18 200,000.00

Purchase of Primary Voltage Copper Cable 32-18 125,000.00

Repairs to the Electric Utility Storage Building and Purchase of Building 37-18 300,000.00

$ 1,440,000.00 $ 690,000.00 $ 306, 111.90

Ref E

E-10

Authorizations Balance Cancelled Dec. 31, 2018

$ 45,000.00 125,000.00

30,000.00 120,000.00

$ 13,265.60 35,000.00

111,427.00

22,100.00

20,000.00

35,000.00

40,000.00

7,095.50 440,000.00

30,000.00 60,000.00 35,000.00 30,000.00

200,000.00 125,000.00

300,000.00

$ 153,888.10 $ 1,670,000.00

E

BOROUGH OF MADISON ELECTRIC UTILITY OPERATING FUND


Operating: Salaries and Wages Other Expenses

Contribution to: Public Employees Retirement System Social Security System

Analysis of Balance December 31, 2017 Ref.

Encumbered E Unencumbered E


$ 133,036.02 2,170,597.66

4,638.71 6,072.56

$ 2,314,344.95

$ 744,899.40 1,569,445.55

$ 2,314,344.95

Balance After Modification

$ 133,036.02 2,170,597.66

4,638.71 6,072.56

$ 2,314,344.95

Cash Disbursed Less: Refunds

Paid or Charged

$ 813,279.90

$ 813,279.90

$ 815,979.90 (2,700.00)

$ 813,279.90

E-11

Balance Lapsed

$ 133,036.02 1,357,317.76

4,638.71 6,072.56

$ 1,501,065.05

E-1

2

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Rep

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Ele

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10

$ 93

1,48

1.03

Ref

. E

E

E-12


SCHEDULE OF CAPITAL IMPROVEMENT FUND

Ref.

Balance December 31, 201 7 E

Increased by: Electric Utility Operating Fund Budget Appropriation $ 595,000.00

Improvement Authorizations Cancelled 153,888.10

Decreased by: Appropriated to Finance Improvement

Authorizations

Balance December 31, 2018 E

E-13

$ 899,257.46

748,888.10

1,648,145.56

690,000.00

$ 958,145.56

E-1

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$ 1,

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Ref

. E

E

E-14

BOROUGH OF MADISON

PART II

SINGLE AUDIT


Sch

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51 3

BOROUGH OF MADISON NOTES TO SCHEDULES OF EXPENDITURES OF FEDERAL AND ST ATE AW ARDS


Note 1. BASIS OF PRESENTATION

The accompanying schedules of expenditures of federal and state awards (the "Schedules") include the federal and state grant activity of the Borough of Madison under programs of the federal and state governments for the year ended December 31, 2018. The information in these schedules is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance") and New Jersey's OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Because the schedules present only a selected portion of the operations of the Borough, they are not intended to and do not present the financial position, changes in fund balance or cash flows of the Borough.

Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Expenditures reported on the accompanying schedules of expenditures of federal and state awards are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts, if any, shown on the Schedules represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Passthrough identifying numbers are presented where available. The Borough has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.

Note 3. RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS

Amounts reported in the accompanying schedules agree with the amounts reported in the related federal and state financial reports.

Note 4. N.J. ENVIRONMENT AL INFRASTRUCTURE LOANS PAY ABLE

At December 31, 2018, the Borough has $686,770.34 and $1,333,489.64 of N.J. Environmental Infrastructure Trust and Fund Loans Payable outstanding which are recorded in the General Capital Fund.

The loan agreements were obtained to finance a portion of the cost of improvements to the MadisonChatham Joint Meeting's Molitor Water Pollution Control Facility. Even though the Borough is responsible for the repayment of the loans, the Borough does not receive or expend any of the loan funds. The Madison-Chatham Joint Meeting is responsible for the draw downs and expenditures of loan funds.

At December 31, 2018, the Madison-Chatham Joint Meeting has received and expended all of the $2,677,906 Loan funds for the improvements to the Madison-Chatham Joint Meeting's Molitor Water Pollution Control Facility partially funded the Loan funds. The project which relates to the loans was completed in 2017.

4

N I s I v 0 c c I A LLP Ceriified Public Accountants & Advisors

Mount Arlingion Corporate Center 200 Valley Road, Suite 300

Mi. Arlington, N,J 07856 973-298-8500 I 973-298-8501 Fax

Lavvrence Business Center 11 Lawrence Road Ne"ton. N.J 07860

973-383-6699 [ 973-383-6555 Fax

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements

Performed in Accordance with Government Auditing Standards


Borough of Madison Madison, New Jersey

Independent Auditors' Report

We have audited, in accordance with auditing standards generally accepted in the United States of America, audit requirements prescribed by the Division of Local Government Services, Department of Community Affairs, State of New Jersey (the "Division"), and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements - regulatory basis - of the various funds of the Borough of Madison, in the County of Morris (the "Borough") as of and for the years ended December 31, 2018 and 201 7, and the related notes to the financial statements and have issued our report thereon dated May 22, 2019. These financial statements have been prepared in accordance with accounting practices prescribed or permitted by the Division to demonstrate compliance with the Division's regulatory basis of accounting, and the budget laws of New Jersey, which is a basis of accounting other than accounting principles generally accepted in the United States of America.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Borough's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Borough's internal control. Accordingly, we do not express an opinion on the effectiveness of the Borough's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Borough's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs as Finding 2018-01, that we consider to be a significant deficiency.

1/vvJvv. n i slvocci a, cor~1 Independent Member of BKR intern(_~tiein;:1l

5


Borough of Madison Page2

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Borough's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

The Borough's Response to the Finding

The Borough's response to the finding identified in our audit is described in the accompanying Schedule of Findings and Responses. The Borough's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the Borough's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Borough's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

May 22, 2019 Mount Arlington, New Jersey NISIVOCCIA LLP

Valerie A. Dolan Certified Public Accountant Registered Municipal Accountant No. 548

6

Summary of Auditors' Results:

BOROUGH OF MADISON SCHEDULE OF FINDINGS AND RESPONSES


The Independent Auditors' Report expresses an unmodified opinion on the financial statements prepared in accordance with accounting practices prescribed or permitted by the Division of Local Government Services, Department of Community Affairs, State of New Jersey to demonstrate compliance with the Division's regulatory basis of accounting and the budget laws of New Jersey.

A significant deficiency was disclosed during the audit of the financial statements as reported in the Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. No material weaknesses are reported.

No instances of noncompliance material to the financial statements of the Borough which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit.

The Borough was not subject to the single audit provisions of the Uniform Guidance and New Jersey OMB's Circular 15-08 for the year ended December 31, 2018 as both state and federal grant expenditures were less than the single audit thresholds of $750,000 identified in the Uniform Guidance and NJOMB 15-08.

Findings Relating to the Financial Statements which are required to be Reported in Accordance with Generally Accepted Government Auditing Standards:

The audit disclosed the following significant deficiency required to be reported under Generally Accepted Government Auditing Standards:

Finding 2018-01 (Repeat Finding 2017-01): Segregation of Duties

Criteria:

Concentration of duties and responsibilities in a limited number of individuals is not desirable from a control point of view.

Condition:

The various departments/offices of the Borough are responsible for the issuance of permits and licenses; collection of taxes, utility charges and permits and license fees; and recording of collections. The reconciliation of certain bank accounts and the preparation of the general ledger for the various funds are performed by one individual.

Cause:

This is due, in part, to the limited number of personnel of the Borough and the decentralized nature of governmental collection procedures.

Effect or Potential Effect:

Segregation of duties refers to separating those functions that place too much control over a transaction or class of transactions that would enable a person to perpetuate errors and prevent detection within a reasonable period of time.

7

BOROUGH OF MADISON SCHEDULE OF FINDINGS AND RESPONSES


Findings Relating to the Financial Statements which are required to be Reported in Accordance with Generally Accepted Government Auditing Standards: (Cont'd)

Finding 2018-01 (Repeat Finding 2017-01): Segregation of Duties (Cont'd)

Recommendation:

It is recommended that an adequate segregation of duties be maintained with respect to the recording and treasury functions.

Management's Response:

The Borough is aware that there is a lack of adequate segregation of duties. However, due to budgetary constraints there are not sufficient resources to completely resolve the finding at this time.

Findings and Questioned Costs for Federal Awards:

Not Applicable - Federal grant expenditures were below the single audit threshold.

Findings and Questioned Costs for State Awards:

Not Applicable - State grant expenditures were below the single audit threshold.

8

Status of Prior Year Findings:

BOROUGH OF MADISON SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS

FOR THE YEAR ENDED DECEMBER 31, 2018

The prior year finding 2017-01 regarding the segregation of duties was not resolved. Due to budgetary constraints there are not sufficient resources to completely resolve the finding at this time

9

BOROUGH OF MADISON

PART III

COMMENTS AND RECOMMENDATIONS


BOROUGH OF MADISON COMMENTS AND RECOMMENDATIONS

Contracts and Agreements Required to be Advertised for N .J. S .A. 40A: 11-4

N.J.S.A. 40A: 11-3 states:

a. " When the cost or price of any contract awarded by the contracting agent in the aggregate does not exceed in a contract year the total sum of $17,500, the contract may be awarded by a purchasing agent when so authorized by ordinance or resolution, as appropriate to the contracting unit, of the governing body of the contracting unit without public advertising for bids, except that the governing body of any contracting unit may adopt an ordinance or resolution to set a lower threshold for the receipt of public bids or the solicitation of competitive quotations. If the purchasing agent is qualified pursuant to Subsection b. of Section 9 of P.L. 1971, C.198 (N.J.S.A. 40A:ll-9), the governing body of the contracting unit may establish that the bid threshold may be up to $25,000. Such authorization may be granted for each contract or by a general delegation of the power to negotiate and award such contracts pursuant to this section.

b. Any contract made pursuant to this section may be awarded for a period of 24 consecutive months, except that contracts for professional services pursuant to subparagraph (i) of paragraph (a) of subsection ( 1) of section 5 of P .L. 1971, C.198 (N.J.S.A. 40A:ll-5) may be awarded for a period not exceeding 12 consecutive months. The Division of Local Government Services shall adopt and promulgate rules and regulations concerning the methods of accounting for all contracts that do not coincide with the contracting unit's fiscal year.

c. The Governor, in consultation with the Department of the Treasury, shall, no later than March 1 of every fifth year beginning in the fifth year after the year in which P.L. 1999, C.440 takes effect, adjust the threshold amount and the higher threshold amount which the governing body is permitted to establish, as set forth in subsection a. of this section, or the threshold amount resulting from any adjustment under this subsection, in direct proportion to the rise or fall of the index rate as that term is defined in section 2 of P.L. 1971, C.198 (N.J.S.A. 40A:ll-2), and shall round the adjustment to the nearest $1,000. The Governor shall, no later than June 1 of every fifth year, notify each governing body of the adjustment. The adjustment shall become effective on July 1 of the year in which it is made."

N.J.S.A. 40A: 11-4 states: "Every contract awarded by the contracting agent for the provision or performance of any goods or services, the cost of which in the aggregate exceeds the bid threshold, shall be awarded only by resolution of the governing body of the contracting unit to the lowest responsible bidder after public advertising for bids and bidding therefore, except as is provided otherwise in this act or specifically by any other law. The governing body of a contracting unit may, by resolution approved by a majority of the governing body and subject to subsections b. and c. of this section, disqualify a bidder who would otherwise be determined to be the lowest responsible bidder, if the governing body finds that it has had prior negative experience with the bidder."

Effective July 1, 2015 and thereafter, the bid thresholds in accordance with N.J.S.A. 40A:ll-3 and 40A:ll-4 (as amended) are $17,500 for a contracting unit without a qualified purchasing agent and $40,000 for a contracting unit with a qualified purchasing agent.

The governing body of the municipality has the responsibility of determining whether the expenditures in any category will exceed the bid threshold within the fiscal year. Where question arises as to whether any contract or agreement might result in violation of the statute, the Borough Counsel's opinion should be sought before a commitment is made.

The minutes indicated that bids were requested by public advertising per N.J.S.A. 40A:ll-4. The minutes also indicated that resolutions were adopted and advertised authorizing the awarding of contracts or agreements for "Professional Services" and "Extraordinary Unspecifiable Services" per N.J.S.A. 40A: 11-5.

1


(Continued)

Contracts and Agreements Required to be Advertised for N.J.S.A. 40A: 11-4 (Cont'd)

Inasmuch as the system of records did not provide for an accumulation of payments for categories for the performance of any work or the furnishing or hiring of any materials or supplies, the results of such an accumulation could not reasonably be ascertained. Disbursements were reviewed, however, to determine whether any clear-cut violations existed. None were noted.

Collection of Interest on Delinquent Taxes, Assessments and Utility Charges

The statute provides the method for authorizing interest and the maximum rates to be charged for the nonpayment of taxes on or before the date when they would become delinquent. On January 3, 2018, the governing body adopted a resolution authorizing interest to be charged at the rate of 8% per annum on the first $1,500 of delinquent taxes and 18% per annum for delinquent taxes in excess of $1,500, and allows an additional penalty of 6% be collected against a delinquency in excess of $10,000 on properties that fail to pay the delinquency prior to the end of the calendar year.

On December 10, 2007, the governing body adopted an ordinance authorizing interest to be charged at the rate of 8% per annum on the first $1,500 of delinquent utility charges and 18% per annum for delinquent utility charges in excess of $1,500. It allows for a grace period of 30 days for payment of the utilities bills.

It appears from an examination of the Tax Collector's and Utility Collector's records that interest was generally collected in accordance with the foregoing resolution and ordinance.

Delinquent Taxes and Tax Title Liens

The last tax sale was held on September 27, 2018, and included all eligible properties.

The following comparison is made of the number of tax title liens receivable on December 31, of the last three years:

Year

2018 2017 2016

Number of Liens

4 3 3

It is essential to good management that all means provided by statute be utilized to liquidate tax title liens in order to get such properties back on a taxpaying basis.

Verification of Delinquent Taxes and Other Charges

A test of verification of delinquent charges and current payments was made in accordance with the regulations of the Division of Local Government Services, consisting of verification notices as follows:

Type

Payments of 2018 Taxes Payments of 2019 Taxes Delinquent Taxes Payments of Water Utility Charges Delinquent Water Utility Charges Payments of Electric Utility Charges Delinquent Electric Utility Charges

Number Mailed

20 20 15 20 15 20 15

2

Municipal Court


(Continued)

The Madison Municipal Joint Court includes the Borough of Madison, the Borough of Chatham, the Township of Chatham, the Township of Harding and the Township of Morris. The transactions for the year 2018 for the Madison Municipal Joint Court were as follows:

RECEIPTS AND DISBURSEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

Balance Balance Dec. 31, 2017 Receipts Disbursements Dec. 31, 2018

Municipal Treasurer: Fines and Fees $ 39,804.04 $ 593,686.44 $ 589,638.70 $ 43,851.78 Restitution 170.00 4,402.29 4,572.29 POAAFTA 166.00 3,104.00 2,964.00 306.00 Public Defender 550.00 9,163.00 9,428.50 284.50

County: Fines 16,446.50 231,018.01 231,373.51 16,091.00

State: Fines and Costs 37,001.96 556,531.09 555,729.33 37,803.72

Conditional Discharge/Dismissal 238.00 5,232.00 4,930.00 540.00 Weights and Measures 9,150.00 106,300.00 100,700.00 14,750.00 Fish and Game 210.00 210.00 Local Park Commission 50.00 75.00 125.00 Interest 65.14 1,376.49 1,289.13 152.50 Bail 5,779.01 56,714.48 58,160.62 4,332.87

$ 109,420.65 $1,567,812.80 $1,559,121.08 $ 118,112.37

General Capital Fund

One ordinance, which is more than five years old, has a deficit cash balance at December 31, 2018. This situation arises when expenditures are made from an ordinance without the respective debt being issued. Management is aware of this situation. This ordinance is expected to be funded by bonds or raised in a succeeding year's budget. No formal recommendation is judged to be necessary.

Financial Reporting

During our review of the Borough financial records, we noted that the analysis of balance for the payroll agency account as of December 31, 2018 has several deficit balances. It is recommended that the various balances in the payroll agency account be reviewed and monitored on a regular basis and any appropriate adjustments be made.

Management's Response

The analysis of balance for the payroll agency account will be reviewed and monitored on a regular basis and adjustments be made as necessary.

3

Management Suggestions

Other Trust Funds


(Continued)

Upon review of the Borough's budget rider report, it was noted that the Borough does not have a dedication-by-rider for all the reserves in the Other Trust Funds. It is suggested that the Borough submit application to the State to seek approval for the dedication-by-riders for all applicable Trust Fund reserves from the State of New Jersey according to N.J .S.A.40A:4-39.

Federal and State Grant Balances

As of December 31, 2018, there were various appropriated reserve balances in the Federal and State Grant Fund which have been on the Borough's records for several years. The Borough passed a resolution in July 2018 to cancel several older balances. It is suggested that the Borough continues to review these older grant reserve balances.

Status of Prior Year Recommendations

The recommendations regarding segregation of duties and the analysis of payroll agency balance have not been resolved.

4

It is recommended that:

BOROUGH OF MADISON SUMMARY OF RECOMMENDATIONS

1. An adequate segregation of duties be maintained with respect to the recording and treasury functions.

2. Various balances in the payroll agency account be reviewed and monitored on a regular basis and any appropriate adjustments be made.

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borough of madison county of morris report of audit …

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